The Minister in Greece (MacVeagh) to the Secretary of State
[Received September 9.]
Sir: Confirming my telegram No. 166 of July 11, 2 p.m., I have the honor to report that the Greek Government has at last replied to my Aide-Mémoire of January 20, 1940, conveying the Department’s proposals for a definitive Trade Agreement to replace the existing Modus Vivendi95 in commercial matters between the United States and Greece.
According to the Note Verbale of the Royal Hellenic Foreign Office, No. 19954 of July 10, 1940, copies of which I enclose in the original French and in English translation,96 the contents of my Aide-Mémoire have been examined with interest by the competent Greek authorities, who have furthermore undertaken a profound study of the problems involved with a view to the initiation of negotiations when the present difficulties due to the extension of the war to the Mediterranean shall have been removed and the normal situation re-established.
There would seem to be little comment to make on this reply, which will perhaps cause no surprise to the Department. That it has taken me many special urgings to extract it from the Foreign Office may be explained partly by a natural reluctance to return such an answer to proposals actually at one time encouraged by the Greek authorities (see my despatch No. 3542 of November 7, 193996) and partly by continual preoccupation with the immediate problems arising from the rapid sequence of events in Europe during the past six months. I see no reason to doubt the sincerity of the Minister of National Economy’s hopeful expressions of last fall, but since then the situation has grown worse for Greece rather than better. Difficulties connected with the British control of exports and imports, and with the absorption by Germany of country after country having commercial agreements with Greece, have been followed by the entrance of Italy into the conflict and the practical cessation of Mediterranean trade. [Page 612] Whether she likes it or not, it would seem that Greece must now submit more than ever to the dictates of the German clearing if she is to continue to live. It is her hope that this situation may be only temporary, but while it lasts, it is perhaps inevitable that she should regard discussion of mutual tariff concessions calculated to increase trade with us as somewhat Utopian. As to the principles involved, these are already embodied in our Provisional Commercial Agreement, or Modus Vivendi, of 1938, and this backed by the vigilance and energy of the Commercial Section of the Legation should continue to afford useful and, in general, adequate protection to our commercial interests under prevailing conditions.