868.51/9–1647: Telegram
Governor Dwight P. Griswold to the Secretary of State
Amag 229. To Wilds from Griswold. 1. Reference loan of $10.8 million Federal Reserve Bank of New York to Bank of Greece secured by Greek gold of equivalent value earmarked with Federal Reserve Bank New York. Loan originally granted on September 24, 1946 for three months. Subsequently renewed for three-month periods on December 24, 1946, March 24, 1947 and June 24, 1947. Prior to expiration [Page 342] date September 24, 1947, Bank of Greece will again request renewal for another three months.
2. Mission urges Department to intercede with Federal Bank New York in support of renewal request. Present available dollar holdings of Bank of Greece less than 5 millions with no prospect of substantial exchange receipts before loan maturity. Sale of gold security by Federal Reserve Bank New York to request loan would require admission by Bank of Greece of loss of gold with probably seriously adverse repercussion on market confidence. Any such disturbance of the highly precarious market stability currently prevailing would seriously endanger success of several major reform measures to be shortly introduced on initiative of Mission. Loss of gold so soon after arrival of Mission also would unquestionably result in adverse publicity.1
- According to telegram Gama 220, September 22, 7 p. m., to Athens, the Federal Reserve Bank of New York notified the Bank of Greece, on September 19, of a further three-month extension of its gold loan (868.51/9–1647).↩