868.51 War Credits/719

Memorandum by the Assistant Chief of the Division of Near Eastern Affairs (Barnes)


The Greek Minister called at the Division this morning to explain that an offer by his Government on May 10, 1936, for partial payment of the semi-annual interest due on that date under Part II of the Agreement for the Funding of the Greek Indebtedness to the United States, made May 10, 1929, is dependent on an agreement being arrived at in time between his Government and the League Loans Committee in London, with respect to the percentage of payment to be made on the 1936–1937 coupons of the Greek Stabilization and Refugee Settlement Loan.

The Minister said that negotiations are now under way in London, but that it is impossible to foretell when an agreement will be reached: therefore, should his Government fail to make an offer to the United States on May 10, 1936 it should not be thought by the Department and the Treasury that the Greek Government had gone back on its decision to continue payments under Part II of the Funding Agreement.

[Page 313]

The Minister then referred, somewhat heatedly, to the following paragraph in the New York Times account (March 31, 1936) of the receipt by the Treasury of the Greek payments on March 26, 1936:

“An effort by the Minister to have the debt regarded in its final settlement as a war obligation and not a private one was rejected by the State Department.”

The Minister characterized the New York Times article as a “press release” and said that the dissemination of such statements as the one quoted above is “not helpful.” It was explained to the Minister that the objectionable paragraph was a conclusion drawn by the author of the article and that nothing of the sort had appeared in the Department’s release.15 This fact, which he reluctantly admitted when shown the Department’s release, failed to console him, as it appears that the Greek press has reproduced the New York Times article and has thereby made it appear in Greece that the Minister attempted, without success, to gain a point with the Department, when in reality there were no negotiations with respect to the point in question, but merely a reservation on the part of the two governments concerning their respective positions on the question of whether the 1929 loan is a war debt or a new loan.

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  1. Dated March 31, 1930, Department of State, Press Releases, April 4, 1936, p. 285.