868.51/10–2544: Telegram

The Acting Secretary of State to the Ambassador in the United Kingdom ( Winant )

8899. In August [July] the Greek Government approached us for financial assistance in the form of a credit of $25,000,000, which they apparently contemplated using for current budgetary purposes. We asked for further information on certain points not covered in the original Greek request, and particularly for a dollar-sterling breakdown of current and anticipated expenditures. In this latter connection, we had in mind the Foreign Office statement, reported in your 5202, September 17, 1942,52 that, “the provision of sterling for the Greeks is generally speaking regarded as falling within the province of the British,” and that the Foreign Office would be glad if we could help them in other respects.

The supplementary information now received from the Greek Government53 does not fully clarify its financial position. However, it appears that Greek dollar expenses, other than the $30,000,000 per annum expenditure for Swedish relief shipping and American relief foodstuffs met by this Government, do not exceed $1,500,000 per annum; and that the Greek Government’s dollar position has in fact improved slightly since we took over these relief expenses beginning January 1, 1943.

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We understand that the Greeks simultaneously approached the British for further financial assistance.54 While we realize that the situation has changed fundamentally with the liberation of Greece and that present calculations will necessarily be subject to revision, we should appreciate any information you may obtain regarding British action on the Greek request and British views and comment on the Greek Government’s financial situation.55

Sent to London. Eepeated to AmEmBalk,56 Cairo.

  1. Foreign Relations, 1942, vol. ii, p. 803.
  2. Memorandum of August 31 to the Under Secretary of State by the Minister Plenipotentiary and Director of Economic Affairs at the Greek Ministry for Foreign Affairs (Argyropoulos) not printed; it estimated expenditures of the Greek Government at £7,890,827 of which the major part was in pounds sterling and of which £5, 111,400 represented expenditures for the armed forces, revenues at £2,576,400 and a deficit of £5,314,427. It fixed gold holdings at £6,719,000 and foreign exchange holdings at £38,326,000 as of March 31, 1944, as compared to gold holdings of the same magnitude and foreign exchange holdings of £45,736,800 at the time of enemy occupation in April 1941, a decline of £7,140,000 [£7,410,800] resulting from the Greek Government’s prosecution of the war. The remaining holdings of £45,045,000 were said to be composed of £31,726,900 and $26,510,570.

    The memorandum stated that Greek revenues had dwindled because of heavy war losses by the Greek merchant marine and that in the first stages after the liberation of Greece the Government would be unable to draw substantial resources from the ruined country while it would have to face vital and pressing needs. (868.51/8–1044)

  3. In despatch 169, July 26, the Chargé to the Greek Government in Exile in Egypt (Shantz) had advised that “the Greek Government has officially approached the British Government with a view to the extension of the mutual aid agreement of March 1942 between the Greek and British Governments to include payment of the salaries of the Greek armed forces.” (868.51/7–2644) In despatch 187, August 10, the Chargé reported the British Government had advised the Greek Government “it is not prepared to extend the provisions of the Mutual Aid Agreement with the Greek Government to include the payment of salaries to the Greek Armed Forces or to make any additional advances to the Greek Government at this time.” (868.51/8–1044) In telegram 9048, October 21, 8 p.m., the Ambassador in the United Kingdom advised that the British Government was arranging for the shipment of 200,000 gold sovereigns to Athens, to which the Greek Government had returned on October 18, after receipt of a firm commitment from the Bank of Greece that the equivalent in gold would be made available immediately to the British Treasury from reserves of the Greek Government, that the shipment would not be repeated and that the Greek Government must not rely upon receiving British financial assistance in correcting financial and monetary disorder (102.1/10–2144).
  4. In telegram 9391, October 31, 6 p.m., the Chargé in the United Kingdom referred to several recent telegrams to the Department giving British views on the financial situation in Greece but gave no further substantive reply to the Department’s No. 8899 (868.51/10–3144).
  5. Registered cable address for “American Embassies to the Balkans” used in connection with telegrams sent to the Ambassador to the Greek and Yugoslav Governments in Exile in Egypt (MacVeagh).