The Chief of the Division of Near Eastern Affairs (Murray) to the Minister in Greece (MacVeagh)

Dear Mr. Minister: Your despatch No. 289 of June 26, 1934, and your personal letter of June 2322 reached us only several hours after my letter of July 27 had been mailed.

We quite appreciate your point that so long as we limit our action against the violation of rights under the exchange of notes of December 9, 1924, to individual cases, and let the principle go unquestioned, the Greeks may continue to treat our rights, as you say, with sublime indifference.

On the other hand the exchange of notes seems a rather weak foundation for heavy artillery as it is subject to abrogation by three months’ notice, and as no doctrine has yet been laid down as to what constitutes infringement of most-favored-nation rights when circumstances cause a state to resort to barter or compensation agreements. Furthermore, you have doubtless already noted the general trend of thought here to the effect that our efforts should be directed rather to the restoration and increase in the total volume of trade than to fighting over the division of the little trade that there is at present.

Under the circumstances what would you think of going to your Greek friends and laying the situation before them something as follows?

American commercial policy is based on the reasoning that increased world trade is a better remedy for depression than trade barriers designed to equalize trade as between given sets of countries. Concrete evidence of this policy is given expression in the Tariff Reciprocity Act. The benefits that should flow to foreign countries from the agreements to be worked out under this Act are to be applied by the United States on the basis of unconditional most-favored-nation treatment, subject to the proviso, however, that the President may withhold these benefits from any country because of its discriminatory treatment of American commerce or because of other acts or policies which in his opinion tend to defeat the purpose of the Act.
By no stretch of the imagination can it be maintained that Greece is now giving us most-favored-nation treatment, a fact which you are obliged to bring repeatedly to the attention of your Government, and which must of necessity be given consideration when working out, under the Tariff Reciprocity Act, a new basis for trade between the United States and Greece.
It is because of the foregoing that you are hopeful that it may soon be possible for you to inform your Government that Greek import permits are being issued in a manner which is not prejudicial to American trade, a fact which should go far in answering those who contend that to avoid the charge of discrimination in fact against us, Greece must not refuse import permits for American products so long as the balance of payments between Greece and the United States is unfavorable to us.

If this suggestion commends itself to you the Department would have no objection to you acting upon it in the form of conversations with Mr. Tsaldaris,23 Mr. Maximos, and perhaps Mr. Pesmatzolgou [Pesmazoglou], with a view to obtaining a statement as to Greece’s considered attitude toward American trade.

Sincerely yours,

Wallace Murray
  1. Letter of June 23 not found in Department files.
  2. Prime Minister of Greece.