868.51 Refugee Settlement Committee/128: Telegram
The Chargé in France (Whitehouse) to the Secretary of State
[Received 3:52 p.m.]
353. L–5.
1. Paragraph 8 your 287, July 17th. In 5th paragraph our L–151 we referred to visit governor, Bank of Greece to London for purpose endeavoring underwrite £2,500,000 sterling for land settlement society in London. Just informed that negotiations London between Norman, Bank of England, and Diomedes, Bank of Greece, took more time than originally contemplated. Principal cause was constitutional difficulties due to position of Greek Government. Felt in London that position more favorable for such loan if position Government could be regularized by elections and if demobilization could be actually effected (both being facilitated by conclusion of Lausanne negotiations). Norman recognized that this delay too long and that something must be done meantime. After discussion Norman made provisional offer to arrange an advance if Greeks made progress in both directions. Figure fixed this advance was £1,000,000 sterling. Among more important provisional conditions proposed were following: Advance to be secured on certain unissued bonds of 1914 loan (the existence of these unissued bonds going some way to meet technical legal difficulties) bonds and service to be duly recognized by the investigations financial commission, money to be paid over and disbursed by the refugee settlement society contemplated under the League scheme. The Greek Government during current advance to undertake no external indebtedness, the Greek banks to participate in the advance as lenders to the extent of 25 percent pari passu, the refugee settlement society to undertake as regards disbursement of proposed advances: (a) to adopt the proposals approved by Council of League of Nations at its 25th session (see American Embassy no. 315, July 6); (b) to effect settlement solely on lands provided free of charge and without encumbrance by Greek Government; (c) to obtain security for all payments; (d) to make payments only for productive purposes; (e) to make no charitable or ex gratia payments; (f) to hand over all eventual assets and security to the International Financial Commission.
The foregoing advance made conditional on the inclusion of an American so that the American member and the League member could in agreement out vote the Greek members. (Foregoing Norman negotiations confidential).
[Page 372]2. On July 29, 1923, the Greek Government formally accepted League scheme for organization land settlement society in words briefed as follows:
“The Greek Government informs League of Nations that it accepts plan adopted by the Council of the League and therefore proceeding on preparatory work of designating the 500,000 hectares of land to be turned over to this society. The Greek Government has also entered into conversations with the Greek banks providing for the agreement of the latter to underwrite £1,000,000 sterling of the total loan and at the same time has commenced negotiations with foregoing banks looking towards the raising of the additional portion of the loan.”
3. Under Norman’s conditions the so-called preliminary advance of £1,000,000 sterling will not be made by London until land settlement society actually set up including “one representative relief societies, an American, as chairman with casting vote.” League of Nations and two Greek members will be designated within a few days. Informed privately that Red Cross and Near East finding difficulty in making joint nomination. Red Cross apparently holding to position stated paragraph 7, Department’s #287. On the other hand, learned from persons connected with League that Near East will welcome invitation to nominate if American Government makes no objections. In that case Near East would suggest Morgenthau who seems likely to be acceptable to League. Procedure contemplated is that League would cable at beginning September to Red Cross and Near East asking them to nominate jointly. Failing joint nomination League would probably like to appoint Morgenthau on direct Near East nomination.
4. While neither advocate nor partisan of idea “one representative relief societies, an American, as chairman with casting vote” formally adopted by League Council, and while fully alive to underlying reasons Norman’s advocacy American chairmanship, nevertheless feel selection some suitable American undoubtedly helpful Greek morale and go far in assuring sound business treatment question. With preliminary £1,000,000 sterling Bank of England advance plus 25 per cent pari passu Greek banks advance or total of approximately £1,250,000 sterling a fairly important capital apparently immediately available upon which to base constructive work. Under foregoing conditions regrettable my judgment that American relief societies cannot jointly make some nomination, to [or?] devise some formula which would completely divorce them from any future responsibility. Obviously Department itself should assume neither directly nor indirectly any responsibility for such nomination.
- Logan
- Whitehouse