The High Commissioner at Constantinople (Bristol) to the Acting Secretary of State
[Received January 25—12:15 p.m.]
28. Department’s 86, November 15th,13 and 6, January 20.14 Question of tariff revision has become acute in Smyrna. Greek authorities have demanded that Standard Oil Company pay to Greek Government arrears of consumption tax amounting 125,000 pounds (Turkish) and have removed Turkish customs officials who, since April 15 last, had failed to collect this tax. When, on advice from Horton,15 Standard Oil Company refused to pay above sum, new Greek director of customs on January 20th forcibly prevented further distribution of oil.
Horton acting with delegates of Great Britain and France, Italian delegate being sick, held a conference with Sterghiades, Greek High Commissioner, and all four delegates have submitted joint note to Allied High Commissioners and myself.
Note states that Sterghiades claims: (1) that subsequent to signature of Sevres treaty Greek administration had superseded Turkish in Smyrna district with the consent of Ottoman Government; (2) that Greek Government assumed administration as mandatory of the Allies; (3) that heavy military expenses that were imposed upon Greeks by their action against Kemalists on behalf of the Allies justified levying and collecting.
In reply to Horton’s inquiries I have telegraphed him as follows:
“January 22, 6 p.m. Referring to your despatch of January 17th and telegrams 116, 118 and 119. You will inform Greek High Commissioner: ‘My Government is surprised at the continuance of the [Page 156] consumption tax during the period which has elapsed since the original formal military occupation of Turkey by the Allied forces immediately after the armistice in October 1918. These taxes upon some of the prime necessities of life impose an inhuman burden upon the poorest classes in Turkey and add to their acute poverty and misery. The taxes as provided for under the capitulations are the only taxes recognized by my Government and other taxes are considered illegal.’
Unless you have already done so you should make written protest to the Greek High Commissioner and if necessary to the Greek military authorities against their direct interference with and apparent discrimination against American business interests. Further, that you are not aware of any military necessity under the terms of the armistice now in force in Turkey that justifies the use of Greek military forces to interrupt the legitimate business operations of an American company. It is presumed that you have protested against the forcible stoppage of company’s business without recourse to the legal processes of law.
You should not by any thing you do in any way imply or admit that the Greek officials and Greek military forces are in any other way on Turkish territory than as representatives of the Allied Powers for the maintenance of the armistice with Turkey.
You should inform the Greek authorities that I have referred this whole matter to my Government and have informed the American Minister in Athens. Further, that the Standard Oil Company is advised not to pay the consumption tax pending reference of the matter to our Government.
You should request the Greek High Commission to furnish evidence that the Greek Government has taken over the administration of the country as mandatory for the Allies. Further request that evidence be furnished that the Greek Government had taken over the administration of the Smyrna region with the consent of the Ottoman Government at the signature of the Sèvres Treaty.
It is my policy to work in harmony with the Allied High Commissioners when their policy conforms to the armistice now being enforced and to the treaty rights of Americans and our interests are being fully protected.
If requested you should advise against the payment of any taxes by American citizens to the Greek Government which are illegal pending instructions from our Government.”
See my despatch October 16th16 for statement of tariff situation. I am taking up Smyrna incident with Allied High Commissioners and will keep Department fully informed of progress. With reference to the Department’s telegram 6, January 20th, my opinion requested therein will be influenced by consideration this case but reply will be expedited.