462.00R296/5325

The Minister in Greece (Skinner) to the Secretary of State
No. 1923

Sir: In my telegram No. 49 of November 4, 4 P.M., 1931,13 I communicated to the Department the substance of a letter addressed to me by the Prime Minister, together with a more lengthy memorandum dealing with the effect of the moratorium proposals on finances. Mr. Venizelos, before my return to Athens, had heard with great perturbation that Greece was not to be included in the list of countries benefitting from the President’s moratorium program because of her failure to accept the proposition without reserves. I do not think it is necessary to trouble the Department with the full text of the long memorandum referred to above inasmuch as the incident is now concluded. After the receipt of the Department’s cabled reply, I saw Mr. Venizelos again and learned to my astonishment that he had been laboring under the impression that the proposals covered a period of ten years! When I showed him that this was not the case, and furthermore explained fully the position as I saw it, he at once accepted the proposals without any reservation, whatever, as I telegraphed the Department in my No. 52 of November 7, 4 P.M.13

Mr. Venizelos, after accepting orally, confirmed his statement to me in a letter, a full copy of which in translation I enclose herewith. I have made it clear to him, I think, that we have no means of dealing in any way with the controversy between himself and Bulgaria and other Near Eastern countries, and I believe that he now understands the position.

For the Department’s information, I may add that in my own view there is no doubt that since Greece is to receive no reparation payments whatever from Bulgaria, it would be absurd to expect her to pay Bulgaria under what is called the Kafandaris-Molloff agreement, [Page 216] a debt from government to government, merely because the Bulgarian Government afterwards makes use of these funds for the settlement of private claims.

Respectfully yours,

Robert Skinner
[Enclosure—Translation]
The Greek Prime Minister (Venizelos) to the American Minister (Skinner)

Mr. Minister: I have to confirm to you in writing that, as I informed you last evening, we accept the proposal of President Hoover regarding “all payments of inter-governmental debts, reparations and debts of assistance, not including governmental obligations held by private persons”.

I cannot, however, refrain from expressing a complaint; when, since the month of June, in our reply to the Hoover proposal, we had accepted, without making conditions, the remission of German reparations but had formulated certain reservations for Eastern reparations, the American Government not only did not advise us that it considered these reservations inadmissible in principle, but on the contrary informed us that it would examine them and give us its opinion on them later, being at that time absorbed in negotiations with France. In July, when the Conference of Experts of London was convened at which we made the same reservations, the American Expert, who was present, did not declare that he considered them inadmissible, and he allowed the acceptance by us of the remission of German reparations as well as the declaration of the experts to the effect that the difficulty which had arisen between Greece and Bulgaria should be settled by direct agreement between the two countries.

Therefore we could consider as beyond doubt that the American Government was according us the remission of our debt to it for the Hoover year.

Nevertheless, only a few days ago, we were informed that we were to pay this debt because the American Government believes that we have not accepted its proposal on account of the reservations we have made.

I have no intention whatever of questioning the right which the American Government had to state in the beginning that it does not accept our reservations and that it does not intend to accord us suspension of the payments of our debt to it.

But I do not believe that it could declare in the beginning that it would examine our reservations, without giving us any answer in consequence and informing us at last, only a few days ago, that it does not intend to remit our debts during the Hoover year because it considers that we have not accepted the American proposal.

[Page 217]

In the meantime we had consented to grant the requested remission not only to Germany, but also to Czechoslovakia, Hungary and Bulgaria for reparations, and we had only demanded payment of a debt of Hungary arising from damages suffered by Hellenic nationals during Greece’s period of neutrality, and had informed Bulgaria that we were not paying her, during the same year, our debt under the Caphandaris-Molloff Convention.

Thus, while owing to the American proposal we are paid none of the $5,136,954 which we were to receive during the Hoover year from Germany, Czechoslovakia, Bulgaria, Hungary and Austria, the American Government has just informed us at the last minute that it claims payment during the same year of our debt to it which amounts to $1,110,000.

This simple narration of events suffices to explain the complaint which I have permitted myself to express to the American Government.

However, in declaring today the complete acceptance of the Hoover proposal, I consider it my duty to acquaint you that Greece, in agreeing to receive nothing during the Hoover year from Hungary and Bulgaria for reparations, from Hungary and Austria for damages caused to private persons during the period of neutrality, has decided not to pay on its side what it owes Bulgaria under the Caphandaris-Molloff agreement.

I beg [etc.]

E. K. Veniselos
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