File No. 861.51/380
The Chargé in Great Britain (Laughlin) to the Secretary of State
[Received October 27, 4.10 a.m.]
3126. [For] McAdoo from Cravath:1
723. Conference held to-day between representatives of British, French, and Japanese Government treasuries and ourselves regarding emergency currency for northern Russia and Siberia. Understand that our State Department has been fully informed regarding and has considered plan approved by British and French Governments under which British Government acting alone will create a special ruble currency for northern Russia available for Great Britain and Allies and the United States for expenditures of missions in that region. Assume have been fully informed of this plan by State Department. British, French, and Japanese representatives [Page 83] agreed that need for emergency currency in Siberia for requirements of Allies and our Government. British and French have thus far provided for their requirements in Siberia chiefly by rubles purchased in various parts of Russia. Further resort to this expedient undesirable, both because of difficulty in procuring old rubles and because of probability that present Russian Government having found that its new ruble notes unpopular is issuing ruble notes which can not be distinguished by [from] those issued by the old Russian Government. Japan has been financing her requirements chiefly by special yen notes issued either by Japan or Korean Government which, however, will only circulate freely in certain portions of Siberia chiefly commercial communities at or near seaboard. Conference agreed that an international note issue highly objectionable both because of great amount of time required to work out details and because of difficulties inherent in any scheme for issuing currency backed by international guaranty or other international action the chief difficulty being that if currency were made convertible into dollars, sterling or yen as would seem to be necessary, it would probably drift automatically to the market which offered the most advantageous exchange rates which for the time being would doubtless be Japan. French representative stated that French expenditures in Siberia would be greater than those of the United States or Great Britain because of obligation assumed by France to provide for Czecho-Slovak Army. We finally suggested that for the sake of simplicity and speed France should undertake an emergency note issue for Siberia similar to that proposed to be undertaken by Great Britain for northern Russia. In this event France would provide the United States, Great Britain, Italy, and Japan with this currency in exchange for dollars, sterling, lire, and yen while assuming current rates of exchange. British Treasury representative approved this suggestion and Japanese representative expressed belief that Japanese approval would be forthcoming. I said that inasmuch as I had no instructions and that [since,] from indications from cables received by British and French Treasuries, the subject was already under consideration at Washington by either State Department or Treasury Department, or both, I could not do more than cable to you the results of the conference and ask for instructions. I should receive these instructions as soon as practicable as prompt action desired by all. Am impressed with the difficulties of any scheme for the issue of emergency currency for Siberia based on international action and am inclined to regard French proposal as best adapted to meet present emergency provided there is no political objection. AH agree that emergency measures now under discussion may be superseded by more permanent measures [Page 84] when further progress has been made in straightening out Siberian situation and basis for creation of a stable government with clearly defined territorial limits has been established. Crosby who is in Paris will receive copy of this cable Monday.
- Paul D. Cravath, advisory counsel of the American mission to the Inter-Allied Council on War Purchases and Finance.↩