Papers Relating to the Foreign Relations of the United States, 1921, Volume II

667.003/107

The High Commissioner at Constantinople (Bristol) to the Secretary of State

Constantinople, February 2, 1921.
[Received February 26.]

No. 36

Sir: With reference to the Department’s telegrams No. 86, of November 15, 1920,² and No. 6, of January 20th, last,³ regarding the restoration of the 11% ad valorem tax, as provided under the Capitulations, I have the honor to submit herewith a copy of a communication which I addressed to the British High Commissioner on January 29th, last, outlining the views of the Department of State as given in the two telegrams noted above. I had not made representations at an earlier date after the receipt of the Department’s telegram of November 15, 1920, for two reasons:

• Firstly, as a result of informal correspondence and discussions with the Allied High Commissioners, I had received assurances that the return to the ad valorem tax had been decided in principle and that only the technical question of the method of putting it in force was delaying action.
• Secondly, the specific tax plus the consumption tax which the Turkish Government has established in place of the ad valorem tax, had not as yet proved a burden to American trade; in fact, until very recently these two taxes combined did not equal the 11% ad valorem tax. At the present time, however, due to the drop in the exchange and the imposition of the consumption tax on further commodities, especially those originating from the United States, this tax has become rather more burdensome and discriminatory than an 11% ad valorem tax.

Upon learning informally that the Allied High Commissioners had temporarily abandoned the idea of returning to the ad valorem tax (although they did not inform me in this regard), I availed myself of the Department’s authorization to make firm representations on this matter in the note of which a copy is enclosed, similar notes being addressed to the French and Italian High Commissioners.

I have [etc.]

Mark L. Bristol

[Enclosure]

The American High Commissioner at Constantinople (Bristol) to the British High Commissioner (Rumbold)

[Constantinople,] January 29, 1921.

Excellency: The question of the reestablishment of ad valorem custom duties, in accordance with the capitulations, was raised in a letter from the Allied High Commissioners, dated December 18, 1920, and was the subject of a communication of November 27, 1920, from His Excellency the French High Commissioner, on behalf of his colleagues, to which I replied on December 8th, last.⁴

From the communication of the Allied High Commissioners, I had understood that the question of principle had been agreed upon, and that the reestablishment of the ad valorem customs tariff only awaited the drafting of the final text of the decree.

Having received no information, however, that the Allied High Commissioners have taken any further action, I feel compelled to draw Your Excellency’s attention again to the fact that the present customs taxes, including the consumption taxes, are illegal, that the continuance of these taxes is detrimental to American commercial interests in Turkey, and that the levying of the consumption tax discriminates against American trade.

As a particular case in point indicative of the difficulties arising under the present illegal regime of taxation, I desire to call attention to the situation that has recently developed in Smyrna, as reported in a joint note from the delegates of the Allied Powers and the United States,⁵ of which Your Excellency has undoubtedly received a copy.

The United States has endeavored to cooperate with the Allied Governments in matters pertaining to trade with the Ottoman Empire under the conditions laid down for the raising of the blockade and the resumption of trade with Turkey. My Government has, however, continually urged the return to the legal method of levying customs taxes, and has very recently informed me that it is surprised at the continuance of the consumption taxes beyond the period immediately after the armistice in October, 1918, required by the Allies for the formal military occupation of Turkey. These taxes upon some of the Prime necessities of life impose an inhumane burden upon the poorest classes in Turkey and add to their acute poverty and misery. Coal, another necessity especially in winter weather, has very recently been placed on the dutiable list. My Government considers these taxes discriminatory against the legitimate interests of certain nations, the United States in particular. The increase in revenue that would have resulted from the Eleven per cent ad valorem tax destroys the revenue argument upon which consumption taxes were purported to have been based. If the revenue from the uniform Eleven per cent tax falls short of the fiscal requirements of Turkey, my Government might entertain the proposition to resume at an early date the negotiations initiated by Turkey in 1914, looking toward an increase in the uniform rate to Fifteen per cent ad valorem.

I am sure that Your; Excellency will agree that joint action by the Allied Powers and the United States Government, in accordance with a pre-arranged plan, would be preferable to individual action.

Respectfully,

[

Mark L. Bristol

]

2. Ibid., p. 765.
3. Not printed.
4. Correspondence not printed.
5. See telegram no. 28, Jan. 24, from the High Commissioner at Constantinople, p. 155.