767.68119/623: Telegram
The Special Mission at Lausanne to the Secretary of State
[Received 5:34 a.m.]
411. Mission’s 409, June 8. I saw Ismet tonight in accordance with request from Pellé. For more than an hour I discussed in a spirit of impartiality and in desire to be helpful the question of payments on the Ottoman debt bonds. Ismet adheres firmly to proposals he has made, which are (1) that the treaty shall not contain any mention of the matter, and (2) that the Turkish Government will deliver to the debt council a formal acknowledgment of obligation to pay coupons in sterling at bondholders’ option, but the declaration is to be accompanied by a reservation to pay only in paper francs for a period of 20 years, in consequence of Turkey’s financial straits. If the Governments concerned decline this offer, Ismet declared very emphatically that he will break off negotiations and quit Lausanne at once. I made an offer of our informal good offices, to which he replied that there is no time to be lost, that we might be too late tomorrow.
I went to see Pellé without delay and gave him an exact account of my interview with Ismet and added my personal opinion that the latter was quite in earnest, but I was careful to make it clear that I could not vouch for the accuracy of the impressions I had received. Pellé seemed to accept Ismet’s statements as genuine, and appeared impressed and perturbed. He told me he feared the reply from Paris would be unfavorable and he seemed uncertain what course to take. He also expressed gratification at our friendly and informal intervention.
I was asked by Ismet whether we would continue to negotiate for a treaty with Turkey if the conference should break up. I said that in that case I should be obliged, under the altered circumstances, to apply for instructions from my Government.
[Page 1021]It is my belief that the European powers will not permit the conference to break up.