File No. 861.00/2478

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


359. Also for Secretary of the Treasury:

Still nothing from Moscow, Vologda, or Petrograd, nor from Department since your August 5, 7 p.m.1 Allied forces advancing down railroad toward Vologda and upriver toward Kotlas, but progress necessarily slow because Allied forces small and resistance unknown. In an engagement on railroad several days ago three French officers killed, but Red Guard defeated and about fifty thereof surrendered and General Poole talks of enlisting them in Allied army.

Quiet here where new government organizing,2 but opposition thereto not wholly eradicated. I am advocating business relations between [with it?] because it appears as most meritorious movement against German control of Soviet government faction in Russia. My inquiry [Chaikovski?] President unequivocally stated that new government has only two main objects, namely, resurrection of suffering Russia and aggressive resistance to Germany; this statement made in response to one from me that Allied chiefs would recommend no recognition or no cooperation and French [financial?] assistance to any Russian government observing Brest peace or any peace unauthorized by Allies.

Financial assistance essential to perpetuity new government. Establishment Allied bank, Archangel, suggested and apparently favored by British, but I expressed opposition thereto because of unlimited liability in connection therewith, because also moral responsibility, and furthermore thought Allied bank would be used by [Page 58] Bolshevism and all anti-Ally Russians as justification of charge that Allies are planning to selfishly appropriate Russian resources and commerce. My opinion is that Russians should therefore be taught and aided to resurrect Russia. French Ambassador and Italian Ambassador agreed with me, but Lindley1 was silent. Minister of Finance will present financial scheme to-morrow; if provides for joint guaranty of bonds by Allies upon which to base bank, it is quite feasible [possible?] I shall be disposed to recommend same with proper safeguards as to management and right of supervision, bonds to be secured by whatever applicable revenues available and by whatever rents for property, such as forests, mines, railroads, etc. If, however, security impossible I think assistance advisable to extent $10,000,000, which at present exchange rate equals Rs. 100,000,000. Our proportion would not exceed one third and even less if Italy and Japan participate. Japanese Chargé dAffaires not yet consulted. What are our relations with Japan? Official announcement forwarded by wireless states understanding reached and Japanese and American troops advancing into Siberia.

  1. Not printed.
  2. See vol. ii, p. 507.
  3. Francis O. Lindley, British Commissioner in Russia.