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Allied Ambassadors had three meetings on Rumanian needs, another Tuesday. Shall cable conclusion when reached.

Please cable respective advances made or promised from $7,000,000,000 appropriated by Congress for Allies as press reports. Also cable respective loans made Allies by private syndicates before and since our entering war.

File No. 861.51/235

FRANCIS

The Ambassador in Russia (Francis) to the Secretary of State

[Telegram]

PETROGRAD, October 24, 1917, 7 p. m.

[Received October 27, 4.40 p. m.]

1904. Leading Moscow commercial paper gives credence to a rumor of cession of Kamchatka Peninsula to the United States for Rs. 20,000,000,000 [sic]. In view of constantly growing rumors that our loans to Russia are applying for Russian territory, which idea is undoubtedly encouraged by German propaganda, would appreciate an official denial for publication.

FRANCIS

File No. 861.51/233

The Secretary of State to the Ambassador in Russia (Francis)

[Telegram]

WASHINGTON, October 26, 1917, 5 p. m.

1800. Your 1864, October 14, 7 p. m. Treasury replies: Total amount made available by Congress for loans to foreign governments engaged in war against Germany, $7,000,000,000. Secretary of Treasury, with approval of President, is authorized to purchase obligations of foreign governments engaged in war against Germany. Under the authority given by acts of April 24 and September 24, whose terms are almost identical in respect to the subject matter, the following credits have already been established: Great Britain, $1,345,000,000; France, $790,000,000; Italy, $255,000,000; Russia, $325,000,000; Belgium, $58,400,000; Serbia, $3,000,000. Cash has been drawn or contracts made substantially covering all these credits.1 Loans by private syndicates before we entered the war are substantially as follows: Great Britain, $1,052,911,566.34; France, $664,121,777.77; Russia, $96,200,000; Italy, $25,000,000; this list may not cover relatively small amounts taken by manufacturers and perhaps not yet reported by the Governments in question. While awaiting advice from you on Russian application for ad

1 Regarding advances to Russia, see letter from the Acting Secretary of State to the Secretary of the Treasury, Jan. 2, 1919, post, p. 55.

ditional credit of about $200,000,000, have agreed upon an increase of $50,000,000. These figures do not cover amount that may be required for cars and locomotives promised by Stevens and undertaken by our Government for future delivery.

File No. 861.51/237

LANSING

The Ambassador in Russia (Francis) to the Secretary of State

[Telegram]

PETROGRAD, October 27, 1917, 10 p. m.
[Received November 2, 7.58 a. m.]

1923. For Secretary of Treasury:

Confidential communication from the Minister for Foreign Affairs states Government desires additional loan $75,000,000 for the same object as previous $75,000,000 loan of which only $50,000,000 already advanced, taking for granted that remaining $25,000,000 be forthcoming when requested. Baltic Fleet openly defiant of Government and Russian soldiers in Finland under influence of Soviet; both declare willingness to defend Russia against her enemies. Communication requests my recommendation which awaits developments. FRANCIS

File No. 861.51/238a

The Secretary of State to the Ambassador in Russia (Francis)

[Telegram]

WASHINGTON, October 29, 1917, 3 p. m.

1806. Your 1904, October 24, 7 p. m. Rumored cession of Kamchatka Peninsula to United States for Rs. 20,000,000 [sic] without any foundation whatsoever. United States has arranged certain loans and credits with free Russia founded exclusively on credit of Russian Government and for the single purpose of cooperating in our common struggle against the autocratic militarism of Germany. The President has already announced to the world that the United States has no desire to add to its own territory.

LANSING

File No. 861.51/238

The Ambassador in Russia (Francis) to the Secretary of State

[Telegram-Extract]

PETROGRAD, November 2, 1917, 11 p. m.

[Received November 3, 8.10 p. m.]

1946. Also for Secretary of Treasury:

Thanks for Department's telegram 1800, October 26, 5 p. m. Understand that $50,000,000 granted Russia reduces by that amount

request in the Department's 17611 to which have given much thought and time conferring three hours last evening with the Minister of Finance and assistant and had two conferences with the Director of Credit Chancellery. Still think Russia will pay all obligations in time but her continuing war is of more importance to us as abandoning now would damage us so enormously that it would require untold billions and many generations to repair. Main question is whether what we lend Russia now will be appropriated by Germany. We must take the risk thereof. President of the Ministry (or Council of Ministers) in an interview given Associated Press manifests impatience that British Fleet not assisting Russia in Baltic and says Allies should help Russia who bore brunt of war in beginning and has fought without aid while England and America helping France. Consequently think should extend additional $100,000,000 credit. Russia tired, peace sentiment growing, and our failure to agree might give irresistible impetus thereto. If Soviet should control, government would not survive long but would be succeeded by stronger government which would be more potential in restoring order and prosecuting war.

FRANCIS

File No. 861.51/239

The Ambassador in Russia (Francis) to the Secretary of State

[Telegram]

PETROGRAD, November 3, 1917, 5 p. m.
[Received November 6, 9.10 p. m.]

1947. Also for Secretary of the Treasury:

Received from Foreign Office note asking my recommendation that the Government of the United States compensate England: "For Russian orders placed in America through the mediation of Morgan and which [amount?] to $165,000,000." Note signed by Assistant Minister for Foreign Affairs and states: "Russian Ministry of Finance asks me to earnestly pray you for assistance for a favorable conclusion of the above." Minister of Finance said nothing about this in three hours' conference evening of 1st, nor could he give me amount paid to England for such ordnance out of advances made by us. Director of Credit Chancellery who conferred with me at Embassy one hour yesterday in reply to such inquiry said amount so paid not large. This note somewhat surprising. Have unsuccessfully endeavored four days to see Minister for Foreign Affairs but appears he otherwise occupied as rumors are current that difference between him and Minister of War concerning Skobelev instructions 1 Dated Oct. 5, ante, p. 23.

for Paris conference, which Minister of War supports, will necessitate resignation of one or the other.1 Can you advise why this requested?

File No. 861.51/242a

FRANCIS

The Secretary of State to the Ambassador in France (Sharp)

2841. For House:

[Telegram]

WASHINGTON, November 22, 1917, 6 p. m.

Department desires your opinion about Russian situation. Should we allow foodstuffs to go forward and ships to be allotted to Russia, as well as additional purchases to be made without knowing whether funds are to be forthcoming? We understand that Russian Ambassador is doubtful whether he has any authority to check against credits here in payment for goods purchased and some have expressed doubt as to whether he is properly accredited representative. Purchases constantly going on, and Russian commission pressing for allocation further ships. Please ascertain views of British and French as soon as possible and cable fully.

LANSING

File No. 861.51/277

The Special Representative (House) to the Secretary of State

[Telegram-Extract]

PARIS, November 24, 1917, 1 p. m.
[Received November 25, 1.40 a. m.]

Your 58602 and 2841. In Great Britain the Russian situation is considered at the moment hopeless. There is no responsible government within sight. I would advise making no more advances at present or permitting any further contracts for purchases.

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EDWARD HOUSE

File No. 861.51/266

The Special Representative (House) to the Secretary of State

[Telegram]

PARIS, November 24, 1917, 3 p. m.

[Received November 25, 1.40 a. m.]

I have just told the French Prime Minister the substance of my cable this morning concerning Russia and he earnestly indorses my opinion.

1 Cf. vol. 1, pp. 211 and 219.

2 Not printed.

EDWARD HOUSE

Decree of the Soviet Government Repudiating All Foreign State Loans, February 3, 1918: Protest by the Diplomatic Corps at Petrograd; Resolution of the Inter-Allied Council-Measures Interfering with Banking-Decree Requiring Registration of All Securities, April 20, 1918— Assumption of the Service of the Russian Debt by the British Government; Use of Bank Balances and Receipts for This Purpose by the Russian Embassy in the United States-Discontinuance of Payments by the British Government; Impounding of Russian Assets-Postponement of Interest Due to the American Government; Continuance of Payment on Bonds Held by Private Investors

File No. 861.51/264

The Consul General at Moscow (Summers) to the Secretary of State No. 240

Moscow, December 13, 1917.
[Received January 30, 1918.]

SIR: The Maximalist newspaper Social Democrat has published and commended the [draft of?] decree repudiating foreign loans, and internal loans as far as now owed abroad, as follows:

1. All foreign loans concluded by Russia, as well as all railway and mortgage loans concluded abroad with the guaranty of the state, are annulled. Payment of interest and amortization charges on these loans is stopped.

2. All bonds of interior loans of the state and of interior loans guaranteed by the state that are held abroad on the day of the promulgation of this decree are annulled. All the bonds of loans indicated in this paragraph that are held in Russia shall be presented before January 14 to the State Bank, its branches or branches of the State Savings Bank for stamping to this effect. Bonds not so stamped are considered annulled after that date.

On

The promulgation of this decree was indispensable for various reasons. these loans, contracted for the most part on account of the war, we should have been obliged to pay foreign capitalists annually Rs. 1,000,000,000 or about Rs. 40 per family. Now there is no reason to pay such tribute to foreign capitalists. Russia has paid enough in blood and suffering on the fields of battle of this war of international capitalism, or in interest and amortization charges in the good old time. What remains the foreign capitalists may charge to profit and loss account, along with their enormous war profits.

The foreign loans of Russia are placed for the most part in England, Germany, and France; therefore the present moment is extremely well chosen for their annulment. The capitalists of these countries are at this moment so enfeebled by the long war and the discontent of the workingmen growing out of it that they will not be in a condition to wage war on Russia for the sole purpose of recovering the amount of the annulled loans.

If we had not annulled the foreign loans we should have been obliged to strip the village of its last egg and its last pound of butter to collect a billion rubles for interest payments. Only the annulment of the loans can ameliorate and equilibrate our balance of trade and augment the vitality, we even say the credit, of our national economy.

The opposition press has had so many protests to make against the course of the Maximalists that it has grown tired. It has not taken the trouble to point out the contradictions in the above references to the enormous war profits and the extreme enfeeblement of international capitalism, but has merely reprinted with approval the indignant comment of the foreign press. Nor has it criticized

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