867.5151/159: Telegram

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

56. Your 149, November 25, 2 p.m. The Department assumes that the existing claims of American exporters are expressed in dollars and that these claims, in order to be satisfied, must be paid in full in dollars, irrespective of the value of the Turkish lira at the time the exchange is granted.

American commercial creditors will doubtless experience difficulty, however, in collecting from their debtors or otherwise realizing the full amount of their claims if no special provision is made at the time of devaluation with regard to funds which the Turkish debtors have previously deposited, pursuant to Turkish requirements, to pay their American obligations whenever exchange should be made available by the Turkish authorities. The simplest method of meeting the situation would appear to be for the Turkish Government to exempt such existing deposits from devaluation. You should endeavor to [Page 882] obtain some arrangement which will result in the full payment in dollars of the American arrears.

Please furnish the Department promptly with a further telegraphic report regarding the situation, including the difficulties which may be expected to be encountered with regard to devaluation as affecting the arrears. Does any Turkish law or regulation existing or contemplated exempt the Turkish importer from any further obligation to his American creditor when he has deposited sufficient Turkish lira to meet his obligation at the rate of exchange existing at the time of the deposit? If so, have not the Turkish authorities, in accepting and holding the lira deposits, assumed responsibility for transferring to the American creditor, whenever exchange should become available, the amount of dollars represented by those lira at the time of deposit? The aforegoing is on the assumption a general devaluation of the lira is contemplated. If the situation is otherwise, please report in full.