Memorandum of Telephone Conversation, by the Chief of the Division of Near Eastern Affairs (Murray)

The Greek Minister called me this morning by telephone in a state of great excitement and indignation over Secretary Knox’s77 statement featured in the morning papers that thirty Grumman fighter planes had been offered as a gift by the United States Navy to the Greek Government and that the latter had refused to accept them.

The Greek Minister is waiting to hear from me whether the Under Secretary or Mr. Berle can see him at once regarding this matter.

The Minister emphasized, what is of course obvious, that Secretary Knox’s statement is void of any foundation whatsoever. The Grumman Navy planes were never offered to the Minister as a gift, and his Government has furthermore never yet turned them down on any basis, whether gift or cash on the barrel head. The Minister pointed out that, in reply to a specific inquiry which his Legation had made of Mr. Philip Young when the offer was made, he was informed that under present existing legislation this Government had no authority other than to expect “cash on the barrel head” for the planes. The Minister further pointed out that only yesterday his aviation expert, recently arrived in this country, had a conference with Rear Admiral Towers and Captain Mitchell at the Navy Department when the Greek officer asked in particular for information regarding specifications of the planes in question for the information of his Government in enabling it to reach a decision in this matter.

The Greek Minister states that in view of the publicity which has been given to Secretary Knox’s erroneous statement in this matter he cannot let the matter rest, and he is sure his Government will not allow him to. Before acting to clarify the matter through a statement to the press on his part he wishes to have an opportunity to confer with high officials of the Department of State.

I have talked meanwhile with Mr. Buckley, Assistant to Mr. Philip Young in the Treasury Department, who informs me that he has been in conversation this morning with Admiral Towers regarding this [Page 689] matter, and that Admiral Towers freely admits that the Navy Department has no authority under the law to dispose of aviation material except to the highest bidder after such material has been declared surplus. Despite this recognition on the part of Admiral Towers, however, he informed Mr. Buckley that the Navy Department had intended to make these planes available to Greece “as a gift”, but that the Greeks had never been so informed. Mr. Buckley added that how the Navy could proceed in that manner under the law was not in any way clear to him.

As for the amount which the Greeks would presumably have to pay for these planes if accepted now, I may say that the Greek Minister has understood that they would cost about a million dollars. Neither Mr. Buckley nor Admiral Towers recalls having discussed the question of price with the Minister.

  1. Frank Knox, Secretary of the Navy.