868.5151/116: Telegram
The Acting Secretary of State to the Chargé in Greece (Morris)
38. Your despatch 2208, August 7.48 Although the probable effects of this legislation are somewhat obscure, it appears to be [Page 435] reasonably clear that certain features are of an arbitrary and confiscatory character and are detrimental to the interests of American citizens. The Department is aware of the difficult banking situation with which Greece is faced and it has no desire to interpose objection to any reasonable measures which the Greek Government may wish to take designed to cope with pressing emergencies. The decree of July 29th, however, appears to be an exceptionally drastic measure containing elements of confiscation without just compensation and of discrimination. The application of this decree to American owned property cannot be viewed by the United States without concern.
The fact that the Greek Government expects, as is evident from the text of the decree, to receive from the Bank of Greece a balance resulting from the forced conversion of foreign currency obligations at a rate less than two thirds of the value established on the date of the decree clearly indicates that something of value is to be taken from the holders of these obligations without adequate compensation. That the Greek Government plans to use a portion of the values thus acquired to guarantee full payments on another and restricted class of obligations held abroad, as provided for in Article 4 of the Decree, merely adds an element of discrimination.
Unless the situation is now materially different from that described in your despatch under reference, the Department desires you to seek an early interview with Mr. Veniselos and to bring the foregoing forcefully to his attention. At the same time you should state that this Government cannot agree to the application to American nationals of legislation having such confiscatory and discriminatory features as those contained in the Decree of July 29th, and that the United States must therefore urgently request that American nationals be exempted from the operation of the confiscatory features of the Decree in question.
Please inform the Department by telegraph of the results of your representations.
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