668.0011/10–145
The Ambassador in Greece (MacVeagh) to the Secretary of State
[Received October 15.]
Sir: I have the honor to report that the resumption of private trade between the United States and Greece, as announced by the Department on September 20 [19],78 is being hampered by artificial barriers requiring the urgent attention both of the Department and of UNRRA. The matter is all the more pressing in view of the extensive overlapping of the UNRRA program for Greece and the preliminary list of requirements submitted by the Greek Ambassador to the Export-Import Bank,79 which accompanied the Department’s instruction No. 408 of September 4, 1945.80
The danger of creating a virtual monopoly of imports in Greece, as a result of Allied military and UNRRA procurement, has materialized substantially as predicted in my despatch No. 663 of March 13, 1945.80 The long and perhaps unavoidable delay in reestablishing procedures for commercial orders, together with the methods of UNRRA programming [Page 241] and procurement now in effect, have been the chief contributing causes. Efforts to remedy this condition should, therefore, center upon a modification of present UNRRA methods in Washington, London and Athens.
As mentioned in my despatch of March 13, the original military relief supply program for Greece consisted of 45 items on a single mimeographed sheet. The UNRRA program has since grown into a monumental affair of some 1,500 pages. Such expansion was inevitable as long as UNRRA was the sole procurement agency for civilian requirements, but the result is that the UNRRA program now embraces almost everything really essential to Greek economy for the near future. And as long as there is a prospect of obtaining all of the country’s needs free of charge, through UNRRA, the Greek Government obviously will not encourage imports through commercial channels involving payment in foreign exchange. Both for this reason and to avoid duplication of requirements, the Ministry of National Economy has announced that commodities programmed by UNRRA may not be imported privately for the time being (Embassy’s telegram No. 989 of September 881). In effect, this ruling limits commercial orders to a comparatively few items such as steamships, cosmetics and certain types of machinery. For example, practically all automotive products, which represented a major part of American exports to Greece, are excluded by reason of the fact that they are provided for in some degree under the UNRRA program. The same is true of most other normal items of trade.
The UNRRA program for Greece consists of items which the Greeks have asked for and which local UNRRA screening officials have found to fall within the general scope of UNRRA procurement. The 1,500-page program is the result. But no one here in Athens knows what it would cost to obtain all of these items, or how many of them are available, or what portion of those available can be covered by UNRRA financial resources available for the relief of Greece. In fact, no figure appears to have been set for the amount of money UNRRA intends to spend on behalf of Greece, either in total or for any given period. In other words, the Greeks have asked for everything they could think of, without regard to cost, and UNRRA has forwarded most of these requests to Washington and London. That a request will be filled is usually not known until a ship arrives in a Greek port many months later, and in the meantime private trade is effectively throttled.
It would seem desirable that UNRRA allocate a specific sum of money for procurement on behalf of Greece during a given period of time, and that officials of the Administration in Athens be kept [Page 242] informed currently as to the availability and cost of the items Greece will actually receive as a result of the requests submitted. These two steps should contribute greatly to the intelligent planning of relief operations in this country. Some clarifications also would result as to the field remaining for private trade, but it is doubtful whether the above measures would be sufficient in themselves to give normal trade a reasonable opportunity of reestablishing itself. The reason for this is, of course, that the two steps proposed would involve considerable delays at best, with a corresponding handicap to the placing of commercial orders contingent upon UNRRA’s final refusal to supply the merchandise in question. The fact that no action appears to have been taken in Washington on the initial effort of UNRRA (Greece) to reopen commercial channels (Embassy’s report No. 59 of April 16, 194582) is not encouraging in this connection.
The question then arises as to whether UNRRA’s future programming and procurement might not be simplified and limited to commodities more or less directly associated with relief activities. It seems probable that the Administration’s financial resources available for Greece could be very largely if not completely absorbed in this manner, leaving most of the broader and all but indefinable field of “rehabilitation” to be supplied through commercial channels. The latter would be paid for in foreign exchange provided either from Greece’s own resources or from credits such as may be made available by the Export-Import Bank. Probably it would be undesirable to announce formally that UNRRA is to forego further rehabilitation work in Greece, but a fairly definite line will have to be drawn somewhere and a decision on this point should not be delayed.
I feel certain that the Department will appreciate the outstanding importance of this question, economically and politically for Greece, as well as financially for the United States. I would therefore request that it be taken up with UNRRA in all urgency.
Respectfully yours,
- The question of the resumption of private trade between the United States and Greece was under consideration by the Department at least as early as April 1945. Assistant Secretary of State Clayton commented on the matter in his letter of May 4 to the Greek Ambassador, p. 213. Discussions were undertaken with interested Government departments and with Greek spokesmen at Washington and Athens, and on September 19 the Department stated that “the resumption of private trade between the United States and Greece, effective immediately and subject to certain limitations and requirements, has been announced by the respective Governments”; for text of statement, see Department of State Bulletin, September 23, 1945, p. 440.↩
- On August 20, see p. 233.↩
- Not printed.↩
- Not printed.↩
- Not printed.↩
- Entitled “UNRRA Undertakes Certain Commercial Orders in Greece,” not printed.↩