868.48/3362
Memorandum by the Chief of the Division of Near Eastern Affairs (Alling) to the Assistant Secretary of State (Long)
Mr. Long: In connection with our conversation on September 17, the so-called “Swedish plan” for Greek relief, and particularly the question of the payment of freight on the vessels, developed as follows:
1. On the insistence of the Greek Government at London and in appreciation of the further deterioration of the tragic food situation in Greece, the British Foreign Secretary addressed a note to Ambassador Winant on February 22, 1942,46 requesting this Government to associate itself with the British Government in proposing to the Swedish Government that Swedish ships be made available to carry 15,000 tons of wheat monthly from Canada to Greece, and that the Swedish Red Cross supervise the distribution of the supplies thus shipped. No mention was made of any arrangements for financing the scheme in this proposal.
2. On February 26 the Department replied as follows: “The American Government will be glad to associate itself with the British Government in the plans for the relief of Greece as outlined in Mr. Eden’s letter.47 In pursuance of this action the American Minister in Stockholm accompanied the British Minister to the Swedish Foreign Office on March 2 when the latter left an Aide-Mémoire embodying the proposal.48
The officers in the Department who were dealing with the subject considered asking the British Government at the time regarding the financial arrangements for the scheme, but it was decided that inquiry on this subject would be inviting a request by the British that we help pay for it, so we made no inquiry of the British on the subject at this time.
3. The Swedish Government agreed to the proposal and, in due course, negotiations were completed for its acceptance also by the Axis powers. Eight Swedish ships were made available and chartered [Page 782] to the Swedish Red Cross, against a financial guarantee of the Greek Government at London.
4. During his recent visit to the United States the Greek Premier appealed to the officials of the Greek War Relief Association to take over the obligation of paying the freight, which was estimated to run to some $900,000 per month, and the Association agreed to do so to the extent that its funds would permit.
5. In connection with its current drive for contributions, the Greek War Relief Association has obtained the approval of the Community War Chest Organization for the allocation to the Association of $1,000,000 per month for an initial period of six months. The War Chest officials felt, however, that this program was entirely too large for private philanthropy and should be handled by some Governmental agency.
6. Officials of the Community War Chest Organization took the question up in this vein with the President’s War Relief Board. The latter agreed with their view, and undertook to explore whether some American government funds might not be available for the purpose.
7. To this end Mr. Charles Taft, Acting Chairman of the War Relief Board took the initiative of calling a meeting of interested official agencies, which was held at the Treasury, and attended by representatives of the Treasury, Bureau of the Budget, War Relief Board, American Red Cross, and State Department (Allen and Kohler of NE49). Among the possible sources of funds discussed was the emergency foreign war relief funds granted to the President, usually referred to as “The President’s Fund”. During the discussions Mr. Mitchell of the Red Cross expressed doubt as to whether the Comptroller General would approve the use of these funds for payment of freight on supplies not purchased in the United States. Mr. Taft suggested that the question be presented to the Comptroller General for a definite ruling, and undertook to do so himself. No objections were raised to this proposal by anyone present at the meeting.
8. NE’s interest in the financial aspects of the Greek relief scheme resulted from our general endeavors, on instructions from Mr. Welles and Mr. Berle, to investigate means of aiding the Greek Government financially, in accordance with a promise we understand to have been made to the Greek King by the President during the King’s recent visit to the United States. The increasing expenditures for the chartering of relief vessels is one of the heavier obligations against the limited resources of the Greek Government (See London’s [Page 783] telegram 5202, September 17, 6 p.m.50). This interest was expressed by our representatives at the meeting at the Treasury Department.
9. Following the meeting, Mr. Taft prepared a letter51 requesting a ruling from the Comptroller General on the question of the possible use of the President’s fund for the payment of this freight. At the request of Mr. Taft, Mr. Allen of this Division accompanied him to the Office of the Comptroller General when he submitted this letter.
10. In response to Mr. Taft’s letter, the Comptroller General ruled that the President’s fund could be used to pay the freight. Mr. Taft informed the Department in a letter52 now in the Special Division. Mr. Taft also informed the Red Cross of the Comptroller General’s ruling.
11. Mr. Norman Davis called Mr. Allen on September 18, to say that he had learned of the Comptroller General’s ruling. He said that regardless of the ruling he did not favor use of the funds in this manner. He said that it had been his understanding that neither the President nor the State Department had favored such use of the funds and inquired whether there had been any change in this respect. Mr. Allen said that he had acted under general instructions to investigate sources of possible United States Government assistance to the Greek Government, that the use of the President’s fund had often been mentioned as one possible source in this connection, and that since Mr. Mitchell of the Red Cross had stated that the Red Cross was not certain whether the Comptroller General would approve the use of the fund in this manner, Mr. Taft had taken steps to determine this question, in order to eliminate any further consideration of this source if it could not be used. Mr. Allen said that it had also been desirable, from the point of view of his study of the general question of financial assistance to Greece, to have this question determined.
Mr. Davis said that he considered the Comptroller General’s decision legally untenable and that he intended to disregard it because (1) the Budget Bureau would not approve anyway and (2) he had given the Finance Committee of the Senate his personal promise, when the last appropriation for the President’s fund was approved, that none of the funds so appropriated would be used for relief in Axis occupied territory. He said he could not go back on his word, no matter what the Comptroller General might say.
[Page 784]Mr. Allen said that he had understood Mr. Taft’s action as a necessary step to determine merely whether the fund could be so used, and not to have involved any decision as to whether it should be used in this manner. He said that in view of Mr. Davis’ position it seemed clear that those who had been looking towards the President’s fund either as a source specifically of Greek relief or as a means of aiding the Greek Government financially would have to look elsewhere for funds.
Mr. Davis said he thought no harm had been done but that he wanted to make his position on the subject clear to the Department.
12. While the above developments have been taking place, officers of the Division have endeavored to learn informally from the British the exact financial arrangements for the “Swedish Plan for Greek Relief”. Attached is a letter which has now been received from the British Embassy,53 reporting that the Greek Government has assumed full responsibility for payment of the freight but that the British Government, unknown to the Greek authorities, has given an underwriting guarantee to the Swedish Government.
- See telegram No. 845, February 22, midnight, from the Ambassador in the United Kingdom, p. 739.↩
- See telegram No. 860, February 26, midnight, to the Ambassador in the United Kingdom, p. 743.↩
- See telegram No. 399, March 2, 7 p.m., from the Minister in Sweden, p. 743.↩
- Division of Near Eastern Affairs.↩
- Post, p. 803.↩
- Dated August 26, 1942, not printed.↩
- Dated September 11, 1942, not printed.↩
- Supra.↩