Wostwag

Abbreviation of the Russian name of a joint-stock company, Zapadno-Vostochno-Jevropeiskoe tovaroobmennoe aktsionernoe obschestvo (West-East-European Trade Exchange Joint Stock Society), which served from 1922 to 1941 as a Red Army vehicle to mobilize funds for the purchase of weapons and strategic raw materials in the West, as well as a potential cover for Soviet intelligence operations in wartime. Wostwag operated under the general political supervision of the commissar for military and naval affairs, Clement Voroshilov, who was in charge of distributing its funds. By 1935, Wostwag had affiliates in Berlin, New-York, Ulan-Bator, Guangzhou and Tientsin (Tianjin), with its head office in Paris.

Wostwag was a successful commercial operation. Started with seed money of $100,000, later increased to $350,000,  its accumulated capital exceeded $3,000,000 by 1934.  Its profit for 1934 reached around $300,000-$350,000. According to an authoritative January 1935 memo from Voroshilov to Joseph Stalin, up until that time Wostwag-affiliated offices “had not undertaken any intelligence work.” According to Voroshilov, part of Wostwag’s income was spent for the purchase of such military equipment as night vision aviation navigation devices, horizons and gyroscope semi-compasses. In January 1935, Voroshilov was also planning to purchase trucks in the United States, as well as various samples of “badly needed teleautomatics, television … optics and other equipment.” ¹