FOREIGN RELATIONS, 1949, VOLUME VI


to time many difficulties interposed to prevent it from circulating
freely. This was especially true in the provinces of Greece., Not long
ago a loan was approved by the Greek Currency Committee for
Eleftheria to buy a new printing press from Germany. A subsequent
loan was granted in order for the newspaper to build an appropriate
building for the housing of the press and newspaper offices. The ex-
treme right newspapers had taken up the matter of the Currency
Committee's approval of the loan and had attempted to portray the
action as a scandal. Because of the political pressure created, the
Committee's approval of the loan was submitted to the Steering
Committee where it is still under consideration. Mr. Venizelos said
he felt that the loan should be granted. He said that if the Americans
on the Steering Committee were favorable to the granting of the loans,
he felt that would facilitate their being finalized. Mr. Venizelos said
he believed that Mr. Tsaldaris was also in favor of granting this loan.
I told Mr. Venizelos that those matters came under the cognizance
of Ambassador Grady who had all power to decide and act on behalf
of the American Government in Athens. I said that I would be in
Athens in a few days and that I would be pleased to-discuss the matter
with the Ambassador.

868.00/11-2149: Telegram
          The Secretary of State to the Embassy in Greece ,

SECRET                    WASHINGTON, November 21, 1949-5 p. m.
  2027. [Here follows a one-paragraph summary of the conversation
of November 18 between Assistant Secretary of State McGhee and
Greek Deputy Prime Minister Venizelos, reported upon in McGhee's
memorandum of conversation, supra.]
  At the same time Dendramis called on Hare to ascertain Dept's
further views re Grk proposal for eastern defense pact embracing
Greece, Turkey and perhaps eventually Yugo. Hare replied Dept's
position, as explained 'by Secy to Tsaldaris Oct 28,2 was unchanged,
namely that US cld not consider extending present commitments until
West Eur members North Atlantic Pact able contribute substantially
to west Eur defense. Added Dept wld consider any approach to
Yugos on mil defense Pact entirely premature, but wld welcome
prelim Grk-Yugo rapprochement. Said Dept cld not oppose direct
Grk-Turk negots and desired neither encourage or discourage purely
local Grk-Turk Pact although psychological benefits Greece of such
Pact might be offset by other disadvantages. In response Dendramis'
  'This telegram was repeated to the Embassies in Turkey and Yugoslavia.
  See the Secretary of State's memorandum of conversation, October 28, p.
447.


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