462.00R296/5084: Telegram

The Consul at Geneva (Gilbert) to the Secretary of State

110. Late yesterday Bulgaria brought a complaint before the Council88 concerning the non-payment by Greece of sums due under the Molloff-Caphandaris agreement and requested to Council to render a decision in regard to the nature of the debt contracted through the instrument, that is, whether it is a debt due by the Greek Government to private interests or whether it is an intergovernmental debt and thus falling under the Hoover moratorium plan. The Bulgarian and Greek representatives summoned to the Council stated at great length the positions of their respective Governments.

The essence of the Bulgarian arguments was that the debt is a private debt and consequently its payment could not be suspended under the Hoover plan or be in any way influenced by the suspension of Bulgarian reparations to Greece under that plan.

The Greek representative took in substance the position that the Hoover proposal was not a mandate from a higher authority which must be obliged but a proposition which should be rejected or accepted conditionally or unconditionally. Greece had accepted the proposal on the condition that the payments due under the Molloff-Caphandaris agreement be suspended. The nature of this debt therefore was irrelevant and it was not incumbent upon the Council to pronounce thereon.

The discussion cleared up several mutual misunderstandings and at the close of the debate the litigants assumed a more conciliatory attitude. Briand, the rapporteur, asked for further time to consider the material offered and expressed the hope that negotiations would be instituted forthwith between the two Governments looking toward a rapid and amicable settlement.

  1. League of Nations Official Journal, 1931, p. 2059.