868.51 Refugee Settlement Commission/90: Telegram
The Ambassador in France (Herrick) to the Secretary of State
315. From Logan:
First. Attended committee meeting Geneva, July 4th. Returned Paris today.
[Page 349]Second. Reference paragraph[s] 3 and 4, my Lausanne cable July 4th:29 Financial subcommittee proposed that committee make following recommendations to League Council briefed as follows:
“Committee opposed organization private land company formed on share capital and limited profit-making basis recognizing that, while such plan promised business management more attractive to lenders, it gave no assurances that bulk refugee problem could be handled. Obviously land settlement company organized on purely business lines would pick only best refugees leaving balance untouched, and might exploit settler unreasonably, which case League subject to criticism for organizing.”
In view foregoing, committee recommended following plan:
- “1. A refugee settlement society (not on share capital basis and not profit making) to be incorporated consisting of one representative relief societies, an American, as chairman with casting vote, two representatives Greek Government and one representative League, such society to direct work essentially productive in character (principally though not exclusively land settlement) the proceeds serving as additional gage for loan.
- 2. Greek Government to assign suitable land not less than 500,000 hectares which property vested in society until liquidation whole scheme when any balance of assets society not disposed returned to Greek Government.
- 3. Greek Government to arrange with Greek banks to underwrite not less than £1,000,000 sterling of loan and this to precede negotiations with external banks and to be done during the month of July.
- 4. Greek Government to assign and place under control existing International Finance Commission gages to be selected in detail after negotiations with Greek banks to be some 25 percent in value of gages declared as available by Greek Government. The Government undertaking to use the whole of the remaining revenues proposed as gages either for payment external obligations or as basis subsequent loan or loans for the purpose of reestablishing Greek financial position so as to prevent depreciation of drachma and consequently value assigned revenues.
- 5. On the basis loan amounting in effective yield to not less than £3,000,000 and not more than £6,000,000 sterling to be negotiated before the end of August by Greek Government on understanding that entire proceeds to be handed over to refugee settlement society.
Under foregoing circumstances League would declare itself satisfied with conditions of loan and expenditure arrangements and permit following statement to appear in prospectus:
- A.
- That nature, control, securities in League’s opinion satisfactory and that, while League would not engage financial responsibility to its members, nevertheless, League’s financial advisers consider that, if Greek Government pursued financial and general policy such as to avoid serious depreciation of [Page 350] drachma, revenues assigned offered reasonably stronger security of contemplated loan.
- B.
- That League prepared to appoint a member refugee settlement society and considered composition that society such as to secure the funds would be used solely in use refugee primarily for productive work and that expenditure would be properly and competently controlled.”
Third. Committee’s report stated advantages of foregoing scheme as
follows:
Fourth. Committee’s report stated disadvantages of the foregoing scheme
as follows:
Fifth. Committee’s report stated as general notes:
If Council approves scheme, committee recommend it should not be published but given officially and confidentially by Council to Greek Government as statement of methods and conditions of cooperation of League.
Next step would be for Greek Government to arrange with Greek banks to underwrite specified part of loan and then to negotiate for similar underwritings for balance by external banks. If Greek Government able to arrange loan, in the opinion of Council, its next meeting end of August refugee settlement society could be formed or completed by addition League members.
An essential basis plan is hope of inducing relief societies, particularly American, to continue their work both during interval in which loans being negotiated and afterwards for relief such refugees [Page 351] as not possible to deal with immediately under scheme for land settlement and industrial absorption”.
Sixth. Foregoing scheme approved by committee and subsequently by League Council and transmitted to Greek Government July 5th. I took no part in formulating or discussing foregoing plan. However, before adoption, I pointed out Secretary’s letter of March 31 appeared to preclude hope such substantial continued charitable relief from American sources as evidently contemplated in committee’s report.
Seventh. Robert Cecil30 who is largely responsible for plan, announced during meeting that he had discussed plan with Venizelos and the latter prepared support it and of opinion that at least £1,000,000 sterling could be underwritten this month by Greek banks. Obvious difficulty in plan as affecting foreign underwriting is power of existing revolutionary government to transfer land titles and to obligate necessary gages committee. Appreciated this difficulty but deemed it best to ignore such phase this stage and allow the question to rest until after £1,000,000 sterling Greek bank underwriting effected, assuming that question would arise and adjustment forced when foreign underwritings undertaken.
Eighth. After committee had approved plan I again called attention to Secretary’s letter March 31, stating it [was] apparent practical working out any refugee settlement plan entailed an extended interval of time during which refugees would have to be supported by charity and asked how proposed handle this situation. Committee held obligation rested exclusively on Greek Government and that continued drachma inflamation [inflation?] incident to Greek military mobilization could be terminated by demobilization under which conditions ample funds available to care for refugees without necessity further inflation—however suggestion made and adopted that committee with Nansen at its head be set up to consider means of aiding Greek Government in caring for refugees. Such committee in addition to Nansen as president and as representative European relief agencies would include representative Greek Government and representative of American relief agencies if latter elected to nominate one. I agreed to transmit invitation to American relief agencies but made no commitment. If policy of our relief agencies is to continue Greek refugee work on limited program, feel best results obtained if latter agencies designate some agent now Europe to get into touch with Nansen at Geneva by telegraph; on the other hand if policy is definite withdrawal, the invitation should be declined. Request early instruction as to reply to this invitation.
[Page 352]Ninth. As plan for refugee settlement society now confidentially before Greek Government and dependent on latter’s acceptance conditions, no invitation as yet transmitted for nomination proposed American chairman refugee settlement society. Question as to whether American relief agencies will elect to nominate such chairman provided necessary underwriting loan successful one broad policy outside of my purview. Every chance that after acceptance plan by Greek Government project will not interest outside investors for in view of political and other risks investment feature not particularly attractive. However, if loan succeeds and relief agencies elect appoint chairman task and responsibility such office deserve most competent presumptive business talent.