File No. 881.51/319
The Ambassador in Great Britain (Page) to the Secretary of State
No. 8936
London, May 1, 1918.
[Received May 17.]
Sir: With reference to the Department’s
telegraphic instruction No. 7203, of April 10, 1918, 3 p.m., in
relation to the policy adopted by the British Government in regard
to meeting the interest and principal on Russian obligations, I have
the honor to transmit herewith, for the information of the
Department, a copy of a note, dated April 27, 1918, together with
its enclosure, which I have received
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from the Foreign Office in response to my
representations in the premises.
I have [etc.]
[Enclosure]
The British Secretary of State for Foreign
Affairs (Balfour) to the American Ambassador (Page)
No. 71926/W/38
The Secretary of State for Foreign Affairs presents his
compliments to the United States Ambassador, and with reference
to Mr. Page’s memorandum
No. 507 of the 12th instant, enquiring what policy had been
adopted by His Majesty’s Government in regard to meeting the
interest and principal on Russian obligations, has the honour to
say that early in the present year instructions were issued by
the Treasury to the banks affected authorising them to cash
coupons payable in London on the direct state debt of Russia and
on securities having the state guarantee of that country:
- (a)
- In the case of British subjects on receipt by the
banks of a satisfactory guarantee that the coupons and
the relative bonds are the property of British subjects
whether domiciled in the United Kingdom or not, and were
the property of British subjects before the 1st January
1918.
- (b)
- In the case of Allied and neutral holders, on receipt
by the banks of a satisfactory guarantee that the
coupons and the relative bonds had both been in physical
possession in the United Kingdom before the 1st January
1918.
In the course of time it became necessary however to modify this
policy, and on the 28th ultimo an official communiqué on the subject was published by His
Majesty’s Government, a copy of which is enclosed herein for the
Ambassador’s information. In accordance with the policy therein
described, His Majesty’s Government can provide no further funds
to meet payments of these coupons, save in the case of overdue
coupons payable in London before the 1st instant and otherwise
conforming with the regulations detailed above.
Foreign
Office, April 27,
1918.
[Subenclosure]
Public Statement Issued by the British
Government, March 28, 1918
The British Government have up to March 31 provided funds to meet
coupons payable in London on the direct state debt of Russia and
on securities having the state guarantee of that country. They
have taken this course hitherto, though under no obligation to
do so, but in view of the present conditions in Russia they can
no longer continue this course.
The Chancellor of the Exchequer gives notice, therefore, that, as
from April 1, 1918, holders of the securities above specified
must no longer look to the British Treasury for the provision of
funds to meet interest due to them from Russia. At the same time
he publishes the following declaration which has been agreed
upon between the British and French Governments, and which will
be published on behalf of the French Government in Paris.
“The Imperial Russian Government, at the time when it entered
into obligations, was without doubt the representative of Russia
and definitely pledged that country and this undertaking cannot
be repudiated by the authorities whatever they may be, which
hold or may hold power in Russia, without the very foundations
of international law being shaken. Otherwise there would no
longer be any security in the relations between states, and it
would become
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impossible
to enter into any obligation for a long period if this
obligation could be questioned.
This would entail the ruin of the credit of states politically as
well as financially. A country would no longer be able to borrow
on normal conditions if lenders should find that their sole
guarantee lay in the maintenance of the constitution in virtue
of which the borrowing government, as the representative of its
country, made its request for credit. No principle is better
established than that by which a nation is responsible for the
acts of its government, and no change in the government can
affect the obligations previously incurred.
The obligations of Russia continue; they are, and will continue
to be, binding upon the new state or group of states by which
Russia is or will be represented.”