The Chargé in Greece (Shantz) to the Secretary of State
[Received October 5.]
Sir: I have the honor to confirm the Legation’s telegram No. 55 of July 19, 1937,7 informing the Department that Minister MacVeagh presented to Prime Minister Metaxas the note and draft Modus Vivendi8 enclosed with the Department’s Instruction No. 392 of May 24th, the draft having been amended in accordance with the second and third paragraphs of the Legation’s telegram No. 49 of June 22, 1937.9
The Prime Minister’s reply to the Legation’s note has just been received and is enclosed, together with a translation. In this reply the Greek Government expresses its perfect accord with the principles set forth in the Legation’s note, explains how its present situation [Page 417] arose, and states that it is ready to undertake the necessary negotiations for the conclusion of an agreement to replace the exchange of notes of December 9, 1924. The reply does not, however, make any comment on the specific provisions of the draft Modus Vivendi.
A possibly significant statement in the reply is that “it would not be possible, in the opinion of the Greek Government, to consider solely the free exchange of the results of production, that is to say, of merchandise, while neglecting the factors of production, namely labor and capital.” It appears from this that the Greek Government, in its negotiations, may bring in the subject of American immigration restriction and the opening of American financial markets to Greek loans. The question of immigration quota restrictions is apparently one which weighs heavily on the Prime Minister’s mind as he has made more than one reference to it in his public speeches.
I have not had an opportunity to discuss the reply with Mr. A. Argyropoulos, Director of Conventions and Commerce at the Foreign Ministry, who drafted the note prior to his departure for Berlin to take part in trade negotiations with the German Government.