840.50 Recovery/12–347
Memorandum by the Coordinator for Aid to Greece and Turkey (McGhee) to the Under Secretary of State (Lovett)
On October 25, 1947 (Amag 3931) Governor Griswold requested $15,000,000 additional aid for Greece under USFRP (P.L. 84) funds, [Page 432] assuming availability of the full $50,000,000 originally earmarked for Greece, which has now been reduced to approximately $40,000,000. On November 13, 1947 (Amag 466), and in subsequent telegrams, this request was increased to $50,000,000 ($60,000,000 taking into account above reduction). On December 2, 1947 (Amag 555), on the basis that additional funds must be sought under the Greek Aid Act, this request was reduced to $25,000,000.
Attached is report by Mr. Eugene Clay, Economic Advisor to the Chief of AMAG and Director of the Financial Division of AMAG, who arrived from Greece on November 21, on the “Economic and Financial Condition of Greece”.2 In this report it is estimated that decreased availabilities due to all causes, of funds originally budgeted, and increased needs, aggregate $118,000,000 for the 15 month period ending June 30, 1948. Foreign exchange estimated available during this period from all sources falls short by $65,000,000 of meeting needs of a minimum and insufficient import program, which was itself reconciled to a lesser shortage of funds estimated earlier, and $124,000,000 short of the import program presented by the Greek Government. Mr. Clay discussed the discrepancy between these figures and the request for $25,000,000 with Governor Griswold by telephone today. Governor Griswold confirmed Clay’s figures and estimates of requirements and stated he would reconfirm by cable. The $25,000,000 figure was suggested solely as a matter of strategy in case it was necessary to ask for an appropriation at this time.
Present plans call for the allocation to Greece of $42,000,000 under ERP for the second quarter 1948, which would be available only in the event of favorable action by Congress on ERP in something like its present form. Under present plans this figure could be increased by the ERP administration if Greek needs were demonstrated.
Recommendation:
- 1.
- That the Chairman of the Senate Foreign Relations Committee be
advised that there will be need for additional appropriated funds
for Greece during fiscal 1948, in an amount yet to be determined but
which will not exceed $65,000,000, and asked for his advice as to
whether:
- a.
- Present non-military Greek Aid funds should be drawn down at a more rapid rate than is permitted by present availabilities and exhausted by April 1, 1948, under the assumption that civilian requirements for Greece will be met from ERP funds starting on that date. This procedure is consistent with present ERP plans, would probably provide funds adequate to meet the 1948 deficit and represents the Department’s preference, or whether
- b.
- An additional appropriation for Greek aid under Public Law 75 should be requested by the Department early in the next regular session in an amount to be determined and justified later, with Greece omitted from the first quarter ERP request.
- 2.
- That an additional OFLC credit of $25,000,000 be granted Greece immediately.
- 3.
- That a credit of $10,000,000 be sought for Greece from War Assets Administration for purchase of War Assets surplus, and that the Department representative on NAC propose such a credit to the NAC at the earliest opportunity.
- 4.
- That the Department through its representative on the Export-Import Bank request $11,000,000, the remainder of the $25,000,000 originally earmarked for Greece, be unfrozen. These funds could be used in lieu of funds now allocated for the reconstruction program and, if available, could result in a corresponding reduction in request for additional appropriated funds.