The Acting Secretary of State to the Ambassador in Great Britain (Bingham) 2

No. 32

Sir: At the request of the Greek Government, the Financial Committee of the League of Nations recently sent certain experts to Greece to undertake an investigation of the financial and economic situation of that country with a view to determining the capacity of the Greek Government to meet its foreign obligations. It is understood that the delegation of experts was composed of Mr. Royall Tyler3 (American), Mr. Mylanarski4 (Polish), and Mr. Tumedei.5

According to the Department’s information the delegation completed its investigation and planned to leave Athens on June 3, 1933 for London to submit its report to the Financial Committee of the League.6 It was understood just prior to their departure that they would be accompanied by Mr. Maximos, the Greek Minister for Foreign Affairs, and Mr. Loverdos, the Greek Minister of Finance, and that these officials of the Greek Government, after having been joined by the Prime Minister, Mr. Tsaldaris,6a would endeavor to come to an arrangement with the holders of the Greek foreign debt. It is expected that they will utilize in their negotiations the report of the League financial experts mentioned above.

The Department is desirous of obtaining a copy of the report of the experts if this is available to you. You are requested also to transmit to the Department any other information pertaining to the negotiations in [Page 545] London between the delegates of the Greek Government and the holders of Greek foreign obligations, which you may be in a position to obtain.

As you will doubtless recall the debt funding agreement of May 10, 19297 between the United States and Greece provided that the new loan arranged for in that agreement should rank with and should share the same securities and all other advantages as the Greek Stabilization and Refugee Loan of 1928 provided for in the International Loan Agreement executed January 30, 1928.8 The agreement of May 10, 1929 included also the following provision with specific reference to the possibility of default:

“In the event of there occurring in any year a default in the payment of the service of this new loan by the United States, the ratio in which it is to share the same securities as the Greek Stabilization and Refugee Loan of 1928 provided for in the International Loan Agreements dated January 30, 1928, shall be the same as that which the amount of the annual service charge due the United States bears to the amount of the annual service charge due the holders of the bonds issued in accordance with the above mentioned International Loan Agreements of January 30, 1928.”

You are requested to transmit also to the Legation at Athens a copy of the report mentioned in paragraph three of this instruction, if obtainable, as well as copies of any despatches which you may prepare pursuant to this instruction, with an appropriate indication of the confidential character of such material if the circumstances so require.

Very truly yours,

William Phillips
  1. The same, mutatis mutandis, July 1, to the Consul at Geneva.
  2. The Financial Committee’s representative in Hungary.
  3. Fehks Mylanarski, member of the League’s Financial Committee.
  4. Cesare Tumedei, member of the League’s Financial Committee.
  5. No formal report by the delegation of experts to the Financial Committee was published by the League; but see League of Nations, Financial Committee, Report to the Council on Greece, July 8, 1933 (C.387.M.194.1933.II.A.).
  6. Panyoti Tsaldaris.
  7. U. S. Treasury Department, Annual Report of the Secretary of the Treasury for the Fiscal Year Ended June 30, 1929 (Washington, Government Printing Office, 1930), p. 308.
  8. See Foreign Relations, 1927, vol. iii, pp. 1 ff., and telegram No. 7, January 30, 1928, to the Minister in Greece, ibid., 1928, vol. iii, p. 7.