The Secretary of State to the British Ambassador (Howard)12

Excellency: I have the honor to acknowledge the receipt of your note of September 17, 1924, in which, acting under instructions from your Government and in concert with your French colleague, you were good enough to communicate to me the following notification with respect to certain Russian gold which, you state, was transferred by Germany to the Allied and Associated Governments under Article 15 of the Armistice and Article 259 (6) of the Treaty of Versailles:

“The equivalent of sixty-two million dollars was paid over to French and British Governments in equal moieties and applied to the reduction of the Russian debt to those countries.”

In reply, permit me to invite your attention to the provisions of Paragraph 7 of Article 259 of the Treaty of Versailles and more particularly to recall the considerations set forth in the note addressed by the Acting Secretary of State on June 30, 1920, to His Excellency, The Eight Honorable Sir Auckland Geddes,13 in regard to the proposal put forward at that time by the British and French Governments to apply the gold in question to redeem a part of the Anglo-French loan of 1915. You will note that in that communication this Government observed that the proposal seemed to involve a question of doubtful right respecting the use of property held in trust for Russia, and that the propriety of disposing of these funds on the sole [Page 703] authority of Powers which stood in the position of trustees and for their own benefit deserved serious consideration. Mr. Norman Davis also referred to the possible interest of the United States as a creditor of Russia, and stated that the Government of the United States would be glad if consideration might be given to the suggestions set forth in his communication before further action were taken with respect to this fund.

Since the action reported in your note under acknowledgment appears to be at variance with the views of this Government heretofore communicated to Your Excellency’s Government, this Government must fully reserve its position with respect to the action taken and its rights in the premises.

I am today addressing a similar note to the French Ambassador.

Accept [etc.]

Charles E. Hughes
  1. A similar note was sent on the same date to the French Ambassador.
  2. Note not printed.