The Minister in Bulgaria ( Shoemaker ) to the Secretary of State
No. 299

Sir: I have the honor to inform the Department that the Bulgarian Government, within several days after the return of Mr. Malinoff from Geneva on the evening of September 23, decided to act upon the League of Nations’ recommendation contained in the Council’s resolution [Page 197] of September 1991 to the effect that Greece and Bulgaria lose no time in seeking an agreement, upon a practical basis, for the application of the Kafandaris-Molloff agreement in conjunction with President Hoover’s debt moratorium in so far as payments for the current year are concerned. At the same time the Bulgarian Government decided to take the initiative in seeking to reach a settlement with reference to all questions outstanding between the two states.

On September 28 Mr. Neicoff, the newly arrived Minister of Bulgaria at Athens, accompanied by Mr. Stoyanoff, Director of the Bulgarian Public Debt Administration, called on the Director General of the Greek Ministry for Foreign Affairs and informed the latter of his Government’s decision. Mr. Stoyanoff stated that he had been especially charged with the mission of reaching a settlement on the application of the debt moratorium in conjunction with the Kafandaris-Molloff agreement. On the following day Mr. Stoyanoff was received by Mr. Venizelos, who, according to Bulgarian sources, declared his Government ready to make every possible effort to reach an agreement. Mr. Venizelos asked Mr. Stoyanoff to present a memorandum setting forth the Bulgarian proposal with reference to the moratorium. Yesterday Mr. Neicoff was received by the Greek Minister for Foreign Affairs with whom he discussed the subject of a general settlement between the two states.

In the Bulgarian Ministry for Foreign Affairs it is thought that the negotiations for a general settlement will take considerable time but that something definite relative to the moratorium question should develop within the next four or five days. Mr. Stoyanoff, according to the Legation’s information, has been authorized to propose a settlement along the lines considered at one time by the Committee of Experts at London, i. e., that Greece continue to pay under the Kafandaris-Molloff agreement and that Bulgaria pay reparations for the benefit of Greece in a like amount. Any settlement reached at this time would of course be without prejudice to the decision to be rendered by the Court of International Justice relative to Article 8 of the Kafandaris-Molloff agreement.92

For the Department’s convenience there is attached the text in English of the resolution of the Council of the League93 undertaking to refer the dispute over the Kafandaris-Molloff agreement to the Court. Bulgarian opinion finds the decision embodied in this resolution partially satisfactory, in that it removes the question at issue, that is to say, whether the Greek obligations under the Kafandaris-Molloff [Page 198] agreement are of a private law nature, from the realm of international politics. There is complaint, however, on the score that the League has again resorted to compromise when circumstances warranted a clear cut decision. One local newspaper, goes so far as to say that the League has gone through the hand-washing procedure as did Pilate on a famous occasion.

As the Department knows, the second 1931 reparations payment from Bulgaria fell due under the Hague accord on September 30.94 On that day the Bulgarian Government informed the Bank of International Settlements that it would not make the full payment pending the conclusion of the negotiations now under way at Athens. Bulgaria, however, did pay the sum of 211,100 gold francs expected from it in connection with the decision of the Committee of Experts at London relative to the Hungarian Optants.

Respectfully yours,

Henry W. Shoemaker
  1. See supra.
  2. For text of the decision, see Permanent Court of International Justice, Series A./B., Fascicule No. 45, March 8, 1932: Interpretation of the Greco-Bulgarian Agreement of December 9, 1927.
  3. See telegram No. 119, September 22, 9 a.m., from the Consul at Geneva, p. 195.
  4. See Great Britain, Cmd. 3484, Misc. No. 4 (1930): Agreements Concluded at the Hague Conference, January 1930, p. 150.