868.51 War Credits/561

Memorandum by the Assistant Secretary of State (Bundy)

The Greek Minister called at my house yesterday to discuss further the question of the Greek payments due November 10th. He stated that he had heard from Venizelos asking him to again take up with the United States Government the problem of finding some method of delaying the payment due in November. He stated that he had not received the long communication from the Greek Government which had been handed to the American Chargé in Athens and only knew the contents so far as revealed in the telegram from Morris.

However, he urged that since the new loan and the old loan20 originated out of war credits they should both be treated alike so far as postponement is concerned, although he admitted, of course, that the contract21 contained no postponement provisions with respect to the “new loans”. The Minister stated that he recognized that no legal postponement could be adopted without Congress, but intimated that what he wanted was such Treasury action as would justify the Greek Government not paying November 10th. This would apparently take the form of a recommendation to be made to Congress when it convenes and is in a position to ratify.

The Greek Minister pointed out that the Congressional Resolution against cancellation or reduction says nothing about postponement.22

I told the Greek Minister that the matter was solely for the Treasury and that he would have to take it up directly with the Secretary of the Treasury and that I had no authority to speak in the matter. I told the Minister that it was my personal view that there was no use in even talking about the matter with Mr. Mills as long as the Greek Government suggested the postponement of everything due November 10th, while at the same time they proposed to pay a substantial sum in respect to the League of Nations loans which rate equally with the American governmental debt according to the express terms of the contract. I further stated that I did not mean to imply that the Secretary of the Treasury would discuss [Page 401] the matter if they proposed to give the American loan equal treatment; that this was a matter for the Treasury, but that I could not see how the Secretary of the Treasury could make a recommendation of any sort implying discrimination against the American Government.

At the end of the discussion it was understood that the Greek Minister should see the Secretary of the Treasury directly. Apparently the Greek memorandum will be in the hands of the State Department in about ten days.

H. Bundy
  1. “New loan” refers to the money loaned to Greece under part II of the agreement of May 10, 1929, and “old loan” to the money loaned under the tripartite loan agreement of February 10, 1918.
  2. The reference is to the funding agreement of May 10, 1929.
  3. See sec. 5 of Public Resolution No. 5, approved December 23, 1931, Foreign Relations, 1931, vol. i, p. 248. Provision is made in sec. 1 of this resolution for postponement of amounts payable during the fiscal year beginning July 1, 1931.