467.11/912: Telegram (part air)

The Consul at Istanbul (Elting) to the Secretary of State

From Nielsen. Your September 25, 11 a.m.38 I regret that Department misunderstood reference in my telegram September 2438 to the Department’s use of the term “present value” and telegraphed detailed explanation. Since Sevki was leaving on September 25 I conferred with him Monday the 24th and laid before him Department’s argument respecting present value. With considerable feeling he replied that he considered irrevelant [irrelevant] use of a term pertinent to an interest bearing term obligation which Turkey had not offered to incur; that Turkey could not pay more nor pay in fewer installments; that the Department by the use of such a term belittled the offer made and made it appear to be less than it was. I stated that Department had no such purpose; that it might be simply said as I already had done that Turkey might properly increase its offer a little by the payment of a moderate rate of interest on deferred payments, the Government having the use of the money and the claimants being deprived of it. I expressed the hope that since the United States might in a spirit of compromise accept the principal sum of $1,200,000 Turkey might readily agree to a moderate rate of interest on deferred payments. Subsequently Sevki stated that Turkey could afford no more; that he would however agree to increase recommendation to $1,300,000 with a term payment of 13 years. He handsomely explained that the concession was made as a personal one to me. I accepted the offer.

It is agreed that formal document of recommendations will be signed when he returns in about a week. Connelly, Maktos39 and I consider the sum should reasonably pay honest claims with legal foundation. It has been difficult to obtain it. Long term payments appear a necessity in view of conditions of poverty here. Some examination of largest claims prompts our judgment respecting probable appropriateness of sum mentioned.…

Turkish delegates take view that function of commission in dealing with lump sum is solely to make recommendation to the Governments although if I should be here I could of course act on final contract. I did not oppose this view since the Department in the past has [Page 933]reserved judgment on lump sum and the portion of the Turkish note of February 8 dealing with lump sum specifically speaks of recommendation. Considering draft of report and recommendations handed me by Sevki to be unsatisfactory though not seriously objectionable with some modifications, I have submitted counter draft to Essat. I think that portion of my draft covering vital points could if accepted be used as a basis for the contract of final settlement which I assume might be concluded after my departure by an authorized person in the Embassy if formulation of contract is considerably delayed.

International agreements relating to payment of money must here, as with us, have legislative approval. Turkish delegates having made recommendation we do not apprehend other authorities will block final action. This delayed message is sent partly by mail. [Nielsen.]

  1. Not printed.
  2. Not printed.
  3. John W. Connelly and John Maktos, legal assistants to the Commissioner and Plenipotentiary (Nielsen). Connelly was also designated as Commissioner.