Armstrong Economics Blog/Ukraine Re-Posted Jan 22, 2023 by Martin Armstrong
QUESTION: I thought Ukraine claimed it was independent in 1918. Was that not then a country?
ANSWER: In the aftermath of World War I which began in 1914, that is when the Russian Revolution took place. That is when Ukraine first tried to assert its independence on January 26th, 1918. The Bolsheviks who seized control of Russia in November 1917 at first sought to negotiate peace with the Central Powers of Europe, which was the coalition that consisted primarily of the German Empire and Austria-Hungary, the “central” European states that were at war from August 1914. The former Russian state of Ukraine attempted to declare its total independence in the midst of this chaos, not unlike the Jews who sought independence when Nero died ending the Julio-Claudian Dynasty in 68AD. The Jews also issued coinage declaring their independence.
Because of the Russian Revolution in 1917, the paper currency of Russia was no longer valid. Russian coins were the only acceptable medium of exchange. This is the only reason why we see a brief issue of Ukrainian paper currency between 1918 and 1921. The Russian paper money was no longer valid.
Nonetheless, the Russian gold reserves, which were the largest in the world, had been hidden to prevent the Bolsheviks and Lenin from using that money. After the collapse of the Czarist government in 1917, the Provisional Russian Government and the Bolsheviks continued to issue the Czarist 5 Ruble note retaining the date of 1909 pretending they had the gold reserves when they did not. The only significant difference between the Czarist and the Bolshevik issues is that the Czarist notes had a full serial number consisting of two letters and six digits. As you can see, the Bolshevik notes had only a series number consisting of two letters and 3 digits again to hide the quantity that they were printing. The lack of serial numbers and backdating of the notes allowed them to issue large quantities of unbacked currency. The 5 Ruble note continued to feature the Romanov Imperial Eagle on both sides. The Czarist note was backed by gold which could be exchanged 3.87 grams of gold. The Bolsheviks were counting on that misconception to fund their revolution.
The very name Ukraine is meant at the border or borderland of Russia. It was flat and one of the major wheat-producing regions of Europe. It also had major deposits of coal which were a vital energy source at that time. Most of Ukraine had become part of the Russian empire after the second partition of Poland in 1793. The Eastern portion, known as the Principality of Galicia, had remained part of the Austro-Hungarian empire. It was this region that became a strategic battleground on World War I’s Eastern Front. It was a Serb who assassinated the Arch Duke in 1914 which ignited World War I.
Immediately following the overthrow of the Russian czar in February 1917, Ukraine declared independence and set up a mega-shift provisional government proclaiming itself a republic, yet within the structure of a federated Russia. When Vladimir Lenin seized power with the help of Germany smuggling him into Russia to stop the war, Ukraine, like Finland, declared its independence in January 1918.
Ukraine’s newly formed Rada government did not really have the support of the people. They also did not have any financial backing. Their first issue of money was actually postage stamp currency. It had serious difficulty imposing its rule of law on the people without their consent. Then there was the Bolshevik opposition and counter-revolutionary activity within Ukraine and the fact that it was a major source of food for Europe that Germany and Austria sent in troops in an effort to support the new government. They managed to force the Russian troops to withdraw thereby establishing a treaty at Brest-Litovsk. That treaty was then signed in March 1918. In truth, Ukraine was really just annexed while pretending to recognize Ukrainian independence. At the time, the German commander in charge of Ukraine, Wilhelm Groener, famously remarked:
“The [Ukrainian] administrative structure is in total disorder, completely incompetent and in no way ready for quick results. It would be in our interests to treat the Ukrainian government as a cover and for us to do the rest ourselves.”
The defeat of the Central Powers, Germany & Austria, followed by the signing of the armistice in November 1918 forced them to withdraw from Ukraine. At the same time, with the fall of the Austro-Hungarian empire, an independent West Ukrainian republic was proclaimed in the Galician city of Lviv. The two Ukrainian states proclaimed their union in early 1919, but independence was short-lived, as they immediately found themselves in a three-way struggle against troops from both Poland and Russia. The Ukrainian government briefly allied itself with Poland, but could not withstand the Soviet assault. In 1922, Ukraine became one of the original constituent republics of the Union of Soviet Socialist Republics (USSR); it would not regain its independence until the USSR’s collapse in 1991.
Ukraine was NEVER a standalone sovereign nation. It was the territory of one of the major powers. That is why they joined the German Nazi movement and began their own ethnic cleansing to exterminate everyone in the region who they regarded were not pure-blood Ukrainians. It was Hitler who promised them the right to carve out their own country. This is why the first coinage of Ukraine was that of the German Nazi occupation.
And as for Kiev, it was founded by the Russ – the Russians. It was destroyed by the Mongol invasion in 1240AD and all that stands today is the golden gate. The Russians finally reestablished their capitol giving birth to Moscow. So sorry, the Ukrainians were the Cossacks which were a roaming tribe that has no actual nation-state.
While the hatred of Polish, Russian, and Austrian-Hungarian peoples in the region stems from their subservient position to one major power to another, it was Stalin who saw the failure of Communism and then stole the food from Ukraine creating the Holodomor where up to 7 million died of starvation. The hatred of anyone other than Ukrainian has been a major issue in Ukraine. Within Ukraine, there are indigenous peoples that nobody mentions. There are three ethnic groups that do not have a mother state but have occupied Ukraine for centuries. This applies to the Crimean Tatars, Karaites, and Krymchaks.