867.5151/82: Telegram
The Chargé in Turkey ( Kelley ) to the Secretary of State
[Received May 10—3:58 p.m.]
31. Having learned that Council of Ministers had approved a decree amending the exchange regulations, to become effective shortly, the effect of which would be to place all Turkish trade on a clearing basis, matter was discussed yesterday with Turkish delegation.
Chief of delegation9 explained that imports from the United States and all other countries whose balance of trade is normally favorable to Turkey will be paid from proceeds of exports of Turkish goods to that country, proceeds from Turkish exports to the United States [Page 1057] will be deposited in special account in central bank, and that 80 percent of the amount received will be available for payment of commercial imports from the United States and remaining 20 percent will be at free disposition of Turkish Government for payment Government purchases, military supplies, salaries of experts and invisibles.
For some months Turkey’s foreign exchange situation has been growing steadily more difficult, and as a result of increased imports from the United States and decreased Turkish exports to the United States exchange situation has become desperate. Turkish imports from the United States first 3 months amounted to 5,663,000 pounds (2,404,000 in 1937) compared to exports of 2,310,000 pounds (4,100,000 in 1937).
Government states this action dictated by necessity protect value of Turkish currency and to prevent accumulation of commercial obligations payable in foreign exchange, and is not designed to influence or interfere with negotiations. Chief of Turkish delegation stated categorically that when trade agreement is signed with the United States the decree will automatically no longer apply to us.
Expect to submit to the Department in a few days results of discussions with regard to quota and exchange provisions.
- Numau Menemeneioglu.↩