868.151/140: Telegram
The Chargé in Greece ( Aldridge ) to the Secretary of State
[Received 10 a.m.]
90. Following extended negotiations relative to the Ulen Company contract and the operations of the Société des Eaux, the Greek authorities now insist upon immediate compliance with five demands. The first four demands involve (1) reduction of operating fee from 7½% to 4%, (2) return of certain fees collected on house tax, (3) delegation to Government of certain supervisory control over expenditures and operations, (4) termination of operations in 1952 whether bonds have then been retired or not. These four demands involve the interests of the Greek Société and the Bank of Athens, as well as whatever American interests Ulen may be able to prove. (Judge Schoenrich will if possible come personally to Washington to explain the foregoing technical points to the Department.) The company informs me that the Government does not claim that these demands are within the terms of the contract but argues only necessity for revision.
However, Ulen is prepared under present pressure from Government to waive what is considered to be its contractual rights on all four points provided the Government will come to terms on point 5. This demand is for the refund of the supplemental fee. Please see Department’s instruction Number 107 of July 13, 1934,33 particularly paragraph 4 of second enclosure (latter dated June 29, 1934, from the company to Ministry of Communications). The company informs me categorically that the refund of this fee would be a direct loss to it and to it alone, and that while it wishes to do everything possible to meet the Government’s desires for revision of the contract it cannot yield on this point without great injustice and considerable hardship to itself. The company is prepared to arbitrate if necessary but does not feel that it should be made to cede all other points and arbitrate point 5 alone as the Government has proposed.
Under date of June 26, 1935, the company received a letter from the competent authorities in the Ministry of Communications threatening to “withhold the guarantee in its hands given by the companies for the Struma works,34 without taking into consideration the relations between them and to apply other compulsory measures which it has at its disposal”.
In view of the foregoing written threat of reprisal against Monks-Ulen, whose Struma contract has no connection whatever with that of [Page 515] the Ulen water works in Athens, the attitude of the Greek authorities would appear to be far more arbitrary than that which resulted in the Department’s telegram No. 42, July 6, 3 p.m., 1934.
It is my frank opinion that if the present threat is allowed to go unchallenged other American interests in Greece may eventually expect to encounter a similar high handed and arbitrary attitude on the part of the Greek Government.
- Not printed.↩
- For previous correspondence regarding the Struma Valley drainage project, see Foreign Relations, 1928, vol. iii, pp. 31 ff., and ibid, 1932, vol. ii, pp. 442 ff.↩