868.51 War Credits/569
The Chargé in Greece (Morris) to the Secretary of State
[Received November 3.]
Sir: With reference to the Department’s telegram No. 42 of September 28th and my telegram in reply, No. 111, dated October 13th,23 I have the honor to enclose herewith a copy of the French text and an English translation of the memorandum handed me by Premier Veniselos. As suggested in my telegram, I feel confident that this Memorandum which summarizes the verbal statements of Mr. Veniselos embraces only the personal views of the Premier in regard to the matter of the debt settlement. In an informal conversation which I had with the Minister of Finance, Mr. Varvaressos, subsequent to my conversation with Mr. Veniselos, I was able to draw the conclusion from the statements made to me by Mr. Varvaressos that Mr. Veniselos clings tenaciously to his view-point that the second part of the debt settlement made in 1929 should be considered as a war debt because he feels that if the United States grants any concessions in respect of war debts this particular debt should benefit thereby even though its settlement has already been arranged for in a definite manner by the Agreement of May 10, 1929. It is probably for this reason that Mr. Veniselos uses in his Memorandum the term “compromise agreement”—French text, “formule transactionnelle.”
In my conversation with Mr. Veniselos, although I asked point blank on what ground the Greek Government proposed to pay 30% to the holders of the Stabilization Loan without offering at least equal treatment to the United States for its debt which was on the same footing as the Stabilization Loan, I could not draw from him an answer to this question. He evaded answering by stating that [Page 402] the debt to the United States was a war debt and must be looked at as such.
From my conversations with Mr. Varvaressos and two officials of the Foreign Office who have been engaged in this matter, it is evident that they do not share Mr. Veniselos’ view-point and probably endeavored unsuccessfully to have him look at this question in its true light. The explanation of Mr. Veniselos’ attitude is to be found largely in the fact that the Stabilization Loan arrangements were made by Mr. Kafandaris and it is well known here that all of the financial arrangements made by Mr. Kafandaris have irked Mr. Veniselos very greatly. It is probably as much for this reason as for his desire to have the second part of the 1929 debt settlement regarded as a war debt for any future advantage that that might imply, that Mr. Veniselos maintains so emphatically, as he did in his conversation with me and as he has with his financial advisers, his conception that the second part of the debt settled in 1929 must be regarded as a war debt and must not be looked at from the actual terms of the settlement. In a few words, he is trying to wipe out what Kafandaris did and what he does not approve of.
I enclose a copy of my note to the Greek Government24 setting forth the Department’s view-point as contained in its telegram No. 42 of September 28th.
- Latter not printed.↩
- Not printed.↩
- File translation revised.↩
- Printed in Greek Debt Settlement: Hearings before the Committee on Ways and Means, House of Representatives, 70th Cong., 1st sess., on H. R. 10760 (Washington, Government Printing Office, 1928), p. 51.↩
- For text of Mr. Mellon’s report of February 4, 1928, see Annual Report of the Secretary of the Treasury … 1929, p. 317.↩