File No. 861.00/929
The Consul at Tiflis (Smith) to the Secretary of State
[Received January 9, 1.22 p.m.]
Vice Consul Doolittle on his return from North Caucasus reports that the Southeastern federation appears to be more a proposition of leaders living in more remote districts [omission?]. In the Kuban district there is much friction between Cossacks and Russian settlers. The native Cossacks are returning from front to retain their predominance and to concentrate a force which later can be used for the common defense but which for the next few months cannot be relied upon for active assistance. The Terek government has combined with the Mohammedans along their southeastern border, but the natural feud of the two races continues and cannot permit a permanent alliance or a common action. The attitude of the latter will depend on developments in upper Caucasus. The two governments are attempting to disarm the Russian troops, returning from the Turkish front and upper Caucasus, but meet with less success than the Don Cossacks. However, a certain amount of rifles are thus collected.
Kharlamov reports that an agreement has been reached with Little Russia on all points except that the latter insists on federation’s being called socialist. The federation’s greatest need is currency. The easiest way to supply this need appearing from facts available here would be by issuing its own paper currency printed in India or United States as against credits opened by Allies. Currency should be issued in the name of Russian federative republic. In securing, all issues by Maximalists to be declared illegal. Temporary currency crisis could be met by means indicated in my telegram of January 6.
The conditions in Don district as being reported are very remarkable. Federation disposes of: Don 60,000 effective forces, Kuban 60,000, Terek 25,000; this number constantly increasing. The next need is supplies such as rifles, machine guns, artillery, [Page 606] airplanes, all classes ammunition and clothing for both troops and civil population. There is a strong Allied moral support tending to unite all elements within federation. Federation cannot be relied on to furnish active force at present but can be molded so as to provide such force by the assistance above referred to. With this in view reorganization of its industry should be given [profound?] attention. This applies also to upper Caucasus. It is reported that the federation is being placed within French sphere of influence with General Berthelot at the head of French mission. The British are attempting to establish similar sphere in upper Caucasus. This provokes criticism which could be more easily met if Allies acted as one without splitting up spheres of influence, [which] not only premature but liable to create undesirable complications in future. Most satisfactory results would be obtained by sending both to the federation and to upper Caucasus a small body of foreign troops not for their importance as a fighting unit but as a healthy nucleus for others to gather round and to show we mean business.