Abstract
The decision of the Currency Committee (CC) of 12 December 1946 to stop all imports immediately, and to freeze all unused credits, was followed by an urgent examination of the imports problem. The question of an imports program for future imports was at last being studied. In the meantime the situation remained critical. On 6 January, the E-I Bank refused Greece the right to use the balance of the $25 million credit to pay for current imports. Though the British Government credited the Bank of Greece with £5million out of accumulated credits of £17 million extended by Greece to the British military forces stationed there, these were not convertible into dollars. At that very moment, the Foreign Members of the CC tried forcefully to seize the opportunity offered by the foreign exchange crisis, and the strong dependency already created in expectation of US aid to Greece, and force an austerity package on the Greek Government. Their goal was to reduce the Government’s appetite for foreign exchange, in order to effect gold sales to the public and to operate a policy of free imports. The ground for such an austerity policy had been prepared by the careless exhaustion of the reserves and the absence of other resources except US aid.
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Notes
- 1.
N.O. A-2/Dec-1946/64; Min.Par. for 30/Jan/1947, p. 1092; N.O. A-3/Jan-1947/142.
- 2.
FRUS;1947/V/11–12.
- 3.
N.O. A-4/Feb-1947/218.
- 4.
A letter (dated 28 January) of similar content was also sent by the same authors to PM Maximos, who had succeeded Tsaldaris four days earlier. FRUS;1947/V/14.
- 5.
FRUS;1946/VII/282–283. On the Porter Mission see Michalis Psalidopoulos Ζητείται ένα Θαύμα για την Ελλάδα (Wanted: a Miracle for Greece) Athens 2006.
- 6.
Gouras (1957), p. 38.
- 7.
N.O. A-4/Feb-1947/219. He also mentioned that there was interest on the part of US companies to invest in Greece, and that $300 million worth of applications were pending on the E-I Bank. Min.Par. for 23/Jan/1947 pp. 925–926.
- 8.
N.O. A-4/Feb-1947/219.
- 9.
Min.Par. for 30/Jan/1947 p. 972.
- 10.
On 12 February, Gouras (1957) p. 38.
- 11.
Financial censorship of mail was first imposed by Varvaressos in June 1945 and then lifted, following Varvaressos’ resignation in November of the same year.
- 12.
FRUS;1947/V/103–104.
- 13.
FRUS;1947/V/19; On 4 March; FRUS;1947/V/93.
- 14.
FRUS;1947/V/93.
- 15.
FRUS;1947/V/95.
- 16.
FRUS;1947/V/18, 19. These figures excluded the British subsidy for the Army, which was assumed to continue.
- 17.
Amen (1978) pp. 116–120. For the other side, see the comprehensive study of A. Tzamtzis, Tα Λίμπερτυ και οι Eλληνες (The Liberty Ships and the Greeks), Estia, Athens 1984.
- 18.
On 21 March, Maximos stated he was studying energetically the application of the above, FRUS;1947/V/129. A decree imposing financial control on letters mailed abroad as from the following week was signed on 16 July 1948, N.O. B-10/Aug-1948/511–514.
- 19.
FRUS;1947/V/103–104.
- 20.
Min.Par. for 30/Jan/1947 p. 1092.
- 21.
FRUS;1947/V/133–134.
- 22.
FRUS;1947/V/20.
- 23.
FRUS;1947/V/22.
- 24.
FRUS;1947/V/54.
- 25.
FRUS;1947/V/68; it is discussed in the biography of Bevin by Allan Bullock; see Bullock (1983) pp. 340–342, 502.
- 26.
Gouras was in charge of the Greek Embassy in Washington, the Ambassador having passed away recently.
- 27.
FRUS;1947/V/69.
- 28.
For the final English version of the Greek note, signed by Maximos and Tsaldaris and submitted by Gouras, see President 1st, pp. 28–29; for the Greek version, Gouras (1957) appendix 1, pp. 123–125; for the draft, FRUS;1947/V/70–71.
- 29.
Gouras (1957) pp. 56–58.
- 30.
FRUS;1947/V/130. The relative Section provided that “Section 3. As a condition precedent of any assistance pursuant to this Act, the Government requesting such assistance shall agree a) to permit free access of US Government officials for the purpose of observing whether such assistance is utilized effectively and in accordance with the undertakings of the recipient Government”. FRUS;1947/V/130. The Government was criticized in Parliament, see Min.Par. for 9/Sep/1947 p. 1483.
- 31.
President 1st, p. 48. FRUS; 1947/V/170–171.
- 32.
President 1st, pp. 49–52. Included as contractual part in the Greece–US agreement of 20 June, see preamble and articles 2,4,10, section (4), and article 11. In these articles the agreement made clear that the US aid was conditional upon Greece implementing the unilateral declaration of intent of 15/07/1947. President 1st, pp. 35–37. The draft had been first produced and cleared within the State Department. FRUS;1947/V/175, 182–185; similarly on the bilateral agreement, FRUS;1947/V/185–188.
- 33.
See p. 114 ff.
- 34.
It also undertook to continue the C.C., with its function modified to fit with those of the American Mission. The framework of US assistance carried over such institutions as were already in place, such as the C.C. In fact Greece undertook to extend its operation beyond the period originally provided by the L.D. 1015/1946, until 30/06/1948, and was continuously extended thereafter; see L.D. 659/1948, Government Gazette A/116, as published in Bank I 1947, p. 123.
- 35.
MacVeagh (1980) p. 718.
- 36.
Griswold, had served as director of internal affairs and communications in the American Zone in Germany under General Lucius D. Clay; elected governor of Nebraska 1940, 1942, 1944. Earlier he had been a banker and newspaper publisher. He resigned on 15 September 1948 and was succeeded as Chief by Henry F. Grady, who assumed this office at the same time as that of Ambassador to Greece.
- 37.
President 1st, p. 2; President 2nd, p. 1. By comparison, the civilian staff of the mission in Turkey numbered eight.
- 38.
FRUS;1947/V/280.
- 39.
MacVeagh (1980) pp. 718–731.
- 40.
FRUS;1947/V/294–296: Undated report received 14 August. This report was followed by direct leaks from the Chief of Amag to the press, which gave credibility to stories of the form “Griswold, Most Powerful Man in Greece”; N.Y.T. 17/Oct/1947.
- 41.
William Hector McNeill The Greek Dilemma, War And Aftermath London 1947; another prominent American historian who expressed similar views on the dilemmas of Western intervention in the Greek Civil War is L. Stavrianos , see: Greece: American Dilemmas and Opportunities, American Book-Stratford Press Inc., New York 1952.
- 42.
FRUS;1947/V/337.
- 43.
FRUS;1947/V/291.
- 44.
FRUS;1947/V/337–338, 340.
- 45.
FRUS;1947/V/361.
- 46.
Records of a meeting of 27 September of Amag officials, including Griswold, with Sofoulis, FRUS; 1947/v/355–356.
- 47.
Eugene Herbert Clay, economic advisor and (before this post was assumed by Charles A. Coombs) Acting Director of the Public Finance Division of Amag.
- 48.
FRUS;1947/V/362.
- 49.
FRUS;1947/v/355–356. According to Truman’s Memoirs, the Greek Government would transfer all aid funds on the military side “if we would let them”, Harry S. Truman, Memoirs of Harry S. Truman, volume II, Years of Trial and Hope, Da Capo Press Inc. New York 1956, pp. 108–109. Sofoulis reverted on 28 November to his earlier position, and requested that more resources be transferred from reconstruction to finance the expansion of the GNA to 100 battalions. Griswold countered that while the NDC had been organized, the army still remained located in areas of personal political interest to Stratos, the Minister of War, see FRUS;1947/V/428, 434, 435–436.
- 50.
FRUS;1947/V/291, 368, 370.
- 51.
President 1st, p. 6.
- 52.
President 1st, p. 6ff. On British earlier efforts to create a Commercial Corporation of Greece in 1946, see Tsaldaris–Bevin talks of 16/07/1946, Xydis (1963) p. 252. Due to reaction within the Populist Party, however, the Tsaldaris Government did not bring the legislation before Parliament; see Athens daily Acropolis 23, 29, 31 May, 7 June 1946. Also, minutes of parliament dated 14 June 1946, p. 212.
- 53.
Amen (1978) p. 130.
- 54.
President 1st, p. 6ff.
- 55.
Another $17.5 million was imported by Amag prior to 31/12/47 under Government’s imports. It is significant that the first cargo to arrive at Piraeus on 2 August carried general military cargo, vehicles, and rations. By early September, the US ships had discharged military goods valued $16 million. President 1st, p. 6.
- 56.
N.O. B-3/Jan-1948/160.
- 57.
N.O. B-3/Jan-1948/150.
- 58.
N.O. B-4/Feb-1948/150.
- 59.
N.O. B/4/Feb-1948/150.
- 60.
N.O. B-5/Mar-1948/250.
- 61.
N.O. B-3/Jan-1948/131–132.
- 62.
US retail price index was 121.1 in 1946, 152.1 in 1947 (1926=100). According to the annual report for the year 1947, the reduction was not only unplanned but also unwelcome; Bank I 1947, p. 35.
- 63.
N.O. A-9/Jul-1947/488.
- 64.
N.O. B-11/Sep-1947/545–546.
- 65.
N.O. A-11/Sep-1947/545–546.
- 66.
President 1st, p. 7.
- 67.
Bank I 1947, p. 37.
- 68.
INSEE (1951) p. 89.
- 69.
C.A. Munkman American Aid to Greece: A Report of the First Ten Years, Praeger, New York 1958, p. 61.
- 70.
Amen (1978) p. 120.
- 71.
President 1st, pp. 12–13; President 2nd, p. 15.
- 72.
FRUS;1947/V/402.
- 73.
FRUS;1947/V/402. The Greek budget had provision for a meager care of 284,000 over eight months; FRUS;1947/V/429. The cost of caring for these refugees as of 1 October amounted to 266,654,100,000 drachma or one-tenth of the total budget of the Greek state; FRUS;1947/V/440.
- 74.
FRUS;1947/V/403.
- 75.
FRUS;1947/V/403.
- 76.
FRUS;1947/V/429.
- 77.
FRUS;1947/V/403.
- 78.
FRUS;1947/V/429.
- 79.
FRUS;1947/V/429–433.
- 80.
FRUS;1947/V/420–422.
- 81.
FRUS;1947/V/371.
- 82.
FRUS;1947/V/371.
- 83.
FRUS;1947/V/371.
- 84.
FRUS;1947/V/420–422.
- 85.
FRUS;1947/V/19.
- 86.
President 2nd, pp. 17, 21.
- 87.
Even expressed at market price it was $18, President 2nd, pp. 18, 20.
- 88.
FRUS;1947/V/420–422.
- 89.
FRUS;1947/V/420–422.
- 90.
As will be remembered, the loan of $10.8 million had been secured 100% by gold originally granted on 24 September 1946 for three months. Subsequently renewed for three-month periods on 24 December 1946, 24 March, 24 June, and 24 September 1947.
- 91.
FRUS;1947/V/449–452.
- 92.
FRUS;1947/V/439.
- 93.
FRUS;1947/V/440–449.
- 94.
FRUS;1947/V/449.
- 95.
Loan would be repaid out of current dollar exchange earnings or even by direct grant to Greek Government for the repayment of the loan, thereby releasing gold security. FRUS;1947/V/449–454. In line with Howard’s memorandum, on 15 December the Bank of Greece cabled the FRBNY that it feared disastrous effects on the local situation if FRBNY insisted upon calling in the loan in its entirety on 24 December. FRUS;1947/V/454.
- 96.
FRUS;1947/V/402, 420–422.
- 97.
FRUS;1947/V/371–372.
- 98.
FRUS;1947/V/431–432.
- 99.
FRUS;1947/V/454–456.
- 100.
FRUS;1947/V/454, 457–458, 481.
- 101.
FRUS;1947/V/481.
- 102.
President 2nd, p. IV.
- 103.
FRUS;1947/V/472–474, 478–480 and President 2nd, p. 6.
- 104.
FRUS;1947/V/483.
- 105.
FRUS;1948/IV/14.
Bibliography
Non-Official and Secondary Publications
Articles
Amen, M. M., American Policy in Greece, 1944–1949: Military and Institutional Aspects, Frankfurt am Main, 1978.
Bullock, A., Ernest Bevin Foreign Secretary, 1945–1951, O.U.P., 1983.
Oikonomou-Gouras, P., Το Δόγμα Τρούμαν και η Σωτηρία της Ελλάδος (The Truman Doctrine and the Salvation of Greece), Athens 1957.
MacVeagh, L., Ambassador MacVeagh’s Reports from Greece, edited by John Iatrides, Princeton University Press, Princeton 1980.
Xydis, S., Greece and the Great Powers, 1944–1947, Institute for Balkan Studies, Thessaloniki 1963.
Institut National de la Statistique et des Sciences Economiques (INSEE), “L’ Evolution Réçente de l’ Economic Hellenique” in Etudes et Conjonctures, L’ Economic Mondiale, Paris, Septembre–Decembre 1951.
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Politakis, G. (2018). The First Year of American Aid: The Porter Mission, the Amag, and Initial Setbacks. In: The Post-War Reconstruction of Greece. Palgrave Studies in Democracy, Innovation, and Entrepreneurship for Growth. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-57734-4_7
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