Shakhty represented a jumble of fact, fabrication, and twisted laws. An investigation of Shakhty’s party organization found it inattentive to industry (its main assignment) and preoccupied with infighting between factions from the Don (ethnic Russian) and Kuban (ethnic Ukrainian), with the latter predominant.168 Still, by 1927–28 the Donetsk Coal Trust, headquartered in Ukraine’s capital, had managed to extract 2.5 million tons of coal, exceeding the 1913 levels, an impressive recovery from the civil war collapse. While mechanized extraction accounted for 15.8 percent of coal output Union-wide, the proportion reached 45 percent in the Shakhty-Donetsk district. These were significant achievements, possible only thanks to skilled engineers and managers as well as workers. At the same time, expensive imported equipment was often used improperly, partly because it fit poorly with existing technology or because skilled installers and operators were lacking. The single-minded drive for coal output, alongside incompetent organization, meant that safety procedures were being violated, mines improperly laid and flooded, and explosions occurring. Some Shakhty defendants admitted lowering worker pay and raising work norms—which was regime policy—and there were links to the former mine owners: the Soviet regime had recruited them, in emigration, to lease their properties back and revive them. One accused mining engineer admitted having received “foreign funds” to blow up a mine, but the mine in question (Novo-Azov) had been detonated in 1921 by directive of the Coal Trust, which had lacked sufficient capacity to restore all the mines and sealed some for safety reasons. Rumor and gossip lent additional credence to the charges. The Polish ambassador was convinced German specialists were conducting espionage (information gathering) on behalf of Germany, albeit not sabotage, but the Lithuania ambassador told his German counterpart that a large Polish-financed organization had carried out sabotage near Shakhty.169

Sabotage under Soviet law did not have to be deliberate: if someone’s directives or actions resulted in mishaps, then counterrevolutionary intent could be assumed.170 But in Shakhty the regime was alleging intent, which meant the OGPU had to get the defendants to confess, a high-order challenge for which the secret police employed solitary confinement on unbearably cold floors, forced sleeplessness for nights on end (“interrogations” by “conveyor” method), and promises of lighter sentences. This produced comic pirouettes: when one defendant who confessed to everything predicted to his defense lawyer that he would be imprisoned for just a few months, the lawyer informed him he could get the death penalty, which induced a recantation. But the “investigator” refused to record the change of heart, while a codefendant worried the recantation would end up destroying them both. (The defense lawyer resigned.)171 Stalin insisted that the evil intent was on orders of international paymasters, which raised the interrogators’ challenge still higher, for the trial was going to be public and visible to foreigners. OGPU chief Mezynski, suffering intense pain as well as bouts of flu, would soon depart for Matsesta to undergo sulfur-bath treatments; it was not his problem.172 Yagoda had to take charge in Moscow. Neither he nor Yevdokimov were stupid: they understood there was no deliberate sabotage.173 Still, Stalin’s pressure was intense, and Yevdokimov and Yagoda gave Stalin what he wanted, from stories of “a powerful counterrevolutionary organization operating for many years” in the Donetsk Coal Trust to “the collusion of German and Polish nationals.”174


Five German engineers, four of whom were employees of AEG who installed turbines and mining machines, had been arrested in connection with Shakhty. (The politburo had decided English specialists were to be interrogated but released.) Soviet accounts explained that the European working class, impressed by Soviet achievements, held bourgeois warmongers back from a military invasion, but the imperialists had turned to invisible war—economic counterrevolution or “wrecking” (vreditel’stvo), a new method of anti-Soviet struggle.175 On March 10, the chairman of AEG’s board telegraphed Ambassador Brockdorff-Rantzau in Moscow from the foreign ministry in Berlin asking him to convey that AEG would cease all operations and withdraw all personnel unless their people were released; the next day the ambassador read the telegram to Chicherin. On March 12, Deputy Foreign Affairs Commissar Litvinov telegrammed Stalin and Chicherin from Berlin regarding the terrible impact on Soviet-German relations of the German arrests.176 Chicherin had tried to limit the damage by giving the German ambassador in Moscow advance warning about an imminent disagreeable event, which, he hoped, could be jointly managed.177 But for Germany, the timing was surreal. Just one month before the announcement of the “plot,” the Soviets had opened new bilateral trade negotiations in Berlin, promising firm orders of 600 million marks, among other inducements, in exchange for a 600-million-mark credit as well as long-term loans. The Soviets were also requesting that German financial markets handle Soviet government bonds.178 German industrialists and financiers had their own list of demands, but now, all that seemed for naught. Stalin had lost the French credits in the fiasco over Soviet envoy Cristian Rakovski’s behavior, but now he was deliberately poking the Germans in the eye. In the March 2, 1928, note to the rest of the politburo, Stalin, along with Molotov, wrote that “the case might take the most interesting turn if a corresponding trial were organized at the moment of elections in Germany.”179

Germany, on March 15, 1928, indefinitely suspended bilateral trade and credit talks, blaming the provocative arrests of its five nationals.180 TASS blamed Berlin for the breakdown in negotiations, and the Soviet press, goaded by Stalin’s apparatus, had a field day spewing broadsides against German perfidy. Nikolai Krestinsky, Soviet envoy to Germany, sent Stalin a letter from Berlin on March 17 (copy to Chicherin) asking for the release of one of the arrested German nationals, Franz Goldstein. An infuriated Stalin responded four days later, with copy to Chicherin, accusing Krestinsky of disgracefully abetting the German efforts to use the arrests “to pin the blame on us for the breakdown in negotiations.” The dictator added: “The representative of a sovereign state cannot conduct negotiations in such a tone as you consider it necessary to do. Is it difficult to understand that the Germans in the most insolent manner are interfering in our internal affairs, and you, instead of breaking off talks with the Germans, continue to make nice with them? The matter has gone so far that the Frankfurter Zeitung has published your disagreements with Moscow on the question of the arrested Germans. There’s no further to go than that. With Communist greetings. Stalin.”181

Suddenly, however, Goldstein as well as Heinrich Wagner, both of whom worked for AEG, were released. Goldstein, according to a note counterintelligence specialist Artur Artuzov wrote for Mezynski, had ingratiatingly told his OGPU interrogators that he knew of three White Guard emigres who worked for AEG in Germany in the Russian department and were extremely anti-Soviet and that he had seen them with a large sum of money. In a further attempt at ingratiation, he indicated his willingness to return to work in the USSR.182 Debriefed back in Berlin by the foreign ministry, however, Goldstein dismissed the Soviet claims of sabotage, attributing the breakdown of equipment to worker disinterest, non-party specialists’ fear of arrest, inept party overseers, and general disorganization. Publicly, he voiced anger at having been arrested on trumped-up charges while trying to rescue Soviet industry, warned other Germans not to make available “their knowledge and ability” to the Soviet regime, and detailed the horrid initial conditions of his confinement in a provincial Soviet prison (Stalino), creating an uproar.183 Meanwhile, three Germans who had not been released—Max Maier, Ernst Otto, and Wilhem Badstieber (who worked for the mining company Knapp)—were being held incommunicado, in violation of bilateral treaties specifying that German consular officials had a right to see them. That was not all: Chicherin had passed a note from Yagoda to Brockdorff-Rantzau detailing the alleged crimes of a German national whose name matched no one who was in the Soviet Union; someone whose name was close to that of the accused had last been in the USSR in 1927, which reinforced German doubts about the OGPU’s “case.”184

The arrest of German nationals redounded onto Franco-Soviet relations as well, confirming many there, too, in their view that Moscow was not a place to do business. Like France, Germany stopped short of severing diplomatic relations, but some German companies began to pull the rest of their engineers.185 Stalin continued to hunger for German specialists, German technology, German capital—but on his terms. AEG decided on March 22 to continue its multiple construction projects in the Soviet Union. A week later, twenty-two days after the arrests, the Soviet regime informed the German embassy that the consul in Kharkov could see the German nationals (confined in Rostov); the German ambassador insisted that someone from the Moscow embassy be allowed to visit them, which was granted. The audiences, on April 2, lasted ten minutes per prisoner, in the presence of three OGPU operatives.186 Five days later the three Germans were relocated to the Butyrka prison in Moscow in preparation for trial.


Stalin was playing with fire. The entire Soviet coal mining industry had perhaps 1,100 educated engineers, and putting 50 of them on trial in just one case was economically perilous, especially as it frightened many others into inactivity and incited workers to verbal and physical attacks.187 “I know that if there’s a desire, one can accuse the innocent, such are the times,” read the note of one engineer with no connection to the Shakhty case who committed suicide after being called a “Shakhtyite” and threatened with arrest. “I do not want defamation, I do not want to suffer while innocent and have to justify myself, I prefer death to defamation and suffering.”188 All industry in Leningrad had just 11 engineers per 1,000 workers; Moscow 9, the Urals 4.189 With the exception of Molotov, the hard-core Stalin loyalists who supported coercion against the peasantry worked to rein in the hysteria Stalin was stirring over Shakhty.190 Orjonikidze, head of the Central Control Commission workers’ and peasants’ inspectorate, told a group of recent graduates on March 26 that the Shakhty engineers were atypical, that engineers were vital to Soviet industry, that foreign specialists should be allowed to work in Soviet industry, and that Soviet specialists should go abroad.191 Kuibyshev, who had been a Left Communist in the civil war opposed to employing tsarist “military specialists,” now, as chairman of the Supreme Council of the Economy, told a gathering of industrial managers, in a speech published in the Trade-Industrial Gazette, the newspaper of his agency, that “every wrong assertion, every unjust accusation that has been exaggerated out of proportion creates a very difficult atmosphere for work, and such criticism already ceases to be constructive.”192 On March 28, he assured a group of Moscow engineers and scientists that the Shakhty case did not herald a new policy vis-à-vis technical specialists, and that “the government will take all measures to ensure in connection with the Shakhty case that not a single innocent engineer will suffer.”193

While Stalin’s faction opposed Shakhty, his politburo opponents opposed to his coercive peasant policy supported the wrecking accusations. Voroshilov wrote (March 29) to Mikhail Tomsky, head of trade unions, who had just returned from the coal region, expressing alarm: “Misha, tell me candidly, are we not walking right into a board with the opening of the trial in the Shakhty case? Is there not excess in this affair on the part of local officials, including the regional OGPU?” Tomsky, a former lithographer, short and stocky, with horrendous teeth, deaf in one ear, a man who drank to excess and suffered depression, but was also gruffly charming and caustically witty, was the sole pure worker in the politburo (the peasant Kalinin had also worked at factories) and genuinely popular among workers, far more than Stalin.194 Tomsky had long been gung ho for “workerification” of the apparatus to combat bureaucratism and a regime summons to worker activism was grist for his mill.195 Tomsky informed Voroshilov that the bourgeois specialists “are running rings around us!” Soviet mining construction plans were being “approved by the French,” as a result of the engineers’ foreign ties. “The picture’s clear,” he reassured Voroshilov. “The main personages have confessed. My view is that it would not be so bad if half a dozen Communists were imprisoned.”196 Bukharin, in a speech to the Leningrad party organization (April 13, 1928), not only endorsed the Stalin line on widespread wrecking in the coal industry, but also the likelihood of finding similar “organizations” sabotaging other industries, and seconded the need for “proletarian democracy” in the form of production meetings. Bukharin underscored the correctness of Soviet vigilance by the fact that after the Germans’ arrests, a vociferous anti-Soviet campaign had broken out in Western Europe and relations with Germany had deteriorated sharply.197 Bukharin, as he had written with his coauthor Preobrazhensky in The ABC of Communism, was long predisposed to view “bourgeois engineers” as traitors. Bukharin was also looking to avoid giving Stalin a pretext to accuse him of schism and factionalism. But Shakhty was less about a political attack on the party’s defenders of the NEP than about Stalin’s outflanking his own loyal faction.

Stalin was also appealing directly to the workers, seeking to win them back and mobilize them for industrialization and collectivization. Wage earners in industry, who were spread over nearly 2,000 nationalized factories, reached 2.7 million in 1928, finally edging past the 1913 total (2.6 million).198 (Another half million workers were employed in construction.) But proletarians were still stuck in cramped dormitories and barracks, and not a few were homeless. Daily life necessities (food, clothes, shelter) consumed three quarters of a worker’s paycheck, when he or she had a paycheck: unemployment had never fallen below 1 million during the NEP, and approached 20 percent of the able-bodied working age population. One in four industrial workers even in the capital was unemployed, a shameful circumstance that cried out for explanation or scapegoats.199 An expensive whoring nightlife, meanwhile, took place right in front of workers’ eyes—who was that for, in the land of the proletariat?200 What had happened to the revolution? Had the civil war been fought and won to hand power over to NEPmen and speculators? History’s “universal class” went hungry while kulaks could hoard immense stores of grain with impunity? Workers were sent into mines that collapsed on them—and it was all just accident? “Bourgeois specialists” and factory bosses lived luxuriously in five or more rooms, with running water and electricity, servants and drivers?201 What was the self-proclaimed workers’ state doing for workers? Doubts about the proletariat’s steadfastness had induced party officials to look to themselves, the apparatchiks, as the social base of the regime, an awkward circumstance even without the Trotskyite critique of “bureaucracy.” Moreover, a vicious public campaign had been depicting workers as shirkers and self-seekers, drunkards and deserters, while “production meetings” with workers organized by trade unions were actually serving as a way to impose higher output quotas. In 1928, however, party committees seized control of these meetings, which now became opportunities for workers from the shop floor to expose mismanagement, waste, and self-dealing.202