Foreign Relations of the United States Diplomatic Papers, 1940, The British Commonwealth, The Soviet Union, The Near East and Africa, Volume III

868.51/1598: Telegram

The Secretary of State to the Minister in Greece (MacVeagh)

Washington, June 19, 1940—5 p.m.

141. Your despatch No. 4062, April 26. You are requested to inform the Greek Government immediately and in an emphatic manner that the Government of the United States expects that the Greek Government will accord to the American Government’s loan of 1929 treatment no less favorable than that accorded the Stabilization and Refugee Loan of 1928² and that, consequently, 43 percent of the interest which accrued to this Government on May 10, 1940, is due and payable, in accordance with Section 2 of Part II of the Debt Agreement of May 10, 1929.³

Furthermore, you should inform the Greek Government that since this Government understands that throughout the past 2 years the Greek Government has paid 40 percent of the interest due on the Stabilization and Refugee Loan of 1928, the same percentage of the interest which fell due on November 10, 1938, May 10, 1939, and November 10, 1939, on the American loan of 1929, is due and payable, no part of such interest having been received.

You should remind the Greek Government that this Government supplied Greece with $12,167,000 in 1929 on the specific condition that this new loan would be accorded treatment no less favorable than that accorded the Stabilization and Refugee Loan of 1928, and that the condition was accepted by Greece in order to obtain the loan. The American Government regrets that during the past 8 years it has been necessary to remind the Greek Government on more than one occasion of its clear and unmistakable obligations in this respect.

It should be made clear to the Greek Government that a most unfortunate impression would be created in this country should the Greek Government, despite the categorical terms of Section 2 of Part II of the Debt Agreement of 1929, accord to the American loan of 1929 treatment less favorable than that which has been or is to be accorded the Stabilization and Refugee Loan of 1928.

As regards the question of availability of exchange, you may remind the Greek authorities orally of the amount of free foreign exchange received by Greece as a result of such items as immigrants’ remittances and veterans’ payments, as well as the export balance of trade which in 1939 was in favor of Greece by a ratio of approximately 4 to 1.

Please keep the Department promptly informed by telegraph.

Hull

2. For terms of this loan agreement, signed at London, January 30, 1928, see League of Nations, Official Journal, April 1928, p. 494.
3. Text printed in Annual Report of the Secretary of the Treasury for the Fiscal Year Ended June 30, 1929 (Washington, Government Printing Office, 1930), p. 308.