File No. 861.24/105

The Chargé in Sweden (Whitehouse) to the Secretary of State

[Telegram]

3145. Your 1276, November 9, 5 p.m. Following is résumé Huntington’s letter to Ambassador Francis dated September 19:

Relative to operations of Tovaro-Obmien I send you letter to [of?] Vice Consul, July 14, 2 p.m., giving complete list of all drafts drawn by Poole against the appropriation of $6,000,000; also translation of memorandum of T[ovaro-Obmien]’s operations, prepared, shortly before I left Moscow, by Darcy,2 a translation of statement of textile-purchasing operations of the Central Union of Cooperatives up to the middle of August, and memorandum of our financial requirements prepared by Darcy in conjunction with our demand upon Lockhart for £600,000. Our Consulate General has in its files vouchers for all payments made for T. Our American operations were kept well within the amount appropriated, although it was insufficient.

Essential records of the T. are in Moscow, probably in French Consulate General, in Darcy’s care. Some time previous to our departure Bolsheviks invaded premises of French Military Mission and Chamber of Commerce, where we had our offices, and all documents not absolutely necessary were destroyed.

Following is Lee’s3 letter:

Referring recent conversation with Darcy, I submit herewith a statement of T’s account with the American Consulate General as follows: [Page 167]

Rubles
June 29 To Huntington for trading company for advance to Cooperatives 2,000,000.00
July 15 “ “ for trading company for flax purchases 100,000.00
17 “ Magnuson for Bukowski and trading company for American Red Cross purchases, Petrograd 1,000,000.00
22 “ … for advance to Cooperatives 1,000,000.00
22 “ … for flax purchases 115,000.00
24 “ … “ “ “ 115,000.00
25 “ … “ advance to Cooperatives 1,000,000.00
26 “ … “ “ “ “ 1,500,000.00
August 2 “ … “ “ “ “ 8,000,000.00
2 “ … 270,000.00
3 “ … “ flax purchases 106,000.00
3 “ … “ “ “ 40,000.00
3 “ … “ advance to Cooperatives 2,000,000.00
5 “ … “ “ “ “ 2,500,000.00
5 “ Darcy for cash to Tovaro-Obmien 6,000.00
5 “ “ “ “ “ “ 60,000.00
5 “ … “ flax purchases 226,046. 50
5 “ … “ “ “ 93,712. 50
5 “ … “ advance to Cooperatives 90,595.00
5 “ … “ “ “ “ 569,000.00
5 “ T[ovaro-Obmien] by All-Russian Central Union Consumers’ Association for advance to Cooperatives for textiles 25,000,000.00
16 “ Miller for cash to T[ovaro-Obmien] 50,000.00
16 “… for cash to T[ovaro-Obmien] 90,000.00
16 “ T[ovaro-Obmien] by Captain Webster for American Red Cross purchases 460,000.00
Total [sic] 46,692,454.00

Darcy’s memorandum on operations of T.:

Company has under way following more important operations:

1.
Evacuation of sunflower-seed oil in the Kuban. We had considered advancing to Central Union of Cooperatives capital necessary; namely, one [hundred?] million. T. had contracted to furnish two instalments of 24,000,000. Have furnished to date 26,000,000, remainder therefore 22,000,000. Moreover, T. having difficulty in obtaining rubles, has agreed with Central Union of Cooperatives that for third instalment of 24,000,000 it will not furnish funds, but will act as insurance company and take risks of war and requisition upon itself under same conditions as outlined in the contracts for the first two cash instalments.
2.
Evacuation of the textile stocks in Moscow. We had considered loaning Central Union the turnover capital necessary for this operation estimated at 100,000,000. T. has contracted to furnish first instalment of 50,000,000 upon which 25,000,000 has already been paid. Remaining 25,000,000 may be furnished in the form of £600,000 for which Central Union agrees to find equivalent in rubles and Lockhart1 being requested to loan this supplemental [sum?]. As a result, if Lockhart consents, T. to fulfil its contracts with Central Union still needs 22,000,000 but it should be remarked that without taking up any new operations and merely to safeguard [Page 168]those already entered upon, T. really needs very considerable sums.

It is possible for instance that to save oil already purchased in the Kuban, T. will be forced to increase purchase price by paying certain indemnity to the sellers who received 40 rubles per pood originally under Bolshevik control, whereas price is now two [hundred] fifty rubles. Some of the oil is still in the Kuban and the sellers are seeking to retake possession so that it will be necessary to make some arrangement with them for this purpose. I should be able to furnish at least 50,000,000 rubles to the Central Union as a loan to be paid as soon as the oil is delivered to the consumer.

As to the textiles, recent agreement with [between] Germany and the Soviet government provides for payment of indemnity of 5,000,000,000 especially in form of shipment of textiles and hides. Up to this time neither the Soviet government nor Germany have ever requisitioned goods belonging to the Central Union. It is therefore desirable to help Central Union to get hold of largest quantity possible of textiles and for this item T. needs 50,000,000. To provide for these two operations, T. ought therefore to have 100,000,000 reserve.

Finally French Government has recommended to T. to make every effort to keep flax and hemp from falling into German hands. This flax and hemp are moreover needed by all the Allies. Therefore T. ought to be enabled to buy 100,000,000 worth now located in territory in the vicinity of the German occupation which is for sale by the holders and to hold it in a safe place until it can be exported.

I am unable to discover in the archives any copy of the other statement and memorandum mentioned by Huntington in his letter to Ambassador.

Whitehouse
  1. Pierre Darcy, French Commercial Attaché and member of the Tovaro-Obmien.
  2. Frank C. Lee, Vice Consul at Petrograd; later detailed to Archangel.
  3. Robert H. B. Lockhart, British special representative in Russia.