the political economy of the Maximalist organ, which, moreover, is probably only for "buncombe." There is now talk of requiring the deposit in bank, subject to restrictions of withdrawal, of all Russian paper currency, with the proviso that notes not stamped shall be annulled. The majority of the Russian currency notes is supposed to be held by the peasants, who would not be troubled greatly by the restriction of weekly withdrawals from bank to Rs. 150. The bank depositors have shown a tendency to withdraw deposits, partly on account of restrictions imposed, and partly because they fear a levy on accounts exceeding a certain minimum. The requirement of the stamping and registration of bonds and currency, to be followed, as is expected, by taxes or partial confiscation of holdings exceeding the Socialist norm, whatever that may be, would be effective means of sabotage and there is no reason to believe that the Maximalist organization will lack the courage of their convictions, or their policies. I have [etc.] MADDIN SUMMERS File No. 861.51/255 The Secretary of State to the French Ambassador (Jusserand) No. 2030 WASHINGTON, January 7, 1918. EXCELLENCY: In reply to your excellency's note of December 20, 1917,1 I am informed by the Secretary of the Treasury that there are in bank in this country certain sums out of which the Russian representatives contemplate paying the interest on certain obligations held here and to which no objection will be made by this Government. The greater portion of such payments is for interest maturing January 1, 1918, while a few extend to May 1, 1918. Other than acquiescing in these proposed payments, the Government of the United States contemplates no action in regard to the service of Russian loans all of which I understand were placed in our markets before the United States entered the war and without any intervention on the part of the United States Government. The Secretary of the Treasury will not fail to convey to American banks the decision of your excellency's Government prohibiting the importation into France after January 1, 1918, of coupons and obligations of Russia. Accept [etc.] 1Not printed. ROBERT LANSING File No. 861.51/258 The Consul General at Moscow (Summers) to the Secretary of State [Telegram] Moscow, January 7, 1918, 12 noon. [Received January 9, 5.20 p. m.] 148. The de facto government has ordered all safety vaults in bank [opened] and money taken therefrom. I am protesting jointly with Consular Corps and they have agreed that if they are opened notwithstanding protest, consular officer must be present. These continued acts of violence ruining banks and industry. SUMMERS File No. 861.51/265 The Consul General at Moscow (Summers) to the Secretary of State [Telegram] Moscow, January 29, 1918, 6 p. m. [Received February 4, 6.32 a. m.] 165. Banks closed and impossible to negotiate drafts. Same situation prevails throughout European Russia. Have asked consuls in Harbin, Vladivostok, and Yokohama to purchase rubles by selling drafts on Department up to $50,000 in all. Please request Red Cross to honor these drafts or if, as I have requested, funds have been placed to my credit at Riggs Bank, this cable will be authority to charge them this account. I have arranged for transfer of rubles purchased to Moscow. I have saved Red Cross 100 per cent by operation. SUMMERS File No. 861.51/269 The Ambassador in Russia (Francis) to the Secretary of State [Telegram] PETROGRAD, February 8, 1918, 10 p. m. 2348. Also for Secretary of Treasury: Central Executive Soviet Committee has approved decree of Council of Commissaries 1 canceling all state loans and all guaranties con 1 This decree was adopted by the Council of People's Commissars, Jan. 1/14, 1918. It differed from the final text printed as enclosure to the following despatch in that it contained, in place of par. 5 of that text, two paragraphs as follows (File No. 861.51/293): 5. Citizens of limited means, possessing the securities of the internal loan which are annulled for a sum not exceeding Rs. 10,000 (at normal value), receive a lifelong yearly annuity from the state amounting to the sum equivalent to the interest derived from the securities which belong to them. 6. Citizens possessing the annulled securities for a sum exceeding Rs. 10,000, do not receive any indemnification for the annulled papers which belong to them. See also the Ambassador's telegram No. 2292, Jan. 26, vol. I, p. 358. cluded by previous governments, stating explicitly, "Absolutely and without exception all foreign loans are annulled." This repudiates all foreign obligations to the extent present government has power. FRANCIS File No. 861.51/295 The Ambassador in Russia (Francis) to the Secretary of State No. 1027 PETROGRAD, February 12, 1918. SIR: I have the honor to transmit herewith enclosed a translation of a decree regarding the annulment of state loans adopted by the [All-]Russian Central Executive Committee at its session on January 21/February 3, 1918, and published in the bulletin of the Soviets of January 26/February 8, 1918. I have [etc.] DAVID R. FRANCIS [Enclosure-Translation 1] Decree regarding Annulment of State Loans, Adopted by the All-Russian Central Executive Committee at its Session on January 21/February 3, 1918 1. All state loans concluded by the governments of the Russian landowners and Russian bourgeoisie, enumerated in a special list which is being published, are annulled (canceled) as from December 1, 1917. The December coupons are not subject to payment. 2. In the same way all guaranties are being annulled, given by the abovementioned governments on the loans of various concerns and institutions. 3. Absolutely and without any exception all foreign loans are annulled. 4. Short-time obligations and series of the state Chancellery remain in force. Interest on them will not be paid, but the obligations themselves will have the same validity as credit notes. 5. Citizens with limited means, possessing the state securities of the interior loan, which are annulled, in sums not exceeding Rs. 10,000 (at the nominal value), will receive in their stead denominated certificates of a new loan of the Russian Socialist Federated Soviet Republic, for a sum not exceeding Rs. 10,000. The terms of the loan will be determined specially. 6. The deposits in the state savings banks and interests thereon are inviolable. All the obligations of the loans to be annulled belonging to the savings banks are being replaced by a book debt of the Russian Socialist Federated Soviet Republic. 7. The Cooperatives, local self-governments, and other universally beneficial or democratic institutions possessing obligations of the loans to be annulled, will be satisfied on the basis of the rules which are being worked out by the Supreme Soviet of National Economy together with the representatives of 1 The translation has been left substantially in the form in which it was received. A few verbal corrections have been made upon comparison with the Russian text published in Collection of Decrees and Orders of the Workers' and Peasants' Government, Moscow, 1919. these institutions, if it can be proved that these obligations were purchased prior to the publication of the present decree. Remark: The local organs of the Supreme Soviet of National Economy have the right to determine which institutions come under the head of universally beneficial or democratic. 8. The general management of the liquidation of the state loans is entrusted to the Supreme Soviet of National Economy. 9. The whole matter of liquidating the loans is entrusted to the State Bank, whose duty it is to immediately commence the registration of all the obligations of the state loans in the hands of the various proprietors, as well as of the other interest-bearing papers, both of those subject and not subject to annulment. 10. The Soviets of the Workers', Soldiers' and Peasants' Deputies form, in conjunction with the local Soviets of National Economy, commissions for determining which of the citizens come under the head of having limited means. These commissions have the right to annul in their entirety savings obtained not by means of labor, even if these savings do not exceed the sum of Rs. 5,000. President of the Central Executive Committee I. SVERDLOV File No. 861.51/271 The Ambassador in Russia (Francis) to the Secretary of State [Telegram] PETROGRAD, February 12, 1918. 2360. At meeting of Diplomatic Corps to-day it was determined to send to Commissary of People for Foreign Affairs a collective declaration, translation of which follows: In order to avoid any misunderstanding in the future the representatives at Petrograd of all foreign powers declare that they consider the decrees regarding the repudiation of Russian state loans, the confiscating of property of all kinds and other analogous_measures as without value as far as their nationals are concerned; and the said representatives reserve the right to claim from the Russian Government at an opportune time damages for all loss which these decrees may cause their nationals. The document is dated to-day and signed by the diplomatic representatives of America, Japan, France, Spain, Italy, England, Sweden, Switzerland, Holland, Belgium, Persia, Denmark, Siam, China, Serbia, Portugal, Brazil, Argentine, and Greece.1 FRANCIS 1 In a despatch of Feb. 13, not printed, the Ambassador enclosed copy of the French text of this declaration, in which Norway appears among the signatories (File No. 861.51/305). File No. 861.51/272 The Ambassador in Great Britain (Page) to the Secretary of State [Telegram] LONDON, February 14, 1918, 10 a. m. 8656. No. 68. For McAdoo from Crosby: 1 At meeting of Finance Section of Inter-Allied Council on Friday, Bonar Law and Klotz 2 both being present, Klotz proposed following resolution which was adopted: The Finance Section of the Inter-Allied Council on War Purchases and Finance, referring to the statement put forward by the Diplomatic Conference of London on February 19, 1831, regarding Belgian affairs, “it is a principle of commanding nature that treaties do not lose their value, whatever be the changes that intervene in the interior organization of peoples," recommends for the consideration of the governments represented the following statement: WHEREAS, The Imperial Russian Government when it contracted liabilities undoubtedly represented Russia and definitely obligated it; WHEREAS, This obligation cannot be repudiated by any authority whatever governing or which should eventually govern in Russia without shaking the very foundations of the law of nations; WHEREAS, There would be in that case no more security in the relations [of] states and it would be impossible to enter into a contract over any long period of time on account of the risk of such a contract being eventually ignored; WHEREAS, Such a policy would mean the destruction of the credit of states as much from a political as from a financial viewpoint; WHEREAS, A state could not borrow money under normal conditions if the lender's only guarantee was the maintenance of the constitution under which the borrowing government as representing the country puts out a call for credit; WHEREAS, No principle is more clearly settled than the one according to which a nation bears the responsibility of the acts of its Government and the liabilities incurred are not affected by any change in authority; WHEREAS, The obligations of Russia bind and will bind the new state or the group of new states that represent or will represent Russia: Now, therefore, The Allied powers will take into consideration the principles above mentioned in every negotiation relating to the recognition of the new state or new states that are eventually to be constituted in Russia. In voting for the resolution, Chancellor of the Exchequer and myself were moved by consideration that being only a recommendation of the general principle to our respective Governments we were not in any way compromising their action and at the same time, according to Klotz's representations, might, if the Governments accept the recommendation, aid him in some of his great difficulties. Due to the vast amount of Russian obligations held in France my own opinion is that the paragraphs defining the general principle of responsibility of succeeding governments for debts of predecessors 1 Oscar T. Crosby, delegate of the U.S. Treasury to the Inter-Allied Council on War Purchases and Finance. |