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From Revolution to Dissolution: The Quai d'Orsay, the Banque Russo-Asiatique, and the

Chinese Eastern Railway, 1917-1926Author(s): Michael Jabara CarleySource: The International History Review, Vol. 12, No. 4 (Nov., 1990), pp. 721-761Published by: The International History ReviewStable URL: http://www.jstor.org/stable/40106277

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FromRevolution to Dissolution:The Quai d'Orsay,the BanqueRusso-Asiatique,and the Chinese EasternRailway, 1917-1926

MICHAEL JABARA CARLEY

the first World War the richest financialinstitution nRussia and the ninth richest bank internationally was theBanqueRusso-Asiatique BRA), whoseoperationsrangedfromLondonand Paristo Pekingand Manchuria.1After the Bolshevik evo-lution in November 1917, and the nationalizationby the new Sovietgovernmentof the Russian banking system, bitter power strugglesimperilled he bank. Its officials urned to the Frenchgovernment orprotection,and the Quai d'Orsay,seeingthe bank as a meansto over-throwthe Bolsheviks nd promoteFrenchpoliticaland economic nter-estsin China,wasquickto respond.The Frenchgovernment'snvolve-ment with the BRA demonstratesnot only intimacywith bankers nParis,but a readiness o use a privatefinancial nstitution or purposesofstate.It also llustrates he character f French mperialismn decline:imperialisme u pauvre,as GeorgesSoutouputsit in anothercontext.2Before1914 Francehad been a prominentexporterof capital,but thewarso exhaustedher financialand human resourceshat by the time ofthe Armistice n November1918, the Frenchgovernmentwas crippledand deeply n debt to its Britishand Americanallies.Too weak to takeI wish to thankthe Social Sciencesand Humanities Research Council of Canada forits financial support; and the Social Science Federation of Canada and the Cana-dian Federation or the Humanitiesforgrantingme leave of absence.Thanks are alsodue to John Cairns,Richard K. Debo, and RobertYoung for readingand comment-ing on an earlierdraft.

1 Revue Economique et Financiere, 1 June 1929, clipping in M[inistere des]Finances], B31593, formerlyF30 669.2 Georges Soutou, *L'impe*rialismeu pauvre: La politique e"conomiqueu gou-vernement rangaisen Europecentrale et orientalede 1918- 1929',Relationsinter-nationales,vii ( 1976 ) , 219-39.The InternationalHistory Review, xii, 4, November1990, pp. 661-880cn issn 0707-5332 The InternationalHistoryReview

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722 Michael JabaraCar eycontrol of the BRA, the failure illustrates the Quai d'Orsay's unwilling-ness to limit itself to objectives within its power.When Allied efforts to overthrow the Bolshevik revolution failed,the history of the BRA matched the halting development of Franco-Soviet relations in the early- and mid-ig2os. As the Soviet governmentbegan after 1920 to rebuild the economy devastated by the Russian civilwar, it sought to re-establish diplomatic and economic relations withthe western powers. Soviet Russia needed western manufactured goodsand credit to obtain them; and she needed markets for her petroleum,lumber, and other raw materials. While exploring the possibility ofusing the BRA to facilitate these objectives, the Soviet government alsosought to control it through clandestine means. Similarly, the Frenchgovernment was preoccupied with the economic reconstruction of itswar-ravaged north-east, where most of its limited financial resourceshad to be directed; with the establishment of new markets for its manu-factured goods; and with finding new sources of petroleum and otherraw materials. In the stagnant post-war economy of the early 1920s,the reintegration of Russia - Soviet or not -seemed essential to therevival of European industry and commerce, and the BRA seemed toprovide a useful means of tying French and Soviet interests together.The Banque Russo-Asiatique (Russko-Aziatskii bank) was formedin 1910 from a merger of the Banque du nord (or Severnyi bank) andthe Banque Russo-Chinoise (Russko-Kitaiskii bank) . The latter, whosecapital stock was more than fifty per cent French, had been establishedin 1896 as an instrument of French and Russian economic penetrationof China. Though the BRA was a Russian bank, the majority of itscapital stock was in French hands before the First World War, and itcame under the influence, though not the control, of the SocieteGenerate and the Banque de Paris et des Pays Bas (Paribas), two ofthe richest and most powerful banks in France. Its assets were by 1914the largest of any Russian bank. It had important interests in theRussian petroleum industry, in mining and metallurgy, in the develop-ment of railways in the Ukraine and Donetz basin, and in virtually everysector of Russian industry. It had nearly one hundred branch offices inRussia and twenty others in foreign cities, including Paris and London.But the majority of its foreign branches were in China, where it hadtaken over the role of the Banque Russo-Chinoise as an instrument ofRussian economic and political influence.

Behind the screen of the Banque Russo-Chinoise, Russia had acquiredin 1896 the concession to build the Chinese Eastern Railway. Thus, theRusso-Chinoise became the sole stockholder of the 1,000 shares of theChinese Eastern Railway Company, though the Russian government

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The Banque Russo-Asiatique 723provided the capital to build the railway, a line of approximately 2,000kilometres across Manchuria linking European Russia, via the Trans-Siberian Railway at Irkutsk and Chita, with the port of Vladivostok onthe Pacific Ocean. The Chinese Eastern Railway had considerablestrategic and economic importance, as it was shorterby several hundredkilometres than the Trans-Siberian route around the vast Manchuriansalient into eastern Siberia. A spur line also ran south from Harbin,Manchuria, to connect with the network of lines leading into China.The capital shares of the railway were deposited in trust with the Rus-sian state bank in St. Petersburg, and symbolized the dominant role ofthe Russian government in the development of this important politicaland economic resource.3The BRA had other important assets.With theHongkong and Shanghai and the Deutsch Asiatische banks, it was oneof the three 'Custodian Banks' of China, where customs revenues weredeposited for the payment of interest on various loans contracted by theManchu government and, after the revolution of 1911, by subsequentChinese regimes at Peking. The BRA also acted as the mandatory ofthe Russian government for the Boxer indemnity - the reparations im-posed by the Great Powers following the failed anti-imperialist andanti-foreign revolt of 1900.During the twenty years before the First World War, the Franco-Russian partnership in the Russo-Chinoise and the BRA was far fromharmonious. As French investors had advanced more than half thefoundation capital in the Russo-Chinoise, the French government, ifnot French financiers, expected the bank to serve French as well asRussian interests in China. The French sphere of influence in Chinawas in the south, but the Quai d'Orsay sought to piggyback its way intothe north on the shoulders of its Russian ally. The Russian financeminister, Sergei Y. Witte, however, resisted the attempt, and succeededin bringing the Russo-Chinoise wholly under Russian influence.4 Whenthe BRA was created, with a board of directors in Paris and an execu-tive committee (pravlenie) in St. Petersburg, each with an equal num-ber of French and Russian members, French financial groups gained astronger hold over policy, but the conflict between French and Russianpolicy objectives did not end.8 *Les nte"retsrangaisdans le Chemin de Fer Ghinois de PEst', Banque Russo-Asiatique,6 March 1926, M[inisteredes] A[ffaires][trangeres],ancienne srie

E-Asie, 1918-1929, followed by geographicsubheading,volume and folio num-bers, hence MAE E-Chine/379, fos. 123-40. See also N.N. Liubimov, Econo-micheskieproblemyDaVnego Vostoka (Moscow, 1925), pp. 5-7.4 Olga Crisp,The Russo-ChineseBank: An Episodein Franco-RussianRelations',Slavonic and East EuropeanReview, Hi (1974), 197-212.

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724 Michael JabaraCar eyFrench participation in the BRA fitted into the larger picture ofFrench investment in the Russian economy, which had begun with theconclusion of the Franco-Russian alliance in 1894 to counter the mili-tary and political preponderance of Germany in Europe. The mortar ofthe alliance was money: French investments poured into Russia tofuel industrialization and to build up Russian economic and militarystrength. Initially directed into Russian securities or bonds listed on theParis stock exchange and guaranteed by the Russian government,eventually French capital flowed into Russian industry and banking

underwritten by such French banks as Paribas, the Societe Generale,and the Banque de l'Union parisienne. By 1914, French capitalistscontrolled a major share of the investment capital of Russian banks, andthe mining and metallurgy of the Ukraine and the Donetz basin.French investment in Russia amounted to more than 13 billion goldfrancs, representing approximately 30% of all French foreign invest-ments, and 36% of foreign investment earnings.5 This enormous sumwas suddenly in jeopardy when the Bolsheviks, who regarded foreigninvestment in Russia as a tentacle of western imperialism, seized power.Tsaristbonds, they said, were debts of the overthrown Romanov dynastyand a prop of the autocracy, for which the new Soviet government couldnot be held accountable. In the interests of state ownership, therefore,they nationalized all Russian banks in December 191 7, annulled theRussian state debt in February 1918, and gradually expropriated allindustrial and commercial enterprises under their control.* * *

These actions were greeted with horror in France : to the French bour-geoisie, rights of property were sacrosanct, and French capitalists,appalled by the enormity of their losses,demanded action by the Frenchgovernment. They were led by officials of the BRA, which overnighthad lost nine-tenths of its assets and control of all of its branches inRussia.6 In the first days of 1918, two members of the bank's board ofdirectors in Paris, Gaston Raindre and Andre Benac, both influentialFrench bankerswho held important positions within the French govern-ment before entering private business,requested protection of the BRA'sassets outside Russia, offering in exchange to put the bank's offices at5 Rene"Girault, 'Problemes de l'impe'rialisme e'conomique a la veille de la premiereguerre mondiale', Revue du Nord ( 1975 ) , p. 127.6 'Note pour Monsieur PoutilofF, signed S. [sic] Poutiloff, 6 Aug. 1925, MAEE-Chine/380, fos. 245-66.

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The BanqueRusso-Asiatique 725the disposalof France.7At the same time, the BRA pravleniewasreconstitutedn Paris out of reachof the Bolsheviks.Raindre,a formerpoliticaldirectorat the Quai d'Orsayand Frenchambassador t Berne and Tokyoat the turn of the century,was chair-man of the BRA board.Benac, a formerdirectorof the Mouvementgeneraldes fondsin the Frenchministryof finance,had before the warbeen the 'rightarm'of hisminister,JosephCaillaux.In addition,B6nacsatontheboardsof a longlist of Frenchcompaniesandbanks, ncludingParibasand the SocieteGenerate.

The upheaval n Russiamadethe BRA anxious aboutits position nChina.In theirwritingto the Frenchgovernment,Raindre and Benacemphasized hat the bank would need Frenchsupportto compel thePekinggovernment o continueto pay the Boxerindemnity,which wasindispensableo the bank'scontinuedsolvencyand the maintenanceofthe tsaristmissions at Peking and Tokyo. As French nationals heldthree-quartersf the bank'scapitalstock,whichBenac estimatedat 150millionfrancs,the BRA, in return,could providefinancialsupporttoFrench ndustries perating n Russia.In spiteof Bolsheviknationaliza-tion, the bank still possessed mportantassetsoutside Soviet control,especiallyn China,and thesewouldgrowas 'order'was re-establishedin Russia.On 8 January, heforeignminister,StephenPichon,promisedRaindrethat the Frenchgovernmentwould do everythingwithin itspowerctosafeguardFrenchfinancialresourcesnvested n Russiapar-ticularly in the Banque Russo-Asiatique'.8A week later, the Quaid'Orsaysent instructions o the French charge d'affairesin Peking,Damien de Martel,directinghim to supportthe bankin China.9In February,Maurice Verstraete,vice-presidentof the bank inPetrogradand a former French consul and commercial attache inRussia,proposed hat the BRA take over the ChineseEasternRailwayCompany,both as collateral or Frenchstockholders nd as a meansofmaintainingthe solvencyof the bank. Verstraete was an influentialbankerwithlongexperiencen Russia.LikeBenac,he had been closetoCaillaux but also to the former French foreign minister,TheophileDelcasse,10nd thushad a goodentree ntothe Frenchgovernment.His7 'Remis par M. Be"nacJ, Jan. 1918, and enclosing letters from Raindre to StephenPichon, MAE E-Chine/ 1 1 1 f os. 6-12; and also Benac to Fre'de'ric Fran^ois-Marsal, financial adviser to French premier and war minister, Georges Glemen-

ceau, 16 Jan. 19 18, SFervice] Hfistorique de 1'] AFrme'e, Vincennes], 5N 280.8 Pichon to Raindre, 8 Tan. 1018, MAE E-Chine/105, fo. 14.9 Pichon to Martel, no. 2q: and elsewhere, 16 Tan. iqi8, ibid., fo. 23.10 Rene"Girault, Emprunts russes et investissements frangais en Russie, i88y-igi4(Paris, 1973), P- 68.

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726 Michael JabaraCarleyrecommendations,ent by cable and diplomatic pouch to Paris, com-mandedimmediate attention at the Quai d'Orsay.Verstraetearguedthat the Chinesegovernmentat Peking,as well asthe otherAllies,wouldwish to keepthe ChineseEasternRailwayout ofBolshevikhands. The generalmanagerof the railway,GeneralD.L.Horvat, had been forced to call in Chinesetroops against insurgentBolshevikworkers,and reallyhad no optionbut to recognize he BRAassolestockholder f the company.The bankshouldcontinueto accepton depositthe receiptsof the railwayand shouldtakeresponsibilityorthe reconstitution f itsboardof directors, tranded n Petrogradby therevolution.Time pressed,however,as the Bolshevikswere attemptingto assertSovietauthorityoverthe railway.11Verstraete's iewsweresharedby the Russiangroupin the bank,inparticularbyAlexeiIvanovichPutilov,chairmanof the BRApravlenie.Putilovhadbeenforcedto fleeSt. Petersburg fterthe Bolshevikseizedpower,and had madehisway to Chinawhere he had becomeinvolvedin efforts o safeguard he bank'sposition here.Known beforethe waras a memberof the 'BigThreeof St. Petersburg', r the 'ThreeHorse-men of the Apocalypse',Putilov,likemanyof his Frenchcounterparts,had startedhis career n government ervice,risingquickly hroughtheranksof the ministryof finance.12 ventuallyhe left the government omake hisfortune n businessandbankingandbecameone of the richestand most influentialfinanciers n St. Petersburg.His reputationwasmarked,according o somesources, bythe total absenceof any moralscruple'and by strongGermansympathies.After the First WorldWar,rumours irculated hathe had tradedwith the enemy,andthat friendsin the ministryof financehad quasheda chargeof high treasonagainsthim.13f Putilovhad little enthusiasmorwar,he hadlessforthe revolu-tion, and in August 1917 providedmoneyto the counter-revolutionary,General L.G. Kornilov,for an abortivecoup d'etat againstthe Provi-sional Governmentof A.F. Kerensky.Although this did no harm toPutilov'sreputation n the eyesof the Frenchgovernment,his presencein Chinaexacerbated raditionalFranco-Russianivalries vertheBRAand the ChineseEasternRailway.In earlyFebruary1918,PutilovcabledfromShanghai o the bankinParissupportingVerstraete'sproposals,and himselfproposed, n view11 'Note sur la SociSte"u Ghemin de Fer de l'Est Chinois,'M. Verstraete,21 Feb.1918, MAEE-Chine/108, fos. 68-74.12 A. I. Romanov,Oncea GrandDuke (New York, 1932), p. 249.13 \Au sujet des Usines Poutilov P. 689b.U., 9 Nov. 1922, AlrchivesJJNlationalesJ,F7 I349I>Ministerede FlntSrieur,SuretyGe"n6rale;nd *Ausujet de Poutilov',P.7717.U., 11 May 1923, enclosing the translationof an article on Putilov pub-lished in Novoe Vremia (Belgrade), 8 May 1923, AN F7 13492.

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The BanqueRusso-Asiatique 727of the absenceof a viable currencyalong the railway,that the BRAshouldissuebanknotesto be called 'Siberianroubles'to pay a rail-way militia and otheremployees.Japanesebanks shouldbe invited tohelpfloat the new currencyn view of Japan's ong-standingambitionsin Manchuria, and its circulationshould be extended into easternSiberia as Bolshevikauthority was overthrown.14 t was here thatPutilovand other membersof the Russiangroupin the BRA begantorun afoul of the Frenchgovernment,especiallyof the French charged'affaires.Martel-who had taken up his post in 1913-was wellinformedof the effortsof Russiandirectorsof the bank to limit Frenchinfluence n its affairs.Deeply suspicious f Putilov andthe bank'sheadof operations n China, L.V. de Hoyer, Martel did not mince wordswith Paris the Russianrevolutiongave Francethe opportunity o turnthe BRAinto an instrument f Frenchpoliticaland economic nfluencein China. In earlyDecember1917, he had warned Paristhat Hoyer'sactivitieswere intended to protectRussianinterests,at the expenseofthe French,andnow his fearswereproving ust.15Leon Viktorovichde Hoyer (or von Goier) was borninto the Balticnobility.LikePutilov,he had served n the Russianministryof financeand been appointedto the BRA in Chinabeforethe war. He had alsoservedas a financialagentof the Russiangovernment n the Far East,and had an unsavouryreputationas a speculatorwith a largefortuneamassedbeforethe revolution.Frenchsources abelledhim a notoriousfrancophobe, openly sympathetic to Germany.16Martel consideredhim an arrogant intriguer',who took no account of French interestswhen developing he BRA's investmentpolicies.Although,in the past,the maintenanceof the Franco-Russian lliance had dictatedtoleranceof Russiandisregard or Frenchobjectives n China, Martel reckonedthat timeshad changed. Why should the Frenchgovernmentcontinueto tolerateRussianoperationsagainstFrench nterestswith,as he put it,'ourown money'?Rather, the Frenchgovernmentshould take directcontrolof the BRA in China.17Martel'ssuspicionswere confirmedwhen, without consultinghim,Putilovnegotiatedwith the Peking government o reorganize he BRA14 Putilov to N. Raffalovich,memberof the BRA board of directors n Paris,7 Feb.1918, MFB32820, formerlyF30 1921.15 Martel, no. 216, 4 Dec. 1917, MAE E-Chine/m, fos. 1-2. Pierrede Margerie,political director of the Quai d'Orsay, left a marginal note on MarteFs letterindicatingthat he sharedentirelyhis viewsof Hoyer.16 General M.P. Janin (in Siberia), no. 460 conf, 27 Nov. 1919 which included anassessmentof Hoyerin the enclosedno. 143 SR, 29 Oct. 1919, SHA 7N 809; andMAE internal note, n[ot] sfigned], 13 Jan. 1919, MAE E-Chine/107, fos. 5-6.17 Martel to Jean Gout, head of the Sous-directiond'Asieat the Quai d'Orsay,per-sonal letter, 10Jan. 1918, MAE E-Chine/108, fos. 24-5.

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728 Michael JabaraCarleyand the ChineseEasternRailway,appointinga new boardof directorsmade up of Russiannationals, ncludingPutilovhimself, Horvat, andHoyer.18By the middleof February,Martel had lost all patience hewarnedParis hatHoyerandPutilov,workingwiththe Russianministerat Peking,N.A. Kudashev,had 'systematicallyxcluded'him and weretryingto deny the Frenchgovernmentany role in the bank in China.He recommendedhatFrenchagentsshould be assigned o eachimpor-tant branchof the bank there and to the ChineseEasternRailway.19Whilethe Quai d'OrsayendorsedVerstraete'sproposal o take overthe ChineseEasternRailway,and Putilov's o issueBRA banknotes,atfirst t didnotrespondoMattel'sconcerns.20utMartePs iewssoonwonsupport.For Martel andforthe Quai d'Orsay, he protectionof Frenchinterestsmeantnot onlyFrenchdirectors n the boardsof thebankandthe railway,but Frenchpersonnelworkingwithin these institutions nChina. It also meant ordersfor Frenchmanufacturedgoods, and aninvestmentpolicy favouring French companiesstarting up or doingbusiness n China. In thissense,Martelwas only advocatingthe tradi-tional policythe Frenchgovernmenthad pursuedtwenty yearsearlierwhen Verstraetehad beennamed,in 1899, to the boardof directorsofthe Banque Russo-Chinoise, n order to promote French economicinterests.Martel asked he Quai d'Orsay orauthority o intervenewiththe Pekinggovernment o stopPutilov.21This time the Quai d'Orsayactedquickly,as F.A. Kammerer,headof the financial ervice,and PhilippeBerthelot,deputypoliticaldirectorof the Quai d'Orsay, paid close atttention to Martel's complaints.Berthelot,who had enteredthe foreignservice n 1889, was a powerfulinfluence n the Quai d'Orsaywith a strongpersonal nterest n the FarEast.Kammerer,a juniorto Berthelotand his admirerhad,likeMartel,studiedat the ficole libre des sciencespolitiques,a trainingschool forthe Frenchpublicand foreignservice.In 1915 he had servedas deputychef du cabinetand in 1917 as a bureau chief in the Sous-directiond'Europe; n 1918-20, he would be made responsibleor the formula-tion of FrenchpolicytowardsSoviet Russia.The influenceof the twomen was the moreimportantbecausePichon, a weak foreignministerin any case and now preoccupiedwith the prosecutionof the war,usually signed without revision or comment whatever Berthelotputbeforehim.2218 Martel,nos. 104, 106-7, 27 Feb. 1918,MAE E-Chine/108, fos. 79-81.19 Martel,no. 75, 1 1 Feb. 1918, ibid., fos. 39 ff.20 Pichonto Martel,no. 94, 21 Feb. 1918, ibid.,fos. 61 ff.21 Crisp,'The Russo-ChineseBank',passim,and fn. 18 above.22 M.J. Carley, Revolution and Intervention: The French Governmentand theRussian Civil Warigiy-igig (Montreal, 1983), pp. 51-2, 97.

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The BanqueRusso-Asiatique 729KammererandBerthelotpreparedon 1March nstructions uthoriz-ing Martelto intervenewith the Pekinggovernment o block Putilov.In their view, the absence of any 'legal' authority n Russia and thethreatto the interestsof Frenchstockholdersn the BRA were sufficientreasons or Martelto insist that officialsof the railway,the bank, andthe Russianlegation in Peking not act independentlyof the Frenchgovernment.The Quai d'Orsay eft it to Martel to decidehow to takecontrol.23One importantcaveat was added: the French governmentwould

have to bear n mindthe possibility f Japanesemilitaryaction in north-east Asia which, throughoutthe first nine months of 1918, was animportantpriority or the Allies.Japanhad alreadyestablished politi-cal and economicpresence n southernManchuriawith its victoryinthe Russo-Japanesewar of 1905. In the yearsthat followed,the con-tinuingRusso-Japanese ivalry n Manchuria focusedon the ChineseEasternRailwayand the importanttimberand coal resourcesof theregion.The Japanesegovernmentwaseagerto extend ts influence ntonorthernManchuria and easternSiberiaundercoverof Allied actionagainstthe Bolsheviksand, given the mountingmilitarycrisis on theWesternFront,was the onlyAlliedpowerwith troopsavailable.China,politicallydivided andin a virtualstateof civilwar,and with a govern-ment at Pekingwhich had authorityonly in the north,was dependentonJapan,andthusnotableto resistherpretensionsn Manchuria.Wellaware of Japan's ambitions,the Quai d'Orsaytold Martel that theAllies'approvalof Japanese nterventionwoulddependon a guaranteeof theirinterests n Manchuriaand Siberia,includingthose of Francein the BRA and the ChineseEasternRailway.24The Quai d'Orsay'scables to Peking crossed with another fromMartelrecommendinghe dismissalof Hoyer,whosepresence n Chinahe regardedas inimical to Frenchinterests.25 ammererand Berthelotnotonly agreed hatHoyershouldbe dismissed, rging hisstepon Benacand the BRApravlenie,but alsothatFrenchnationals houldbe placedin the administration f the Chinese EasternRailway. But their per-spectivewasbeginning o go farbeyondcontrolof the bankand protec-tionof the interestsof Frenchstockholders.Kammerer old Martel thatthe BRA, throughthe issue of banknotes,was likely to become 'the23 Pichon to Martel, nos. 118-19, 1 March 1918 (drafted by Kammerer, revised by

Berthelot), MAE E-Chine/108, fos. 89 ff.24 Pichon to Martel, no. 120, 2 March 1918 (drafted by Margerie), ibid., fo. 98. ForFrench government views on Japanese intervention, see Carley, Revolution andIntervention, pp. 48-51, 72-80.25 Martel, no. 117, 1 March 1918, MAE E-Chine/108, fo. 86.

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730 Michael JabaraCarleyprincipalfinancialagencyof Allied action in the Far East for the re-establishmentof order on the Trans-SiberianRailway and for thereconstitution f a regularRussianadministrationn Asia5. t wasthere-fore 'indispensableo establishcompletelyreliable relations and closecollaboration'between local French and Russianofficials.26n Frenchterms, his meantbringingthe Russiangroupin the bankfirmlyunderthecontrolof theQuaid'Orsay.However, Putilov immediately began to fight back, sending fromShanghaia seriesof angrycables o Benacasking orthe reversal f whathe took to be MartePspersonalpolicies.27 enac'seffortsto strengthenPutilov'scredibilitywith the Frenchgovernmentwere more effectivethan they might have been, because MarteFsdiplomatic nterventionsin PekinghadunderminedheBRA'spolitical tandingwiththe Chinesegovernment,which seemedinclinedto seize the Chinese EasternRail-way and to refuseto pay the Boxerindemnity.As the Pekinggovern-ment wasscarcelymorethana puppetof the Japanese,Martel'seffortsto discredit he BRA'sRussianagents n Chinariskedyieldingthe rail-waytoJapan.28n view of Frenchplansforthebank,therefore,heQuaid'Orsayquicklymodified tsposition.Kammererand Berthelotsent new instructions o Martel backingaway from his view that French investmentcapital ought to serveFrenchprivateaswell as state nterests.The protectionof Frenchprivateinterests, heysaid,should take secondplaceto 'generalAlliedpolicy ntheFarEast',nor could t be allowed o compromisehe Frenchalliancewith Russia,represented y Putilov,Kudashev,and otherRussianoffi-cials n Chinawhowould,soonerorlater,takepoweragain'when orderwas reestablished'.The ChineseEasternRailway was an 'importantpolitical ever'overwhich Franceshouldestablishherrights n the nameof Frenchinvestors n the BRA, but 'not at the priceof delivering herailwayinto the hands of the Chinese ... and eventuallyover to theJapanese'.Hoyerwould be dismissed,and Frenchagentsappointedtothe bankin China andto thepravleniewhich hadbeenmovedto Paris.Beyondthis the Frenchgovernmentcould not go: both the BRA and26 Pichon to Martel, no. 126, 5 March 1918 (drafted by Kammerer, revised byBerthelot), ibid., fos. 108 ff; and Joseph Louis de Fabry, charged with Russianaffairs in the ministry of finance, to Charles Sergent, under-secretary of state,finances, 2 March 19 18, MF B32820, reporting Kammerer's views. For Frenchpolicy regarding intervention in Soviet Russia, see Carley, Revolution and Inter-vention, passim.27 Gout to Kammerer, n.d. Ir10 March 191HLMAfc b-Uhine/ 108, to. 144.28 See Be*nac to Pichon, 8 March 1918, ibid., fos. 130-3, and Auguste Wilden,French consul-general in Shanghai, no. 16, 9 March 1918, ibid., fos. 134-5; sn[sans numero], 9 March 1918, ibid., fos. 136-7; and sn, 10 March 1918, ibid.,fo. 142.

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The Banque Russo-Asiatique 731the ChineseEasternRailwayhad to remain Russian n order to retaintheirprivilegedposition n China and to providea bridgehead or theanti-Bolshevikmovement. The Franco-Russianpartnership,howeveruneasy,had to continue.Duringthe springof 1918, relationsbetween the two sidesin Chinawere strained.PutilovvirtuallydefiedMartel,which the Quai d'Orsaywould not have toleratedbut for its preoccupationwith the WesternFront.PutilovsoughtJapaneseandAmerican nvestmentn the ChineseEasternRailway,and Kudashevorganizedresistanceo Frenchcontrolof theBRA.29Althoughthe Quai d'Orsaywaspowerlesso stopPutilov,it insistedon the sackingof Hoyerand the additionof French nationalsto the pravlenie n Parisand the bankin China,whereMartelcoveredthe BRA with the Frenchflag. However,the boardof directorsof theChineseEasternRailwaywas reconstituted nderRussiancontrolwithno Frenchrepresentatives, nd in the summer,Putilov left China forJapan,the United States,and France, n searchof freshcapitalfor theBRA. His departureand that of Martelfor Siberia into the thick ofthe civil war- left the affairsof the BRA in China temporarilycalm.Beforeleaving Peking, Martel warned Berthelot n a privateletteragainstPutilov,and even morestronglyagainstHoyerwho,he said,wasbound to returnto Manchuria.30 he new French minister n Peking,Auguste Boppe, initiallysought to improverelationswith his Russiancolleagues,but in a few monthswas even morecriticalof PutilovthanMartelhad been. As Boppeput it, Putilov'hadneverresignedhimselfto consider he BanqueRusso-Asiatique s an organof Frenchcapitaland had alwayssupposed hat he could use [the bank] as an ... instru-ment in the service of Russian political groups which he secretlyfavoured'. The politiciansso favoured had included Kornilov beforethe Bolshevikseizure of power, Horvat, and the anti-Bolshevik ree-booter, G. Semenov,in 1918. Like Martel, Boppe drew attentiontoPutilov'snegotiationswithJapaneseand American inanciers,to lessenthe financial ervitudeof the banktowardFrance',over whichnegotia-tions neither the Frenchlegationin Pekingnor Putilov'scolleagues nChina had any control.31Nevertheless,Putilovretainedthe supportof29 Wilden, no. 19, 13 March 1918, MAE E-Chine/108, fo. 152; Martel, no. 188,5 April 1918, ibid., fo. 204; and Martel, no. 204, 13 April 1918, ibid., fo. 206.30 Martel to Berthelot,personal letter, 20 May 1918 (the last part of the letter is

missing), MAE E-Chine/105, fos. 153-4. Whether Martel was sent to Siberiabecause of his quarrelwith Putilov is not known,but by the end of 1920 had seenmore than two years' service on various fronts, including brief postings in theCaucasusand the Crimea.31 Boppe,no. 636, 5 Oct. 1918,MAE E-Chine/i 11, fos. 136-7.

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732 Michael JabaraCar eyBenac,who resistedQuai d'Orsayeffortsto exercise oo close a controlof thebank.32The rivalries ngenderedbythe creationof theBanqueRusso-Chinoisetwentyyearsearlierhad thusintensifiedas the balanceof powerbetweenFranceandRussiawas overturnedbyRussia'smilitarycollapse,andtheFrenchgovernment aw an opportunity o exercisegreatercontrolovertheBRA. In Peking,Martel was an aggressiveproponentof this 'hard'approach,which Berthelotand Kammerer n Parissupported nsofaras circumstancespermitted.Its implementationproveddifficult,how-ever,owingto the desperate truggleon the WesternFront.* # *Paradoxically, n 1918 Verstraete,whose recommendationshad firstexcitedtheinterestof theQuaid'Orsay n the ChineseEasternRailway,now temporarilyhreatenedFrenchcontrolof the BRA.Verstraete,ikeotherFrenchand Alliedobserversn Russia,wasimpressed ytheenergyof the Bolsheviks nd thoughtto save someof the assetsof the bankbyco-operatingwith the Soviet government n the reorganization f theRussian banking system33the first of many efforts by the bank'sofficials o come to terms with the Soviet government.But the Quaid'Orsaywould not tolerate such co-operation(though it would do soin the 1920s), nor would the bank'sboardof directors, earingfor itsprivilegesand assets n China.The Frenchgovernmentwanted to usethe bank as a bankof issue to supportthe Soviets'Russianopponents;withtheGermanandBritishgovernments uyingup shares n a numberof Russianbanks,Francecould ill affordto lose itsinfluence n this one.The Quai d'Orsay herefore nstructedtsambassadoro Russia,JosephNoulens,to makeVerstraete top his talkswith the Bolsheviks,and inSeptember1918 he wasstrippedof his authority n the bank.34The Frenchgovernment onsidered he BRA the principaleconomiccomponentof itsanti-Bolshevik olicyuntil late in the summerof 1918,when controlof the bank wasfound to have slippedinto the handsofthe Russian I. Stakheev and Company. In 1916, Verstraeteand aFrenchpartnerhad takenoutoptionson a newissueof stock,floatedbythe bank,but as they could not raise sufficientcapital,had to give up32 'Note confidentiellede M. [Gaston-Camille]Kahn', [French oreignservice officerwith long experience in the Far East], 26 July 1918, MAE E-Chine/105, fos.248-9.33 MauriceVerstraete o his brotherGeorges n Paris,8 May 1918,MF B32820.34 Pichon to Noulens, nos. 284-6, 23 June 1918 (drafted by Kammerer,revisedbyBerthelot), MAE, ancienne seVieZ- Europe, 1918-1929, followed by the geo-graphic subheading,volume and folio numbers,hence Z-Russie/414, fos. 31 ff.;and also Carley,Revolution and Intervention,pp. 100-1.

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The BanqueRusso-Asiatique 733their options to Stakheev.35Although apparentlysympatheticto theAllied cause,Stakheevwas too much of an entrepreneuro be trustednot to sell to the highestbidder.36The ministryof financeadvisedtheQuai d'Orsay hat if Stakheevwantedto sell, he mustbe persuaded osellto a Frenchgroup.37Kammererdrafted nstructions or Noulenstothiseffect, stressing hat a general assemblyof the bank's stockholdersshould be blockeduntil the end of the war to preventan unfriendlytake-over.Putilov,whowasa partner n the Stakheevcompany,assuredthe Frenchgovernmentthat the firm'sshares would not pass to un-friendlyhands,butassurancesromPutilovwere cold comfort n Paris.38Frenchgovernment nterventionon behalf of and within the BRAtaperedoff untilthe followingsummerwhen the Russiancivilwartooka turn in favourof the anti-Bolsheviks.With prospectsgood that theSovietgovernmentmight finallybe overthrown,French financiersandtraderspreparedto resumeactivitiesin Russia. A tradingsyndicate,headed by Noulens, was organizedby Paribas and the Banque del'Union parisienne.39 t the same time, interestgrew in transformingthe BRA into a French charteredbank.40The second of the 'Three Horsemenof the Apocalypse',CharlesJaroszynski,was at the centreof these efforts.Jaroszynskiwas a Polewith a large fortune made before the war, and a reputation fordubious financialdealings.41n 1918 he got involvedin Britisheffortsto buy up Russianbank shares,and early in 1919 did the same inGermany.42The Quai d'Orsay eventually came to see Jaroszynskias a buffoon,but he was takenquite seriouslyduringthe heady sum-mer of 1919 when anti-Bolshevikarmies were advancing towards35 Note by Verstraete, 2 1 June 1918, MF B32820.36 *RA', note by Sergent, 28 May 1918, ibid.37 L.L. Klotz, finance minister, to Pichon, no. 51 11, 1 June 1918, ibid.38 Pichon to Noulens, no. 24 1 11 June 19 18, MAE E-Chine/ 105, fo. 174 ; EugeneRegnault, French minister in Tokyo, passing on message from Putilov to Benac,no- 293, 8 July 19 18, ibid., fo. 231; Klotz to Societ6 G6nerale, no. 6173, 2 July19 18, MF B32820; Soci6t6 Ge*ne"raleo Klotz, 13 July 1918, ibid.; and 'Note dela Socie*te" e'ne'ralesur la Banque Russo-Asiatique', Nov. 19 18, MAE E-Chine/11 1 fo. 146.39 Garley,Revolutionand Intervention,p. 139.40 Note by J.L. de Fabry,ministryof finance, 17 July 1919, MF B32022, formerlyF30 1111.41 Romanov,GrandDuke,p. 250.42 Louis Delavaud, French minister in Stockholm, no. 228, 4 Feb. 1919, MAE

Z-Russie/495, fo. 8; and 'Note remisepar N. Raffalovich',29 April 1921, ibid.,fos. 313-22; see also E. Semenoff, Un cri d'alarme: Epargne franco-russeetbanques russes depuis le coup dStat bolcheviste (Paris, 1926), passim; MFB32005, formerlyF30 1092/93; and Michael Kettle, The Allies and the RussianCollapse,March igiy-March 1918 (Minneapolis, 1981), passim.

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734 Michael JabaraCarleythe centreof SovietRussia.43aroszynski ppeared o workcloselywithParibasand Societe Generateto launch a new issue of BRA stock,approvedby the Quai d'Orsayon conditionthat at least half of thepravlenieand board of directorswere French nationals,an approvalfacilitatedby the bank'spledge to assist in the rebuildingof Frenchindustries n Russia.44 t was virtuallythe same plan as proposedthepreviousyear by Benac and Raindre,withoutthe focus on China.Thefresh capital needed dependedon the sale of new stock, which itselfdependedon the successof the anti-Bolshevik rmies.However,by theend of November the summer'shope of a speedySoviet collapsehadvanished.The RedArmywon decisivevictorieson all fronts.Jaroszynskistillhopedto carryouthisplan,buthe could not raise hemoneyfor it.45Soviet victories n the civil war did not end hopes of refloatingtheBRA, or transformingt into a Frenchcharteredbank. At the end of1919, the Chinagroup againaskedfor Frenchhelp in fendingoff newefforts by Peking to take over the Chinese EasternRailway which,throughouthe Russian ivilwar,had beentheobjectnotonlyof Chinesebut also of Japaneseand US interest,as well as French.The rivalriesamongthemwerebarelyaffectedby the conclusionearlyin 1919 of aninter-Alliedagreementcoveringthe entire Siberianrailwaysystem, n-cluding he ChineseEastern,ollowing he AlliedmilitarynterventionnSiberiabegun n August1918.Bythe endof 1919,A.V. Kolchak'santi-Bolshevikgovernmenthad collapsed,and chaosreignedalongthe rail-way as the survivorsof the counter-revolutionn Siberiafled eastwardfrom the advancingRed Army. A French militarymission and theanti-BolshevikCzechoslovakLegion, supportedand theoreticallycon-trolledby the Frenchgovernment,had difficulty scaping he debacle.46The fall of the Kolchak governmentunderminedthe authorityofHorvat and the Russian legation in Peking. The Russian minister,Kudashev, earingthe pretensions f the Pekinggovernment, urnedtothe French egationas he had done in 1918, proposing hat the BRA inChina takeover directadministration f the railway,which wouldthuscome under Frenchprotection n exchangefor orders or rollingstockand materielplacedwith French firms.Frenchnationalswould also be43 Panafieu to Berthelot, then secretary-general, or to E.M. Peretti de la Rocca,private letter, 1 July 1921, MAE Z-Russie/495, fos. 324-5; and Berthelot orPeretti to Panafieu, private letter, 30 July 1921, ibid., fos. 328-9.44 Societe* Gne*rale/Paribas to Pichon, 6 Sept. 1919, MAE E-Chine/m, fos.

158-60.45 MAE internal note, n.s., 27 Nov. 191 9, ibid., fo. 171.46 For the general situation in Siberia and Manchuria during the civil war, see PeterS. H. Tang, Russian and Soviet Policy in Manchuriaand OuterMongolia, 191 -1931 (Durham, N.C., 1959), pp. 114-29.

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The Banque Russo-Asiatique 735brought nto the administration f the company.Boppe supported heseproposals,provided he BRA became a Frenchbank,but warnedthatprompt action would be necessary o thwart the ambitions of otherAlliedpowers.47The Quai d'Orsay's nitial responsewas cautious,but Kammerer,who had recentlybecomehead of the Sous-direction 'Asie, minuted'It would be interesting o take underour control the ChineseEasternline, providedwe arenot laterforcedto give it up.'48 n early January1920, the Quai d'Orsaythereforeagreedto take the Chinese EasternRailwayunderFrenchprotection,butonlyon condition hat a majorityof seatson a new boardof directorswould be French.49As Berthelotlater told Boppe, the Frenchgovernmentdid not intend to extend itsprotection onlyto be eliminatedfrom [the railway]later on when itsprotectionwasnolongeruseful'.50In spite of the difficulties acing the Russian legation in Peking,Kudashevwould not acceptthe French terms.51Negotiationswent onthroughoutFebruary1920,but the Quai d'Orsaybeganto lose interestin light of Russian talkswith other parties.Kudashev had authorizedHorvat to approachboth the Japanese and the Chinese to find analternativemeans of maintainingcontrol of the railway indeed ofrunning t, as the companywasvirtuallybankrupt.The railwayneededfreshcapitalto continueoperations,whichnecessarilyimited the cash-poor Frenchgovernment's bilityto force its terms on the Russiansorto gainsomeshareof controlof therailwaywith the otherAllies.Boppeproposedas an alternativehe 'internationalization'f the line,to whichthe Japaneseseemed agreeablein order to 'give everyonehis share'- also to preventthe Americans rom obtaininga dominantfinancialposition.52 oliticalallianceschangedas quicklyas shiftingsand, andnegotiationswerefeverishas the competingAllies tried to preventoneanother romgainingtheupperhand.Berthelot and Kammerer,who formulatedFrench policy in thisregard,werethoroughlydisenchantedwith the anti-BolshevikRussiansbecauseof theirmilitary ailures n the waragainstthe Soviets.In early47 Boppe, nos. 487-8, 10 Dec. 1919, MAE E-Chine/108, fos. 241-4; and RogerMaugras, French high commissioner in Siberia, nos. 697-9, 16 Dec. 19 19, ibid.,fos. 245-7.48 Note by Kammerer, 19 Dec. 19 19, ibid., fo. 248.49 Aide-memoire, Russian embassy in Paris, 8 Jan. 1920, MAE E-Chine/109, fo. 1;and Pichon (Berthelot) to Boppe, nos. 11-15, 13 Jan. 1920, ibid., fos. 10-11.50 Pichon (Berthelot) to Boppe, nos. 16-17, 13 Jan. 1920, ibid., fo. 15.61 Boppe, no. 29, 19 Jan. 1920, ibid., fos. 19-20; and Boppe, nos. 32-3, 20 Jan. 1920,ibid., fos. 21-2.52 Boppe, nos. 98-9, 26 Feb. 1920, ibid., fos. 53-4; Boppe, no. 131, 19 March 1920,ibid., fo. 74; and numerous other cables from Boppe in MAE E-Chine/109.

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736 Michael JabaraCarleyMarch 1920, Kammerer minuted that France should pull out of thenegotiations as the Russians wanted to exclude her from any control of'their' railway. Why should France get further involved, he questioned,when the rights of the BRA overthe Chinese EasternRailway were 'theo-retical at best, and in fact, a complete deception'?53Kammerer's con-tempt for the anti-Bolsheviks was venomous: 'The Russians are absurd... and moreover we should avoid providing any financial support what-ever,especially as we are shutting down our ruinous expedition in Siberiaand we are not going to start over again somewhere else.'54A few weekslater Kammerer modified his position slightly when he scrawled anothermarginal note : 'If we can get involved without money, it might not be abad idea, but the Russians are so incapable that we should not con-template making any deal with them.'55Kammerer's views were formalized in instructions for Boppe. TheFrench government could make 'no financial contribution whatever' toa reorganization of the Chinese Eastern Railway, and would thereforehave to pursue a less aggressive policy limited to protecting Frenchprivate interestsin the BRA. However, Boppe was still to protest againstany attempt by third parties to take control of the railway.56For theFrench government and the BRA pravlenie, the only hope of securingFrench influence over the railway appeared to lie in playing off on theChinese and Japanese governments. Internationalization, proposed bythe other Allies, could only be a last resort, as French interests wouldthen be swamped.57The success of this strategy was at best limited. In September 1920,BRA officials in China undertook direct negotiations with the Pekinggovernment. An agreement was struck to maintain the BRA's controlover the railway,58and a modus Vivendi signed on 2 October 1920which allowed the BRA to manage it. But the agreement also recognizedChina's provisional sovereign rights over the railway zone until somearrangement could be reached between Chinese authorities and a recog-nized Russian government.59Asserting its authority, Peking removed53 Note byKammerer,6 March 1920, ibid., fo. 57.54 Kammerer'sminuteon Boppe'snos. 98-9 citedabove,ibid.,fos. 53-4.05 See Kammerer'smarginalnote on kink L,abonne,Servicerusse,MAIL, o Kam-merer,22 March iQ2O, bid., fo. 73-56 Millerandto Boppe,no. 96, 4 April 1920,ibid., fo. 93.57 Millerand (Kammerer) to Boppe, nos. 125-6, 7 May 1920, MAE E-Chme/109,fos. 128-9. For Chinese and American perspectiveson these negotiations, seeLeong Sow-theng, Sino-Soviet Diplomatic Relations, 1917-1926 (Honolulu,

1976), pp. 98-115; and B.M. Unterberger,America'sSiberianExpedition, 1918-1920 (Durham,N.C., 1956), pp. 204-29.08 Boppe,no. 305, 7 Sept. 1920,k-Uhine/ 109, 10. 104.59 Boppe, no. 178, 11 Oct. 1920, MAE E-Chine/no, fos. 8-25; and lang, RussianPolicy, pp. 130-1.

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The Banque Russo-Asiatique 737Horvatfrompower n Harbin,withdrewrecognitionof Kudashev,andsuspendedpaymentof the Boxer ndemnity o the BRA.There was not much the Frenchgovernmentcould do about thesedevelopments,houghBoppetriedwithoutsuccess o reverse hesuspen-sionof the indemnitypayments,and the BRA pravlenieaccepted onlyunderprotest he temporaryChineseassumptionof Russianrightsoverthe railway.60Moreover, n December1920Boppewarned that in spiteof the Octobermodusvivendi,the authorityof the BRA overthe rail-way was quite uncertainbecauseof Japaneseand Soviet 'intrigues'.61These were the inevitabledrawbacksof a Frenchimperialismwithoutmeans.But Berthelot eckoned t would be a wasteof moneyto commitscarce financial resources o the railway.The Quai d'Orsaythereforebided its time, leaving the 'unfortunateRussians' in China to shiftlargely or themselves.62o be sure,French officialswouldstillattemptto protectin some measureformertsaristprivileges n China, but thepriceof Frenchprotectionwasgreatercontrolover the railway hroughthe BRA. Besides,French protectionwould not go beyond Boppe'sexertions n Peking. Indeed, the Frenchgovernmentdeclinedeven topay the costsof maintaininga Frenchrepresentativen the Inter-AlliedTechnicalBoardestablishedn 1919 to administer he Trans-Siberianand ChineseEasternRailways,untilBoppepersuaded he Quai d'Orsayto do so at the expenseof the BRA.63The Quai d'Orsay husappeared o want something or nothing: toretaina stake in the BRA and the Chinese EasternRailway withoutmakinganyrealfinancialorothercommitment.The Frenchmaintainedthis stancethroughout he early 1920s,even after Berthelotand Kam-merer'sday. Paul Cambon,the long-timeFrench ambassadorat Lon-don, noted that Frenchpolicy during this period often exceeded theFrenchgovernment's apabilities.64his wasundoubtedly he casewithregard to the BRA, in dealing with which the French governmentconstantlyattemptedto piggybackon the anti-BolshevikRussians.60 Millerand to U.-R. Reau, French consul-general in Shanghai, no. 51, n.d.[September1920]E-Chine/109, fo. 203; Boppe,no. 163, 28 Sept. 1920,E-Chine/113, fos. 130-7; and Boppe, no. 204, 16 Nov. 1920, ibid., fos. 141-4.01 Boppe,no. 422, 31 Dec. 1920,tMJhme/ 110,to. 50.62 See Berthelots minutes on CharlesLepissier,Frenchconsul in Harbin,no. 13, 10Sept. 1920, MAE E-Chine/109, fo. 188; Rene"Andre", rench consul in Vladi-vostok,no. 157, 29 Sept. 1920, ibid., fo. 218; and Andre,no. 182, 26 Dec. 1920,MAE E-Chine/i 10, fo. 46.63 Georges Leygues, premier and foreign minister (Peretti), to J.J. Jusserand,

Frenchambassador n Washington,nos. 3049-50, 31 Dec. 1920, MAE E-Chine/110, fos. 54-5; Boppe, no. 422, 31 Dec. 1920, ibid., fo. 50; Kammererto Boppe,no. 6, 7 Jan. 1921, ibid., fo. 59.64 See, for example, Paul Gambon, Correspondence, 8yo-iga4 (Pans 1946), 111.379-

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738 Michael JabaraCarley* # *

While Boppe laboured to defend the BRA's interests in China, Frenchofficials in Paris sought to encourage its legal transformation into aFrench chartered bank. Although Jaroszynski's plans came to nothing,in the spring of 1920 the French group in the bank sought to set up aFrench chartered company to receive all the assets of the BRA outsideSoviet Russia.65 Some French stockholders were anxious to sell theirshares because of the bank's doubtful future, but the Quai d'Orsay dis-couraged them.66The hopes of the Quai d'Orsay for a quick transformation of theBRA were dashed by a series of conflicts among the bank's directors,not only between the French and Russians on the board, but also withinthe Russian group itself. The latter arose out of Putilov's managementof the bank in 19 19. Putilov had drawn off profits from the bank inChina to finance trade operations in southern Russia during its occupa-tion by anti-Bolshevik forces. When these investments led to hugelosses after the anti-Bolshevik movement collapsed, French and Russiandirectors joined forces to remove Putilov as head of the bank.The most important of the Russians opposing Putilov was his formerclose collaborator- and third member of the 'Three Horsemen of theApocalypse' - Procopy Petrovich Batolin. Alleged to be the son of aliberated serf, by 1914 Batolin was both wealthy and powerful and, likePutilov, a partner in the Stakheev company. After the Bolshevikseizureof power Batolin fled abroad and eventually reached France in Novem-ber 1919.67 In December 1919 he set up, along with Putilov and twoother collaborators,a dummy corporationcalled the Compagnie generatede commerce et d'industrie which 'bought' 82,000 BRA shares from theStakheev company. The transaction was highly questionable: the actualstock certificates had been left behind in the vaults of the Russian banksnationalized by the Soviet government, and the only proof of theirexistence were bank receipts, themselves of doubtful legitimacy.68To Putilov's evident surprise his old colleague soon turned on him,65 A. de Saint Sauveur, then a member of the BRA Paris committee, to Kammerer,28 May 1920, MAE E-Chine/i 11, fos. 210-13.60 Andre Homberg, vice-president of the bociete Uenerale, to t rangois-Marsal, n.d.,MF B32820; Frangois-Marsal to Millerand, no. 131 19, 24 Aug. 1920, ibid.; andMillerand to Fran$ois-Marsal, no. 2125, 22 Sept. 1920, MAE E-Chine/m, fos.

228-9.67 Romanov, Grand Duke, pp. 249-50; and also an untitled report from the PansPrefecture of Police, 29 Dec. 1921, MAE E-Chine/i 12, fos. 143-5.68 Pierre Jaudon, judicial trustee for Russian property and interests in r ranee, todouard Herriot, 6 Feb. 1925, and ends., MF B 32820.

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The BanqueRusso-Asiatique 739findingreadyallies n theFrenchmembersof theboardangryaboutthebank's ossesand Putilov's nterferencen establishinga Frenchchart-ered institution o take overBRA assets n China.69BatolintemporarilyreplacedPutilov on the pravleniewhen, at the end of 1920, Frenchboardmembers,with the approvalof the Quai d'Orsay,triedto forcePutilovout altogether.The head of the BRA'sChinaoperations,W.S.Jezierski,also took part, having come to Paris at that time to preventfurtherbleedingof the bank'sresourcesn China.70Putilov was a formidableopponent, however, and would not goquietly.Heasked woRussianmembersof theboardto jointhepravlenieand set out to find French financialsupportto refloat the bank.71Hisspokesman n the venture was Antoine Vlasto, a nonentity in Parisbanking circles though with apparent connectionswith the FrenchRadicalParty.Vlasto provedincapableof raisingenoughmoney,andwas opposedby the French faction on the BRA board.72At the sametime,theRaindre actionappointed ournewdirectors,ncludingJezier-ski,to thepravlenie o controlPutilovwho wasnot,however,dismissed.Putilovinitiallyresisted his solution,or Quai d'Orsayarbitration orthatmatter,but in Aprilhe finallyyieldedfor fear of being drivenoutof the bank altogether.73His control, however,had been limited theQuai d'Orsay nstructedBoppein Pekingto adviseBRA authorities oacceptonly Jezierski's irectives,74 hichtheywereglad to do, becausethey needed the French legation's political supportto carryon, andbecausePutilov'sbad businessdeals threatened hesolvencyof the bankin China.The conflict betweenPutilov and the French directorson one sideand Batolinon the otherwasnot resolvedby thissettlement. n-fightingcontinuedandalarmedRaindrebecause he Societe Generateand Pari-bas,whichhad long backedthe BRA, werelosinginterest,wearyof itsinternalconflicts.In 1920and 1921,there were severalFrenchresigna-tionsfromthe boardof directors,ncludingthat of the vice-president f69 Boppe, nos. 301-2, 5 Sept. 1920, MAE E-Chine/i 11, fos. 219-21.70 Raindre to Aristide Briand, 18 Jan. 1921, ibid., fos. 260-1; and Kudashev toM.N. Giers, former Russian ambassador in Rome, 1 1 Jan. 1921, MAE E-Chine/1 12, fos. 75-9.71 Banque Russo-Asiatique , MAE internal note, n.s., 27 Jan. 1921, MAE E-Chine/1 11, fos. 277-8.72 See two notes by Labonne to Kammerer, 26 Feb. 1921, ibid., fos. 282-94.73 See various documents in MAE E-Chine/ 112, but especially three letters fromJacques de Gunzburg, member of the BRA board of directors, to Kammerer, 26March 1921, fos. 55-61; n April 1921, fos. 72-3; and 4 April 1921, fo. 239.74 Briand (Berthelot) to Boppe, no. 59, 18 March 1921, ibid., fo. 48; and theminutes of the BRA board of directors meeting of 14 March 1921, ibid., fos. 31-6.

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740 Michael JabaraCarleythe Soci6te Generate, Andre Homberg, which prompted Raindre toseekgovernment help.75In response to this request, Kammerer approached both Hombergand the influential director-general of Paribas, Horace Finaly, arguingthat since Putilov had been brought under control there was no needfor the Societe Generale and Paribas to withdraw their representativesfrom the BRA board of directors.76Kammerer's demarches, and Rain-dre's, failed: Homberg replied evasively, and some months later, inFebruary 1922, the Paribas representative also resigned.77Increasingdoubts at the Societe Generale and Paribas about the ability of the BRAto survive were due not only to dissension within the bank, but also toits shaky legal status. The BRA was a Russian chartered institution andhad not held a general assembly since 19 17. Theoretically, such anassembly should take place on Russian soil among stockholders owningproperly validated shares in the bank. Obviously, these conditions couldnot immediately be met, or circumvented, unless the bank's directorscould resolve their differences and a French chartered institution couldbe established.

Hope springs eternal, however, and a number of initiatives were madeto refloat the BRA, despite the continuing rivalries inside the bank, forevents in Russia seemed to revive its opportunities. In the spring of 192 1famine struck the Volga basin and intensified Soviet efforts, begun inthe previous year, to obtain western financial assistance and investmentto rebuild their devastated economy. In early January 1922 the Allies,on the initiative of the British prime minister, David Lloyd George,agreed to convene an international conference at Genoa, to whichSoviet delegates were invited, which would attempt to lay the ground-work for the economic reconstructionof central and eastern Europe andSoviet Russia. In France, these developments prompted an increasinglystrong business interest in the re-opening of the Russian market toFrench manufactured goods.78The resumption of trade relations with75 See two letters from Raindre to Briand, 3 June 1921, ibid., fos. 98-102; and 20June 192 1, ibid., fos. 107-8.76 Kammerer to Homberg, 24 June 1921, ibid., fo. 109; Kammerer to Finaly, 24June 192 1, ibid., fo. 1 1 1; and Kammerer to Raindre, 24 June 1921, ibid., fo. 110.77 Homberg to Kammerer, 2 July 1921, ibid., 10. 114; Kammerer to Jezierski, 9 Aug.192 1, ibid., fo. 121 ; and Raindre to Raymond Poincare, 20 Feb. 1922, ibid., fos.158-61.78 E. Beau de Lome'nie, Les responsabilitis des dynasties bourgeoises (Paris, 1954),

iii. 274, 277-8. On the Genoa conference, see Renata Bournazel, Rapallo: Nais-sance d'un mythe (Paris, 1974); Stephen White, The Origins of DStente: TheGenoaConferenceand Soviet-WesternRelations,1921-1922 (Cambridge,1985) ;and Carole Fink, The Genoa Conference: European Diplomacy, 1921-1922(ChapelHill, 1984).

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The Banque Russo-Asiatique 741Russia would require financial institutions, and here the opposing fac-tions of the BRA saw salvation, although that did not quiet their con-tinued and increasingly bitter rivalries. Plan and counter-plan were putforward by Putilov and his rivals to refloat the BRA.79Putilov was frantic to find a solution on his own terms, as any success-ful plan offered by his rivals would undoubtedly lead to his dismissalfrom the bank. He tried a number of gambits, including a proposal,similar to the one he and his colleagues had put forward in 1918, toestablish a bank of issue in Soviet Russia.80This and other ideas failedto attract French interest, but Putilov was not easily discouraged:rumours circulated that he was negotiating with German banks toreorganize the BRA.81The rumours eventually reached Martel, now French minister atRiga, the Quai d'Orsay's listening post to Soviet Russia before Frenchrecognition of the Soviet government in October 1924. Martel had lostnone of his distrust for Putilov and warned the Quai d'Orsay not topermit him to regain control of the BRA, especially if accompanied byGerman bankers. Though French holdings in the BRA had declinedsignificantly, these still remained a stake worth protecting, the more sobecause the bank could 'serve as an intermediary for French penetrationin a reconstituted Russia'.82Evidently French government officials werebeginning to see a different role for the BRA than that of banker for theRussian counter-revolution.Nor were Putilov's rivals unaware of the future possibilities of theBRA. Even before MartePs report, Jezierski had approached in July1922 the finance minister, Charles de Lasteyrie, to ask for Frenchgovernment support in transferring the assets of the BRA to a newFrench chartered bank.83The ministry of finance supported his request,recognizing the potential of the BRA as 'an agent of French influencein the Russian market', and recommended it to Raymond Poincare,Briand's successor as premier and foreign minister in early 1922. InNovember 1922 the Quai d'Orsay authorized the finance ministry'sintercession on behalf of the BRA to obtain the necessary backing from79 See, for example, 'Banque-Russo-Asiatique',MAE internal note, n.s., 18 May1922, MAE E-Chine/i 12, fos. 180-1 and 'Note sur la BRA', MAE internalnote,n.s., 17Aug. 1922,MAEE-Chine/377, fos. 18-20.80 'Note remisepar M. PoutilofF,27 Dec. 1921, MAE, ancienne seYieB- Relations

commerciales,Deliberations nternationales/105, fos. 18-20.81 *Visitede M. Poutiloff a M. de Peretti',MAE internalnote, 12 June 1922, MAEE-Chine/ 112, fo. 183.82 Martel,no. 433, 30 Aug. 1922,MF B32820.83 Jezierski o Lasteyrie,6 July 1922,ibid.

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742 Michael JabaraCarleyFrenchbanks.Government upport,however,would be strictly imitedto the 'moral' phere; t hadno moneyor financialguarantees o offer.84It was Putilov,however,who took advantageof this opportunity.85With a new collaborator,L.A. Gaboriaud,who had presumablyre-placedVlasto as a French front-manand who alsohad connections othe RadicalParty,he calledon PierreChaslesat the ministryof financetowards the end of January 1923. Chasles,who was responsible orRussianaffairsat the ministry, ook detailednotes as Putilov laid outhisplan,based on Jezierski'smodel,for the reorganization f the BRA.A Frenchgroupheadedby the BanqueBauer et Marchalof Pariswasprepared o put up 25 to 30 millionfrancs,equal to the assetsbroughtto the new Frenchcharteredbankby the BRA. Putilov assuredChaslesthat the interestsof Frenchstockholderswould be protected,and thatthenew bankwouldprovide he Frenchgovernmentwith 'a diplomaticinstrument f the firstorder',notonlyin Chinabut alsoin Russiawhennormalrelationswere re-established.86In the days that followed,Putilovand Gaboriaudsent to Lasteyrieseveral ettersconfirminghe substance f theirearlierconversationsndstatingthat the BRA pravleniehad approved he reorganization lan.Finance officials were not so sure of this latter point, however, andexpressedheir concernsabout Putilovto Poincare,referringo Mattel'searlierwarnings; heir nterest, ike theQuai d'Orsay,wasto gainindis-putable control of the bank.87The Quai' d'Orsay replied in mid-February1923that theBRApravleniewasunawareof Putilov's nitia-tiveandopposedanyagreementwith the Baueret Marchalsyndicate.88In June 1923 the board of directorsrepudiatedPutilov'splan.89In view of thisrebuke, t is curious hat Putilovwas not drivenfromthe bank forthwith.For morethan threeyearshe had beenthe targetofsustainedefforts, ncludingthose of the Frenchgovernment, o restrainhispowerordismisshimfromthe bank.Yethestillclungto hisposition.The explanation ies in yet anotherfacet of the struggleto reorganizetheBRA,namely, he bank'sattempt o negotiatewiththe Sovietgovern-ment,in which Putilovwas a key figure.84 Lasteyrieto Poincare",o. 6636, 13 July 1922, ibid.; and Poincare"o Lasteyrie,no. 3303, 23 Nov. 1922,ibid.85 Lasteyrie o [Jeaderski],no. 11593, 15Dec. 1922,ibid.86 Note byChasles.24 Jan. 1923,ibid.87 See Putilov to Lasteyrie, 24 Jan. 1923; Gaboriaudto Lasteyrie (two letters), 29Jan. 1923; and Lasteyrieto Poincare",o. 1372, 8 Feb. 1923, ibid.88 Poincareto Lasteyrie,no. 545, 18 Feb. 1923, ibid.; see also Raindreto Lasteyrie,12 March 1923, ibid.; and Raindreto Poincare',14 March 1923, MAE E-Chine/377, fos. 92-3.89 Minutes of the BRA board of directors, 12 June 1923, MAE E-Chine/377, fos.132-3-

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The Banque Russo-Asiatique 743# * #

In the aftermath of his failed initiative at the ministry of finance, Putilovabandoned Gaboriaud and the Bauer et Marchal group, as he had jetti-soned Vlasto two years earlier. None too pleased, Gaboriaud retaliatedby sending photographs to the French government of two confidentialletters showing that Putilov, with the approval of the BRA pravlerde,was negotiating with the Soviet government to revive the bank's activi-ties in Russia. The first letter was addressed to a Simon Rechtsamer andsigned by Putilov and Jezierski. Dated 1 October 1922, it offered to payRechtsamer 500,000 francs if he could facilitate the successful conclu-sion of an agreement with the Soviet government. The second letter, alsoto Rechtsamer and dated 21 October 1922, was signed by Putilov,Jezierski, Raindre, and Edmond Spitzer, a member of the BRA prav-lenie. It promised new operating capital for the bank in exchange forthe return of its former buildings and other property in Russia, andrecognition by the Soviet government of the bank's stockholders.90Gaboriaud claimed that the BRA pravlenie had in fact been aware ofthe Bauer et Marchal reorganization plan, but had reneged after Rain-dre's son Jacques, a member of the pravlenie, returned from talks inLondon with Soviet representatives. Jacques Raindre then met a fewdays later with Paribas officials, who vetoed the Bauer et Marchal plan,probably believing that a better offer would be forthcoming from theSoviet government.91Paribas had thus not entirely washed its hands ofthe BRA. As one source in the Surete Generate observed, Paribas wasknown on the Paris bourse as ca band of sharkswanting to thread its wayinto everything'.92If the BRA began to finance Russian economic recon-struction, Paribas would want to be involved.Gaboriaud's revelations came as no surprise to the French govern-ment. The Surete Generate had identified Rechtsamer as a Soviet agentin 192 1;98moreover, Jacques Raindre had met with the political direc-tor of the Quai d'Orsay, E.M. Peretti de la Rocca, in March 1922 toinform him that the Soviet government wished to initiate negotiationswith the BRA, with a view to resumption of the bank's activities inRussia and restitution of its assets. According to an internal Quaid'Orsay note, Putilov had been negotiating with the Soviet government90 Gaboriaud o Lasteyrie,25 May 1923, and ends., MF B32820; and Gaboriaud oPoincare",5 May 1923, MAE E-Chine/377, fos. 116-26.si Ibid.92 Unlabelled, undated note [first half of 1923], AN F7 12952; and also 'Banque deParis et des Pays-Bas, Finaly, Horace ...', P/4.971, 15 June 1923 (15 pp.)> ibid.93 See for example 'Russes bolchevistes : Rechtzammer [sic]', P.5571.U., 21 Nov.192 1, AN F7 13490.

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744 Michael JabaraCarleysincethe springof 1921. Perettitold Raindre that the Frenchgovern-ment, consistentwith its tradepolicy towardsSoviet Russia,regardedFrenchcitizensas freeto enter ntorelationswith the Sovietgovernmentat their own 'risksand perils',and that the Quai d'Orsayneither en-couragednor discouraged uch talks.A few dayslater,Raindre eft forBerlin ordiscussionswith Sovietrepresentativesn theeve of the Genoaconference.**The SureteGenerate lsopickedup tracesof thenegotiationsn 1922.One report aidthat Putilov had 'frequently'met the Soviet commissarfor foreigntrade,L.B. Krasin, n Berlinduringthe winterof 1920-1.95Krasin,a long-timeBolshevik,had maintaineda careeras a prominentengineerand industrialistn tsaristRussia,and had collaboratedwithPutilov bothbeforeand duringthe war.96Putilov's iesto Krasinmadehim an importantassetto the BRA as long as therewas a possibilityofresumingthe bank's activitiesin Russia; undoubtedly,this was thereasonthe Raindre faction did not drive Putilov out of the bank.On 27 January 1923, only threedays after Putilov and Gaboriaudsaw Chaslesat the ministryof finance, Putilov,with Jezierski,JacquesRaindre, Rechtsamer,and CharlesInchbald,a Britishmember of theBRA pravlenie,met Krasin in London.They gave him two unofficialnotes layingout the basis for co-operationbetweenthe BRA and theSovietgovernment,alongthe linesalreadymappedout generally n theinstructionsfor Rechtsamer. The terms included regulation of thebank'slegal status, protectionof the bank'sforeignstockholdersandcreditors, resumption f businessactivities n Russia,andresolutionofthe questionof the ChineseEasternRailway.The Soviet governmentshouldagreeto give a new 'Franco-Russian ank' a concession or allbankingoperations n Russia,and for all Russianrightsin China, inparticularover the Chinese Eastern Railway. The BRA delegationagreed to work through Arcos, the Soviet foreign trade agency, onresumptionof commercialactivities in Russia. This could be donethroughthe transformation f the Londonbranchof the BRA into aBritishcharteredbank,which could then developits connectionswithBritishfinancialgroupsand facilitatethe expansionof Soviet foreigntrade.97There is no reference n the Soviet Dokumentyvneshneipolitikito94 *Visitede M. Raindre, fils, a M. de Peretti5,1 March 1922, MAE E-Chine/i 12,fo. 162; and MAE internalnote, n.s., 7 March 1922,ibid., fo. 163.95 *Ausujet des Usines Poutilov',P. 6896.U., 9 Nov. 1922,AN F7 13491.96 'Au sujet de Poutilov', P.7717.U., 11 May 1923, AN F7 13492; and alsoRomanov,GrandDuke, p. 252.97 Two notes handed over to Krasin, for G. V. Chicherin, Soviet CommissarforForeignAffairs,27 Jan. 1923,MAEE-Chine/377, fos.43-61.

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The BanqueRusso-Asiatique 745indicate why the Soviet government undertook these negotiations.98Certainly, Soviet representatives were aggressively working to re-estab-lish economic and political ties with Europe: the discussions with thedirectors of the BRA were among the many unofficial contacts that theSoviets were forced to make in the absence of full diplomatic relationswith the West. It was pure Leninism to sup with the Devil, and Sovietofficials did so with hardly less appetite than did Putilov and hiscolleagues.On the French side, the Quai d'Orsay maintained a largely passiverole in the development of French economic relations with Soviet Russiaand in the negotiations concerning the BRA. This was a very differentattitude from that taken earlier towards Verstraete's talks with Sovietofficials in 1918. But the Quai d'Orsay was under increasing pressurefrom French business groups with connections to the opposition RadicalParty who wanted to trade in Russia. Even within the Quai d'Orsay,however, Peretti and Martel in Riga, fearing a resurgent Germany andFrench isolation, began to think that the time had come to consider arapprochement with the Soviet government. A change of policy wasresisted by the French president, Alexandre Millerand, who hated theBolsheviks, and by Poincare, who was prepared to tolerate trade withSoviet Russia but not to extend to it diplomatic recognition. Soviet offersto discuss a resolution of the 'debts question'-the repudiated tsaristbonds and nationalized property of French citizens -did not muchtemper the anti-Bolshevism of Millerand and Poincare ; moreover, Poin-car was preoccupied with reparations and security issues which pro-voked the Ruhr crisisin 1923, and unlike some French business men andpoliticians, did not think that access to the Russian market would helpsolve France's difficult economic problems. Hence, while recognizing thepotential contribution of the BRA to the development of Franco-Sovieteconomic relations, the Quai d'Orsay failed to exploit this opening.The French government's attitude towards the BRA was also mouldedby the factionalism among its Russian directors. French judgements wereharsh, and reflected the enduring wartime hatred of Germany and ofanyone seen to be too intimate with German government or businesscircles. Some of the Surete Generale's informants, who watched theBRA very closely, were undoubtedly Russian emigreswith scores to settlewith Putilov, whom they considered a German and Soviet double agent.98 Komissiiapo izdaniiudiplomaticheskikh okumentov,Dokumentyvneshneipoli-tiki SSSR, vols. ii-vii (Moscow, 1958-1963). There are no references either toSoviet negotiationswith the BanqueRusso-Asiatiquen V.A. Shishkin,Sovetskoegosudarstvo strany Zapada v igi9-i923gg. (Leningrad, 1969).

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746 Michael JabaraCarleyIn 1923, while the Quai d'Orsay turned a blind eye to Soviet negotia-tions with the BRA pravlenie, French police informants reported thatthe bank appeared 'more suspect than ever' and a menace to Frenchnational interests."Batolin did not escape criticism either, despite having earlier co-oper-ated with the Raindre faction: in 1922, French police sources allegedthat Batolin was a Soviet 'financial agent'.100Caught in the prism of theGermanophobia of French conservative circles, police informers seemedto outbid one another in their vitriolic denunciations of emigre bankers.In 1923, one source characterized Batolin as catraitor, a German agent,[and] a speculator of the worst sort', who, like Putilov, was reported tohave been involved in selling grain to Germany during the war.101Similar appraisals came from more direct sources. Pierre de Margerie,then French ambassador at Berlin, observed in May 1923 that Batolin'sbusiness practices would not stand close scrutiny. In general, Margerienoted that exiled Russian bankers like Batolin,did not representa reliableelement for the countrieswhere they found safehaven,particularly n France.They pursueda policyof exclusivelypersonalinterestand all too often consideredthemselvesexempt from any scruplesbecause of their misfortune. Some of them, shakenby their country'scala-mities, were affected by a spitefuljealousytowardsthe otherAllied powerswho had fared betterin the war. Most had collaboratedwith Germanfirmsbefore 1914 and now resumed these relationships,the more so because inBerlin they found positions and real interest in their future plans ... TheBatolins are all court followers ... emigres tied to the old order ... Theirinfluence in the new Russia will not be great and their malevolent disposi-tions towardsus, supposing they are not tempered by our successes,shouldnot overlydisturbus.102

French assessmentsof the 'Horsemen'were not always negative. Martelmet Batolin on several occasions in Riga during the spring of 1923, andlearned that Batolin and Putilov had fallen out completely, though BRAboard members were still trying to reconcile them. Batolin told Martelthat he too had had discussions about the reorganization of the BRAwith the commissar for foreign affairs, G.V. Chicherin, and the presi-dent of the Gosbank (Soviet state bank), A.L. Sheinman. Batolin con-99 *LeRusse Poutilov', P. 6.708.U., 30 Sept. 1922, AN F7 13491 'Sur la BanqueRusso-Asiatique',P. 7356.U., 2 March 1923, AN F7 13492; and 'BanqueRusso-

Asiatique, Poutiloff,Alexis .. ' P/4.862, 13 April 1923, AN F7 12952.100'Batoline',P/2.527, 12July 1922,AN F7 13491.101Renseignementssur Batoline', P. 7.36i.U., 3 March 1923, AN F7 13492.102Margerie, no. 356, 4 May 1923, MAE Z-Russie/496, fos. 97-8; see also \Lesbanquesrussespro-allemandes',P. 7.482.U., 22 March 1923,AN F7 13492.

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The BanqueRusso-Asiatique 747sidered hepravlenie'snegotiationswith Krasin n London'maladroit',addingthathe himselfhad madeno commitmentso Sovietofficials. nfact, like Putilov,Batolinwould have descended nto Hades to turn adeal on the BRA; no doubt playing up to Martel, he said he wouldprefera French-sponsoredeorganizationplan. Martel, who dislikedPutilovandwastherefore ympathetico Batolin,stressed gainto Paristhe importanceof the bank as an instrumentof FrenchparticipationnRussianeconomicreconstruction.103The Quai d'Orsaywas uneasy about Martel's conversationswithBatolin and instructedhim to avoid negotiationswith agents of theBRA and to meet them for informationonly.104 pparently, he Quaid'Orsaydidnot wantto complicate hepravlenie3negotiationswith theSovietgovernment.On the otherhand, Soviet officialsmay have beenexploring he possibility f dealingwith Batolinas a bargainingcounterin negotiationswith the praulenie.105n any event, the negotiationsbetweenSovietrepresentativesnd thepravleniecontinued.PutilovsawSheinmann Paris n the autumnof 1923, but the termsof an agreementremained argelythe same as earlier n the year.106Negotiationsthenmovedin January 1924 to LondonwhereK.G. Rakovskii,soon to beSovietcharged'affaires here,becameinvolved.Putilov,Jezierski,andother bank officialsmet again with Rakovskii and Sheinmanin lateApriland earlyMay 1924.Circumstancestill favouredan agreement.A Labourgovernmentunder Ramsay MacDonald took power in Great Britain in January1924andrecognized he Soviet Union early n February.Electionswereset to takeplacein Franceduring hespringand it wasexpected hat theCarteldesgauches, he Radical-Socialist artycoalition ed by EdouardHerriot,would take power. Much improvedSoviet politicaland eco-nomicrelationswithGreatBritainandFrance herefore eemedcertain:the BRA could serve to facilitate this rapprochement.Moreover,inChina,the fate of the ChineseEasternRailwayremained o be settled,andthe BRApravlenie houghtthe Sovietgovernmentmightacceptthebank as administrator f the railway,to keep it out of the hands ofthirdparties.107103Martel,no. 266, 9 May 1923,MAEE-Chine/377, fos. 113-15.104Poincareto Martel,no. 79, 28 May 1923,ibid., fo. 127.105See Marters no. 266 above; and La Banque Russo-Asiatique',P. 7.464.U., 20March 1923,AN F7 13492.106Ausujet de Scheinmann',P. 8.554.U., 15 Oct. 1923, and several other reports

during the autumn 1923 in AN F7 13492; and Note, Sous-directiond'Asie,confidentiel,5 May 1924,MAEE-Chine/377, fo. 254.107Traduction d'une note en Russe ..., remisea M. Sheiman [sic]9,29 April 1924,MAE E-Chine/377, fos. 257-69; 'Situationde la Banque Russo-Asiatiquedans laGompagniedu Chemin de FerChinois de l'Est', 1May 1924, MAE E-Chine/430,

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748 Michael JabaraCarleyThere was a definiteambivalenceon the partof the Frenchgovern-ment towardsthe BRA negotiationswith Sovietrepresentatives. oin-care's hostility towards the Soviet governmentseems to have beenmoderatedbyincreasingpressuresrom Frenchbusinessgroupswantingto trade withthe SovietUnion. They appearto havehad closetieswiththe Radical party headed by Herriot,who was a strongadvocateofimprovedFranco-Soviet elations.Poincaremust have found himselfonthe horns of a dilemma: improveeconomic relationswith the Sovietgovernmentandperhaps teal a plankfrom Herriot's lectionplatform,

orcontinuea hostilepolicytowards he SovietUnion,undoubtedlymoreconsistentwith the premier'spersonal preferencesand those of thecentre-right loche led.# * *

While the Poincare cabinet vacillatedon its Russianpolicy,the Sovietgovernmentwasnegotiatingdirectlywith thePekinggovernmentaboutthe ChineseEasternRailway.These negotiationscausedgreat anxietyat the BRA as its officials,with the supportof the FrenchlegationinPeking,manoeuvred o retaincontrolof the railway;hence the differ-encein perspectivebetween he French egation n Pekingand the Quaid'Orsaywith itspatsolutions n Paris not to mention the bank's eud-ing directors.Meanwhile,China wasrivenby civil war and in the earlystages of a great revolutionary truggle,one of whose objectiveswasto end special privilegesfor imperialistpowers and throw them outof China.

Only a year after the modus vivendiof October 1920, the Frenchlegation in Peking reportedvarious 'enemies'stalking the ChineseEasternRailwayandthe 'custodial'privileges f theBRA. The Japanesestillhadtroops n Manchuriaandhopedfora pretext o intervene,whilethe Chinesecontinued o chipawayat the bank'sspecialprivilegesandrequisitionedat will or simply looted railway property.The Soviets,havingdefeated he counter-revolutionn Siberia,reassertedheirrightsto the railway,and the United Statessought to establish ts influencethrough'international' olutions.It was, paradoxically, his multitudeof adversaries,achtrying o containthe other,that permitted he BRAto maintain ts controlover the ChineseEasternRailway.As the Frenchcharged'affaires,GastonMaugras,put it, the BRA hadonlythe optionof choosingwhich peril it preferred o face. Bolshevik expropriation'

fos. 165-7; and 'Note pour M. le President du Conseil', 7 May 1924, MAEE-Chine/378, fo. 1.

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The Banque Russo-Asiatique 749and Chinese'ruin' were the gravest dangers;the least of evils was aninternational olution,which the Frenchgovernment hould not rejectout of hand.108While the Quai d'Orsaysoughtto transform heBRA into a Frenchcharterednstitution,Frenchagents n Chinabeganto opposeit. Theyreasoned that although the BRA needed fresh capital, the Pekinggovernmentwould resist a French take-over of Russian concessions.The bank'sresources nd profitsderived rom its special privilegesas aRussian nstitutionif it becameFrench, tsprivilegeswould mmediatelybe attackedby the Pekinggovernmentand by competingbanks.109nfact, the BRA wasno longera financialenterprise s such,but ratherapseudo-governmentalgency,stillfunctioning ong after the fall of thegovernment hat had createdit. The 'custodial'privilegesof the BRAwere all thatkeptit solvent.Aime-Josephde Fleuriau, ormerFrenchcharged'affairesn Londonand Boppe'ssuccessoras ministerat Pekingin 1921, began to expandupon these ideas. Fleuriau,like Kammerer n Paris indeed, like theSovietgovernment rejected he idea that the BRA in fact ownedtheChinese EasternRailway and that it thus representedcollateralforFrenchstockholdersn the bank. The railwaywas the propertyof theRussian tate: the bank wassimplya trustee.Even in thisrole, however,the bankstoodin the way of the Sovietgovernment,which wantedtotakecontrolof therailway.Moscowhad either o cometo termswith theBRA oreliminate t. Contrary o opinion n Paris,Fleuriaunotedthatifthe Frenchgovernmentgave anyhintof wantingto take controlof theChinese Eastern Railway through reorganizingthe bank, everyonewouldoppose t. The ambiguous tatusof the bankwas itsbestdefence:'This is one of thosecaseswherethe moststronglyprofesseddisinterestservesbest the most avowed self-interest,and we should interveneinRussianaffairs n Manchuriaonlyif we firstaffirmandthenafter affectnot to want to becomeinvolved.'110Fleuriaualso reportedthat the rumoursof factionalismwithin thegoverningbodyof the BRA in Paris, ts bad investments, nd its doubt-ful legal statushad undermined ts credit.Competitors, ensingweak-ness,bidedtheirtime,waitingforan appropriatemomentto make a run108GastonMaugras,no. 188, 12 Sept. 1921. MAE E-Chine/no, fos. 14^-^2.109Petithugueninto Berthelot or Peretti, 9 March 1921, MAE E-Chine/112, fos.110Fleuriau,no. 96, 18 June 1922, MAE E-Chine/430, fos. 3-4; no. 196, 19 Oct.1922, ibid., fos. 14-16; no. 107, 30 June 1922, MAE E-Chine/377, fos. 1-3; no.12, 29 Jan. 1923, ibid., fos. 62-3; no. 92, 5 May 1923, fos. 106-9; and Tang,RussianPolicy,pp. 132-3.

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750 Michael JabaraCarleyat theirfalteringrival'sprivileges,and infightingmade it moredifficultto face 'thecommonenemy the Chinese'.Hoyerwas back in Harbin,having apparently ost none of his gifts for dubiousdealing: Fleuriaudescribedhim as 'intriguepersonifiedn man'.111In spite of the difficulties, he French governmentstill sought toprotectthe BRA'sinterests n the Chinese EasternRailway.Rumoursperiodically urgedof a Red Armyoffensive o seize controlof the rail-way orof Sino-Sovietcollusion o wrest t awayfromthe bank.In May1923, the Quai d'Orsaywas prompted o instructFleuriau o warn offthe Peking governmentand determinewhether some internationalactionmight after all be takento protectBRA rights.112leuriaudidthe best he could, but informedParisthat, as a joint initiativeby thepowerswould be useless becauseof their conflictinginterests, t wasbetterto sit tight. The rightsof the BRA to the railwaywerepalpablyshakyandhardto defend.A few months ater,Fleuriauobserved hat ifthe Soviet governmentwanted to seize the ChineseEasternRailway,therewouldbe nothingFrancecoulddo to stopit. As forthedevelopingChineserevolution, t posedless of a dangerto the BRA than would astrongandstable Chinesegovernment.118The BRAmanagedto hangon to the railway or a short ime longer,weatheringanother crisisduringthe late summer of 1923. In March1924, however,the situationdeteriorated gain. On 14 March,Sovietand Chinesenegotiators igneddraftagreementsproviding or Chineserecognitionof the Soviet governmentand turning over provisionalmanagementof the Chinese EasternRailway to the Soviet Union.114At the same time, the British-controlledChinese customs and taxservices moved to withdraw their accounts from the BRA, whichthreatened the bank with insolvency.Fleuriau intervenedwith thePeking government o delayratificationof the Sino-Sovietagreement;he alsopersuaded he Britishheadsof the customsand tax services omaintaintheir depositswith the BRA.115In Paris,Jezierskiasked the Quai d'Orsayfor support,which wasquickly forthcoming,but not effective. The French governmentre-questedUS and Britishparticipationn a collectivenote to the Chinese,111 Fleuriau, no. 92, 5 May 1923, MAE E-Chine/377, fos. 106-9; a^d Fleuriau, no.112, 15 June 1923, MAE E-Chine/430, fos. 36-8.112 Poincare" o Fleuriau, nos. 73-4, 21 May 1923, MAE E-Chine/430, fo. 31.113 Fleuriau, no. 112, 15 June 1923, tbid., fos. 36-8; and Fleunau, no. 158, 22 Sept.1923, MFB32820.114 Tang, Russian Policy, pp. 149-50.115Fleunau, nos. 40-1, 16 March 1924, MAE E-Chine/377, fos. 219-20; andFleuriau, no. 39, 24 March 1924, ibid., fos. 226-34.

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The Banque Russo-Asiatique 751backingFleuriau'sdelayingaction in Peking,116ut they declinedtoco-operate ullyand Fleuriaumadehis protestalone.117The negotiationsbetweenBRA and Sovietofficials n Londonat theendof Aprilwere a last-ditcheffortto staveoff a Sino-Sovietagreementand Chineserecognitionof the Sovietgovernment.But the bank'snego-tiatorswould notagreeto give up therailwayand,ultimately,Fleuriau'sdelayingactioncould notstoptheratification f the accordson 31 May1924. Putilovand Jezierskiprotested,but as Fleuriauhad earlier ore-seen, the Frenchgovernmentwas powerless o intervene.118n an un-wittinglyprescientrequiemfor GreatPowerimperialismn China,theQuai d'Orsaywas compelledto observe hat its setbackhad been pre-judicialnot only to Frenchinterests n the BRA, but that it had com-promised heauthorityof all the Alliedpowers.119The Sino-Sovietaccordof May 1924spelledthe end of effortsby theBRA to retain controlof the Chinese EasternRailway by bluff andprotest.The Quai d'Orsayand the ministryof finance, though theyfailed to listen to Fleuriau'sadvice, at the same time expectedhim todefend he bank's nterests, s indeedhe did with considerablekill,withonlythe prestigeof hisofficeto assisthim. In 1924,however, he writ offoreigndiplomatsn Chinano longercarried he force it once had done.The tricolourand the Frenchlegation n Pekingwere no substitute ormoney: cash-poor mperialismhad definite imitations.* * *Thoughthe BRA had lost its mostimportantassetin the Far East, thestruggle or controlof the bank itself was not over. Indeed, the Sovietgovernment tillthoughtthe bank mportantenoughto justifyefforts otake controlof it. However,there wereno furthernegotiationswith theBRApravlenie subsequentSovietefforts,mainlyclandestinen nature,began in the summer of 1924 after the conclusionof the Sino-Sovietaccord,but beforean agreementwith the Manchurianwarlord,ChangTso-lin,permitted he Sovietgovernmento takecontrolof the ChineseEasternRailway.In July 1924, MikhailoBrodyanski, liasMichelNentskyand,accord-ing to the Parispolice, a Soviet agent operatingout of London, was116Jezierskito Poincare", 7 March 1924, MAE E-Chine/430, fos. 102-3; Poincare"to Jusserand,nos. 72-3; and to A. Saint-Aulaire,French ambassadorn London,nos. 334-5, 21 March 1924, ibid., fo. 115; and Poincare1o Fleuriau,no. 25, 21March 1924, ibid., fo. 122.117See various documents in MAE E-Chine/430, but especially Fleuriau, no. 67,14May 1924,fo. 168.118Putilov/Jezierski o Poincare",June 1924,MAE E-Chine/378, fos.4-10.119Herriotto Saint-Aulaire,no. 521; and elsewhere,26 June 1924, MAE E-Chine/430, fo. 198.

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752 Michael JabaraCar eyappointed o the BRApravlenie.In the springand summerof 1924,hemade several trips between London and Paris, often meeting withBatolin,120uringwhichtime he boughtfiftypercent of the Compagniegeneratede commerceet d'industrie, he dummy corporation laimingtitle to the 82,000 sharesacquiredfrom the Stakheevcompany. Ofcourse,the actual sharescould not be produced,but Putilov,Jezierski,and other bank officialswere apparentlydisarmedby his promisesoffreshmoney- GastonRaindre,the recognizedspokesman or Frenchinterests,was awayfromParis.Nentsky'splan was to refloatthe BRAwith a British yndicateassociatedwithJosephM. Kenworthy,a mem-ber of parliamentknownto favourimprovedtrade relationswith theSoviet government.121ritish financial groups, knowing the Londonbranch of the BRA had sizeable iabilities,periodically ought controlof it, or stoodreadyto blockany reorganizationhat did not take intoaccounttheir interests.Thus Batolin,who had failed to establish he legalityof his 82,000phantomshares,orto sell them for that matter,sought throughNentskyonce again to make good his claim to controlof the BRA, but whenNentskyfailed to produce new capital, Raindre was able to rebuffBatolin and ultimately he Sovietgovernment.Nentskydeniedin thepress hat he wasa Sovietagent,but French ntelligence ourcesdid notbelievehim.122Theseevents ookplaceas a new Frenchgovernmentassumedpower.In May 1924 the Cartel des gauches defeated the Bloc national innational electionsand the followingmonth Poincareresigned.On 15June,Herriotformedwhatprovedto be an unstablegovernmentbasedon a coalitionbetweenthe Radical and Socialistparties n the chamberof deputies.The cartel's isetopowerhad,of course,beenanticipatedbytheSovietgovernment,whichhopedthatFrenchdiplomaticrecognitionand improvedpoliticaland economicrelationswould be forthcoming.On 28 October 1924, after some hesitation,the French governmentrecognizedheSovietUnion;ambassadorsweresoonexchanged,Krasin120 Note au sujet de Nentsky, Michel ...', n.s., but appears to be from the ParisPrefectureof Police, 1Aug. 1924,MAE E-Chine/378, fos. 13-16; and 'Sovietisa-tion de la Banque Russo-Asiatique',P. 9929.U., 11 July 1924, AN F7 13493.121Raindreto Alexis St. Le*ger, eputy bureauchief, Sous-directiond'Asie,20 Dec.1924, MAE E-Chine/378, fos. 66-70; and Jaudon to Herriot, 6 Feb. 1925 andends., MF B32820.122 Note au sujet de Nentsky, Michel ...', 1 Aug. 1924, MAE E-Chine/3783 f