File No. 861.51/170a

The Acting Secretary of State to the Ambassador in Russia (Francis)


1595. Following from Secretary of Treasury:

No credits have yet been granted to the Russian Government except the $100,000,000 and the $75,000,000 mentioned in previous telegrams. Former sum allocated as follows: Approximately $46,000,000 for 10,000 cars and 500 locomotives, this sum not payable [Page 18] for some time. Thirty-five million dollars in cash has been turned over to Bakhmeteff for payment of various accounts due in the United States, including interest on loans in this country and part payments on agricultural and railway machinery, all these exclusive of contracts placed on British credit. Bakhmeteff desires remaining sum to be spent largely for silver bullion desired to be transformed into coin for the payment of Russian troops in territory where paper rubles will not be accepted; and for two million pairs of shoes represented as urgently needed. No drafts thus far notified to us against the special credit of $75,000,000 although $10,000,000 was placed in National City Bank to meet any sudden call such as indicated in Root’s telegram.

Bakhmeteff on July 21 submitted request for total credit and cash to January 1, 1918, of $733,000,000, this including $154,000,000 chiefly for additional rolling stock, much of which would not be actually paid out until sometime next year. In this request is included $110,000,000 balance due on orders placed with British credit; $25,000,000 for Remington contract for rifles; $15,000,000 for Westinghouse contract for rifles; $38,000,000 for payments in Sweden; $23,000,000 for interest on money borrowed and expected to be borrowed from the United States Government; $8,000,000 for interest on other borrowings in this country; $70,000,000 for support of ruble exchange; $150,000,000 for various orders desired to be placed in the near future.

I have no thought of allowing the further credit except possibly to meet August payments on orders placed on British credit and possibly other urgent sums on contracts placed independently and requiring payments in the month of August. Cash payments which Russia may require and which I might consider favorably will probably not exceed in that month $60,000,000, largely to relieve the British for their responsibility for Russian orders. Bakhmeteff states delay in meeting his request may produce misapprehension in Petrograd. Would like your immediate advice as to whether Russian Government desires British Government to be relieved of these payments; whether political conditions in Petrograd suggest desirability of favorable treatment of Bakhmeteff’s request; also whether Russian Government desires that any action I may be able to take shall be determined wholly upon representations made by Bakhmeteff. Give me fullest possible information. Reported Russian demoralization makes it most important that I should be given fullest possible information and advice by you so that I may act as intelligently and advisedly as possible.