868.5151/103: Telegram
The Chargé in Greece (Morris) to the Secretary of State
[Received August 1—9:05 p.m.]
75. My 73, July 30, 5 p.m. Text of legislative decree now available. It took effect July 29 and is expected to be ratified by Parliament today.
Principal provisions are:
- (1)
- Foreign currency indebtedness of any nature payable in Greece and created prior to April 26, 1932, is converted into indebtedness in drachmas at the rate of 100 drachmas per dollar.
- (2)
- Bank deposits in foreign currency existing on April 26, 1932, are included in the forced conversion.
- Following indebtedness are exempted:
- (a)
- Foreign currency debts owed abroad derived from commercial transactions.
- (b)
- Foreign currency indebtedness owed from abroad to persons in Greece.
- (c)
- Deposits in foreign currency or exchange of foreign subjects of foreign nationality permanently residing abroad at the time of enforcement (July 29, 1932) of the present decree.
Finance Minister answered my verbal inquiry this morning to the effect that all foreigners habitually resident in Greece including [Page 431] native-born Americans are subject to provisions of decree. I hope informal observations made by me this morning may result in relaxation of rigid interpretation of subhead (c) made by Minister of Finance before ratification. Application of this interpretation to American residents in Greece means outright confiscation of 35 percent of their foreign currency bank deposits. Foreign currency deposits in banks estimated at £22,000,000 (sterling). Government may potentially realize £7,000,000 (sterling) from this measure.
I understand Venizelos telegraphed qualified approval but it appears his position is not certain. He arrives August 7th.