forces of Petliura were cooperating against the Bolshevik and when the Board considered the Ukraine [to be in a position] similar to that of the Baltic states [to which] sales were [also] made. I may add confidentially that Judge Parker is frank to admit that in view of events subsequent to the sale, the apparent collapse of the Petliura movement and the anti-Polish and anti-Denikin trend it has taken, it is unfortunate that the sale was ever made but that now it is too late for the Liquidation Board to retract and their chief concern is, if possible, to cover themselves financially unless political considerations should influence the Department of State to take up the matter. The Liquidation Commission is now considering whether to accept [at this time] further signatures on the Ukrainian [notes] by officers of a cooperative society which purports to have purchased the goods from the Ukrainian Government for sale and distribution to civilian populations. I may have [see] a number of embarrassing possibilities in the present situation. Notwithstanding French regulations to the contrary, it is very probable that the Ukrainians can succeed in liquidating the marketable supplies in France and realize sums to be used to further their propaganda or to ship other supplies to [forces in] south Russia which we might not particularly desire to assist at the present time especially as we have done so little to assist Denikin. In this connection Kramář, former Czech Premier, who has just returned from Denikin's headquarters, expressed the greatest surprise and astonishment at this reference [sale] to the Ukrainian forces and spoke of the discouraging effect it would have upon Denikin if he knew of it. The matter is of the most extreme urgency and yet so delicate that I did not feel that I could intervene decisively without instructions. In view of the fact, however, that I learned that a shipload of these supplies was about to be sent from Marseilles to Galatz, I have addressed a confidential note to Clemenceau outlining the situation in case the French authorities might desire to take precautions against the dissipation of the stocks in France or their possible shipment to Ukrainian forces. A [number] of possibilities present themselves: (1) that no political action should be taken, but the matter left to the Liquidation Board, which should be left free to take such precautions as might be possible to protect itself against financial loss; (2) that the State Department should intervene and request or cooperate with the French authorities in sequestering these supplies; (3) that efforts should be made to arrange for the possible supervision of the distribution of these supplies in Russia by American Red Cross officials. I have shown this telegram to Judge Parker who leaves Paris today. In view of early departure of the Commission, I suggest that reply be made to the Embassy which has retained all the necessary papers in the case. POLK AMERICAN MISSION 811.24/512: Telegram The Secretary of State to the Ambassador in France (Wallace) WASHINGTON, December 23, 1919, 4 p.m. 9404. Am[erican] mission's 5558, December 5, 4 p.m. Department of State regrets sale of supplies to Ukrainians by Liquidation Committee and would welcome any action to annul its effects which would not embarrass American authorities. Department concurs as to undesirability of Ukrainians obtaining funds in France through sale of supplies. See Department's 3749 November 13, 2 p.m. to Am[erican] mission.36 Distribution of that portion consisting of medical supplies by Red Cross now under consideration and will be discussed with Polk. Can you devise method to prevent Ukrainian use of other supplies? LANSING 811.24/547: Telegram The Ambassador in France (Wallace) to the Secretary of State PARIS, January 20, 1920, 4 p.m. [Received January 21, 9:44 a.m.] 196. Referring Embassy's 194, 19th.36 Following is digest of note received by Embassy from the President of the Ukrainian Mission in Paris dated January 16th: Twelve million dollars worth of American Army stocks were ceded to the Government of the Ukrainian Republic by contract signed June 1919 through Liquidation Commission. Treasury notes of Ukrainian Government were accepted in payment. Transfer effected November 11th. Exact sum owned [owed?] by Ukrainian Government determined at $7,844,600.90. By letter dated January 16th Liquidation Commission declared contract annulled and demanded surrender of stocks in return for the Ukrainian notes received. No motive or reason given. Colonel Noble of Liquidation Commission in several interviews indicated that measure was based on assumption that de facto Ukrainian Government no longer existed and con "Not printed. 118353-37-57 sequently could not fulfill its obligations. President Ukrainian peace delegation earnestly protests and declares that Ukrainian Government has never ceased to exist and is at this moment endeavoring [apparent omission] in close union with Polish and Roumanian Governments to liberate its country from foreign and enemy incursions. Petlura still President and Commander-in-Chief of national Ukrainian Army. Government transferred to Rovno and therefore its scope of activity from a territorial point of view vaster than trade in [that at] time of signing of contract when Government was at Kamenetz-Podolsk. States Ukrainian Government continues to consider itself responsible for obligations assumed and insists upon exact execution of contract. I request instructions as to what reply if any should be made to foregoing note. This is the first correspondence Embassy has had on this subject with Ukrainian Mission. WALLACE 811.24/547: Telegram The Acting Secretary of State to the Ambassador in France (Wallace) WASHINGTON, January 28, 1920, 4 p.m. 207. Your 196, January 20, 4 p.m. Although this Department has informed the representatives of the Liquidation Commission in the United States of its belief in the inadvisability of allowing the Ukraine Mission in Paris to obtain large stocks of salvage surplus army supplies, it is not thought best that the Department appear as an active participant in the negotiations. You will, therefore, tell the Ukraine Mission informally, if you consider it advisable to correspond with it, that the matter rests entirely in the hands of the Liquidation Commission and the Department of State can take no action in the matter. POLK |