that the Government of the United States may give its consent for the issue of this supplementary loan, destined to meet the urgent needs of Athens and of The Piraeus. Please accept [etc.] 868.151/35 CH. SIMOPOULOS Ulen & Company to the Department of State NEW YORK, May 14, 1923 [1925]. SIRS: Knowing it is the desire of the Department to be informed of prospective bond issues to be placed in the United States we are advising you that under our contract signed with the Government of Greece on December 23rd [22nd], 1924, copy of which we forwarded you May 11th, 1925,2 we agree to take $10,000,000. of Government bonds in payment for the work covered by the contract. The Banque d'Athènes is a party to the contract to the extent of taking $5,000,000. of these bonds. We also wish to advise you that under our contract signed with the Government of Greece on May 9th, 1925, copy of which we are forwarding you under separate cover today, we agree to take $1,000,000. of Government serial bonds in payment for the work covered by this contract. The Banque d'Athènes is a party to this contract also to the extent of taking $500,000. of these bonds. A New York banking institution will be appointed as Trustee for both of these issues. If the Department has no objections, we would appreciate an expression of approval of the placing of these two issues in the United States. We will be glad to furnish any further information you desire in connection with these bonds and contracts. Very respectfully, ULEN & COMPANY 868.151/32 The Secretary of State to the Greek Minister (Simopoulos) WASHINGTON, May 23, 1925. SIR: I have the honor to acknowledge the receipt of your note of May 7, 1925 in which you inform me that the Greek Government desires to issue, in connection with its $10,000,000 contract with Ulen and Company for the construction of a waterworks system for the cities of Athens and The Piraeus, a supplementary loan of $1,000,000. You 'Not printed. indicate that it is proposed to employ the proceeds of this million dollar loan for the immediate execution of provisional works which will insure a supply of water until the permanent construction is completed. You further indicate that this preliminary loan will be issued with the same securities and under the same conditions which were specified in your note of April 15, 1925 with reference to the loan for $10,000,000. You request the assent of this Government to the pledging by Greece of this security for the supplementary loan of $1,000,000. In reply I beg to inform you that having offered no objection to the pledging of the securities for the principal loan of $10,000,000, as communicated to you in my note of May 5, 1925, this Government will not be opposed to the pledging of the same securities for the supplementary loan of $1,000,000 in question. As set forth in previous correspondence, it should also be understood that the present consent of the Government of the United States is given with full reservation of all questions with respect to the Agreement of February 1918. Accept [etc.] 868.151/35 FRANK B. KELLOGG The Secretary of State to Ulen & Company WASHINGTON, May 25, 1925. SIRS: I beg to acknowledge the receipt of Mr. Shepperd's letter of May 14, 1925, regarding the flotation in the United States of the bonds to be received by you from the Greek Government under your contracts of December 23, 1924, and May 9, 1925, for the construction of water works for Athens and The Piraeus. In reply to your inquiry I take pleasure in stating that the Department of State, in the light of the information before it, offers no objection to the sale of these bonds in the American market. You of course appreciate that, as pointed out in the Department's announcement of March 3, 1922, the Department of State does not pass upon the merits of foreign loans as business propositions nor assume any responsibility in connection with such transactions, also that no reference to the attitude of this Government should be made in any prospectus or other advertising matter. A copy of the Department's statement of March 3, 1922, is enclosed herewith.3 I am [etc.] For the Secretary of State: Foreign Relations, 1922, vol. I, p. 557. JOSEPH C. GREW Under Secretary 868.151/37: Telegram The Acting Secretary of State to the Ambassador in Great Britain (Houghton) WASHINGTON, June 6, 1925-1 p. m. 176. (1) On December 22, 1924, Ulen and Company, of New York, concluded with the Greek Government a contract for the construction of waterworks for the cities of Athens and Piraeus. Under this contract, which was ratified by the Greek Parliament on April 3, 1925, bonds to the amount of $10,000,000 are to be issued by the Greek Government secured in the manner described in Article 19 of the Contract substantially as follows: "(a) Revenues of waterworks existing in Athens and Piraeus or to be constructed under the contract; (b) A first lien upon existing waterworks construction at Athens and Piraeus and upon the works to be constructed pursuant to the contract; (c) The excess of revenues, assigned to the service of the Public Debt, and subject to the control of the International Financial Commission but only to the amount necessary to pay the said service of interest and amortization. . . . The said revenues shall be subject only to the prior charge for the service of loans made previous to the date of this contract and for which the said revenues are pledged by law." Under a subsidiary contract for provisional waterworks construction signed later and not requiring Parliamentary ratification, bonds to the amount of $1,000,000 are to be issued, ranking after the service of the bonds for $10,000,000 as a charge upon the same security. On April 15 and May 7, 1925, the Greek Government, through its Minister at Washington, acting in pursuance of the Loan Agreement of 1918, requested the assent of the United States to the pledging of the security specified in the contracts with Ulen and Company. Requests of the British and French Governments are understood to have been made at the same time. (2) In view of the urgent need of improved waterworks for Athens and Piraeus, particularly under the conditions resulting from the large accession of refugees, and in view of the fact that the payments of principal and interest of the contemplated loans will apparently be met out of the revenues to be derived from the operation of the waterworks, the Department under dates of May 5 and 23 communicated to the Greek Legation its assent to the pledging of the security specified in the contracts. The Department is informed that neither 'Omission indicated in the original telegram. the British nor the French Government has replied to the Greek request for assent to the pledging of this security. It is reported that the British financial house of Hambro, which, in cooperation with Speyer and Company of New York, undertook the flotation of the recent Greek refugee loan, has, presumably for the protection of investors in that loan, made representations to the British Government against compliance by that Government with the Greek request. The Greek Government itself, acting, Ulen and Company believe, at the instigation of the French or British Government, is reported to have requested the International Financial Commission to declare that the bonds to be issued under those contracts must, despite the stipulation in Article 19 (c) of the principal contract, rank, as a charge upon the revenues of the Commission not pledged at the time of the conclusion of the Ulen contracts, after the portion of the Ottoman Public Debt to be allocated to Greece and presumably to be charged upon the revenues of the Commission under Article 48 of the Treaty of Lausanne." Ulen and Company inform the Department that they are ready, if necessary, to execute formal assurances with respect to withholding their half of the bonds from the market for two or even three years and that they would use their influence with the Bank of Athens to secure similar action on the part of the Bank. Ulen and Company are not disposed at this time to consider the question of allowing priority to the Greek share of the Ottoman Public Debt as a charge on the revenues of the International Financial Commission remaining unpledged on the date of their contract. (3) The Department desires you to approach the Foreign Office informally and, without requesting any action or the expedition of any action by the British Government, to ascertain what is the present status of the consideration of the question of complying with the Greek request and what may be the factors responsible for the apparent hesitation of the British Government to comply with that request. (4) Repeat foregoing to Paris, Rome and Athens and telegraph cost of repetition to be charged Ulen. (5) Mr. James F. Case, a representative of Ulen and Company, is in London and will call at the Embassy and furnish any explanations which you may desire to have before approaching the Foreign Office. Telegraph reply. GREW "Treaty of July 24, 1923, between Turkey and the Allied Powers; League of Nations, Treaty Series, vol. xxvIII, p. 11. 126127-40-vol. II-24 868.151/37: Telegram The Acting Secretary of State to the Ambassador in France (Herrick) [Paraphrase] WASHINGTON, June 6, 1925—1 p. m. 222. Department's telegram 176, June 6, 1 p. m., to Ambassador at London will be repeated to you by Embassy for your information. That telegram instructs the Ambassador to make informal inquiries at the British Foreign Office regarding the assent of the British Government to the pledging by Greece of security in connection with the proposed loans for construction by Ulen and Company of waterworks for Athens and Piraeus. Please make similar informal inquiries at the French Foreign Office. Reply by telegraph. GREW 868.151/49 The Ambassador in Great Britain (Houghton) to the Secretary of No. 173 State LONDON, July 6, 1925. SIR: I have the honor to refer to the Department's Instruction No. 176 of June 6, 1 p. m., relating to a contract concluded by Messrs. Ulen and Company, of New York, with the Greek Government and in which the Embassy was instructed informally to approach the British Government with a view to expediting action on its part in giving assent to the pledging of certain revenues as security to the loan. In this connection, I take pleasure in stating that the matter was informally discussed with the appropriate British authorities and the Embassy was informed on Friday, July 3rd, that the consent of the British Government had been given to the Greek Minister that morning. There is attached a copy of an Athens telegram appearing in the press to-day." I have [etc.] 'Not printed. For the Ambassador: F. A. STERLING Counselor of Embassy |