868.51/12–2747: Telegram
The Acting Secretary of State to the American Mission for Aid to Greece
Gama 725. With reference to Amag 734,1 Dept pleased to note progress towards economic reform proposed and in progress.
Grk Emb presented note to Dept Dec. 232 requesting Dept assistance with negotiations FRBNY looking toward renewal of loan balance after repayment $2,000,000 and exchange of gold bars received for $2,000,000 for sovereigns to be used in Grk open market.
Dept reply3 follows:
“Dept informed repayment $2,000,000 made and that FRBNY extended balance loan. Dept also advised by AMAG that AMAG informed Grk authorities to effect use gold to secure sovereigns for open market operations would not be recommended by AMAG at least until new economic controls and measures vigorously instituted. Determinations this nature by AMAG fully supported by Dept.
Under circumstances Dept regrets unable lend good offices arrange exchange gold for sovereigns. It believed preferable course permit gold remain at present location so it may be available at any time in event required for purchase essential supplies.”
Dept would appreciate advice as to source $2,000,000 used by Grks to repay Fed Bank.