868.51/1262: Telegram

The Secretary of State to the Ambassador in Great Britain (Mellon) 16

253. The Department has noted the communiqué issued September 14, 1932,17 announcing the results of the conversations in London between representatives of the Council of Foreign Bondholders, the League Loans Committee and the Greek Minister of Finance regarding the service of the Greek External Debt for the fiscal year 1932–1933. It is observed that the Greek Government proposes to make payments of 30 percent of the total annual interest service during that year, such payments to be applied to the first half-yearly or first two quarterly coupons of each loan due or falling due during the period in question. It is further observed that the representatives of [Page 398] the Council of Foreign Bondholders and of the League Loans Committee have agreed to recommend to the British Government that the Governments represented on the International Financial Commission at Athens should instruct that body to release to the Greek Treasury such sums as may be considered appropriate.

As you are aware, the debt funding agreement of May 10, 1929, between the United States and Greece makes the following provisions with respect to the security to be enjoyed by the “new loan” which was extended to Greece by the United States purely for reconstruction purposes:

[Here follow the clauses quoted in the telegram supra.]

The Department desires that you seek an immediate interview with appropriate Government officials and that after inviting attention to the foregoing, you inquire whether this Government is correct in assuming that it is the intention of the British Government in any instructions that it may issue to its representative on the International Financial Commission in accordance with the recommendations made in the communiqué of September 14, to make adequate provision for the safeguarding of the rights of this Government as set forth in the above-mentioned debt funding agreement of May 10, 1929, and that no distribution of funds or allocation of foreign exchange will be arranged which will either technically or in substance prejudice the equal treatment to which the United States is entitled in respect to the payment due November 10, 1932, and otherwise.

Stimson
  1. The same, mutatis mutandis, to the Ambassadors in France (No. 344) and Italy (No. 77).
  2. Published in the London Times, September 14. Copy transmitted to the Department by the Ambassador in his despatch No. 353, September 14; received September 22.