367.1164/126
The American Ambassador in Turkey (Grew) to the Turkish Minister for Foreign Affairs (Tevfik Rüştü)30
My Dear Minister: A matter of serious import having arisen, I venture to bring it first to Your Excellency’s attention in this informal way—as you have been good enough to invite me to do from time to time—rather than to make formal representations, and I do so in full confidence that even a brief examination of the matter will convince you of the soundness of the point of view which I herein present.
The Turkish tax officials in Stamboul have recently conducted a survey of the revenue of the various American educational and philanthropic institutions in this city, including the colleges and schools. They have inquired as to the amount of the deficits and from what sources these deficits are covered and by whom. There is therefore apprehension that the purpose of this survey may envisage the assessment on these revenues of the so-called Inheritance and Bequest Tax.
The moneys received by these institutions from their parent organizations in the United States, which control and operate them, can in no sense be considered as gifts or bequests. These moneys represent the income derived from funds invested in America, being received on the basis of a continual running account with the parent organizations, and they are applied to American educational institutions in Turkey not as free gifts or bequests in the meaning of the Turkish law but simply as operating expenses to meet the deficits and to balance the budgets of the subsidiary institutions abroad. Without this income the American educational institutions in Turkey could not continue to exist as they are not self-supporting.
American colleges and schools, eager to serve the New Turkey, are accepting at partial or total reductions of tuition Turkish pupils to a total of many thousands of liras each year. To claim a tax on such sums expended for the education of worthy Turkish students, and to increase the tax in proportion to the increased expenditures for Turkish youth, would be difficult to understand or explain.
Americans interested in Turkey’s remarkable new birth, sympathetic with her national ideals, have placed in Turkey a group of [Page 874] friendly Americans who today constitute the most sympathetic interpreters of the Turkish people before the American public. To them in substantial measure is due the changing attitude in America toward the New Turkey. They bring large moral and material assets to Turkey every year. They should not be penalized for this service.
I do not wish to bother Your Excellency with more detail. The issue appears quite simple but it also appears of the greatest importance because an insistence by the Turkish authorities on the levying of this tax, contrary I am sure to the spirit of the law, would undoubtedly result in the closing of the doors of the American institutions in question for they could not continue to operate under such a heavy burden. I express the hope, still in this informal manner, that Your Excellency may find it possible to reassure me that the apprehensions of our educational institutions in Turkey that this tax is to be levied against them are unfounded. Should there be any doubt about the matter, I trust that you will find it desirable to lay the case before His Excellency Ismet Pasha31 in order that he may be apprised, before it is too late, of the potential seriousness of this situation.
I avail myself [etc.]