309. Telegram From the Department of State to the Embassy in Greece 1

586. During ceremony at White House August 9, during which President made formal presentation 4 black Angus cattle Salonika Farm School, Greek Ambassador gave President 4-page personal letter from Karamanlis concerning economic aid.2 Letter notes that decision about to be taken in connection amount aid to be allotted Greece FY 1958 and reviews progress made to date by Greece, with support US aid, in bolstering Greek economy and military defense. Letter also notes that Government now faces task consolidating achievements made to date and in this task continued US aid vital. Describes “serious dangers” which would result if level of aid lower than FY 57. Prime Minister summarizes specific aid requests GOG as follows:

Aid should at least equal that of last year, that is, $50 million.
Aid should be used for purchase surplus commodities up to amount Greece’s requirements, balance in global PA’s.
Additional military aid in amount $13 million to meet increased military expenditures.
Loan—aid from Economic Development Fund over two year period amounting $25–30 million for financing nitrogen fertilizer factory and Larissa–Katerini–Salonika Highway.

Greek Ambassador subsequently saw FitzGerald at ICA and made detailed oral and written presentation same subject.

President’s reply avoids discussion specific GOG requests and notes that aid legislation still under consideration Congress. Letter states that until legislation enacted no commitments can be undertaken but points out that reductions appear likely and aid to Greece will have to be determined in context needs throughout world.

Signed Presidential letter dated August 14, for delivery to Prime Minister3 and text Prime Minister letter follow by pouch. Dept [Page 594] assumes that no publicity with respect to exchange messages is contemplated. Should GOG approach you seeking agreement on release you should request instructions.

  1. Source: Department of State, Central Files, 781.5–MSP/8–1657. Official Use Only.
  2. Dated August 3. (Ibid., Presidential Correspondence: Lot 64 D 174, F–L 1957) In a note transmitting Karamanlis letter to Dulles, Eisenhower wrote, “It emphasizes that they believe that reduction in our foreign aid would be catastrophic, at least as far as they are concerned.”
  3. Eisenhower’s reply to Karamanlis reads:

    “Your letter raises the question of future American aid to Greece. As you know, the entire program of our aid under the Mutual Security Program for Greece and the rest of the Free World is still being considered by Congress. Until the necessary legislation has been enacted we cannot, of course, undertake any commitments on this subject. I must point out, however, that the total of our aid programs for the coming fiscal year may very well be reduced from last year. This will raise problems with respect to individual programs in many countries. I am sure that you understand that our aid to Greece will therefore have to be determined in the context of other priority needs for our aid throughout the world.” (Ibid.) Transmitted to Athens in instruction A–44, August 17. (Ibid., Central Files, 781.5–MSP/8–1757)