868.51 War Credits/461: Telegram

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

99. Your 116, December 15, 10 p.m. This Government is unable to perceive that the fact that Greece expended in Canada the proceeds of the loan refunded by the Greek-Canadian Agreement of December, 1923, in any way affects the situation. Under the refunding agreement Greece pledged additional revenues for the service of an external loan without obtaining the consent of the United States, as required by the 1918 agreement. This appears to be a substantial breach of the latter’s agreement and even in the absence of other considerations it would seem to follow that the United States is relieved from further obligation in the matter.

While this Government would be glad to receive Mr. Roussos or any other representative of the Greek Government duly authorized to negotiate with the World War Foreign Debt Commission for the funding or other settlement of the debt of Greece to the United States, the Department feels that the Greek Government should be aware of the fact that, in the light of this Government’s view that the 1918 Loan Agreement has been violated, this Government considers that discussion in Washington with a representative of the Greek Government with respect to the making of further advances under this Agreement would serve no useful purpose.

The use of the proceeds of further advances for the purposes indicated by Mr. Roussos instead of those contemplated under the original agreement would not change the position of this Government in the matter.

You may convey the foregoing informally and orally to Mr. Roussos so that in connection with his contemplated visit he may be under no misapprehension as to the views of this Government.

Hughes