868.51 War Credits/786: Telegram
The Chargé in the United Kingdom (Matthews) to the Secretary of State
[Received March 28—1 p.m.]
1497. Foreign Office has informed us that the Greek Government desires the abolition of the International Financial Commission at Athens and that the British Treasury proposes to put the following points to Greek Finance Minister Varvaressos in order to safeguard interests of bondholders:
- “(a) Formal reaffirmation by Greek Government that existing rights, securities, privileges and priorities of external loans will remain unchanged.
- (b) Disposal of assets held by Commission on behalf of bondholders (including drachmae treasury bills and mortgage on ex-property of Refugee Settlement Commission).
- (c) Appointment of some agency (for example Bank of Greece) to receive and release assigned revenues and take over other functions of Commission in connection with service machinery.
- (d) Arrangement for provision of statistics.
- (e) Substitution of new agency (for example Bank of Greece) for the Commission in loan contracts and other relative documents.
- (f) Disposal of Commission’s accounts with paying agents.
- (g) Safeguards for Commission’s staff.”
Foreign Office note to Embassy continues:
“It is proposed to suggest to Monsieur Varvaressos that the best course would be for him to discuss these points informally with representatives of the Council of Foreign Bondholders and the League Loans Committee, and to tell him that an arrangement satisfactory to these bodies would be likely to meet with the approval of His Majesty’s Government. Monsieur Varvaressos would also be told that the United States Embassy have been informed of the position in view of the United States interest in certain of the loans.
As soon as agreement has been reached regarding points (a) to (g) above, an agreed announcement could be issued to the effect that His Majesty’s Government were prepared to withdraw their representative on the International Financial Commission, and to [Page 796] acquiesce in its formal suppression by the Greek Government. Subsequently, still more detailed modifications to the loan contracts would have to be negotiated between the Greek Government and the various bankers, who are trustees for loans; also with His Majesty’s Government in respect of guaranteed loans still outstanding, and with the United States Government in respect of the loan made by them in 1929.
The points (a) to (g) constitute the safeguards, etc., which our Treasury have in mind, but they are not final and may be modified or amplified in the course of the various discussions with the Greek Minister of Finance.”
Foreign Office has given us copy of telegram concerning these proposals sent by League Loans Committee in London to Federal Reserve Bank New York for communication to Wadsworth care Red Cross Washington with copy to National City Bank New York. We presume this is available to Department.64
- Telegram of March 26, 1942, from the Bank of England to the Federal Reserve Bank of New York, not printed; it described in part the anxiety of the Greek Government to abolish the Commission as (Vichy) French and Italian representatives, possibly with the addition of reappointed Germans, were competent to exercise the functions of the Commission; it indicated further that the British Government was in principle disposed to withdraw its representative, who was unable to exercise his functions in any case, and had no objection to the termination of the Commission by the Greek Government. A copy of the telegram was furnished to the Department on April 1, 1942, by Eliot Wadsworth who was American member of the League Loans Committee in London. (868.51/1651)↩