What was the strategic importance of Moscow to the Soviet Union in Dec 1941?
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Transportation Hub
Moscow was the major railway transport center:
Losing Moscow would have made moving fuel to the already besieged Leningrad even harder.
In this regard, Moscow was even more important than Stalingrad (which controlled the flow of oil from Baku along Volga).
Industrial Center
Before the war, about 30% of Soviet defense industry was in Moscow. Despite evacuations, a lot of it still remained in the city.
Population Center
There were 4-5M people in Moscow, and population is a critical military resource. One of the reasons USSR won despite the losses of 1941/42 was Перманентная мобилизация ("Permanent/Continuous mobilization") that the Soviet leadership learned to practice during the Civil War and again during WW2.
Psychology
Moscow was extremely important to the Soviet "central control" mentality. ("как реки встречаются в море, Так встречаются люди в Москве")
PS. Note that when Napoleon took Moscow in 1812 it was not the capital (and transport and industry were not as important then).
Upvote:2
Moscow was the center of the country. Both geographical and psychological.
Geographical: If you take European Russia (up to the Urals), Moscow is close to the center of this land mass, on a North-South axis, and also East and West. For instance, Moscow is 600 air miles from Archangelsk in the north and 700 air miles from Odessa in the south. It is 750 miles from Lublin in occupied Poland to the west, and 1000 miles from Sverdlovsk (now Ekaterinberg).
Most north-south road and rail lines went through Moscow. If the Germans had captured the city, the country would have effectively been split in half, with Leningrad and Archangelsk in the north isolated from the rest of the country in the south. Hitler's stated priorities were 1) Leningrad 2) Donbass and 3) Moscow, but German possession of Moscow would have meant that the fall of Leningrad was just a matter of time.
Pyschological: The Germans eventually occupied 700,000 square miles of the country, versus 1.5 million of for European Russia, that is, almost half. If you add Moscow and its environs to the German "bag," it would have been more than half of European Russia by land area, and more than two thirds by industrial capacity. That would have been a psychological advantage for the Germans, because it would have been a "tipping point" for with more than "half" of European Russia under control, it would have been downhill from there. Also, Moscow (formerly Muscovy) was the "core" from which modern Russia was founded. Take away Moscow, and you take away Russia's "heart."
Actually, the Russians lost more men defending Kiev (about 700,000) than the 534,000 for Moscow in your question. But having lost Kiev, the Soviet Union could not afford to lose Moscow as well.
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