868.51 WarCredits/396

The British Ambassador ( Howard ) to the Secretary of State

No. 1007

Sir: Under instructions from His Majesty’s Principal Secretary of State for Foreign Affairs, I have the honour to inform you that the attention of His Majesty’s Government has been drawn to two contracts recently concluded by the Greek Government which appear to conflict with the obligations assumed by Greece under the agreement between that country and Great Britain, France and the United States of February 10th, 1918. You will recollect that Article 4 of the above agreement provides that until the repayment of advancements then made, no new security should be assigned to any external loan without the assent of the Governments of the three Powers. The Contracts in question are those of the Société de Commerce de Belgique in respect of the supply of Greek railway material,2 and of the Foundation Company of New York in respect of the Salonica drainage scheme.3

Article 16 of the Convention providing for the former contract, which was signed at Athens on August 27th last provides that a “privilege du premier rang” shall be given to the Belgian Company on the receipts of the Greek State railways sufficient to secure the service of a loan.

Article 28 of the Foundation Company’s contract signed at Athens on September 7th last provides that surplus revenue administered by the International Financial Commission and the proceeds of taxation of Salonica plain shall be a pledge for the service of a new loan.

I have the honour to state that, in the opinion of His Majesty’s Government, these clauses constitute breaches of Greece’s international obligations which should not be allowed to pass without a protest. His Majesty’s Government accordingly desire to invite the [Page 372] United States and French Governments to join with them in expressing to the Greek Government in clear terms their surprise and regret that they should thus ignore their obligations under the agreement of 1918, and in requesting the latter to take no further steps in the matter unless and until the assent of the three Governments has been given to the assignment of the proposed securities.

In the circumstances, I have the honour to ask that, if you see no objection, you will be so good as to send immediate instructions to the United States Minister at Athens to join with his British and French colleagues in representations to the Greek Government in the above sense.

I would add that His Majesty’s Ambassador at Paris has been instructed to approach the French Government on the above lines.

I have [etc.]

Esme Howard
  1. For extracts from the text of the contract which was dated Aug. 27, 1925, see Greek Official Gazette, Apr. 19, 1926 (vol. i, No. 132), p. 997.
  2. For text of the contract which was dated Sept. 7, 1925, see ibid., Oct. 8, 1925 (vol. i, No. 295), p. 1996.