Papers of the War Cabinet's Eastern Committee [‎159r] (317/544)

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APPENDIX IV.
E.C.-2426.
Copy, Telegram from Viceroy, Army Department, dated November 20, 1918.
[Deceived 9 f.m.]
Clear the Line.
15064. 20th November. Summary of Malleson’s M.D.00995,17th November, from
Askabctd, giving result of discussion with /iemen and financial Minister, is as
follows : —
(a.) Trans-Caspian Government’s monthly expenditure is 16,000,000 roubles, and
they have no means of raising revenue till stable government is installed owing to
trade stoppage and inability to impose taxes on population, three-fourths of which is
Turcoman.
(b.) All methods of affording financial assistance were discussed and difficulties
explained to Askabad Government, who said there was undoubtedly good deal of money
in country, but it was hoarded in small quantities.
(c.) Two following methods only ones likely to produce money :—
(l.) Selling bank drafts on India for rupee or on London for sterling, to tempt
larger holders of rapidly depreciating roubles to make them available.
(2.) Malleson to be authorised by His Majesty’s Government to collect rouble notes
against promise to pay in silver rupees Indian silver coin also widely used in the Persian Gulf. three months later, rate of repayment
being Meshed Bank daily kran rate for rouble notes, and 2 krans being
taken as equivalent to 1 rupee. Our guarantee essential, as their credit is
nil. No interest to be paid, as falling value of rouble would result in
ultimate profit to investors.
(d.) Askabad Government’s immediate requirements before end of November to
prevent collapse of Government are 30,000,000 roubles, equivalent at present rate to
rather more than 250,000L They urge immediate authority to collect rouble
notes, as in (c) (2), pointing out lack of financial assistance given them to date and
that expenditure has been for our mutual benefit, without which [? resulting] anarchy
would have had far-reaching and serious results.
(e.) Malleson made them no promises nor held out hopes not covered by previous
sanction, but he considers payment of this money cannot be further postponed without
risking everything gained, and he suggests immediate approval to raise money as
proposed.
(/’.) Askabad Government have further commitments of 88,000,000 roubles
expended on providing for refugees, arming and equipping tioops, repairing railway,
and buying food for sale at low rates. They ask for permission for Malleson to raise
this amount also for them before end of December, and thereafter for a monthly
subsidy from us of 16,000,000 roubles, until they are firmly established in Turkestan,
when, they represent, they would be able to pay their way by release of cotton and
wool and by assistance of orderly elements rallying to their side.
(g.) In reply to Malleson s objecting to these large amounts, they assured him of
economy exercised, but submitted it was cheap investment for us, as, alternatively,
their ruin would involve us in larger expenditure to stem .the consequent anarchy
which would be created by Bolsheviks and Mahommedans.
2. We must point out that, if His Majesty’s Government decide to give the
financial assistance asked for, the supply from India of the specie required is, in view
of currency situation, out of the question, nor can we undertake to meet inpee drafts
on India. "Please see in this connection our telegram 13393, 2nd October, and your
telegram of 17th October. In another telegram Malleson asks for authorisation within
the next three days to collect rouble notes on the lines indicated in paragraph 3 of
the above telegram.