ATTITUDE OF THE UNITED STATES TOWARD THE DESIRE OF THE: GREEK GOVERNMENT TO ABOLISH THE INTERNATIONAL FINANCIAL COMMISSION 70

868.51 War Credit/789

The Ambassador in the United Kingdom (Winant) to the Secretary of State

No. 12,945

LONDON, December 27, 1943. [Received January 4, 1944.]

SIR: I have the honor to refer to the Embassy's telegram No. 1497, March 28, 1942, and the Department's reply thereto, No. 2251, May 19, 1942, concerning the contemplated abolition of the International Financial Commission at Athens by the Greek Government. There is enclosed a copy of a letter dated December 16, 1943, from the Foreign Office, together with a copy of a draft of a note from the Greek Government to the British Government 72 in connection with this matter. This draft has not yet been shown to Mr. George Mantzavinos, Greek Under Secretary of State for Finance and Under Governor of the Bank of Greece, but it has been prepared on the basis of tentative ideas presented by him.

74

With respect to Paragraph 4 E of the draft, in which it is stated that the provisions set forth in the preceding sub-paragraphs 73 will apply mutatis mutandis to the inter-governmental payments due to be made in respect of the 1833 Three Powers Loan, the Foreign Office letter states that the British Government is wondering if the United States Government does not wish explicit mention to be made of the United States Government Loan of 1929.75 The Foreign Office requests the views of the United States Government on this point. Respectfully yours,

For the Ambassador: W. J. GALLMAN First Secretary of Embassy

70 Continued from Foreign Relations, 1942, vol. II, pp. 794–797. 71 Ibid., pp. 795 and 796, respectively.

72 Neither printed.

73 According to these paragraphs, upon the projected abolition of the International Financial Commission, the Bank of Greece, under the explicit direction of the Greek Government, would establish various accounts in connection with the external loans and assume the functions of the Commission to assure their service.

"Reference is to the Guaranteed Loan promised to the new Greek State by the Three Protecting Powers, Great Britain, France and Russia, in the London Protocol of February 20, 1830 (British and Foreign State Papers, vol. xvII, p. 203), the terms of which were spelled out in article XII of the Convention signed at London on May 7, 1832 (ibid., vol. XIX, p. 33). In effect there were three loans or "instalments" (two in 1833 and one in 1836), each receiving the appropriate guarantee from the three Powers in separate diplomatic instruments and each the subject of a separate negotiation and contract between the Greek Government and private banking interests.

Provided for in the agreement between the United States and Greece signed at Washington on May 10, 1929, Annual Report of the Secretary of the Treasury .. 1929, p. 308; for correspondence on this subject, see Foreign Relations, 1928, vol. III, pp. 1 ff.

868.51 War Credits/790

The Secretary of State to the Ambassador in the United Kingdom (Winant)

No. 3887

WASHINGTON, March 25, 1944.

SIR: A copy of the Embassy's despatch No. 12,945 of December 27, 1943, and copies of the enclosures thereto, were transmitted by the Department to the Treasury Department with a request for its views and comment on the matter.

For the Embassy's guidance in making informal reply to the Foreign Office informal communication, No. R 12968/3988/19 of December 16, 1943,76 on this matter, the Department quotes the substance of a letter from the Acting Secretary of the Treasury," dated March 14, 1944, replying to this Department's inquiry on the matter :

"As stated in this Department's letter of May 4, 1942,78 the Secretary of the Treasury is not in a position to formally consent to the action proposed by the Greek Government for the abolition of the International Financial Commission at Athens, because the Secretary of the Treasury was authorized to execute the agreement of May 10, 1929, pursuant to the Act of Congress approved February 14, 1929.79

"Nevertheless, if such action is taken by the Greek Government, the Treasury Department feels that in order to safeguard American interests, paragraph 4 E should be slightly altered to read as follows:

"The provisions of sub-paragraphs 4 C and 4D above will apply mutatis mutandis to the intergovernmental payments due to be made in respect of the 1833 Three Powers Loan and of the agreements between the Government of the Hellenic Republic and the United States of America, dated May 10, 1929 and May 24, 1932.'

80

"In order to further stress the interest of this Government in the proposed draft, the Treasury Department wonders whether the British Foreign Office might not wish to give consideration to adding the following statement to sub-paragraph 4 I: 81

'In view of the interest of the United States of America as indicated in subparagraph 4 E above, like notification will be transmitted to the Government of the United States of America.'"

Very truly yours,

For the Secretary of State:

DEAN ACHESON 82

76 This was an enclosure to despatch 12,945, supra.

"Daniel W. Bell.

78

'Not printed; for quotation from this letter, see telegram 2251, May 19, 1942, to London, Foreign Relations, 1942, vol. II, p. 796.

79 45 Stat. 1176.

80 The latter agreement is printed in the Annual Report of the Secretary of the Treasury. 1932, p. 291; for correspondence on this subject, see Foreign Relations, 1932, vol. I, pp. 626 ff.

81

...

This paragraph stated the Greek Government would inform the United Kingdom when the various measures set forth in the draft agreement would be put into effect.

82 Assistant Secretary of State.

868.51 War Credits/791

The Chargé in the United Kingdom (Bucknell) to the Secretary of State

No. 15,937

LONDON, May 29, 1944. [Received June 3, 1944.]

SIR: I have the honor to refer to the Department's instruction No. 3887 of March 25, 1944, concerning the proposed abolition of the International Financial Commission at Athens, and to state that the views of the State and Treasury Departments expressed therein were transmitted to the Foreign Office, from which a reply dated May 26, 1944, has now been received, pertinent excerpts from which are set forth below:

"We find some difficulty in agreeing to the addition suggested to paragraph 41. The notes we propose to exchange with the Greek Government cannot, of course, constitute a formal abolition of the International Financial Commission. The Commission, being an international body, cannot be properly abolished either by the Greek Government acting alone, or by His Majesty's Government and the Greek Government acting in agreement. All that the notes are intended to do is to set out the conditions on which His Majesty's Government will consent to withdraw their representative on the Commission and to raise no objection to its abolition by the Greek Government. We feel, therefore, that it is of some importance that the notes should not be so phrased as to suggest that His Majesty's Government are purporting to act for anyone except themselves. I am sure you will appreciate that unless we exercise some care on this point, we shall lay ourselves open to justifiable criticism from the other Governments which are represented on the Commission, and in particular the French, for not having associated them with ourselves in the present negotiations.

The real purpose of paragraph 4 I is to enable His Majesty's Government, to whom the Greek Government's undertakings are addressed, to see that these undertakings are duly implemented. For the reasons given above, we feel that it might be better if the United States Government were not associated with His Majesty's Government for this purpose. I do not think that the Treasury Department need feel any concern lest they should not be kept fully informed of all developments. The United States Government in respect of their 1929 loan are in somewhat the same position as the bondholders' representatives and the bankers in respect of other loans. They will receive a copy of the standing instructions to the Bank of Greece, according to the provisions of paragraph 4 D and 4 E, and they will no doubt be approached by the Greek Government after the abolition of the Commission regarding the amendment of the Agreements of 1929 and 1932.

We should be most grateful if you would transmit these considerations to the United States Government and ascertain whether they would agree not to press for the suggested addition to paragraph 4 I."

Respectfully yours,

HOWARD BUCKNELL, JR.

840.51FC/7–1344

The Secretary of State to the Ambassador in the United Kingdom (Winant)

No. 4354

WASHINGTON, July 26, 1944.

SIR: A copy of the Embassy's despatch no. 15,937 of May 29, 1944, was transmitted by the Department to the Treasury Department with a request for its comments on the matter.

For the Embassy's guidance in replying to the communication from the British Foreign Office of May 26, 1944, excerpts from which are quoted in the Embassy's despatch above-mentioned, the Department quotes the substance of a letter from the Acting Secretary of the Treasury, dated July 13, 1944, in response to the Department's inquiry:

"It is noted that the British Foreign Office has found exception to the Treasury's suggestion that consideration be given to adding a statement to sub-paragraph 4 I of the proposed draft, indicating that notification should be transmitted to the Government of the United States of America as and when the proposed measures are put into effect. In view of the arguments set forth by the British Foreign Office in the above-mentioned document, the Treasury has no objection to the omission of this particular suggestion provided that inclusion of explicit mention of the loan agreements between the Government of the Hellenic Republic and the United States of America, dated May 10, 1929 and May 24, 1932, remain as a part of the text of the proposed draft.

"Inasmuch as provision for notification to the United States Government by the Greek Government concerning final acceptance of the agreement is to be omitted from the draft, it is suggested that the American Embassy in London be advised by the British Foreign Office when the proposed measures are put into effect. Upon receipt of such information, this Government will be in a position to communicate directly with the Greek Government with respect to the status of its indebtedness to the United States under the agreements of 1929 and 1932 if such action should be deemed necessary at any time."

Very truly yours,

For the Secretary of State:
DEAN ACHESON

[In the ensuing months, there is no further correspondence in the Department's files concerning the desire of the Greek Government to abolish the International Financial Commission. Italy was eliminated from membership as an aftermath of World War II, membership thereby being reduced to Great Britain and France.]

INDIA

INTEREST OF THE UNITED STATES IN THE SITUATION IN INDIA; MISSION OF WILLIAM PHILLIPS AS PERSONAL REPRESENTATIVE OF THE PRESIDENT1

[For statement, "United States Objectives in India and the Far East," made on February 1 by President Roosevelt, regarding the presence of American troops in India, see Department of State Bulletin, February 5, 1944, page 145.]

845.00/2217: Telegram

The Officer in Charge at New Delhi (Merrell) to the Secretary of State

NEW DELHI, February 19, 1944-1 p.m. [Received February 20-12:46 a. m.]

132. After appealing for the cooperation of all elements in India in the prosecution of the war, the Viceroy on February 17, 1944, in his first political pronouncement of importance told the Houses of the Indian Legislature that: (1) The British Government and people hope that as early as possible India can achieve complete self-government as a willing partner of the British Commonwealth. (2) The Cripps' offer which was not made in panic still stands and suggests one, but

1Continued from Foreign Relations, 1943, vol. IV, pp. 178-231.

2 Field Marshal Archibald P. Wavell, Viscount Wavell, Viceroy since October 1943.

3 In March, 1942, the British War Cabinet had commissioned Sir Stafford Cripps, then Lord Privy Seal and Leader of the House of Commons, to proceed to India to offer Indian nationalist leaders a plan proposing an interim transfer of political power in India, pending a permanent constitutional settlement at the end of the war. The "Cripps proposals" (printed subsequently as a White Paper, British Cmd. 6350: India (Lord Privy Seal's Mission), April, 1942) were rejected by the Indian leaders, both of the predominantly Hindu Congress party and the Moslem League.

With the subsequent evoking of mass civil disobedience by the Indian nationalist leader and proponent of non-violence, the Mahatma Mohandas K. Gandhi, and endorsed by the leadership and Working Committee of the Congress party, the Government of India in August 1942 had ordered the arrest and imprisonment of Gandhi; Maulana Abul Kalam Azad, Congress party president; Pandit Jawaharlal Nehru, Gandhi's "heir" in the Congress party leadership; and the Working Committee of the Congress party. Widespread disorders followed throughout the country.

For interest of the United States in aspects of the situation in India in 1942, see Foreign Relations, 1942, vol. I, pp. 593 ff.

232