102.1/9–2949
The Chargé in Greece (Minor) to the Secretary of State
No. 542
Sir: With reference to the Embassy’s telegram No. 1421 of July 22, 1949,1 I have the honor to report that the Secretary of the United States Treasury Department, The Honorable John W. Snyder, visited Athens from July 22 to July 24, 1949. The Secretary was accompanied by Messrs. Martin, Saxon, Willis, and Glendenning of the Treasury.
Despite the flagrant over-optimism of the Greek press and the wishful dreams of local politicians that Mr. Snyder would bring with him a magic to cure all the country’s economic ills, the Secretary’s visit was a pronounced success. This, I think was due to Mr. Snyder’s personality, poise, understanding, and, above all, to his complete candor. The Secretary made it crystal clear to all Greeks with whom he came in contact that he was not here to study or discuss American aid to Greece—a subject which, he consistently pointed out, was properly in the competent hands of Ambassador Grady and his assistants and that while he appreciated the pressing problems of this country, it was up to the Greeks themselves to save Greece with the help they were now receiving from the American “taxpayer”. This candid approach [Page 377] by the Secretary brought almost all of the local politicians and newspapers down to solid earth, and it appears considerably less likely that the announcement of visits by distinguished Americans will be so quickly and generally seized upon as an easy opportunity for increased Marshall Plan aid and more inter-party recriminations.
[Here follows a brief account of Secretary Snyder’s arrival at Athens on July 22, the social functions held in the Secretary’s honor that day, and the briefing for the Secretary held at the headquarters of the Economic Cooperation Administration Mission to Greece on the morning of July 23.]
Following this 1¾ hour meeting, the Secretary, in the company of the Ambassador, called on the President of the Bank of Greece, and from there proceeded with the Ambassador to a one-hour meeting with the heads of the Greek Government, presided over by the Prime Minister.
Following the discussions in this meeting, at which the Ambassador was the only Embassy representative present, two memoranda were presented to the Ambassador by the Prime Minister, one “On Foreign Assistance and the Reconstruction Program”, and the other “On Pending Economic Problems in Greece”. Three copies of each of these memoranda are submitted as enclosures 1 and 2.2
The first memorandum, “On Foreign Assistance and the Reconstruction Program”, is a concise exposition of the financial considerations governing the 1948–49 recovery program and the Greek Government financial proposals for the 1949–50 program. The primary design of the memorandum seems to be to focus attention on the alleged need for increased funds to carry out a more sizeable reconstruction program. It is pointed out that at the present projected rate of expenditure for the first two years of the four-year program the deficit at the end of the four years will be larger than the 95 million originally contemplated.
The second memorandum, “On Pending Economic Problems of Greece”, purports briefly to analyze the existing monetary problem of the country and then to propose ameliorative changes involving a sanction for the Bank of Greece to purchase foreign exchange “according to its own judgment”, apparently with the primary purpose of fixing such exchange rates on incoming capital from abroad and restoring to the Greek economy a greater volume of income from invisibles. Another proposal in the brief involves an arrangement whereby both bank deposits and bank loans would be calculated on the basis of “an accounting currency unit”. It is argued that the adoption [Page 378] of such a plan which would require a “dollar equivalent of the drachmae deposited written down side by side with the drachmae figure” would tend to put the brakes on exchange speculation, encourage drachmae deposits and reduce, to an extent, the demand for gold.
On the afternoon of July 23, the Greek Government gave a luncheon for forty persons in Secretary Snyder’s honor. In addition to the members of the cabinet, the guests included prominent deputies, leading directors of the Bank of Greece, the Chief of the Currency Control Commission, the Director of the Greek Recovery Program, the American Ambassador, and the ranking officers of the Embassy staff. The occasion was marked by a cordial and interesting toast from Prime Minister Diomedes and by the Secretary’s telling response.
[Here follow portions of the texts of the toasts exchanged by Prime Minister Diomedes and Secretary Snyder.]
Secretary Snyder was received by the King at 5:30 on the afternoon of July 23, the King having returned from his vacation especially to receive the Secretary.
The Secretary left Athens at 7:00 a. m. on Sunday, July 24. Ministers Helmis, Ailianos, and Mavros3 saw him off on behalf of the Greek Government at the Hellenikon airfield. Ambassador Grady accompanied Secretary Snyder and his party on their special plane to Washington, D.C., where he will testify before Congress on the Military Assistance Program for Greece. Secretary Snyder and all of his associates pronounced themselves well satisfied with their visit to Athens.
Respectfully yours,