Memorandum of Conversation, by the Secretary of State2

The British Ambassador3 called at his request to see the Secretary.

He said his Government was a bit disturbed by a statement that Tsaldaris4 had made to the press that he expected soon to receive American aid for financial relief. He said they were wondering whether the US did give Greece a loan in anticipation of action by Congress, or at least assurances of a loan.

The Secretary replied that we cannot stop Tsaldaris from making a statement he believes will be helpful to him at home. He stated there was no commitment at all and that it was made plain to him by everyone that it was an exceedingly difficult matter, and that the only way he could get a loan was through the Export-Import Bank. He wanted assistance between now and April 1st because he was disturbed by the immediate financial situation and was convinced nothing could be done as a result of the Economic Mission5 until late spring. The Secretary stated further that the Department’s economic people had talked with Tsaldaris to see if there were any way something could be worked out. The Secretary said he suggested to him on the day he left Washington that he should not make any statement which would lead his people to be optimistic and then later cause them disappointment. He said he regretted Tsaldaris had given the impression that any commitment was made.

The Ambassador inquired if a loan to Greece would have to be approved by Congress.

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The Secretary replied it would not, that the loan through the Export-Import Bank could be made out of funds they now have. He said Tsaldaris was informed that money for lending purposes was restricted by the language of the law and that the Directors of the Bank were disposed to view these applications for loans quite closely and to live within the language of the law.

The Secretary said Tsaldaris then asked for a loan by authority of Congress and stated that his Greek friends here had advised him such a loan would be approved by Congress. The Secretary told him his friends were no doubt being misled by a Congressman or Senator who feels kindly toward Greece, but who would have to stand with the majority of his party when the issue came to a vote.

  1. Drafted by Dorothy H. Morgret of Secretary Byrnes’ office.
  2. Lord Inverchapel.
  3. Constantine Tsaldaris, Greek Prime Minister and Minister for Foreign Affairs; for an account of his visit to the United States in December 1946, see telegram 8, January 3, 1947, Foreign Relations, 1946, vol. vii, p. 286.
  4. For the appointment of Paul A. Porter as Chief of the American Economic Mission to Greece, see telegram 1569, December 12, 1946, to Athens, ibid., p. 278. The Department of State, on January 9, 1947, released the membership and terms of reference of the Mission (Department of State Bulletin, January 19, 1947, p. 136).