Revisiting the Canadian–Soviet barter proposal of 1932–1933: The Soviet perspective
| Published date | 01 September 2016 |
| Date | 01 September 2016 |
| Author | Kirk Niergarth,J.L. Black |
| DOI | 10.1177/0020702016666014 |
| Subject Matter | Scholarly Essays |
Scholarly Essay
International Journal
2016, Vol. 71(3) 409–432
! The Author(s) 2016
Revisiting the
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Canadian–Soviet barter
DOI: 10.1177/0020702016666014
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proposal of 1932–1933:
The Soviet perspective
Kirk Niergarth
Humanities, Mount Royal University, Calgary, Alberta, Canada
J.L. Black
History Department, Carleton University, Ottawa, Ontario, Canada
Abstract
In the autumn of 1932, when Canada had massive agricultural surpluses and hunger was
afflicting millions of Soviet citizens, a proposal to trade Canadian cattle for Soviet fuels
attracted considerable public support. Negotiated by a syndicate of Canadian business-
men, the cattle–oil barter deal was initially stalled because Conservative prime minister
R.B. Bennett was ideologically opposed to it. Soviet documents suggest that this was
not the end of the story. Revisiting the cattle–oil barter in light of these documents
complicates current accounts of Canadian–Soviet relations in this period and raises
questions about the Bennett government’s attitude to international trade and sensitivity
to the kind of public pressure exerted by the proposal’s many Canadian supporters.
In spite of major obstacles, the potential mutual benefit of the project nearly overcame
ingrained mutual distrust.
Keywords
Canada, USSR, Canadian–Soviet relations, trade, R.B. Bennett, G.G. Serkau, 1930s,
cattle, oil, barter, farmers, politics, newspapers
In the autumn of 1932, with massive inventories and depressed prices, the situation
facing the Canadian cattle industry was dire; even more desperate were food short-
ages facing millions of Soviet citizens. Taking advantage of both circumstances, a
syndicate of Canadian businessmen led by G.G. Serkau of Winnipeg proposed to
Corresponding author:
Kirk Niergarth, Mount Royal University, Humanities, 4825 Mount Royal Gate SW, Calgary, AB, T3E 6K6,
Canada.
Email: kniergarth@mtroyal.ca
410
International Journal 71(3)
trade about half of Canada’s surplus cattle to the Soviet Union in exchange for coal
and oil products. According to the plan’s supporters, Canadians would profit from
the barter directly, particularly in the agricultural and transportation sectors, but
the deal had indirect benefits as well. Not only would the Soviet market be opened
for other Canadian goods, the entry of the Soviet fuels into Canada would reduce
Canadian reliance on American imports and put pressure on the United States to
lower the tariff wall that had diminished Canada’s access to the American market
since 1930.1 For the Soviet Union, aside from much needed food, there were pol-
itical as well as economic benefits to be gained by trading with Canada. The Soviets
hoped the barter could lead to other avenues for trade elsewhere in the West and
the British Empire. Both sides, it would seem, stood to gain.
When news of the potential Canadian–Soviet barter deal hit Canadian news-
papers in December 1932, the public show of support for the proposition was loud
and widespread. It persisted even after Conservative prime minister R.B. Bennett
rose in the House of Commons in January 1933 and explained the government’s
rejection of the first iteration of the proposition in no uncertain terms. The eco-
nomic interests of western Canadian farmers, central Canadian manufacturers, and
railway corporations have rarely aligned, but this deal seems to have been an
exception. To bring about an international trade agreement in this protectionist
era, however, required considerably more than a show of public support.
Ultimately, the barter was never realized.
The political calculations that influenced the fate of the deal on the Canadian
side were complex and ranged far beyond the specifics of the particular proposal
itself. Partisan politics figured prominently: could a coalition dominated by trad-
itionally free-trade supporting farmers and backed by Liberal-sympathetic news-
papers have any influence on a Conservative prime minister committed to a high
tariff policy? In terms of international relations, the ramifications of the deal on
Canada’s trade with other, more significant trading partners also needed to be
anticipated. Would the barter make hypocritical Canada’s entreaties to England
to reduce its importation of Soviet timber, wheat, and fish in favour of more
expensive Canadian products? Might England use this as an excuse to back
away from the imperial preference negotiated in Ottawa only a few months previ-
ously?2 On the other hand, would the entry of Soviet coal and oil into the Canadian
market at the expense of American firms pressure the United States administration
1.
The most convincing account of Canadian trade policy and priorities in the early 1930s is Anthony
Patrick O’Brien and Judith A. McDonald, ‘‘Retreat from protectionism: R.B. Bennett and the
movement to freer trade in Canada, 1930–1935,’’ Journal of Policy History 21, no. 4 (2009): 331–
365. On the Smoot-Hawley tariff and an overview of Canadian–American relations in this protec-
tionist period, see Norman Hillmer and J.L. Granatstein, For Better or for Worse: Canada and the
United States into the Twenty-First Century (Toronto: Thomson Nelson, 2007), 105–113.
2.
On the relationship between the Bennett government and the British, in addition to O’Brien and
McDonald’s ‘‘Retreat from protectionism,’’ see Roy MacLaren, Commissions High: Canada in
London, 1870–1971 (Montreal & Kingston: McGill-Queen’s University Press, 2006), 270–307. On
the context of the Ottawa Conference and the Bennett government’s attitude to international rela-
tions more generally, see Norman Hillmer, O.D. Skelton: A Portrait of Canadian Ambition
(Toronto: University of Toronto Press, 2015), 183–204.
Niergarth and Black
411
to negotiate freer trade with Canada? Did the Soviet Union, apparently the only
purchaser on the world stage in 1932, offer a large and largely untapped market for
Canadian products?3 Clearly, there was more at stake than simply trading surplus
cattle for surplus fuel.
Since we know that the deal failed, the way in which the Bennett government
answered these questions seems obvious and fits a well-known historical narrative.
Bennett was notoriously anti-communist and anti-Soviet. He was hardly a pro-
moter of liberalized international trade. Famously, he announced his intention to
use the tariff to ‘‘blast’’ his way into foreign markets. His priority was to increase
trade within the British Empire, but even here he did not favour free trade: rather,
he sought preference for certain Canadian commodities while maintaining protect-
ive tariffs for Canadian manufacturers. In light of Bennett’s ideological position
and strategic goals, the Canadian government’s rejection of the barter in January
1933 seems to have been inevitable.
Historian Max Foran has written the most extensive account of the Canadian
side of the proposed barter,4 an episode that has been discussed only in passing by
researchers investigating Canadian–Soviet relations.5 The Canadian cattle indus-
try, as Foran documents, was in free fall in 1932 with few prospects for respite. The
prospect of exporting 100,000 of roughly 200,000 surplus cattle to the Soviet Union
provided a glimmer of hope for desperate farmers. It is in relation to their plight
that Foran reads the barter negotiations—a ‘‘soon-to-be-forgotten episode in what
might have been’’—as an example of ‘‘the Utopian escapism associated with des-
perate times.’’6 That, to use Foran’s phrase, the ‘‘bizarre incident’’ of the proposed
barter could attract national press attention and be discussed at length in the House
of Commons illustrates just how badly Canadian cattlemen were in need of a
‘‘lifeboat’’—no matter how speculative and ‘‘audacious.’’7
But how ‘‘bizarre’’ was the proposal? Revisiting this story through Soviet arch-
ival documents reveals that the barter’s history was more complicated than Foran
suggests. Negotiations persisted and concessions were made even after the
3.
The USSR’s five-year plan made it one of the few buyers in the international market. Between 1929
and 1932, while the rest of the world’s industrial production had decreased by 36 percent (42 percent
in Canada), the USSR’s increased 83 percent. By 1937, when the rest of the world was returning to
1929 levels of production, the USSR had increased over its 1932 gains by an additional 232 percent.
A.E. Safarian, The Canadian Economy in the Great Depression, 3rd ed. (Montreal & Kingston:
McGill-Queen’s University Press, 2009 [1959]), 98. See also R.W. Davies, Mark Harrison and
S.G. Wheatcroft, eds., The Economic Transformation of the Soviet Society, 1913–1945
(Cambridge: Cambridge University Press, 1994). On the history of Canadian business during the
1930s, see Graham D. Taylor and Peter A. Baskerville, A Concise History of Business in Canada
(Don Mills, ON: Oxford University Press, 1994), 371–382; and Michael Bliss, Northern Enterprise:
Five Centuries of Canadian Business (Toronto: McClelland and Stewart, 1987), 412–425.
4.
Max Foran, ‘‘‘Hooves for gallons’: The Canada–Russia barter deal of 1932–33,’’ Alberta History
49, no. 2 (Spring 2001): 12–19.
5.
The only such study in which the Serkau affair received attention, if not in much detail, is Aloysius
Balawyder, Canadian–Soviet Relations between the World Wars (Toronto: University of Toronto
Press, 1972), 163–168.
6.
Foran, ‘‘‘Hooves for gallons,’’’ 18.
7.
Ibid., 12, 18.
412
International Journal 71(3)
Canadian government rejected the initial proposal. Serkau...
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