File No. 861.61323/10
The Consul at Archangel (Cole) to the Secretary of State
[Received September 1, 11.18 p.m.]
132. Archangel representative of the Central Flax Growers’ Cooperative Association now has 20,000 tons of flax here unsold. Roughly estimated cost will be around Rs. 100 per pood or say $10; terms of sale hoped for are payment in full in a week of the confirmation of the sale by opening confirmed bank account in dollars in New York, quantity and quality divided into three parts: 20 per cent first sort, 40 second, and 40 third. This flax grew in the Smolensk, Rzhev, Yaroslavl, Rybinsk, and Vologda regions. Sale is to be franco warehouse, Archangel.
[Page 141]British Government agents here negotiating for this flax but are not hastening to close deal as they wish to reduce the price and also force cooperative to accept rubles in Archangel. A guaranty that the rubles will be paid being made simultaneously with the confirmation of the sale. This unacceptable to the cooperative. I feel offering is to be in favor of the British idea but payment of dollars in New York would not result in export of capital out of Russia if it was understood that dollars deposited in New York could not be moved except to cover payments for manufactured articles needed by Russia purchased in the United States. In this way purchaser of the flax would not have to carry inflated rubles likely to decline unexpectedly.
Same cooperative has 40,000 additional tons of similar flax down railroads in the country between Vologda and Moscow.
Please reply by telegram immediately and fully how much flax needed, how soon and your ideas as to means of payment.