868.51 War Credits/443: Telegram

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

[Paraphrase]

72. In conversation with me in which he requested that his views be regarded as his own and therefore unofficial, Mr. Michalakopoulos, the Minister of Foreign Affairs, stated that the present Greek Government would not consider itself bound by any debt negotiations conducted under the dictatorship of Pangalos. The Minister then suggested that legal points relative to the American debt be dropped from consideration and that settlement be made on basis of new loan of $48,000,000, of which $30,000,000 would be used for pressing work for refugee settlement, which, although available resources are limited, is yielding unanticipated results, and that the other $18,000,000 represent the principal and interest now due from Greece. He believed the new loan would be morally justified because of urgent humanitarian considerations and that for it there would be solid fiscal guaranties controlled by the International Financial Commission. He added that an American representative would be invited to take part in the spending of the money. Such a settlement would have the effect of paying in full the American debt and of stabilizing the economic and social life of Greece.

I called the Minister’s attention to the shortness of the present term of Congress and remarked that the same results would apparently be achieved by settlement of the Greek debt to the United States followed by a commercial loan in the American market. If the Department wishes to comment on the conversation reported above, it seems likely that the Greek Minister in the United States will be instructed by his Government to submit, without delay, formal proposals of some sort.

Skinner