868.51/1–146: Telegram
The Ambassador in Greece (MacVeagh) to the Secretary of State 63
[Received January 3—12:33 p.m.]
1497. For Hawkins and Taylor. I agree with my British colleague that in view unstable political situation here financial economic discussions mentioned Deptel 11089, December 27, to London should be expedited every possible way. Presumably these will be in effect simply continuation talks in Athens recent weeks particularly during and since McNeil visit [apparent garble] not all reported in detail to Department. Assume Department supplied you with copies mytels which at time deemed unnecessary repeat London especially 1467, December 20, and 1472, December 23,64 also despatch 2002 December 15.
Delays in reaching agreement between London and Athens and in taking appropriate action based on such agreement have allowed inflation to go well into explosive stage. Gold pound currently quoted around 190,000 drachmas and paper dollar nearly 8,000 making total open market value entire drachma note issues less than $12,000,000 thus illustrating primary importance psychological factors.
Grove plan for reestablishing Greek currency shows remarkably clear insight local situation and this or something equivalent seems absolutely essential deal with present crisis however old-fashioned gold standard may be regarded certain circles. Matters have been allowed go so far due in part to unwillingness British Treasury accept plans Kanellopoulos Government in November that serious disturbances quite likely urban areas due inability salaried and wage earning classes buy food present prices. At official rate reasonably good meal in restaurant costs $50, eggs are $17 per dozen, cheese $11 per pound.
Virtually all observers agree that stable currency essential Greek economic revival and Embassy doubts that fiat currency issued by any Greek Government likely remain stable until after country has enjoyed substantial degree economic recovery. Cannot stress too strongly that Greece only Balkan country attempting retain orthodox ideas private property and free enterprise along American lines. Money therefore plays far greater role than totalitarian dictatorships.
Would urge again that time and stability are of the essence and hope you can help.