Papers Relating to the Foreign Relations of the United States, 1919, Russia

861.00/4157: Telegram

The Commission to Negotiate Peace to the Acting Secretary of State

Paris, March 26, 1919—noon.
[Received 12:46 p.m.]

1329. Following from [Jenkins at] Odessa.

[3.] March 22nd, 6 p.m.

[1.] Economic situation. The Odessa region suffers from a lack of manufactured articles of all kinds owing to the shortage of raw materials formerly obtained from districts now held by Bolsheviks. Industries are practically at a standstill. Of the 50,000 workmen formerly employed in the town, 40,000 are idle. No tramways are running, electric lights burn intermittently and heating is a luxury. Prime necessities sell at enormously enhanced prices, although a survey of the markets shows an apparent abundance. I have informed the authorities that until the stocks of foodstuffs said to be hoarded by Russia are made available, or at least until a serious attempt to do so has been made, I could not give support requests for foodstuffs from America. An Inter-Allied Commission is being formed by the French to control imports and exports, regulate distribution and combat speculation, which is in practically all organizations. The masses suffer while a few make enormous profits, a combination which inevitably breeds Bolshevism. Refugees from Bolshevik Russia have increased the population to nearly 800,000, or 30 per cent above normal. Single unheated rooms without board rent for 1,000 to 2,000 and small apartments from 5,000 to 15,000 roubles monthly. Congestion, underfeeding, and lack of sanitary supplies are the underlying causes of prevailing typhus epidemic.

2. Financial situation. Notes issued by the defunct Hetman government and the city of Odessa are in circulation, Romanoff and Kerensky roubles being held for speculation. The currency situation is rendered more complex by the presence of unauthorized Ukrainian notes and counterfeit money, the latter estimate[d] to exceed 50,000 roubles. Each note must therefore be carefully examined and often endorsed by the last holder. Unlimited speculations in gold bullion with consequent violent fluctuations renders it impossible to know real value of cash on hand. Imperial Bank notes sell at a premium of 100 per cent for large and 50 per cent for small amounts, Kerensky’s at a premium of 25 to 40 and 15 to 25 per cent respectively. Money changers charge as much as 19 per cent for small change. Banking has largely degenerated to speculation. In German territory the franc varied in two days from 2½ to 5 roubles, pound notes from 75 to 100 roubles. Francs are in greatest demand, being necessary for the essentials and rental. It is evident that steps must be taken to stabilize the currency, possibly along the lines adopted at Athens. The scarcity of exportable goods in this importing district renders exchange of goods impossible except for large organizations having branches in the North Caucasus, where there are surplus supplies.

3. Political and military situation. The military situation is far from satisfactory, although the French have apparently resolved to try to hold Odessa. A large percentage of the workmen of the laboring classes sympathize with the Bolsheviki and should the city be seriously threatened another debacle such as that at Kherson, where French and Greek garrisons well bred [were] fired upon from the rear, would probably result. The French and Russian commands do not have sufficient forces to undertake the imperative task of disarming the local population. The relations of the French with the Russians have been frequently unfortunate and number of democratic organizations have become estranged. The French commander-in-chief admitted to me that all classes are dissatisfied. None of his staff has had experience in Russia and unfortunately Chief of Staff Freidenberg is a Jew and particularly successful in antagonizing Russian and even Allied elements. This is the inevitable result military intervention unaccompanied and undirected by experienced political agency. Here and elsewhere in Russia the great lack of coordination and efficiency among the Russians themselves emphasizes the need of tact and understanding on the part of outsiders. The French are also handicapped by having troops who are tired of fighting and whose morale is therefore far from good. The Greeks are poorly officered and are a doubtful element away from their native soil. A betterment of the situation depends on the arrival of sufficiently strong reinforcements to assure safety in the rear and to make possible an extension of the zone of operations so as to include and securely hold the supply districts a short distance [to the?] North and East. Please acknowledge by telegraph. Repeat to Department. Jenkins.[”]

Am[erican] Mission