In their desperation to raise funds to support the Greek armies in central Anatolia, the Finance Minister, Protopapadakis, proposed novel legislation requiring that all paper banknotes be turned in to the government to be literally cut in half, with the ‘cross’ side being returned but the ‘crown’ side surrendered to the government in exchange for a bond yielding 6%, thus a “forced loan” from the people. Since the Allies refused to lend any money to Greece as long as Constantine was on the throne, this bold and ingenious scheme was necessary to pay for the military costs which were beyond the government’s taxation powers. The Greek citizens accepted the measure stoically, as Gilbert observed. While he was not sure what to make of its economic novelty, he was politically astute enough to predict accurately that it would pass in the Assembly. His sources were reliable.
Leave A Comment