Office of the Historian

868.50/4–347

Memorandum by Mr. Ward P. Allen of the Executive Secretariat to the Acting Secretary of State

[Washington,] April 3, 1947.

The following is a summary of the recommendations contained in the attached tentative report of the American Economic Mission to Greece.1

A. Amount of Aid (pp. 13–18)

1.
Military aid through June 1948—$181 million.
2.
Reconstruction for 5-year period—$335 million total need. Most of the $151 million for the first two years must come from abroad and probably $30 million annually for the next three years also. This would provide a balanced budget and minimum civilian needs for the people.

B. Measures to be Taken by Greece (pp. 18–22F)

1.
Increase revenues by simplifying the tax structure, improving income tax enforcement, and revising assessments and duties upwards.
2.
Reduce expenditures by revising government auditing and accounting systems, strengthening the budget control of the Ministry of Finance, reviewing pension lists, and resisting increase in government salaries.
3.
Augment foreign exchange by establishing a new exchange rate, seeking to restore pre-war European market, lifting embargoes on the export of olive oil, controlling imports, etc.
4.
Begin administrative reform by reducing the number of civil servants, training personnel, and reorganizing the Ministry as per recent governmental recommendation.
5.
Seek to improve the economy as a whole by:
a.
Methods of direct control, including the development of labor dispute machinery, and the improvement of price and rent controls;
b.
A program of reconstruction of public service and communication facilities pursuant to an overall plan (pg. 22C suggests a priority list);
c.
A series of concrete steps to aid in industrial and agricultural recovery.

C. Administration of the Program (pp. 23–30)

1.
It is suggested that separate from the mission a number of American technicians be employed as individuals by the Greek Government in key posts to participate in day-to-day operations.
2.
It is strongly recommended that the permanent mission be small (initially about 25), with groups of experts sent for limited periods as temporary members.
3.
The mission should have two sanctions: (a) power to stop or curtail aid and (b) the obligation to publish quarterly reports on progress of Greek recovery.
4.
The mission should exercise general supervision of all government finance and participate in the development of fiscal policies. It need not scrutinize each expenditure.
5.
The mission should be the sole United States authority in Greece to supervise all American aid programs (including surplus property and Exim Bank), as well as all governmental or private imports.
6.
The mission should be autonomous and separate from the Embassy, with general policies determined in Washington. The American military authority should be on the staff of the Chief of the Mission.
7.
A United Nations adviser should be attached to the mission and some of the groups of experts for special studies can be furnished by the United Nations.
  1. Not printed; it was submitted on April 1, apparently informally, for interim use and comment by the Department. Ambassador Porter formally transmitted the tentative report, dated April 25, with his letter of the same date to Mr. Acheeson, who made acknowledgement on May 3 (868.50 Porter/4–2547).↩