868.51 Public Works/44

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

No. 881

Sir: I have the honor to refer to the various telegrams addressed to the Department in regard to the unwillingness of the International Financial Commission sitting in Athens to accept the service of what is known as the Seligman loan of $54,000,000. All the information available in this country indicates that the commission as now composed proposes to maintain its unfavorable decision on this matter. One or two flimsy pretexts are put forth in justification of this inhospitable attitude. One is that as the Hambro loan of a few months ago was floated independently of the commission, no subsequent loans should be floated through the commission. Another is that it is in the interest of Greece hot to place national bonds on any other footing than municipal issues. Still another is that the several countries represented on the commission desire to terminate the commission’s life as soon as possible by refusing to take on additional loans.

I had a conversation with Mr. Venizelos16 on this matter on the 26th instant, during which he expressed himself with some bitterness [Page 96] respecting the antagonistic attitude of the old allies of Greece, meaning France, Great Britain and Italy, in matters of Greek interest; but thought that following the ultimate official refusal of the commission to deal with the Seligman loan, it might be possible to arrange matters to the satisfaction of the American banking group by passing a law which would require all the excess revenues of Greece turned over by the International Financial Commission to pass through the hands of an official delegate of the American group who, after setting aside sufficient amounts for the satisfaction of the loan, would deposit the balance to the credit of the Greek Government. This is more easily said than done, as I shall explain in Washington when I arrive there at the end of April. At all events, the representatives of the Seligman group now in Athens and their associate, Mr. John Eliasco of the Bank of Athens, perceive objections to this plan, the first of which is that if the history of the most recent Hambro loan in London can be taken as a criterion of what would happen to any similar loan floated outside the International Financial Commission, the market would absorb bonds so issued at somewhere near 5 points under other Greek issues dealt with by the Commission, and these five points obviously would be another unnecessary charge upon the Greek people who are already heavily taxed.

. . . . . . .

We must find some issue out of the present deadlock. If the Seligman loan falls to the ground due to the unwillingness of the International Financial Commission to deal with it, the Greek Government will be considerably embarrassed, because the British market seems to be unequal to the flotation of another Hellenic loan within the present year. Almost certainly, however, when market conditions in London undergo some change, Hambro’s Bank will again come forward and renew the lucrative arrangements which have characterized their issues in the past, and American finance will be excluded from Greece, except as to such participation in Greek loans as London may care to permit. In other words, the centre of Greek financing, instead of being New York will be again London, as it has been during these past forty or fifty years.

I am still hopeful that the intervention of the Department in London may result in acceptance of service of the Seligman loan by the International Financial Commission. We have been informed in Athens that opposition in Rome and Paris is manifested only to be agreeable to British influences which completely dominate the International Financial Commission, and the Financial Commission of the League of Nations as well.

I have heard nothing from the Department as to the possibility of our accepting membership in the International Financial Commission itself. Such membership would be warmly welcomed in Greece, and [Page 97] it would seem difficult for the nations now represented to oppose our admission. Whether it would suit our policy in financial matters, I do not know. There is precedent, of course, for our intervention in financial questions in the Eastern Hemisphere in the case of Liberia, our government naming the Director General of Customs. Personally, I am more and more inclined to encourage our participation in the work of the International Financial Commission, as I perceive a permanent handicap to our interests in this field without such participation, and can discover no political objections to our membership.

As I shall be in Washington before the Department can possibly deal with the present despatch, an answer in writing to the views here expressed is unnecessary.

I have [etc.]

Robert P. Skinner
  1. E. K. Venizelos, Greek Prime Minister.