868.51/1233: Telegram

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

39. Your 17, May 5, 2 p.m. British representative on Council of League of Nations has proposed to register strong protest against May 1st default and threat of Greek Government to ignore rights of International Financial Commission. Before any League action British Government desires further direct action at Athens and has requested French and Italian Governments to join it in collective protest by diplomatic representatives at Athens to be undertaken on May 14th by presentation to Greek Government of written representations signed jointly by the three representatives. If French and Italian Ministers are not instructed to join him British Minister will protest independently on May 14th after agreement with his representative on International Financial Commission. British protests, and it is hoped collective protests, will cover following ground:

Repeat protest against Greek Government’s action in invoking League of Nations as having countenanced Greek default;
Endorse protest of International Financial Commission against Greek Government proposal to pay into blocked account May 1st maturities;
Stress refusal of Greek Government to convert into foreign currency sums required for service which is a contravention of article 24 of Law of Control;7
Conclude with definite demand that Greek Government should provide International Financial Commission with ordinary and customary facilities for purchase of foreign exchange to carry out functions for which commission was constituted.

I think it is desirable to instruct me to make simultaneous and formal representations on May 14th covering subject matter of points (b) and (d).

Since yesterday sharp controversy has arisen between Government and International Financial Commission over refusal of latter to surrender as usual to Government surplus drachmas collected from pledged revenues. Commission maintains right to hold all drachmas collected until transfers effected in foreign money. Owing to drachma instability and Government’s refusal to permit transfer commission cannot tell how many drachmas are necessary to purchase foreign exchange until actually authorized to effect this transfer operation. Enough drachmas have been collected to purchase foreign exchange [Page 390] at present rate but any considerable further depreciation of exchange value of drachma will wipe out this margin.

  1. British and Foreign State Papers, vol. xc, pp. 403, 411.