File No. 868.51 War Credits /7

The Secretary of State to the Minister in Greece ( Droppers)


328. Referring to your telegram dated August 19, reporting a request by Prime Minister Venizelos for a loan for military purposes, the Secretary of the Treasury states that it will be difficult to reach conclusions about such a loan unless the Greek Government authorizes its diplomatic representatives in Washington to conduct [Page 570] their negotiations, and gives such representatives the fullest powers for binding the Greek Government by the signing of such obligations as may be required by the statutes of the United States. The Greek Government should further authorize its representatives to receive any moneys that might be advanced and to expend the same for purposes approved by the Secretary of the Treasury.

As to the merits of the proposal itself and the particular requirements which the Secretary of the Treasury might be willing to cover with a loan, it is pointed out that an Inter-Ally Council is about to be organized in Europe consisting of representatives of Great Britain, France, Italy and Russia, with the representatives of the smaller powers adjoined in such manner as may be later determined. This council will have for its function a coordinated study of the military needs of all the Allied powers, and, having made such study, will recommend to the United States Government a program of requirements with indicated priorities as to manufacture and shipment, and will also take into account, as far as available to it, information concerning facilities for transporting the materials in question. The place of meeting of the council has not yet been determined, but it will be London or Paris. The Secretary of the Treasury therefore suggests that the Greek Government keep itself informed through communication with the Allied powers above mentioned as to the progress made in the establishment of the council, and make its representations to such council.

Pending further progress along the lines above indicated, the Secretary of the Treasury can do now no more than to state that the matter is receiving his most serious consideration.