File No. 861.51/396
The Russian Ambassador (Bakhmeteff) to the Counselor for the Department of State (Polk)
[Received November 2.]
My Dear Mr. Polk: Information coming from Siberia reveals without doubt the most acute shortage in the country of currency of small denominations. This fact has to be accounted for not only when devising plans for economic assistance to Russia but has to be most seriously considered with reference to any plans for the re-establishment of the financial system of the country.
Latest information relates to efforts of most encouraging character in this respect. The reports show that a treasury has been instituted at Omsk, that taxes are levied and that considerable gold reserves have been saved from Kazan and moved east. More so, the new government desires to establish its financial system on a sane basis, refraining, by all means possible, from the issuance of paper money.
[Page 80]Actual developments will naturally depend greatly on the general course which the United States and the Allies will adopt with regard to financial policy connected with economic assistance and still more on the forms which this financial aid shall assume. Nevertheless, whatever course might be pursued, the necessity of having sufficient currency of small denominations is evident.
The uncertainty at the moment of the exact character which the financial measures in Russia will assume does not justify delay in placing orders for notes of small denominations. In fact if the notes are ordered in the form of small treasury bills without any indication on their face of their value relative to gold, one may obtain currency which might be used as change in connection with any bank notes to be issued in the future. The usefulness therefore of these bills would not be impaired. While on the other hand, one should take into account that under circumstances the execution of the order will necessarily take considerable time.
It is the plan of the Embassy to place the order with the American Bank Note Co. of New York for the total amount of 110,000,000 bills, the cost of such an order being approximately $800,000. In the first place it is purposed to order 50,000,000 of the 50-kopek bills similar to those which previously were used in Russia.
As under present circumstances these orders can not be placed without the consent of the United States Government I have the honor to present the question for your consideration.
I am [etc.]