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WAR CABINET.
Chiefs of Staff Committee.
MILITARY IMPLICATIONS OF HOSTILITIES WITH RUSSIA IN 1940.
REPORT.
WE desire to lay before the War Cabinet an appreciation of the principal military factors which are of importance when considering the effect of Allied hostilities with Russia in 1940, in relation to our main object in this war, the defeat of Germany. The paragraphs dealing with the economic aspects of this problem have been prepared in conjunction with representatives of the Ministry of Economic Warfare, who have agreed their text. The political aspects of the problem were discussed with the Foreign Office in the early stages of the preparation of this report, but this is not necessarily to say that the Foreign Office subscribe to the views herein expressed.
1. GENERAL FACTORS.
German-Soviet Economic Collaboration.
2. The present trend of German policy towards Russia is to develop German-Soviet economic collaboration to the utmost extent that the Soviet will allow. Russian reactions to this policy are open to doubt, but it seems that they are determined to drive as hard a bargain as they can with the Germans. It is safe to assume that, owing to ultimately conflicting interests, Russia will not wish Germany to emerge from the war in great military and economic strength.
3. The extent of German-Soviet economic collaboration is subject to the following important considerations:-
(a) The inefficiency of the Russian economic and transportation systems imposes a limit upon the supplies which Germany can receive from Russia. (b) Russian production is just sufficient to meet the requirements of Russian internal economy as at present planned. If the Russians were prepared to revert to a less ambitious programme, some increase in supply to Germany would be possible, but up to the present Germany has succeeded in obtaining only a fraction of what she hoped to get. It is unlikely that supply can be increased in 1940.
(c) Any increase, however, would be dependent upon a reorganisation of Soviet transportation and industry and on a cessation of Soviet military activity. This could be achieved to a material extent with German assistance, but not in 1940.
(d) If the Germans are allowed to undertake this reorganisation they would never be certain that the Soviet would permit them to reap the benefit.
The general deduction is that Soviet assistance to Germany in the economic sphere is likely to be on a small scale in 1940.
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