811.20 Defense (M)/5530: Telegram

The Chargé in Turkey ( Kelley ) to the Secretary of State

105. Department’s 34, February 3, 2 p.m. paragraph 3. Following recommendations and suggestions are submitted for Department’s consideration in connection with elaboration of plans for preclusive purchasing of Turk products.

It is recommended that question be thoroughly discussed with British with view to formulation of unified program. British here have been engaged in sporadic and apparently ill-defined preclusive purchasing program. For instance, they recently purchased as measure of economic warfare over a million skins involving 900,000 pounds sterling, whereas some time ago they refused to purchase when offered to them by producer stock of antimony which has just passed into hands of Germans. It is further recommended that consideration be given to having common program agreed upon carried out through British purchasing agencies; first, because British have in Turkey an extensive commercial organization, United Kingdom Commercial Corporation, and second, because they are obliged to make considerable purchases in Turkey in order that Turks may have sufficient pounds sterling to pay for their purchases in sterling area. I understand that British may be faced in near future with alternative of either increasing their purchases in Turkey greatly beyond their needs or making Turks a loan.
With regard to possibility of preventing or interfering with German acquisition of Turk products it is first of all to be noted that Turk Government considers itself obligated under its commercial agreement with Germany to furnish quantities of Turk [Page 710] products specified in schedules provided Germany delivers stipulated German goods.
It is not believed that it would be possible through policy of preclusive purchasing to make any inroads on amounts specified for Germany. However, it might be possible by such a policy to cause some delay in shipment of Turk products to Germany as Germans are slow in their deliveries, because in such event it is probable that Turks would be willing to sell stocks earmarked for Germany thereby compelling Germans to acquire stocks from next crop (agreement covers two Turk export seasons).
From an investigation made in Istanbul it would appear that Germans have already actually acquired or obtained commitments for a very considerable part of Turk products covered by trade agreement.
In drawing up plans for preclusive purchasing of Turk products, especially those on free market, consideration should be given to effect such action might have on Turk price structure. Turk Government has been for some time seriously disturbed by rising prices and it would undoubtedly view with disfavor any action calculated to enhance prices still further.
With regard to commodities specifically mentioned in Department’s telegram all wool stocks are now controlled by Government and in view of greatly increased domestic consumption no export licenses are being granted; British are now engaged in preclusive purchasing of skins; and it is believed that bulk of German tobacco purchases have already been effected (British have been seeking to induce Russians to purchase low grade tobacco of type purchased by Germans). Germans appear to be greatly interested in olive oil and vegetable oils but British are also active in this market having recently purchased 5,000 tons of olive oil.