467.11/898: Telegram

The American Commissioner on the Turkish-American Claims Commission (Nielsen) to the Secretary of State

Three days ago I made somewhat strong statement and closed by asking Turkish delegation if it intended to stand uncompromisingly on original offer of $500,000 and stating that in that event American delegation was prepared to proceed next stages of work pertaining to individual examination of the cases and possible arbitration. Yesterday Sevki Bey appeared for first time since first meeting. After long sparring he finally reached $1,200,000 payable 12 annual installments and asked me to join in recommendation of that sum which I assume Turkish Foreign Office under which delegation has acted would accept. I considered it advisable at the time to decline to join in recommendation but offered submit figure to Department.

My despatch of September 5 if received will reveal difficulty of past and possible future proceedings. Because of conditions here adjustment through individual consideration of the cases appears to be hopeless and conclusion arbitration protocol now impracticable without great delay. I have in mind also inconsiderable expenses to date here and large sums spent in the past on a single or a few cases submitted to arbitration in comparison with awards when any given.

We tried hard for more but believe that the sum offered would afford reasonable percentage on all claims in which a competent tribunal would render awards. Obviously at present we can only estimate amounts. Suggest Department not take too seriously amounts claimed which in the vast majority of the cases including three largest are badly exaggerated. In the list36 transmitted with my despatch August 17 not much weight should be given to cases other than those labelled “serious”. Those designated “not deemed serious” were discarded. Those in other classifications were used by me largely for legitimate bargaining. See also my despatch of August 28 concerning the status Smyrna fire cases. Department knows something of sordid character evidence in some cases and extreme weakness in others and the fact that cases are not prepared for arbitration. Future proceedings with many cases of various kinds would be embarrassing. [Page 930]We feel we have left undone little of which use could properly be made in cordial and peaceful negotiations by way of legal arguments, figures or proper expedients. Obviously account must be taken of the sorry financial situation here. Shaw, to whom I mentioned results yesterday, urgently recommended acceptance. I have tried to indicate practical considerations respecting character cases, lack of disposition and personnel on the part of Turks to settle cases and financial stringency here.

Sevki Bey lingers here a few days for the purpose of effecting settlement. Please telegraph earliest possible reply.

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