File No. 861.00/1064
The Ambassador in Russia ( Francis) to the Secretary of State
[Received February 7, 11.07 a.m.]
2336. Germans purchasing bank and other stocks notwithstanding confiscation decrees. National City refused currency deposit of twenty million rubles, because feared increased responsibility and could not lend. Furthermore, bank thought, very properly, that such sum could only come from German sources. Heard also confidentially [Page 369] that largest holder in well-known bank here had bid for his holdings at highest market ever known, notwithstanding Soviet decree confiscating bank shares. These and similar transactions indicate Germany anticipating separate peace and united commercial relations and deposing of Soviet domination. This and other reliable information increase my fear of separate peace which Germany can dictate if so inclined. Think Germany be much pleased if Soviet government recognized by Allies and would then in a moment demand separate peace, signing of which with Russia would mean much more with Allied recognition of Soviet government than without. For this and other reasons I cannot recommend recognition. Am, however, endeavoring to establish gradually working relations with view of influencing Soviet government in the manner described.
Danish and Siamese Legations invaded by official armed delegations searching for food but instead of calling Diplomatic Corps for protest as requested by some colleagues I sent Robins to Smolny and [to] suggest that local commissaries under whose direction searching conducted be instructed against violation of extraterritorial rights. Lenin promised Robins to comply.