811.20 Defense (M) Turkey/198: Telegram

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

1312. As an indication of the results of our preclusive purchasing program here, the Germans have recently made representations to Turkish Government regarding the difficulties they have been encountering in obtaining the Turkish products provided for under Clodius agreement and for which they hold export licenses.

Following these representations the President of Foreign Trade Section of Turkish Ministry of Commerce visited Istanbul in an effort to ascertain why the prices of various oil seeds (which are dealt in on commodities exchange) while fluctuating considerably were even at their lowest level always above the price at which Germany is authorized to buy. Turkish official returned to Ankara without having obtained any explanation of these price manipulations.

There seems little doubt that Germans have been seriously inconvenienced by our woolen rag purchases. From available information it now appears certain that Germany and the other Axis nations have exhausted their stocks of woolen rags and that Germany in particular had counted on utilizing Turkish rags for manufacture of uniforms and blankets for the winter’s campaign in Russia. Both Hungary and Rumania are now unsuccessfully offering most lucrative compensation transactions in a wide variety of their products against Turkish woolen rags.

We hold commitments for some 2,242,000 kilos of woolen rags for a value of 1,473,000 Turkish pounds and are preventing any accumulation of stocks through purchases of small lots both at Istanbul and in the interior.