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Hmmm that german diplomat looks suspiciously like FDR to me...
It was his secret life, he was an evil form of superhero but without the super power;

US President by day, Nazi diplomat by night.
 
Helping China To Hurt Japan

In the late summer of 1937, war erupted between Japan and China. The Imperial Japanese Army and Chinese forces clashed in the Marco Bridge Incident, which led to the Japanese capturing Beiping and Tianjin. The Kuomintang under Chiang Kai-shek mobilized as a result, determined to beat back the invaders. They would need allies to do so, however, and while the Western powers supported China with limited aid, Europe and the U.S. were hesitant to engage in direct intervention.

Chiang decided to turn to the Soviet Union, albeit with reluctance. He had been fighting the communists within his own country, who were now being aided by the USSR. But the enemy of his enemy could be his friend, and the Soviet Union and Japan were definitely adversaries. The first step was taken with the Sino-Soviet Non-Aggression Pact. This was followed by Operation Zet, in which the Soviet Union started sending aircraft, pilots and financial assistance to the Republic of China. It was Chiang’s hope that this would eventually lead to the Soviet Union declaring war upon Japan, with the Soviet hammer pounding the Japanese against the Chinese anvil.

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But Stalin was in no rush to save China. While his relations with the West were thawing, it was still not a warm relationship. In event of a Sino-Japanese war, the benefactors would be the West, who would delight at Japanese imperialists and Soviet communists killing each other. They would stay out of the conflict directly, but they would continue – if not strengthen – their ties with Japan to prolong the conflict. As it was, Britain, France and the United States were slowly backing away from supporting Japan due to its hostility. Far better to stay out of the fight, Stalin reasoned, and let Japan to be weakened than to give the West any reason to help Japan.

There was also the matter of Mao and the Chinese communists. If the Japanese invasion was crushed, Chiang and the KMT could then turn their sights back to bringing down the rival Chinese warlords and finally putting down the communist rebels once and for all. A China occupied by Japan was not ideal, but a strong and united China under the nationalist, anti-communist KMT was not much better.

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A Soviet pilot stands beside one of 250 Polikarpov I-16 Type 10 fighter planes sent to China as part of Operation Zet. Note the white sun insignia of the Republic of China across the front.

In the December of 1937, the last of the factories in the Second Five Year Plan were completed. This finally freed up resources to go towards arming the Soviet Union. With the situation in the east under control, Stalin could turn toward the west. He was now looking ravenously at those countries that had broken free of the Russian Empire – Finland, Estonia, Latvia, Lithuania – and was more and more conscious of an ultimate showdown with the fascists in Germany.

The Boss commissioned the construction of multiple divisions of Lavochkin-Gorbunov-Goudkov LaGG-3 fighter aircraft, Yakolev Yak-4 short range bombers and the highly experimental Sukhoi Su-2 ground attack bombers. He held off on the mobilization of infantry divisions and the construction of armor units, preferring for the time to build up the air force and for land units to be slowly upgraded.

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1938

The Case of the Trotskyist Anti-Soviet Military Organization

While Stalin was indeed the Boss, he was ever mindful to consolidate his power and squash any potential rivals. In 1938, he moved against the army. Stalin’s foe in the power struggle following Lenin’s death, Leon Trotsky, had controlled the army in earlier times. When Stalin had replaced Trotsky with Kliment Voroshilov in the 1920s, he also dismissed former commanders. He continued the process in the early 1930s, with 47,000 more dismissed. But there had been some commanders who had been too difficult to touch. They had been heroes of the Civil War against the Whites, praised vociferously in the Soviet history books. They also despised Stalin. They knew what a poor leader the Boss had been in the Polish campaign. They talked about him behind his back. Would they unite against Stalin? Out of a hunger for power? Or out of fear for their own survival? Stalin’s paranoia over took him. He devised a conspiracy where the high command, Trotsky and the German fascists had joined together against the Soviet Union. It was not too difficult to connect the Red Army leadership with Germany, since the former had previously had close connections with the Reichswehr.

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The first to fall was Marshal Mikhail Tukhachevsky, a tsarist officer, well-groomed and self-possessed. He shared a mutual contempt with Voroshilov. During World War I, Tukhachevsky was for some time in a German POW camp. In the period of military cooperation between the USSR and Germany after the war and before Hitler came to power, he had sung the Reichswehr’s praises. It would not be difficult to find compromising material in the impending investigation.

At the same time, Hitler’s intelligence service had set out to weaken the Soviet army by forging a letter in which Tukhachevsky announced his intention of carrying out a Napoleonic coup. Whether this occurred to German intelligence spontaneously or was inspired by Stalin’s agents is a matter for conjecture. It is widely believed that the forged documents were probably superfluous, as many of them were not even used by the prosecutors against the generals.

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Marshal Mikhail Tukhachevsky was charged at his trial with taking part in a “right-wing-Trotskyist” conspiracy in which he collaborated with the Germans against the Soviet Union. Tukhachevsky shared a mutual contempt with Kliment Voroshilov, the People's Commissar for Defense.

Tukhachevsky was arrested first and soon confessed. More arrests followed – Iona Yakir, Ieronim Uborevich, August Kork, Vitaly Primakov and many more. The head of the Soviet Air Force, Yakov Alksnis, once so valued for his insight on air doctrines, went from sitting on the tribunals to standing before them. More than a hundred military chiefs had been called in from the provinces because the ranks of the Military Council itself was thinned out catastrophically. A quarter of its members had been arrested as conspirators. It went on like this for the rest of the year. In September, Voroshilov would report that a total of 37,761 officers and commissars were dismissed from the army, 10,868 were arrested and 7,211 were condemned for crimes against the Soviet Union.

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The Soviet intelligence agencies were also targeted. Yan Berzin, the head of military intelligence, was tried and convicted. So it went with Genrikh Yagoda, the man responsible for the NKVD, the Soviet internal police agency. Lavrentiy Beria took over from Yagoda while Nikolai Yezhov replaced Berzin.

Commanders had to be replaced as quickly as possible. This meant rapid promotions for those who lacked experience and who were not yet ready for the responsibilities that went with their ranks. For a country with plans for war and neighbors with hostile intentions, this was a terrible setback. Thankfully, promising up-and-comers – such as Zhukov, Ivan Konev and Vasily Chuikov – had been spared. But would it be enough?

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The Battle of Lake Khasan

In July 1938, the tension between Japan and the Soviet Union exploded. The Japanese insisted that Soviet troops be removed from the border between Russia and the Japanese puppet state of Manchukuo, in the Lake Khasan area not far from Vladivostok. Moscow rejected the demands. The Japanese government had wanted to keep the incident diplomatic, but the Japanese army had little patience with diplomacy. It sent an infantry division under General Kamezo Suetaka to the scene with an order to await the outcome of the negotiations. The order, however, could apparently be construed to apply only to the initial situation, in which the Soviet occupation had been limited. By the end of the month, Soviet troops were now positioned in large numbers. Suetaka attacked and seized the entire ridge possessed by the Soviets.

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At that time, Marshal Vasily Blyukher was the Soviet military commander in the Far East. When he learned of Suetaka’s success, he ordered reinforcements to the Lake Khasan area, but they were slow to arrive due to poor roads south of Vladivostok. After the counterattack failed, Blyukher received an order from the Politburo to take command of the operations in person, only to be replaced by his second-in-command not long afterward. Soviet success was hindered due to an order that prohibited any incursion into Japanese territory, meaning that Soviet units had to move over terrain that heavily favored defense over offense. Though not immediately in danger but at a disadvantage in numbers, the Japanese relented and a ceasefire went into effect in early August.

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Soviet troops positioned atop one of the hills to the west of Lake Khasan, situated along the border between Russia and Japanese-occupied territory. Since entering Japanese territory was forbidden, Soviet units had to fight along the ridges, rendering armor useless.

Although the Soviets had been victorious, the fact that the Japanese had not been ably resisted or pushed back drew harsh criticisms from Moscow. Blyukher was made the scapegoat. His command was taken away and he was sent to the Black Sea resort at Sochi for some rest and relaxation. He was arrested soon after and charged with having been a spy for the Japanese since 1921.

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Marshal Vasily Blyukher, a namesake of the famous Prussian marshal, had been an adviser to Chiang Kai-shek before assuming command in the Soviet Far East. He had been a member of the tribunal that had convicted Marshal Tukhachevsky; he himself was dismissed and arrested due to the unimpressive performance of Soviet units at Lake Khasan.

Treason… The Good Kind

Before 1938 came to a close, something unexpected happened. Colonel Juho Peltonen, an officer in the Finnish army, defected to the Soviet Union. This caused a scandal within Finland, where public opinion was sharply against the Soviets. The actual cause for the defection was disputed, with the Soviets saying Peltonen was escaping the “repression of Finnish socialism” and the Finns claiming Peltonen was an opportunist seeking advancement in the Soviet military.

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Peltonen had been a protégé of Vilho Petter Nenonen, the man responsible for devising artillery tactics for the army of General Carl Gustaf Emil Mannerheim. After several interviews, he revealed knowledge of using artillery against airborne targets – much of which was antiquated in other major countries, but as of yet unknown in the USSR. Not seeing much value to it, Stalin opted not to pursue using artillery in such a way, instead using Peltonen purely for public relations purposes.
 
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Colonel Juho Peltonen, an officer in the Finnish army, defected to the Soviet Union.
Did that happen historically, or did you make up such an interesting explanation for that random event? :D
 
Did that happen historically, or did you make up such an interesting explanation for that random event? :D

It's fictional to explain the event. Bit oddball, really, considering the animosity between Finland and the Soviet Union. I suppose if it had been a non-military tech, it could easily be explained as a scientist with far left views leaving a very conservative Finland, but the fact that it was a military tech threw me for a loop... So I just left it intentionally vague.