868.00/11–1347: Telegram
Governor Dwight P. Griswold to the Secretary of State
Amag 466. Reference to Amag 4541 will disclose that several important conditions vitally affecting AMAG operations have developed or become known since Mission organized:
Substantial curtailment estimated Greek wheat crop, increased world price of wheat, Greek Government bread subsidy and free distribution of food all serve to reduce AMAG funds originally planned to bring out consumer goods to combat inflation and furnish drachmas for reconstruction program. Another new and unanticipated factor is bandit policy of forcible recruitment which has had important military and economic effects recent months. Bandit forces increased from 12,000 to 18,000 despite several thousand reported casualties or surrenders. It is one factor in ineffectiveness GNA operations and it means that continuance this now apparently established policy will give bandits substantial reservoir future recruits from among Greek population until GNA successful its campaign. Although forced recruiting may be considered sign of weakness, I do not think it affords grounds much optimism. Hard-core Communists have successfully prevented any large scale acceptance amnesty and fighting ability bandits appears undiminished. Only favorable effect may be changed bandit tactics to prevent desertions. By curtailing normal dispersion procedures, they afford more attackable foes for GNA. Unfortunately recent [apparent omission] did not indicate any improvement GNA. Most serious effect forced recruiting has been compulsory evacuation villages by GNA as mentioned Amag 454.
To diminish possibilities forced recruiting by bandits and securing supplies by raiding villages, GNA recent months embarked intensive policy mass evacuation villages from areas within bandit range. Army transports evacuees to safe areas and then assumes no further responsibility. Evacuees now estimated at 310,000 in addition to thousands of refugees who have fled voluntarily for security. Unless reversal of policy immediately and effectively implemented, estimated evacuees will total half million by January 1.
[Page 403]Large number evacuees want to return their villages where risks preferable their miserable condition as refugees. Political dangers obvious as evacuees even more than refugees feel abandoned by Government and subject Communist propaganda. Policy also psychological value to bandit [apparent omission] confession Government weakness and yielding territory to bandits. Economic results, however, even more serious. Food, clothing, shelter, heat and health measures must be provided by Government and although provision for refugee relief has been made in Greek budget it cannot care effectively for situation beyond short period. Furthermore peasants unable plant winter crop and have been bringing their cattle which they now eating for lack cattle food and shelter. Effect on food production will be noticeable next spring.
Government agreed November 8 to stop further evacuations except where absolutely necessary and General Staff orders that effect issued November 9. However, effect in implementing these orders not yet certain. In any event existing refugee problems will still be too great for Greek Government and AMAG simply will not be able to assume this new and unexpected task unless it abandons entirely reconstruction program.
In my opinion it would be serious political and economic mistake to give up reconstruction program contemplated by Congress and American people when Greek aid statute enacted. I believe $300,000,000 appropriated for AMAG sufficient accomplish objectives stated when AMAG established.
Recommendations for special session Congress:
USFRP functions terminate about January 1 and must be picked up by AMAG. Because of unanticipated relief requirements which have developed I earnestly recommend that provision be made for USFRP or some equivalent agency continue until June 30 responsibility for furnishing general relief assistance and assume especially relief assistance necessitated by refugee situation. I believe members of Congress who have visited Greece and particularly those who witnessed refugee situation northern Greece would support such a recommendation.
Assuming that $50,000,000 present USFRP funds will be available Greece, I believe $50,000,000 additional will be required to meet relief costs until June 30. Clay will explain basis estimate which involves certain policy decisions.
I am convinced it would be error however because of Greek psychology publicly to appropriate or earmark any special sum for Greek relief Rather, I urge that out of any appropriation for European aid made by Congress at special session a sum be specified which might [Page 404] be available for relief in several named countries including Greece, and that a maximum amount within this sum be agreed in executive session between Congressional leaders, Department and USFRP to be available for Greek relief. Small allotments against this sum could be called forward as needed. Procedure outlined would give us additional handle needed in seeking appropriate action by Greek Government especially relative return of refugees to their villages and making better use of Greek aid. Would also permit release of unneeded amounts for use other countries if by securing return of refugees to homes estimated relief costs can be reduced.
- Dated November 11; the second section of the telegram outlined eight dangers to the success of AMAG posed by developing inflationary pressures: the effect on public confidence of the military stalemate; the threat to budgetary equilibrium arising from the rapid increase in costs for refugee care; increased costs of imports; supply shortages; the temporary but extremely dangerous increase in drachma circulation arising from credit expansion via the printing press; accelerating increases in the price index; intensifying demands for wage increases; and the administrative impossibility of introducing extensive rationing or other effective controls in time to alleviate temporary inflationary pressures (868.00/11–1147).↩