Memorandum by Mr. Paul Alling, of the Division of Near Eastern Affairs, of a Conversation With the Bulgarian Minister (Radeff)

While calling yesterday on another matter the Bulgarian Minister stated that two or three days ago he had received instructions from his Government to bring to the attention of the Department the Bulgarian viewpoint with respect to the President’s proposal for a postponement of inter-governmental debts. He went on to say that he realized that the present was not an auspicious time for him formally to bring the Bulgarian viewpoint to the attention of this Government but that [Page 190] he would like to mention informally one point which he considered the most important factor in the Bulgarian thesis. He said that we undoubtedly knew of an agreement known as the Molloff-Caphandaris convention, relating to the compensation to be made to Greek and Bulgarian refugees, which had been signed on December 9, 1927.79 Under the terms of this Convention each government was to issue to its new citizens arriving from the territory of the other special bonds covering the amount of compensation in each individual case and bearing interest at the rate of 6 per cent per annum. After the completion of the bond issues in the two countries a mixed claims commission set up for that purpose was to draw up an account as between the two governments in order to determine which of them was the net debtor or the net creditor. As a result of this accounting it appears that Greece owes to Bulgaria a substantial sum. The Bulgarian Government is of the opinion that this is not an inter-governmental debt within the meaning of the President’s proposal and that consequently there should be no postponement in its payment by Greece. The Bulgarian Government holds to this point of view chiefly because the sums which it receives from Greece are turned over immediately to Bulgarian refugees. The Bulgarian Government therefore simply acts as an intermediary in the transaction and the sums received are not susceptible of use by the Government itself. Under these circumstances it was felt that there was no good reason for Greece to postpone payment. I asked Mr. Radeff whether he had any objection if I mentioned the Bulgarian viewpoint informally to the appropriate officers of the Department and he replied there was no objection on his part; in fact he said he felt it would be desirable for the officer handling the question to have advance notice of the Bulgarian position in order that it might be possible for him better to comprehend the Minister’s representations when he came down to make them formally.

Note: In connection with the above statement of the Bulgarian position, attention is called to Mr. Skinner’s telegram No. 25 of July 1, 1 a.m.80 in which he states that Mr. Venizelos81 has informed him that he (Venizelos) must have assurances from Bulgaria that since Bulgaria is to profit by postponement of payment amounting to ten million marks, Greece shall be relieved of payments under Caphandaris-Molloff agreement amounting to 3,794,000 marks.

Paul Alling
  1. League of Nations Treaty Series, vol. lxxxvii, p. 199.
  2. Post, p. 209.
  3. E. K. Venizelos, Prime Minister of Greece.