811.20 Defense (M) Turkey/35: Telegram

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

398. 1. Your 819 of August 2, noon, was most helpful. In the light of its contents and comments on the program received from the London Preemption Committee, appropriate modifications have been under study here. In this process it has seemed desirable to transform the program originally designated as short term into a program to run for the next 12 months. The changes noted hereinafter have been agreed by the Department, Board of Economic Warfare, and United States Commercial Company. They have in addition [Page 723] been discussed with the British Embassy here and will be submitted to the London Preemption Committee for their approval.

2. The same general principles outlined in the Department’s 358 of July 23, 4 p.m. obtain. In addition, it is believed that as a general policy individual responsibility as between the British and ourselves should be assigned in the case of each commodity. This does not preclude, however, jointly purchasing a specific commodity if for any reason in your judgment and that of your British colleague such action promises the most effective results. Extreme flexibility is sought and, consequently, recommendations from the Embassy for the removal or addition of commodities or for modifications in outstanding purchase directives are solicited.

3. Caiques. Your recommendation that no action be taken at the present time is accepted, but the Board of Economic Warfare is leaving its directive unchanged so that you will be free at any time to act under it if the situation changes.

4. Antimony. It is reported by MEW that there is currently a deficiency of this metal in Germany. Little information is available here on the situation in Turkey with regard to production, stocks, etc., and your forthcoming comments are eagerly awaited.

5. Cotton. In the light of your recommendation and because of the fact that it is planned to leave primary responsibility for this commodity with the British, the Board of Economic Warfare directive on cotton requires no action but it is left in effect for later exercise if the situation changes.

6. Linseed. The Board of Economic Warfare is issuing a purchase directive to cover 10,000 tons of this commodity. Tentatively a dollar limit has been set of $6,000,000.

7. Gum tragacanth. The BEW is studying and would appreciate information regarding Axis uses and London response to UKCC request for purchase authority.

8. Oil seeds. Your recommendation is being carefully considered. The Joint Preemption Committee in London has recommended against buying sesame, sunflower and ground nuts. The Board of Economic Warfare is studying the matter, and a final decision will be made after any necessary reconciliation between MEW and BEW views.

9. Hazel nuts. No decision pending receipt of forthcoming study from the Embassy.

10. Copper. The outstanding purchase directive is for 6,000 tons with an all-inclusive limit of $4,760,000. This is in correction of paragraph 4d of the Department’s 358 of July 23.

11. In summary, responsibility for the following products would be assigned to the U. S.: antimony, copper, woolen rags, molybdenum, linseed, and, if necessary, caiques. On the following products primary [Page 724] responsibility would rest with the British: olive oil, wool, cotton (the export of these three commodities being currently prohibited), sheep and lamb skins, goat and kid skins, valonia, valex, silk cocoons and waste. Mohair, cotton clippings, waste and rags, flax and hemp are to be purchased jointly by the British and ourselves in collaboration. The existing arrangements regarding chrome would remain unchanged.

12. In certain commodities it is expected you will decide to have the Embassy negotiate, using the UKCC to handle the physical details. In others, pending the arrival of USCC representatives, it is presumed you will delegate the actual purchasing as well as the physical details to the UKCC.

13. Pending final determination of financial arrangements between the British and ourselves, it is expected that the UKCC will make payment out of their Turkish pound balances (through their “special” account) for such purchases as they make for our account. In the latter case London has pointed out that UKCC should appear in Turkey as the principal. It therefore follows that while such purchases would be ultimately for account of USCC, USCC would have to place order with UKCC, after consultation with you. Purchases negotiated by the Embassy presumably should be made in dollars or Turk pounds purchased by U. S. against dollars.

14. Progress is being made on selection of USCC mission, and it is expected that definite information will be telegraphed shortly.

15. Your comments and recommendations will be welcomed on this telegram which has been repeated to London.