861.51/675: Telegram
The Chargé in China (Tenney) to the Acting Secretary of State
[Received 12:14 p.m.]
From [Harris at] Omsk.
September 20, 10 a.m. I am informed by financial department here that negotiations with American and British financial group for $50,000,000 have become abortive in view of the attitude assumed in this question by the United States Government. Apparently the British banks were prepared to intervene, but the American banks, considering the military and political situation in Siberia, could not encourage cooperation.
I am informed that the Omsk Government was prepared to guarantee the American banks by actually depositing in Manila or San Francisco sufficient gold to cover the amount advanced.
Upon the receipt of this news the Omsk Government sold 12,000 kilograms of gold to France, amounting in value to 50,000,000 [Page 431] francs. This sale was outright and the gold is now en route to Vladivostok, leaves today.
In view of changed conditions in Omsk I recommend that our banks reopen negotiations as concerns this loan and permit sufficient gold to be deposited in San Francisco as a guarantee. Harris.