The Secretary of State to the Minister in Greece ( MacVeagh )
Sir: The Department has given consideration to the circumstances discussed in your despatch No. 3333 of August 21, 1939, regarding the required conversion of earnings of foreigners into Greek currency, under the provisions of Article 12 of Emergency Law No. 1704, which you state went into effect on July 18, 1939.
It is observed that the Greek Foreign Office in its note No. 18925 of August 17, 1939,11 states that the Greek authorities have ample power under the Law to satisfy any requests of American nationals for the granting of foreign exchange and will take all necessary measures to insure that the requests of American nationals, with respect to certain [Page 614] specific needs, will be granted. The Foreign Office expresses the opinion that American nationals will thus be satisfied fundamentally, and that a change in the Law (exempting Americans from the operation thereof) would not in fact improve the situation of American citizens.
The Greek Government’s assurances that requests of American residents for foreign exchange to cover a specified list of needs will be approved is not a satisfactory solution of the problem. Aside from the fact that the Foreign Office did not specify all of the needs for foreign exchange mentioned in the Legation’s note to the Foreign Office of July 8, 1939,13 it would obviously be impossible to set forth in any list all of the specific needs for foreign exchange which might arise. Furthermore, to require Americans to make specific requests for foreign exchange in each instance would entail delay and mutual annoyance. You were correct therefore in not accepting the Greek Government’s reply as a satisfactory solution.
The Department understands from your reports that Article 12 of the Law requires the transfer to Greece and the conversion into drachmas of all foreign exchange derived from business done in Greece or from remuneration for services rendered in Greece including any part of such revenue or remuneration which might, except for Article 12, have been held or deposited in the United States. It is not clear, however, how it is proposed to enforce this law or what penalties are provided in case of violation. In view of the conciliatory tone of the Foreign Office’s note of August 17, it seems probable that no endeavor will be made in actual practice to require American residents in Greece to transfer to Greece their entire earnings resulting from services rendered in Greece, and the Legation may consider it desirable not to discuss the matter with the Greek authorities until an actual case arises requiring representations by the Legation.
Should such a case arise, the Legation is requested to report the facts to the Department by telegraph and to await the Department’s instructions before taking the matter up with the Greek authorities.
In connection with the subject of Greek exchange regulations, the Department desires to learn whether the Greek authorities are attempting, by virtue of Article 12 or any other exchange measure, to limit the control by American residents in Greece over their funds held outside Greece. For instance, are American citizens in Greece who have funds in the United States required to obtain the permission of the Greek authorities to send out of Greece through the mails dollar checks which they draw on their American banks?[Page 615]
Furthermore, the Department would be glad to learn whether American residents in Greece who happen to receive dollar checks in Greece are required to convert these checks into drachmas, or whether they may mail the checks abroad without conversion.
If the Greek regulations do not permit Americans to mail from Greece negotiable instruments drawn on banks outside Greece and calling for payment in foreign exchange, by what means and to what extent has an effort been made to enforce these regulations?
Very truly yours,