Some Aspects of Participation of the USSR’s Secret Services in Operation X Concerning the Evacuation of the Gold Reserve of Spain (1936)

Ratz Sergey V., Candidate of Science in Political Studies, Associate Professor, Institute of Philosophy , St. Petersburg State University, Saint Petersburg, Russia

The article deals with the participation of the USSR’s secret services in the transfer of the gold reserve of Spain (1936) to the Soviet Union.

Key words: gold reserve of Spain (1936), the USSR secret services, civil war in Spain, Operation Х.

The 1930s are characterized by the intensifying struggle of the working class of the European countries for democratic change.

In Germany, Italy, Portugal, Hungary, Romania and Japan the Nazi, Fascist and militarist groups came to power.

The Nazi and militarist leaders incited the people of their countries to start repartition of the world and seizure of alien territories. It was clear that the progressive world community was on the brink of a global war with the forces of Nazism and militarism.

In Spain by 1936, a multi-party government had been formed, in which the leftist parties, especially the Socialists, had the leading positions. The reactionary circles among the higher command of the Spanish army could not put up with the social changes brought by the democratic government. In the evening of July 17, 1936, they started a Fascist military revolt.

The governments of Adolf Hitler and Benito Mussolini gave military help to the Spanish putschists. In ten days after the start of the putsch, the transport air forces of Germany and Italy were already transporting the so-called African army (56 thousand people), including 14 thousand ethnic Moroccans and the 11-thousand corps of the foreign legion mercenaries led by F. Franco, from the territory of Spanish Morocco.

The leaders of the USSR clearly recognized that the civil war in Spain was a curtain-raiser for another world war. Joseph Stalin and his entourage took a number of organizational and political measures to use the conflict in Spain in the interests of security of the Soviet country and to reinforce the influence of the ruling party – All-Russian Communist Party (of Bolsheviks) - VKP(b) - in the global Communist movement.

The X Department, which was active as a part of the X Operation led by the head of the Intelligence Department of RKKA S. Uritsky with the participation of the head of the Foreign Intelligence Department of NKVD – People’s Commissariat of Interior Affairs - A. Slutsky, assembled the advisor staff and groups of volunteer military experts. The X Department worked at analysing the intelligence data that was coming from the foreign and military intelligence, planned traffic routes for the Soviet transport vessels with military and humanitarian aid, prepared cover documents. Marshal K. E. Voroshilov, the USSR’s People’s Commissioner for Defense, personally supervised the activity of the X Department.

The details of this operation were put together on the basis of archive materials and analysed by Yu. E. Rybalkin in his book “Operation X. The Soviet Military Help to the Republican Spain”[1] and by B. A. Starkov in his extensive study “The Avant-Garde War with Fascism. Soviet internationalists in Spain. Some Pages from the History of Operation X”, O. Tsarev and D. Costello “Fatal Illusions. From the Archives of the KGB. The case of A. Orlov” and by the Spanish researcher A. Viñas “Spanish Gold in Moscow”.

The chekists (Soviet state security officers) and military intelligence officers decided that it made sense to organise arms shipments both from the USSR and from abroad. The task of arms procurement abroad was imposed on the underground Soviet NKVD and the Workers and Peasants’ Red Army – RKKA- military intelligence stations, which had to buy arms from foreign companies allegedly for third countries through figureheads and to transport it covertly to Spain.

On September 29, 1936, the Politburo of the Central Committee of VKP (b) approved the suggested plan. The arms transfer headquarters were created at the Intelligence Directorate of the Defense Commissariat, led by the head of the Spanish X Department Colonel G. Shpilevsky. The members of the headquarters also were recruiting personnel to work in Spain as councillors and military experts”[2].

The nature of the special operations implemented by the personnel of the Soviet NKVD required such characteristics as lack of documentation and the increased grade of security. Usually such operations were conducted with the monitoring and close attention by the leaders of the Party and the Soviet government; the missions were often set verbally or in code telegrams which were later destroyed.

The senior command of the Soviet NKVD was urgently putting together a team for the station in Spain. Among the first candidates, the People’s Commissar of the Interior G. G. Yagoda recommended sending Senior Major of State Security[3] A.M. Orlov (real name Leyba Lazarevich Felbin, also known as L. L. Nikolsky) under cover as a political attaché for the position of the chief of the NKVD foreign intelligence station in Spain and chief advisor to the republican government on the matters of internal security and counterintelligence.

The candidature of A. M. Orlov was approved at the session of the Politburo of the Central Committee of VKP (b) on July 20, 1936[4].

Orlov was probably one of the best and most experienced employees of the central office of the Soviet NKVD; he spoke several foreign languages and had experience working abroad, including underground work.

The NKVD foreign intelligence staff in Spain was recruited in a similar way. Let us list the most notable of the station personnel: A. M. Orlov (chief of station, Senior Major in 1936), G. S. Syroezhkin (deputy, Major, 1936), N. I. Eitingon (deputy, Major, 1936), S. A. Vaupshasov (Captain, 1936), L. P. Vasilevsky (Captain, 1936), N. M. Belkin (Senior Lieutenant, 1936).

What were the tasks set for a NKVD station active in a country where civil war was raging?

The advisors to the republican government and the employees of the Soviet NKVD had to deal with both external and internal enemies.

One of the tasks the Center put before the station personnel was collecting intelligence information on putschists, their leaders, political parties, on the strength, tools and methods of the intelligence  agencies of the frankists and their allies, the Nazi regimes.

Besides this, the Center set the following tasks before the station: exposing enemy agents, preventing acts of terror by putschists and their allies, reorganizing the intelligence and counterintelligence agencies of the republican Spain, creating training camps for training of personnel, organizing the training process and participating in it as instructors.

However, there were also specific tasks related to the fact that the Party and Soviet leaders still believed the Trotskyism as a political movement to be one of the main enemies of the USSR.

According to O. Tsarev, before leaving for Spain, the NKVD station chief A. M. Orlov was received by I. V. Stalin, who set him a task to liquidate the Trotskyist leaders, to investigate them proactively through the agent network and to compromise them.

Besides that, I. V. Stalin touched on the issue of Spain compensating for the arms and humanitarian aid deliveries from the USSR. There is a theory that it was during the meeting with A. M. Orlov that the Secretary General of the VKP (b) defined the issue of evacuating the Spanish gold reserve to the USSR. He gave  verbal instructions to A. M. Orlov to persuade the Prime Minister of Spain to make this decision; however, he forbade leaving any document trail in the form of debt warrants or any other financial documents proving the fact of transfer, the volume and the place of the gold delivery.

As the further events have shown, this condition turned out to be the stumbling block in the negotiations which A. M. Orlov conducted with the Prime Minister and the Minister of Finances of Spain.  

The details of the operation were specified in coded messages by I. V. Stalin who, as it is well known, signed them with a symbolic name “Ivan Vassilievich”. The coded messages were usually destructed after reading.

Be as it may, after a meeting with the republic’s chief advisor on security and counterintelligence A. M. Orlov, the Prime Minister of Spain F. Caballero gave the republic’s Minister of Finances J. Negrín instructions on the transfer of the gold reserve.

There is also a theory of the Spanish researcher А. Viñas, according to which on October 15, 1936, the Prime Minister of Spain F. Caballero appealed to the government of the USSR to accept for safekeeping about 500 tons of gold.

The fact of the republican government’s request to accept the gold reserve of Spain for safekeeping is recorded in the Special File of the Minutes of the meetings of Politburo of the Central Committee of VKP (b). Let us quote its text in full: “Minutes No. 44 of the meeting of Politburo of the Central Committee of VKP (b) of October 17, 1936. Question by comrade Rosenberg[5]. Authorise comrade Rosenberg to respond to the Spanish government that we are ready to accept the gold reserve for safekeeping and that we agree to transport this gold on our vessels returning from ports”[6].  

In the opinion of the author of this article, there are no contradictions between those versions, since Rosenberg's appeal to the Politburo of the Central Committee of VKP (b) was a logical conclusion to the working meetings of Prime Minister F. Caballero and J. Negrín with the chief of the NKVD station A. M. Orlov concerning the issue of evacuating the gold reserve of Spain to the USSR.

A.M. Orlov coordinated all the details of the operation for transportation of the gold from Madrid to the territory of the naval base in Cartagena with F. Caballero and J. Negrín. Despite the Prime Minister’s repeated suggestions about signing the certificate for delivery and acceptance of gold, the chief military advisor on internal security and counterintelligence matters did not take this step, convincing the head of the government that the document in question would be signed in Moscow by one of the leaders of  the USSR.

P.A. Sudoplatov mentions the following detail in his memoirs when he talks about the transfer of the Spanish gold: “The document on the transfer of the gold was signed by F. Caballero, the Prime Minister of the Spanish republic, and by the Deputy People’s Commissar for Foreign Affairs N. N. Krestinsky, later executed by shooting as an enemy of the people  together with N. I. Bukharin after the show trial in 1938”[7].

That said, the acceptance certificate for the gold was signed in early February of 1937 in Moscow by the People’s Commissar for Finance G. Grinko, the Deputy People’s Commissar for Foreign Affairs N. Krestinsky and the Ambassador of the Spanish republic Marcellino Pasqua. After the end of the civil war, that  copy of the certificate was kept by J. Negrín and only after his death  fell into the hands of F. Franco.

The gold reserve was removed from Madrid to the port of Cartagena by railway in a special train. The gold bars were packed into wooden boxes, sixty five kilos in a box, and moved from the Cartagena powder depots to the wharf on lorries driven by Soviet tank troopers. The security during the loading of the gold was provided by a group of international fighters, mostly ethnic Germans. The NKVD station officers managing the operation were N. I. Eitingon and L. P. Vasilevsky. A. M. Orlov provided general direction. For purposes of secrecy, the loading was done at night. During the day, the Cartagena port was heavily bombarded. A cover story was developed and communicated to everyone connected with the operation which stated that the gold bars in boxes were being moved to the USA. A. Orlov under the name of Blackstone played the role of the American representative of the National Bank. Despite all the precautions, however, already on the next day the inhabitants of Cartagena were discussing the news about Spain's gold being moved to Russia.

Here’s how N.G. Kuznetsov, at that moment the naval attaché and senior naval advisor of the republican government, described the situation in his article “The Spanish navy in the national revolutionary war, 1936-1939”: “I was also embarrassed  by how this whole operation became known throughout the city, especially among anarchists. On the next day, the secret cargo was, of course, the freshest sensation discussed by the population in every possible way. The crews of the steamships chuckled saying that they were loading fruit, since the boxes were too small and unusually heavy for that”[8].

At the exchange rate existing in 1936, 510 tons of gold bullion were worth approximately half a billion US dollars. According to Yu. E. Rybalkin's information, they were evacuated in October and November of 1936 on four Soviet transport vessels, Neva, Kim, Kuban and Volgoles, and safely brought to Odessa[9]. N.G. Kuznetsov gives precise dates for loading and departure of Soviet ships with gold on board, from October 22 to October 25, 1936.

Since there was a leak of information about the transportation of Spanish gold to the USSR, the navies of the Nazi Germany and Fascist Italy organized an unprecedented operation for interception of the Soviet cargo vessels transporting the gold reserve of Spain.

It is worth noting that the Italian and German submarines and the putschist military vessels from September 1936 to October 1938 made more than 866 attacks on Soviet cargo vessels. From 1936 to 1939, three vessels were sunk: Komsomol, Timiryazev and Blagoyev. Seven Soviet ships were captured together with their crews and interned at ports controlled by putschists.

For this reason, the NKVD station, using its agents, spread misleading information about the route of the “gold caravan”. At the same time, N. G. Kuznetsov developed an alternative route which went along the coasts of Northern Africa, Near East and Turkey and took the “gold caravan” to its desired destination without losses. He also obtained approval for the caravan to be escorted by the republican naval squadron up to the neutral waters of Algiers.      

The delivery of the precious cargo from Odessa to Moscow was arranged by the Commissar of State Security 2nd rank, Deputy People's Commissar of the Interior of Ukraine Z. B. Katsnelson[10], later executed in 1938 (he was A. M. Orlov’s cousin).

There is a theory that it was the arrest of Z. B. Katsnelson that mostly brought A. M. Orlov to the decision to go underground and become a  defector. The A. M. Orlov’s biography will be discussed in detail in another article.

In November 1936, for his successful management of the operation on the evacuation of the gold reserve of Spain A.M. Orlov was given an extra promotion to the rank of the Senior Major of State Security and was decorated with the order of Lenin.

At the same time, in Yu. E. Rybalkin's study “Operation X. Soviet military aid to republican Spain (1936-1939)”, the author states that A. M. Orlov received no rewards for implementing the government asignment of evacuating the gold reserve of Spain[11].

Concerning this issue, P. A. Sudoplatov remembers that “…Orlov was given the most serious covert assignments, one of which was the evacuation of the gold of the Spanish republic to Moscow. This bold operation led to his promotion. The Pravda newspaper wrote that the Senior Major of State Security[12]  Nikolsky (aka A. M. Orlov or Feldbin) was awarded with the order of Lenin for implementing an important governmental task. The same issue of the newspaper also stated that the Major of State Security Naumov (actually N. G. Eitingon) was decorated with the order of Red Banner, and Captain of State Security L. P. Vasilevsky - with the order of Red Star”[13]. The naval attaché and senior naval advisor of the republican government N. G. Kuznetsov was decorated with the order of Lenin.

For more than forty years, that is, during the whole period of Franco’s dictatorship, the USSR maintained no diplomatic relations with Spain. The government of Spain had repeatedly appealed to the government of the USSR with the request to return the gold reserve of Spain transfered in 1936. Until late 1990s,   the USSR did not even officially admit  the fact of the gold reserve of Spain being in the USSR, and only after the death of Franco, that is, since 1975, complicated negotiations have begun about partial compensation of the gold still not returned. It is worth noting that 90% of the volume of the gold reserve of Spain accepted for safekeeping in the USSR in 1936 was in coins, that is, also had a numismatic value.

At any rate, the NKVD station and the RKKA military intelligence team as a part of Operation X brilliantly fulfilled the task of evacuation of the gold reserve of Spain set before them by the Soviet and Party leadership.

According to the information from the  economist and researcher S.V. Burtsev, on various stages of its development, Russia had the following gold reserves: 1914 – 1527.8 tons, 1936 – 1020 tons, 1953 – 2048 tons, 1991 – 484 tons, 1992 – 290 tons. Currently, Russian Federation is in possession of more than 2000 tons of gold.

1. A.I. Kolpakidi. Entsiklopediia sekretnykh sluzhb Rossii [Encyclopedia of secret services of Russia], AST Astrel, Moscow, 2004, p. 565.
2. E.P. Sharapov., N. Eitingon. Mech vozmezdiia Stalina [Stalin’s Sword of Retribution]. Neva Publishing House, Saint Petersburg, 2003, p. 47.
3. N. Nikolaev, N.I. Kuznetsov. Iz istorii osvoboditel‘noi‘ bor‘by ispanskogo naroda  [From the history of the liberation struggle of the Spanish people]. Publishing House of the Academy of Sciences of USSR, Moscow, 1959, p. 27.
4. P.A. Sudoplatov. Spetsoperatsii NKVD. Lubianka i Kreml' 1930 – 1950 [Special operations NKVD. Lubianka and Kremlin 1930 – 1950]. Olma-Press, Moscow, 1997, p. 73, 75.
5. Yu.E. Rybalkin. Operatsiia X. Sovetskaia voennaia pomoshch’ respublikanskoii’ Ispanii [Operation X. The Soviet Military Aid to Republican Spain]. Moscow, 2000, p. 92, 94, 315, 316.