File No. 861.51/461

Memorandum of Mr. Miles of the Division of Near Eastern Affairs of the Department of State

Mr. Ughet1 called on me last week and I asked him if my impression was correct that he thought the bank notes shipped in the transport Sheridan on November 25 to Mr. Heid at Vladivostok, were to be delivered to the Russian authorities to be put in circulation. He said, “Yes.” I told him my impression was very different. I told him we had a distinct understanding with Mr. Bakhmeteff, that while we agreed to ship these ruble notes it was only on condition that they should be held by some American authority until such time as we thought they could properly be released; that we had no conception that they should be put into circulation until some governmental authorities were recognized in Russia who could be responsible for such a currency.

[Page 98]

Mr. Ughet expressed considerable anxiety and the greatest astonishment. He declared quite frankly that the Omsk government had been bombarding the Embassy with telegrams to furnish them funds, and that finally he had prepared telegrams which were sent over the Ambassador’s signature stating that this shipment of rubles had been prepared and was on its way; that from that time he had no more pleas for money. He said that Mr. Bakhmeteff had never told him of any such arrangement I described, and that he merely understood the ruble notes were to be shipped to Mr. Heid, the War Trade Board representative, to be delivered shortly to the appropriate Russian authorities. He reiterated that he had no understanding whatever of the scope of the agreement under which the ruble notes were shipped or definite understanding that they were to be held in escrow for the Embassy until we saw fit to release them for circulation.

Mr. Ughet called on me again to-day and I told him we were telegraphing the facts to Mr. Bakhmeteff and suggesting that he would like to discuss the matter with the Allied representatives at Paris. I also asked if he objected to the shipment of ruble notes being delivered to the Governor General of the Philippine Islands, to be held in his custody as a temporary measure until some further decision was reached. He said that as long as the rubles had not been landed at Vladivostok, he believed that was the next best alternative and would entail the least expenditure.

Basil Miles
  1. Serge Ughet, Russian Financial Attaché at Washington.