861.77/784: Telegram

The American member of the Inter-Allied Railway Committee (Smith) to the Acting Secretary of State, transmitted by the Consul at Vladivostok (Caldwell)

205. [From Smith:]

That for the present and until financial condition can be definitely studied the members of the Inter-Allied Committee make the following recommendations.

Those Allied powers who decide to offer financial aid for the purpose of improving the transportation on the Siberian and Chinese Eastern Railways, shall, as far as possible, limit their financial aid to the purchase of those materials, supplies and equipment which must be obtained in foreign countries, and to the payment of the expenses of Allied supervision.
The cost of the above-mentioned purchases of materials and equipment shall be apportioned equally among the said Allied powers and paid from the general funds which shall be from time to time requested by the Inter-Allied Committee and advanced by the Governments interested.
The expense of the Allied supervision which shall include the salaries of the members of the Technical Board, the foreign Allied [Page 264] inspectors, assistant inspectors and other foreign assistants shall be fixed and paid for by the particular nation to which the said persons belong.
The salaries and wages of any employees specially engaged in the service for a purpose common to all members of the Technical Board shall be fixed by the Board and shall be paid from the general fund advanced by the Allied Powers.
All other expenses, such as the payments of the salaries and wages of the Russian officials and employees of the said railways, et cetera, and the cost of additions and improvements, except those purchases named in section 1, shall be financed from Russian resources, provided such resources are found to be sufficient. If the Technical Board finds that the Russian resources are insufficient for the above expenses, then the Allied financial assistance can be utilized to the extent necessary to meet any emergency which would seriously imperil the successful operation of the railways. But in each emergency such aid shall be strictly limited to sums to be ascertained by the Technical Board and approved by the Inter-Allied Committee.

This expenditure, if found necessary, shall be paid from the general funds provided by the Allied powers and shall be equally borne by the said powers.

6th. All expenses, as above outlined which will be paid by the Allied powers shall be debited to the Russian people who are obligated to repay same.

Resolution regarding advance of money: Resolved, that in accord with the financial recommendations made by the Inter-Allied Committee an advance of dollars 20 million gold is requested by the Committee from the Governments participating in the financing of the Russian railways. Of this sum dollars 4 million shall without delay be placed in the Hong Kong Shanghai Bank Harbin, to the credit of the Technical Board. The remaining dollars 16 million will be held by the Governments subject to the order of the Inter-Allied Committee. End of resolutions.

The above resolutions were unanimously passed by Committee after a consultation with Technical Board who are fully in accord. Committee has requested Military Commanders to decide questions of location of railway guards. The French Commander now consents to participate in this meeting. Repeated to Tokyo. Smith.