868.51/1230: Telegram

The Chargé in Greece (Morris) to the Acting Secretary of State

37. Your 17, May 5, 2 p.m. On April 30 I verbally communicated all of Department’s views as contained in its 16 of April 28, 7 p.m., to Director General of Foreign Office as Foreign Minister was absent due to Orthodox Easter. My aide-mémoire of April 30 conformed in general tone to those of other diplomatic representatives. On May 7 I repeated verbally to Foreign Minister Michalakopoulos the Department’s viewpoint as contained in its 16 and supplemented by its 17 and left aide-mémoire setting forth almost verbatim Department’s arguments and viewpoint. Foreign Minister told me that no action looking to resumption of debt service would be taken until reparations conference which Venizelos will attend in a further effort to obtain financial aid to carry on productive public works. If successful an effort will be made to resume interest payments: if not Greece will then ask for a commission of experts from disinterested countries to examine her finances and to indicate how and in what percentage she is able to resume interest payments. The Foreign Minister’s reply did not impress me as representing his own mind or as based upon any agreed-upon line of conduct. Two days previously he told British Minister that Greece should have continued at least partial interest payments. To my direct suggestion in this sense he replied negatively. Venizelos is responsible for his Government’s debt default and it is probable that Foreign Minister is not entirely in agreement with him. It is clear that no plan to resume debt service has been evolved. In my opinion suspension of service will continue indefinitely unless pressure of retaliatory nature is resorted to. Forbidding emigrant remittances from the United States and suspending Veterans’ Bureau payments in Greece would have a profound effect.