868.151/130: Telegram
The Minister in Greece (MacVeagh) to the Secretary of State
[Received January 19—2:55 p.m.]
7. Your 59, November 1, 3 p.m., 1932,31 and related correspondence. The Government demands that on or before Wednesday the 23rd the water company hand over the funds it holds for the Chase Bank on account of the water works loan. This company has been notified by both the Chase Bank and a committee of bondholders that it will be held legally responsible in case it complies with the Government’s demands. Ulen officials now claim that under article 44 of its contract of December 1925 with the Greek Government the Ulen Company can be held legally responsible for acts of the water company which it formed and operates under said contract, and that therefore compliance by the water company would make Ulen liable to prosecution for breach of trust.
It seems possible that the order to pay may not be immediately enforced but the Ulen officials request that the Legation hold itself in readiness with the Department’s consent to intervene to prevent its sudden execution and consequent possible damages to their interests. Negotiations are now going on between the Government and the bondholders which if and when completed will allow of legal release of the funds.
- Not printed.↩