667.116/86

The Ambassador in Turkey ( Skinner ) to the Secretary of State

No. 398

Sir: I have the honor to report that various evidences have reached me of a definite intention on the part of the Minister of Finance to [Page 957] direct Turkish purchases to countries having clearing agreements with Turkey to the exclusion of the United States which has no such agreement, but in which Turkey enjoys an important favorable trade balance. In other words, the Minister of Finance finds it convenient to utilize American balances for the purpose of paying for goods purchased in various other countries. I enclose a copy of an official decree72 published in the Official Journal of October 1, 1934, in which it is specifically laid down that certain purchases intended in several instances for public departments are to be imported only from countries having clearing agreements with Turkey. In another instance, much more important in terms of dollars, the Government deliberately rejected certain tenders of the Curtiss-Wright Company and signed a contract for the same equipment with the Hispano-Suiza organization in France although the French offer was substantially higher in price, and although the Curtiss-Wright representatives had abundant reason to suppose that the order would be placed in the United States. As this Curtiss-Wright business has to do with war supplies, naturally nothing has been said about the discrimination practiced, but the instance is nonetheless interesting as revealing the tendency of the Government.

As the decree published in the Official Journal and enclosed herewith relates to ordinary merchandise, I have brought the attention of the Minister of Foreign Affairs to the matter and have set forth our confident expectation that our goods would be treated no less favorably than the goods from countries which have clearing arrangements with Turkey, and the fact that we have no such clearing arrangement but, on the other hand, do provide a favorable trade balance, abundantly entitles us to this consideration. I have furthermore remarked that the discrimination now being practiced was contrary to the spirit of commercial arrangements between the United States and this country. I shall report promptly the result of my comments to the Minister who, no doubt, will discuss the matter at once with his colleague the Minister of Finance.

Probably the last thing in the world which Turkey really desires is a clearing arrangement with the United States which would limit in any way the free use of the Turkish trade balance in our country, and I take it that it is not our desire to imitate continental practice in regard to these agreements if it can be avoided. However, as we are in danger of being victimized from the mere fact that we are more important as buyers than we are as sellers, the mere existence of some general rule in the United States applicable to countries which are inclined to discriminate against us might have the happy effect of keeping them in order. I am disposed to hope that in discriminating [Page 958] against the United States the Turkish Government is less animated by a definite desire to discriminate against us than by the thought that the activities complained of will pass unperceived.

Respectfully yours,

Robert P. Skinner
  1. Not reprinted.