611.6731/646: Telegram

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

157. My telegram No. 156, December 12, 4 p.m.

When I pointed out to the Minister for Foreign Affairs this morning that the liquidation of arrears at the new rate would cause serious losses and disorganization of trade and that in the opinion of our Government it would be contrary to the spirit of the trade agreement he replied that the Turkish Government simply does not dispose of the exchange necessary to pay the arrears at the old rate and that the proposed loan would be the only means of enabling it to make a satisfactory settlement.
He incidentally stated that the Turkish Embassy in Washington has been approached by “a prominent lawyer” named Alley with a proposal to raise in the United States a loan for Turkey of from 5 to 15 million dollars.
He further told me in strict confidence that in the near future (as a result of the pending negotiations with Great Britain) the Turkish pound is to be formally devalued by basing it upon gold at a rate not yet fixed but representing its real value rather than its present artificial value.