Memorandum by the Chief of the Division of Near Eastern Affairs (Murray)
Mr. Edgar W. Smith, Vice President of the General Motors Export Company of New York City, came to see me this afternoon with regard to the question of furnishing the Turkish Government, for military purposes, with 900 trucks. The proposal involves about $1,000,000 worth of business. Mr. Smith told me that no definitive agreement in the matter had been reached with the Turkish Government since many phases of it had yet to be clarified. With regard to the financial aspects he stated that according to his understanding the Turks would be prepared to pay 20% in cash, the remainder of the payments to be spread over a five-year period and guaranteed by bonds issued by the Turkish Ministry of War. He said the proposal had been discussed with the Chase National Bank of New York, not with the idea of obtaining credits since he knew the bank would not be prepared to accord them for so extended a period, but merely to get their views as to the general practicability of the transaction. He said the Chase National Bank regarded the Turkish credit record as good.
Mr. Smith also informed me that he had discussed the matter with Major Hall of the Export-Import Bank and had been informed that the bank would probably be reluctant to accept Turkish bonds issued by the Ministry of War in case credits were requested of the bank. Mr. Hall apparently intimated that the bank would not be in a position to finance exports for military purposes.29
Mr. Smith stated quite frankly that his Company would like to get the business regardless of any policy considerations respecting the export of arms and munitions of war since the business would go to a rival of General Motors if they did not obtain it. When asked whether the Company itself would be able to finance the transaction he made reference to the General Motors Acceptance Corporation which would be in a position to perform services of this kind but [Page 1049] would prefer not to unless the Export-Import Bank was not willing to extend the necessary credit.