868.51/11–2945: Telegram
The Ambassador in Greece (MacVeagh) to the Secretary of State
[Received November 30—6:15 p.m.]
1376. Deptel 1159, November 16. Program for use proposed Export Import Bank credit discussed Greek officials, UNRRA, Joint Transportation [Facilities] Mission26 and trade circles. In general seems excellent but following comments may prove useful:
- 1.
- Program includes relatively minor items numbered in Deptel as 6, 7, 10, 11, 12, 16, 19 through 23, 25. Bank Greece has ample dollar assets cover such imports through normal trade channels and Export Import Bank financing behalf Greek Government liable interfere revival private trade already gravely handicapped by restrictions, formalities, red tape. Figures for agricultural machinery and tires probably exaggerated due large UNRRA procurement.
- 2.
- Items 1, 2, 3, 5, 8, 14, 17, 18, 26 all relate construction or similar work in which maximum benefit both to Greece and US requires that American contracting engineering firms should have every opportunity to bid with provision in Export-Import Bank credit for payment their services in dollars. No organizations exist in Greece qualified execute large construction programs utilizing amount equipment requested. Six million pound road construction project handled by Greeks prewar period was failure and other large prewar work almost invariably let foreign contractors chiefly American while one British firm has already resumed operations drainage projects. Unless US firms receive support connection Export Import Bank credit, latter probably wasted large extent or utilized benefit other foreign contractors.
- 3.
- Railway equipment (item 4) and ship repair material (item 9) needed but former case raises question economic future various Greek railroad lines some of which probably should be abandoned and their work performed by sea, highway and air transport. Current studies Joint Transportation Mission pertinent this subject. Passenger ships (item 13) reportedly attended [intended?] international trade while small coastal steamers combination passenger cargo most urgently needed.
- 4.
- Large orders urban telephone and telecommunications equipment (items 15 and 24) beyond present needs and include new exchanges non-existent prewar plus 125 circuit underground cable Athens-Salonika. Latter discussed prewar but not started due estimated cost dollars 4 million including labor. British AuTelCo27 [Page 274] negotiating sew up Greek telephone system and British Marconi local radio broadcasting and telegraph facilities with long term contracts. US firms should have opportunity study possibilities on ground before Export Import Bank extends any large credits this connection.
- 5.
- Spare parts industrial and other mechanical equipment urgently needed many times figure quoted item 27 particularly since UNRRA procuring almost nothing this line. Credit this purpose up to $3 million recommended involving procurement private Greek-US channels subject only Government approval.
- 6.
- In summary suggest modification Greek proposals on basis elimination items first numbered paragraph above and allocation $13,600,000 for group items paragraph 2 substantially as requested but with provision up to $2 million additional for US contracting or other technical services. Bequests totalling $4,500,000 in paragraph 3 probably justified but require consideration in light economic possibilities and policies. Paragraph 4 items should be reduced to perhaps $2 million with US firms given opportunity investigate. Paragraph 5 item could be increased to $2,900,000 making grand total $25 million.
Finally for psychological reasons would urge most strongly that any favorable decision involving Export Import Bank credit be announced as tangible evidence US desire help insure progressive economic improvement in advance elections (mytels 1250, November 5; 1317, November 17; 1331, November 2029). Recent financial crisis culminating in fall Kanellopoulos government largely due misapprehension as to what might be expected this connection.