Over the centuries, Greek Diaspora merchants acquired a worldwide reputation for their "innate" talent in long-distance trade and shipping. Their homeland was a good breeding ground for this expertise. Greece has always been an "open" economy. When the international capital market lifted its embargo on loans to the Greek State in 1879, foreign borrowing attained massive proportions. (In less than three decades the nominal amount of the loans raised by the State abroad was equivalent to 60 per cent of the value of Greek exports for the same period.)(1) In relative terms this was a large amount, considering that in the final quarter of the nineteenth century foreign trade accounted for a relatively high proportion of national income.(2)The relatively advanced mercantile sector linking Greece with the outside world existed alongside a slow-moving, backward domestic sector. Monetisation and the creation of a unified national market were late developments in Greece.(3) Even during the early post-Second World War years, subsistence production in agriculture was as high as 60 per cent of total agricultural production.(4) The permanence of barter trade and the local character of transactions were in part a result of the existence of a national network of toll stations, communal taxes and the plethora of regulations prohibiting the transport of agricultural produce, chiefly vegetables and fruit, within the country.(5) The antiquated state of internal transport, i.e. coastal shipping and land transport, did nothing to encourage movement towards a unified national market.(6)
Greece was poorly equipped with rails and roads.(7) Traditionally, capital shortage and the plethora of mountains dividing the country into small, compact regions have been blamed for such backwardness. Notwithstanding the importance of these two factors, it may be argued that the deficiencies of the land transport system have been partly a result of institutional blockages. The State did not utilise capital in an economically efficient and productive way. Notably, there was no continuity and no co-ordination in key areas of economic policy. Partly this was because public administration in Greece has always been slow-moving and patron-client-oriented. But a more important reason for what appeared (from an economic viewpoint) as a careless or even "irrational" use of capital was that the State was engulfed in political issues.
Throughout the nineteenth century and up to the 1922 Asia Minor military debacle the driving force of State policy was irredentism (namely the ambition of the Greeks to rebuild the older Greek territories into a State).(8) In the 1920s the priorities were again political. On the domestic front, the State's main priority was the legitimisation of parliamentarism, which was under threat as a result of the deep national schism in Greek society between the followers of the statesman Venizelos and the Monarchists.(9) In external affairs, Greece was insecure and vulnerable because it had lost its British political backing (protection) without acquiring a new great-power patron.(10)
Political and military considerations were given more weight than economic criteria in decision-making regarding public works. This was true all the way through, i.e. from the conception to the building and operation of social overhead capital projects. This article examines the two land transport schemes of the 1920s, the "Belgian" railway project and the "'Makris" road scheme. It is argued that both serve as extreme examples of the economic misallocation of capital by a State that was both internally weak and externally dependent. Unfortunately, Greece has not been the only poor country to have wasted money on ill planned and economically irrelevant land transport projects.(11)
The Greek railway system and the Belgian project
When the railway effort began in 1882, Greece had only 11 km of rails. By 1902, when the boom in construction petered out,1,065 km had been built.(12) Seventeen years later, partly as a result of some construction activity, but mainly through the annexation of the so-called New Provinces, the railway system increased to 2,632 km.(13) The network was not designed to promote industrialisation. It did not link isolated areas with nascent urban centres. Instead, it was a coastal line, uniting what were at the time basically rural areas. It has remained unchanged ever since, as there have been no extensions, even after the massive destruction Greek railways suffered during the Second World War.
The lines were built by foreign contractors with foreign machinery. Greece had no coal or iron deposits, and all materials were imported - even those that could have been produced locally, such as wooden dowelling. Half the railways were pure foreign direct investments and the other half were constructed with funds the State was able to secure from foreign borrowing.(14) By 1922 the State-operated network, the Hellenic State Railways, amounted to a total of 1,317 km.(15) This network, through which Greece was connected with the Continental system, was to the standard gauge, unlike the lines of the private railway companies.(16) It was through the building of a railway system and not, for example, the creation of a local armaments industry that the State sought to enhance its military strength. From the point of view of the still "immature" Greek State, rails had the additional advantage of helping to undermine the long tradition in Greece of communal rule, i.e. local self-government. (17)
In March 1925 the government of Andreas Michalakopoulos announced plans for a large railway scheme that would involve renovating the main State railway running from Piraeus to northern Greece - the line was in deplorable condition and unsuitable for heavy traffic through a combination of heavy use during the war and lack of maintenance.(18) purchasing new rolling stock from abroad (in the absence of an advanced engineering industry, locomotives, coaches or wagons could not be constructed at home); and extending the mileage of the State railways. Initially, six extensions were envisaged. However, there was soon talk of building two new lines, unimportant from a traffic viewpoint but important for national defence; one would run from Egoumenitsa up to the Adriatic, the other would connect Veroia, Kozani and Ioannina.(19)
The Societe Commerciale de Belgique (SCB), which was also interested in the new Athens electricity concession, put in a bid.(20) At first the government hesitated to sign a contract.(21) Expert opinion at the Department of Public Works and the State Railways was strongly against such a move, for among other things the SCB was specifying material costs 80 per cent above world market prices.(22) However, things took a positive turn for the SCB as a result of domestic political developments. In late June 1925 General Theodore Pangalos carried through a military coup and assumed control of the government with the "silent" assent of the National Assembly. Michalakopoulos inclined towards consolidation of the status quo that had emerged after the 1923 Peace Treaty of Lausanne.(23) Pangalos disagreed, and it was alleged that he nursed territorial designs on eastern Thrace and Asia Minor. For Pangalos the railway project under discussion was of key military and strategic importance.(24) He rushed into signing a contract with the SCB eight and a half weeks after coming to power.(25) No tender was held, and the only "concession" by the SCB was that it agreed to some minor financial amendments and to shorten the time span of construction from seven to four years. There was one more contender for the scheme. This was a British firm by the name of Armstrong which reportedly offered better terms than the SCB, in spite of the higher cost of transporting railway material from England to Greece.(26) Unlike the SCB, however, it was not willing to accept government bonds in payment. This was an important drawback, for as a result of its weak credit position the State could not raise a loan through public subscription. However, the most significant obstacle to an agreement with Armstrong was that the Foreign Office viewed Pangalos's territorial ambitions with distrust and would not have allowed Armstrong or any other British firm to participate in a scheme that would facilitate the realisation of Pangalos's military plans. For Pangalos was not interested in ordering rolling stock to make the railways more efficient economically. His intentions being purely military, he wanted to place a large order for freight wagons so as to equip the railways for a mobilisation of the army. From a commercial viewpoint, the Greek railway system already had too many freight wagons, whereas there was a dearth of passenger vehicles.
The contract
Under the contract signed with the SCB at the end of August 1925, in addition to rolling stock (sixty-five steam locomotives and 1,450 freight wagons), the Belgian firm was to supply 84,600 tonnes of rails in order to upgrade the main line of the State railways (482 km) from Piraeus to Salonika. It was also to extend the system substantially.(27) Although the routes were not designated, the SCB was commissioned to build extensions totalling approximately 350 km by 1930. This would amount to a 26 per cent addition to the State rail system.
The renewal and improvement of the Piraeus-Salonika line and the construction of the new lines were to be undertaken within the framework of a cost-plus agency contract. This formula was preferred by engineering firms when doing business in underdeveloped countries. The absence of an upper limit on the cost of construction gave contractors maximum security, especially in the event that the fee and the general expenses were not fixed but were estimated as a percentage of the cost of the works. In the case of the SCB the general expenses were set at 17 per cent and the fee of the contractor at 12 per cent of the cost of the works. At 29 per cent of the cost of the works, the total remuneration of the contractor was relatively low for such a large public undertaking. A few months earlier, in April 1925, Ulen and Co. had received total remuneration of 327 per cent for building a new water system for Athens, and less than two months later, in early October, the Foundation Company was assigned the reclamation of the Vardar valley at a rate of 345 per cent. However, as mentioned above, exceptionally the SCB was granted the exclusive right to supply virtually all the requisite materials at its own prices. This "concession" put the State at a great disadvantage, considering that the prices demanded by the Belgians were 80 per cent above world market prices.(29)
As with the Athens water scheme, there was to be no public flotation.(30) Instead the SCB undertook to accept payment in the form of Greek government bonds. Two separate issues of 8 per cent short-term paper, each amounting to US million (2,172,530), were to be arranged. One (Schedule A) was to be issued at 90 per cent and was to be spent on repairing the old line and the construction of extensions. The redemption period was fixed at only ten years. Until the works were complete, the SCB had to deposit the bonds with the Societe National de Credit et l'Industrie (i.e. the national bank of Belgium), which was to act as trustee of the loan.(31) The other (Schedule B), essentially a short-term commercial credit, was to be issued in series as and when the rolling stock material was supplied. The issue price was 94 per cent and the redemption period was six years from the receipt of the goods.(32) That the real interest rate was high is not surprising, considering that contractors who acted as "bankers" to States with a weak credit rating insisted on a heavy discount.(33)
Although the bonds were the direct debt of the State, it being effectively a short-term loan, no government revenue was pledged as security. Instead, the loan was secured against a first mortgage on the new line(s) and equipment and a first charge on the gross receipts of the State railways. As the State railways ran at a loss, it was assumed that the loan would have to be repaid direct from the central State Treasury.
The works: doing and undoing
The renewal of the main line was the only aspect of the project to be fully implemented. On the whole the outcome was satisfactory, as the journey time between Piraeus and Salonika decreased from fourteen to about nine hours. Nevertheless, there were complaints that a certain element of waste had been involved and that the materials used could have been less sturdy, given the low density of the traffic.(34)
The building of the new lines had a sluggish start and was carried out in a haphazard manner, a fundamental problem being that the State had no clear idea of what it wanted. As already indicated, at first, prior to the establishment of the Pangalos dictatorship, there had been talk of small extensions to the existing network at various points. Then the building of a line from Egoumentitsa up to the Adriatic and another line connecting Veroia with Ioannina was contemplated. However, when the contract was signed, Pangalos instructed the SCB to connect Salonika with Angista (135 km), and Larissa with Veroia (210 km). But, roughly two years later, in March 1927, at the very moment when the SCB had just completed a US,000 (41,000) feasibility study of construction of the Salonika-Angista line and was ready to start building, the company was asked by the newly elected coalition government to begin work at once on a 180 km line which would connect Kalambaka, Kozani and Veroia.(35) None of these three "cities" was on the existing rail network! Construction began in 1928, but never got beyond the stage of preliminary earthworks. It petered out in mid-1932 from lack of funds.(36) The Ministry of Communications had originally estimated that this extension of the network would cost roughly US million (1,438,000). By early 1929 it had become obvious that at least US million (4,106,700) would be required. In 1932 construction was 'indefinitely' interrupted. The difficulty of justifying such expenditure on commercial grounds as well as the obvious lack of interest on the part of the contractor or of any foreign bank in supplying supplementary funds led to an 'indefinite' halt to construction in 1932.
In total about US million to million (at least L1 million) was wasted on the construction of this 'phantom' line. The sum was roughly equivalent to 6 per cent of the amount borrowed from abroad for public works during the inter-war years. From an economic viewpoint the government would have done better to connect the State railway system with the Bulgarian network. This would have involved the construction of only 20 km of line from Sidirokastro to Petritsi and would have brought a high commercial return. But strategic reasons did not make the construction of such a line feasible.(37) The provision of rolling stock was not fully implemented, either. While designs were being prepared by the SCB for the first locomotives and goods wagons ordered, the dictator placed orders for 1,300 wagons from the Czechoslovak firm Skoda, 100 from the interallied commission in Istanbul and an unknown number from the Austrian firm Ringhoffer. Reportedly some locomotives were also ordered.(38) Thus in 1927 the coalition government reduced the order for locomotives from sixty-five to twenty, and only 375 instead of 1,450 freight wagons were bought.(39) The coalition made this gesture for two reasons. On the one hand it had to balance the budget so as to make a League of Nations financial stabilisation plan for Greece possible (40) and, on the other, it wanted to eradicate the image the West had of Greece as a country harbouring revisionist tendencies vis-a-vis the peace treaties. Despite this corrective move, the country was left with a surplus of "military" rolling stock which was expensive to maintain. The total number of steam engines on the state railways was 200, but only 110 were in active service, and out of a total of 4,000 commercial wagons only 2,500 were being used.(41) This waste of resources was basically due to over-supply, although shortages of spare parts and breakdowns cannot be totally ruled out. Eventually, in April 1928, the SCB itself agreed to compensate the factories with which the orders had been placed for the forty-five cancelled engines and 1,075 wagons.(42) It was also arranged that, as a result of the cancellations, the total credits granted by the Belgians to the government would amount to US,097,600 (3,307,000), not US million (4,345,000) as originally agreed.(43)
In 1929 the government secured one more financial "concession" from the Belgians to its advantage: it managed to have the loan rescheduled. Some blackmail was exercised by Athens, as the government informed the Belgian group that `it would be impossible [for the National Assembly] to ratify the convention [i.e. the contracts signed under Pangalos] unless the terms of the bonds were modified to conform more closely to the standing of Greek credit at the present time, i.e. 1929.(44) Indeed, this was the only occasion during the 1920s when the State was able to improve the terms of a foreign loan raised during the decade. For schedule A the nominal interest was lowered from 8 per cent to 6 per cent and for schedule B from 85 per cent to 64 per cent. The redemption period of the bonds of Schedule A was extended from ten to thirty years, and that of those for Schedule B from six to twenty years. Furthermore, a seven-year period of grace was granted, and the government was given the right of full redemption a year after the amortisation of the loan began. As the loans were converted to long-term affairs, the government granted as security the surplus of the State revenue accruing to the International Financial Commission (IFC).(45) This was the agency set up in 1898 by the powers through which a large share of Greece's tax base and monetary policy was placed under external control.(46) The rescheduling of the loan probably prompted the contractor to try to get rid of the bonds it had accepted as payment. This was not unusual, since most contractors who took government bonds in payment did not hold on to them as an investment and usually disposed of them by selling them to investment banks.(47) In fact the SCB had encountered difficulty in raising the money promised, and as a result the government had been forced during the first ten months following the signing of the contract to allow it substantial advances.(48) Also, between 1929 and 1931 the SCB tried to place about US,250,000 (1,078,000) worth of the bonds through Hambro's Bank, which during the 1920s was the major issuer of Greek government loans. But Hambro's showed no interest in placing them privately, or in offering them to the public, as it considered Greece to be "overexposed" in the City.(49)
The Belgian railway contract had been heavily criticised by the National Assembly after the fall of Pangalos.(50) But, although Belgium was not an important source of funds for Greece,(51) it is unlikely that the government would have gone ahead with the 'radical' changes in the original Belgian railway contract had it not had the approval of foreign supervision. Under the circumstances external intervention played a positive role. After the election of the coalition government in December 1926, the League of Nations - to the dismay of the Belgian government - urged the coalition to improve the loan terms, so as to ease the burden on the budget, and to cancel the order for the "unnecessary" "military" rolling stock. It can be assumed that, had these orders not been of a military nature, and had they concerned not Belgium but Britain, which was a major player in the affairs of the League of Nations, the latter would have been less inclined to offer such "radical" advice.(52) In short, the so-called Belgian railway scheme was an exercise in economic "irrationality", what with the overpriced materials, the refurbishment of the main State line to an unnecessarily high standard, the freight wagons lying idle and the "phantom" new lines.
Notes
B.E./C.B.P. Bank of England Archive/Central Bank Papers. B.G./T.A. )Bank of Greece/Tsouderos Archive. B.M./V.A. Benaki Museum/Venizelos Archive. F.O./371 British Foreign Office/371 series at the Public Record Office. G.L.H.A.AD.A. Greek Literary and History Archive/Diomedes Archive. M.F.A./H.A. Greek Ministry of Foreign Affairs/Historical Archive. N.B.G./D.A. National Bank of Greece/Diomedes Archive. N.B.G./H.A. National Bank of Greece/Historical Archive. U.S.A./NAT. US Department of State Records/National Archives. (1) During the 1879-93 foreign borrowing spree, the total nominal amount of the loans raised by the Greek State in the international capital market amounted to 640 million gold francs. P. Dertilis, Le Probleme de la dette publique des Etats balkaniques (Athens, 1936), pp. 131-3.
(2) It has been estimated that in 1876 the total value of imports and exports made up 467 per cent of national income, whereas for the years 1887-94 foreign trade represented 35'6 to 329 per cent of national product. P. E. Petrakis and H. Panorios, `Economic fluctuations in Greece, 1844-1913', Journal of European Economic History, 21, 1 (1992), p. 36.
(3) Such was the international prominence of Greek merchants in the nineteenth century that Jean Baptiste Say made specific mention of them in his work. The only other 'national' merchants to whom he devoted attention were those of the United States. J. B. Say, Cours complet d'economie politique pratique (Paris 1828)
(4) K. Tsoukalas, Koinoniki anaptyxis kai Kratos: i syngrotissi tou dimossiou horou stin Ellada (Social Development and the State: the Formation of the Public Realm in Greece) (Athens, 1988), p. 55
(5) Because of regulations set up to control the transmission of the plant disease phylloxera, apples from Macedonia could not be supplied to old Greece. H. Hill, The Economy of Greece (New York, 1939), p. 33
(6) Coastal shipping should be treated apart from the Greek mercantile marine which by the inter-war years had attained international significance. Royal Institute of International Affairs, The Balkan States (London, 1936), pp. 150-1, Hill, Economy of Greece, p. 30
(7) Railway mileage per square mile of territory was 333 for Greece (1929), compared with 609 miles for Yugoslavia (1931); 55-3 for Romania (1932); 2365 for Great Britain and Northern Ireland (1932). RIIA, Balkan States, p. 147
(8) D. Dakin, The Unification of Greece, 1770-1923 (London, 1972).
(9)This division centred on the issue of who bore the "responsibility" for the 1922 military defeat in Asia Minor. For the political situation in the 1920s see G. Mavrogordatos, Stillborn Republic: Social Coalitions and Party Strategies in Greece, 1922-36 (Berkeley, Cal., 1983)
(10) T. Veremis, Ellada Evropi apo ton Proto Pangosmio Polemo os ton Psyhro Polemo (Greece and Europe from the First World War to the Cold War) (Athens, 1992).
(11) In the case of Colombia a railway line began in the 1920s which was to connect two valleys separated by a range of mountains 9,000 ft high, for which there was no economic justification, since both valleys had their own outlet to the sea. A very expensive tunnel through the mountain range was begun and then abandoned; and while the Federal authorities were driving a tunnel through the mountains the local authorities were making a costly road over them'. A. Salter, Foreign Investment, Essays in International Finance, 12 (Princeton, N.J., 1951), p. 17
(12) L. Papayiannakis, Oi Elliniki sidirodromoi, 1882-1910 (Greek Railways, 1882-1910 (Athens, 1982)
(15) Greece's New Provinces were Epirus, Macedonia and Crete (annexed as a result of the 1912-13 Balkan wars) and Thrace, which was annexed under the treaties of Sevres and Neuilly in 1919. Oikonomiki Epetiris tis Ellados (Economic yearbook of Greece), ed. G. Haritakis, 1933, p. 274; Naval Intelligence Division, Geographical Handbook Series, Greece, (London, 1944), II, pp. 338, 348.
(14) For railways built under Ottoman rule in the New Provinces see B. C. Gounaris, Steam over Macedonia, 1870-1912: Socioeconomic Change and the Railway Factor (New York, 1993)
(15) The remaining mileage was divided among four private railway companies: the PAP (750 km); the Thessaly (230 km); the Franco-Hellenic (185 km) and the North Western (61 km). Oikonomiki Epetiris 1933, p. 273, and NID, Greece, pp. 350-62
(16) The gauge of the private railway companies was either 2 ft 5' in or 3 ft 33 in
(17) Under the Ottomans, Greece had evolved into a society of segregated self-governing local rural communities among which there was little contact or exchange. P. Sherrard and J. Campbell, 'I istoriki anadisi tou neoellinikou kratous' (The historical revival of the modern Greek State), Synoro, 40 (1996-97), p. 263
(18) At the beginning of 1923 the lines were in such a poor state that in certain places only a maximum speed of 10 km hr was permissible! Department of Overseas Trade (R. F. H. Duke), Report on the Industrial and Economic Situation in Greece for the Years 1923-24 (1925)
(19) The six local connections to be made were between: Drama and Kavala; Salonika, Stavros and Angista; Kozani and Veroia; Sorovitz, Kastoria and the Albanian frontier; Agrinion and Arta; Ioannina and the Thessaly network. Eleftheron Vima, 7, 15 April 1925
(20) The SCB was particularly interested in the part of the new concession relating to tramways. N. Pandelakis, O exilektrismos tis Elladas: apo tin idiotiki protovoulia sto kratiko monopolio, 18891956, (The Electrification of Greece: from private initiative to State monopoly, 1889-1956) (Athens, 1991), pp. 175-366
(21) Eleftheron Vima, 10 August 1926; D. Gatopoulos, Andreas Michalakopoulos, 1875-1938 (Athens 1947), p. 869
(22) Kathimeni, 25 September 1925.
(23) The Peace Treaty of Lausanne signified the end of irredentism as the driving force in Greek political life. For the 100 year Greek war of independence (18221922), D. Dakin, The Unification of Greece, 1770-1923 (1972), p. 261
(24) T. Veremis, Oikonomia kai didaktoria: i syngyria tou, 1925-26 (Economy and dictatorship: the concurrence of 192526) (Athens,1982), pp.11-35. It should be added that Pangalos negotiated with the Societe du Chemin de fer Ottoman for the purchase of the 204 km line running from Salonika to Monastir, which was finally purchased by the State for approximately 600,000 in 1927. Oikonomiki Epetiris 1932, pp. 526-8; Eleftheron Vima, 28 September 1925
(25) The contract was signed on 27 August 1925 and was ratified bv the President of the Republic on 8 October 1925. The National Assembly did not give its seal of approval, as it did not reconvene after the termination of its official summer vacation. This suspension of the activities of the National Assembly lasted throughout the remnant of Pangalos's stay in office. Efimeris tis Kyverniseos (Official Gazette of the Greek government), First Issue, folio 294, 8 October 1925
(28) The full name of the firm is not given. Possibly it was the Tyneside armaments firm Armstrong's. Or maybe it was Sir George Armstrong, a director of Henry Boot & Sons, who in 1921 tried to set up a 10 million syndicated loan for the government. G.M.F.A./H.A., Political Department 1921, A/7 File 2 Negotiation of the Armstrong loan: George Armstrong to Rangabe, 20 July 1921; Kathimerini, 25 September 1925; Eleftheron Vima, 23 September 1925; B.M./V.A., File 333: C. Boot to Venizelos, 6 July 1928
(29) The "fixed material" to be removed during the renewal of the main State line was to be used in the construction of the extensions, presumably because the latter would not carry heavy traffic.
(30) Article 1 of the contract; Oikonomiki Epetiris 1933, pp. 273-4. U.S.A./NAT/MAS/S.D./M443/31/868.51 Economic Matters: USA Legation to Department of State, 26 January 1927. Article 16 of the 1925 contract and the supplementary contract of January 1926, in which the details pertaining to this US million (2,069,075) gold dollar loan were settled. Official Gazette, First Issue, folio 57, February 1926.
(31) The Societe Nationale de Credit et l'Industrie was also placed in charge of paying out the coupons of the amortised bonds.
(32) For example, the US million (2,069,075) Athens water loan which had been issued in December 1925 by Ulen & Co. and the Bank of Athens, although a long-term loan, had an issue price of 85 per cent and a nominal interest rate of 8 per cent, the real rate of interest of the loan amounting to 94 per cent. Oikonomiki Epetiris 1932, pp. 517-19.
(33) R. W. Dunn, American Foreign Investments, Contracts and Concessions edited by Adrain Richt (1926), p. 102.
(34) B.M./V.A., File 190: `Note de la Societe Commerciale de Belgique', 31 December 1928; Oikonomiki Epetiris 1933, p. 276
(35) On 7 August 1926 Pangalos was overthrown by General George Kondylis. Elections were held on 7 November 1926, and a national coalition government was formed on 4 December 1926. The coalition was made up of four parties: the United Liberals, the Republican Union, the Populist Party, and the Free Opinion Party.
(36) A. Matsas, `To provlima tis syndeseos tis sidirodromikis grammis KalambakasKozanis' (The problem of the connection of the Kalambaka-Kozani railway line), in N. Kitsikis (ed.), I oikonomiki erevna ton megalon tehnikon zitimaton (The economic investigation of large infrastructure problems) (Athens, 1933), pp. 194-5; S. Markezinis, Politiki istoria tis neoteras Ellados: i syghronos Ellas (Political history of modern Greece: contemporary Greece) (Athens, 1978), 3, p. 195
(37) Oikonomiki Epetiris 1933, pp. 273-89
(38) Eleftheron Vima, 17 March 1927; B.M./V.A., File 190: `Note de la Societe Commerciale de Belgique', 31 December 1928; B.E./C.B.P. 326, vol. 4: "Pangalos Commitments".
(39) B.E./C.B.P. 327, vol. 1: `Confidential Note of a Conversation with M. Al. Diomedes, Governor of the National Bank of Greece', 14 February 1927
(40) Ioanna Pepelasis Minoglou, `Transplanting Economic Ideas: International Coercion and Native Policy', LSE Working Papers in Economic History 30/96, (199
(41) Also, at least twenty passenger carriages were needed. Oikonomiki Epetiris 1933, p. 277. 42 N.B.G./H.A., X Banks, Foreign Banks, File 68, N.B.G., correspondence with Hambro's: Governor of the N.B.G. to Hambro's, 6 February 1929, Memorandum B.
(43) This was so because only US,597,600 (around 1,202,000) was provided within the framework of Schedule B. Moreover, it must be noted that part of the funds granted under Schedule B covered not the supply of rolling stock, as initially planned, but instead fixed material. Oikonomiki Epetiris 1932, p. 515
(44) As mentioned above, Pangalos had relieved the National Assembly of its functions, and as a result all the large contracts signed during the dictatorship were ratified after the restoration of parliamentary rule. N.B.G./H.A., X Banks, Foreign Banks, File 68, N.B.G., correspondence with Hambro's: C. Hambro to Diomedes, 17 June 1931
(45) Namely those revenues remaining after provision had been made for the servicing of all the loans under the supervision of the IFC, including the unissued portion of the 22 million loan for public works. The modified contract was ratified by the National Assembly on 13 August 1929. Official Gazette, First Issue, folio 297, 20 August 1929, Law 4387
(46) Pepelasis Minoglou, `Transplanting Economic Ideas', passim.
(47) Dunn, American Foreign Investments, p. 102
(48) In July 1926 it was noted that the government was advancing US,000 (about 16,500) per month to the contractors to enable them to carry out the preliminary work. U.S.A.,NAT/MA5/ S.D./M443/31/868.51 Economic Matters: Goold to Secretary of State, 13 July 1926
(49) N.B.G./H.A., X Banks, Foreign Banks, File 68, N.B.G. correspondence with Hambro's: Diomedes to Hambro's, 6 February 1929; C. Hambro to Diomedes, 17 June 1931. The contract had not been ratified by the National Assembly during the rule of Pangalos. Thus after the restoration of its functions, following the fall of Pangalos on 26 August 1926, it actually `threatened' not to ratify the contract if the terms were not improved. Eleftheron Vima, 2, 8 February 1927. 51 In fact this was the only instance during the 1920s in which the Greek State raised capital in Belgium.
(52) B.E./C.B.P., 327, vol. 1, Jackobson to Sir Arthur (Salter?), 8 February 1927. Also N.B.G./H.A., X Banks, Foreign Banks, File 68, N.B.G. correspondence with Hambro's: Diomedes to Hambro's Bank, 6 February 1929 |
