The Secretary of State to the Minister in Greece (MacVeagh)
40. Your 67, October 16, 1 p.m.11 Please convey the following to the Foreign Minister orally, with such amplification as you may think desirable:
- This Government regrets that the Greek Government is not prepared at the present time to enter into a modus vivendi, on the basis proposed by the United States, to replace the exchange of notes of December 9, 1924.
- This Government will not press at the present moment for the conclusion of a modus vivendi provided the Greek Government will take prompt and effective steps, such as was suggested on October 2 by Mr. Argyropoulos to the Chargé d’Affaires to alleviate the adverse effect of the present Greek restrictions on those products imports of which into Greece have been diverted from the United States to other countries. This Government believes that the Greek Government should extend to American products the fullest equality of opportunity.
- The Greek Government will understand that, in not subscribing to the modus vivendi which we have proposed, it is postponing the time when the basis of Greek-American commercial arrangements may be broadened. The conclusion of a comprehensive agreement calculated to provide for a mutual expansion of the trade of the two countries, must await the time when Greece is prepared to undertake formally to grant to American trade equality of treatment in respect of all forms of trade and payments control. It is for this reason in particular that the United States Government regrets that Greece is not now willing to enter into a modus vivendi along the lines proposed.
In connection with the above numbered paragraph 2 it is suggested that you supply the Minister informally with the substance, or in your discretion with copies, of Rankin’s Special Report No. 14, August 23 and Economic and Trade Notes No. 70, August 6.12 In the event you adopt this suggestion you should make it clear to the Minister that while the material does not constitute an adequate basis upon which to formulate this Government’s desiderata with respect to any possible future trade agreement negotiations it is nevertheless indicative of the disquieting effects of Greek commercial policy on Greco-American trade.
With respect to paragraph numbered 3 you may make such use as you consider desirable of the fact that on November 3 the Acting Secretary of State made preliminary announcement of trade agreement negotiations with Turkey. As Greek and Turkish exports to the [Page 424] United States are composed largely of similar products the significance to Greece of this announcement should be apparent to the Foreign Minister, especially in view of the policy of the United States of withholding trade agreement benefits from countries which discriminate substantially against American trade. If the opportunity is afforded please point out that the initiative with respect to the present negotiations with Turkey was taken by the Turkish Government.