462.00R296/4520
The Minister in Greece ( Skinner ) to the Acting Secretary of State
[Received July 15.]
Sir: In various telegrams addressed to the Department during the past few days, I have communicated the point of view of the Hellenic Government in regard to the President’s moratorium proposals. It arises out of the data submitted that without a moratorium, and assuming that the European powers meet their obligations, the Greek Government would receive during the fiscal year beginning July 1st, 1931, from foreign governments, 20,270,000 gold marks, and in the same period would be obliged to pay foreign governments the amount of 18,513,245 gold marks. Various questions of detail are still to be determined, and in particular whether or not the Greek debt to Canada arising out of the purchase of wheat, and the obligations under the Kafandaris-Molloff Agreement in [with?] Bulgaria are included in the scheme. I have had a number of interviews on this matter with the Prime Minister, whose feelings may be summed up by the statement that in his view the American fiscal authorities are not familiar with what are called oriental reparations, which should be dealt with in a separate and special way. He mentions very particularly that a certain debt to the National Bank of Greece, in which Great Britain and France were involved in the same manner, was recognized as a commercial debt by Great Britain and paid, whereas France escaped payment, but eventually capitulated to the point that Greece was given a larger proportion of reparations from oriental countries than would otherwise have been the case to meet this special claim which, as stated, Greece regards as commercial.
In the course of my interview with Mr. Venizelos, which took place yesterday, he expressed himself as follows. I translate from notes of the conversation which he, himself, supplied: [Page 211]
“I have come to support and define the Greek point of view with respect to President Hoover’s proposals. You know the embarrassing situation in which this proposition places us. America, finding herself brusquely in the presence of the danger that Germany might go under, and to prevent this catastrophe, proceeds to an urgent and radical proposition. I do not see what reasons have induced her to include the Oriental reparations in this proposition, but I do believe that if she had had the necessary time to study these reparations she would not have done so; the truth is 76.73% of these reparations, which are paid by Hungary and Bulgaria, come to one single small country, that is, to Greece.
“Bulgaria during the coming year should pay a total, under the head of reparations, of 8,099,996 marks, of which 6,215,127 come to Greece. On the other hand, during the same period, Bulgaria is Greece’s creditor for the amount of 3,794,000 marks. This sum, which is applied to the amortization of the credit balance, which goes to the profit of Bulgaria for the liquidation of the property of Greek immigrants in Bulgaria and of Bulgarian immigrants in Greece, is payable to the Bulgarian treasury, according to the Kafandaris-Molloff Agreement of December 9, 1927, under the plan of payment of 1922. The debt to Bulgaria, therefore, without any doubt, falls within the frame of the Hoover proposal. In any case, the Hellenic Government desires to know if the American Government recognizes the reasonableness of this point of view.
“Hungary, whose financial situation is not at all critical, whose budget balances, pays a total, during the same period, of 7,230,000 marks, of which 5,547,685 come to Greece.
“Finally, Czechoslovakia undertook at the Hague to pay a fixed annuity of 10,000,000 marks during 37 years, to be divided among the creditor Powers, of which Greece receives 17.58%, that is, 1,758,339 marks.9 This is not a reparation debt. It constitutes the price in consideration of which Czechoslovakia was liberated from the obligation of paying into the reparation treasury the value of property ceded to it by the former Austro-Hungarian monarchy. If this debt were remitted to Czechoslovakia, she would find herself in a particularly privileged situation since, on the other hand, she is also subject to the payment of war debts, the annuity of which, according to my information, should amount to 25,000,000 marks.
“This privileged situation established in favor of a rich and flourishing land, likewise the unfavorable treatment which menaces a weakened country like Greece, in which the war was prolonged with short intervals during ten years, ending with a catastrophe and the arrival of a flood of 1,500,000 refugees, suffices to show that the inclusion of the oriental reparations in the Hoover plan must have been decided before its consequences had been examined. Otherwise, it would be difficult to conceive that breaches should thus be opened in the budget of a little country for the benefit of other countries who do not suffer in the same manner.
“There is, however, a means of remedying the difficult situation in which Greece finds herself placed. If it is decided that Czechoslovakia [Page 212] shall not benefit by the suspension of payments on account of the Greek debt arising out of the acquisition of property, or, at all events, that she shall continue to pay regularly the Greek portion of this amount, if, moreover, the suspension of payments is extended to our debt to Bulgaria and to our debt to Canada which was fixed in the London agreement of December 27, 1923, then Greece would find herself covered, and would suffer no damage from the application of the Hoover proposition.
“There is, finally, another aspect of the question which the efforts that I have consecrated to the cause of peace in this part of the world encourage me to touch upon. The Hoover proposition has as its object the amelioration of conditions in the world generally, and to contribute to the consolidation of universal peace; but one of its effects, nevertheless, will be to destroy international treaties to which America is not a party. Certainly America has a world prestige sufficiently important to accomplish an act of this nature if this act is based upon justice, but if this base is lacking it would constitute, I fear, the resurrection of the theory of ‘a scrap of paper.’ If America should employ its moral authority to impose upon a small country in the Near East, a heavy sacrifice of its rights for the benefit of other countries which do not need this sacrifice, she would weaken the sentiment of justice and the respect for international obligations and would compromise by this fact the work of consolidation of peace in this portion of the world.”
Respectfully yours,
- See Great Britain, Cmd. 3484, Misc. No. 4 (1930), p. 170.↩