868.51 War Credits/479a: Telegram
The Secretary of State to the Minister in Greece (Skinner)
34. As result of conversation yesterday between representatives of State and Treasury Departments and Greek Minister, possible settlement of Greek debt question is being considered on terms outlined below:
- 1.
- Funding of present Greek debt under 1918 agreement with interest to date on same basis as recent settlement of Greek debt to Great Britain.
- 2.
- The American Government to loan enough additional money to make the total American loan equal in amount to the money loaned by Great Britain under the 1918 agreement. Under this arrangement the minimum amount of the new loan would be $12,000,000, which would be made payable at a favorable interest rate in 15 years; the amount of the loan under the auspices of the League of Nations to be reduced by a sum equal to the new American loan to Greece; the new American loan to have the benefit of the guaranties which apply to the League of Nations loan.
The Greek Minister offered the objection that 15 years was too short a term for the new loan. It was agreed to postpone further consideration of this point pending a careful investigation of the Greek financial situation and of the ability of Greece to repay in 15 years, the margin which should be left to allow for Greek productive economic expansion to be taken into consideration. The Greek Minister undertakes to supply as early as possible reports made to and by the Finance Commission of the League of Nations in connection with consideration of the loan under League auspices.
It was agreed to avoid any premature publicity concerning these conversations.
It is understood that a new loan can only be made by authority of Congress.