Papers of the Interdepartmental Conference on Middle Eastern Affairs [‎20r] (39/290)

our credit was being deeply committed, thus General I^orrestier
Walker had entered into an agreement with the Government of the
Armenian Republic in which he had guaranteed, on behalf of the
Allied Powers, the financial security of the administration so.long
as it remained pure and reasonably economical. In view of the
position that existed in the (Jaucasus, did the (conference consider
that the two points raised by the Treasury covered the situation, or
did they think that something more was required ?
Mr Baldwin asked if the occupation would come to an end on
the conclusion of peace.
The Chairman said that we could not hope to get out of the
Caucasus until there was someone to take our place. There was
some talk of the Italians going there, but when they realised what
troops and money were required, any eagerness that they had shown
on general imperialistic grounds would probably be greatly modified.
Personally, he would be surprised if we were quit of the Caucasus
before the end of this year.
Mr. Baldwin said that if our occupation were to continue for
the period mentioned by the Chairman, or even for a much shoiter
period, he would much prefer that some responsible financial adviser
did go out.
The Chairman said that he felt the same about the matter.
The present position was dangerous politically and otherwise. The
military officers on the spot did not know r our policy, and kept
entering into obligations which we had never intended that they
should incur. The whole position was unfair to our military
authorities, and he thought that an adviser should go out.
General Kirke said that General Forrestier Walker was a very
able man, but probably knew little of high finance.
Air. Crosland, referring to a suggestion that theAVar Office should
send out a man, said that he was not sure if it was realised what a,
clear distinction there was between War Office finance and a need such
as existed at present in the Caucasus. ’ He did not think that a military
financier would have the knowledge required for the present situation.
The problems to be dealt with concerned currency and other matters
with which military finance had little or nothing to do. What was
required was that a man should be selected by the Treasury.
The Chairman said he agreed. The present financial situation
in the Caucasus called for a different experience, a different training,
and a different type of brain from those of the average military
financier. What seemed ta be required was a civilian with expert
knowledge on currency problems, but at the same time it was
essential to bear in mind that the present position hung on our
military occupation. He agreed with Mr. Baldwin that an
immediate order should issue to stop the manufacture of these rouble
notes. He suggested that telegrams should be sent embodying the
two proposals contained in the Treasury memorandum, and that,
in addition, a financial adviser should he despatched as soon as
possible.
In reply to a question by Mr. Kidston, he agreed that the
Foreign Office could not be held responsible for Caucasian finances.
The Conference decided —
1. That a telegram should be sent by the War Office to stop
immediately the manufacture of rouble notes referred to in
paragraph 4 of the Treasury memorandum (Appendix II)
and to state that our policy should be to avoid all inter
ference with local currency arrangements, and to allow the
relative value of sterling, rouble notes, and local currencies
to establish itself by the natural law of supply and demand.