811.20 Defense (M) Turkey/82: Telegram

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

953. British Ambassador and I have conferred with Prime Minister on the general subject of chrome with particular reference to the desire of British Government to contract for deliveries from 1943 to 1947 inclusive as the existing contract expires on January 8, 1943.

Hugessen stated he was authorized to propose a contract for deliveries in 1943 and 1944 under which British would purchase entire output of Turk chrome over and above the existing commitment to [Page 747] Germany under the Clodius agreement, the price to be the same as that paid by the Germans. In addition he proposed to contract for entire output for the years 1945, 1946, and 1947 or for duration of the war and 1 year beyond, whichever is the less.

Prime Minister agreed in principle to a contract for 1943 and 1944 deliveries which would assure to the British the entire output over and above the existing commitment to Germany of 90,000 tons in each of these 2 years. He was somewhat vague, however, in giving an assurance that British would receive such part of 90,000 tons destined for Germany in 43 and 44 as they might not be entitled to by reason of a failure to meet their obligation to deliver war material to Turkey prior to shipment of chrome.

Insofar as concerns 45, 46, and 47, Saraçoğlu stated he had recently flatly rejected a German proposal to purchase entire Turk chrome output for these 3 years. He said he would prefer not to “tie his hands” but if Britain and the United States insisted he would contract to deliver to Britain or the United States 50% of total output in each of these years. He added it would be extremely difficult and might even be regarded as hostile for Turk Government to obligate itself at present time to deliver more than 50% of total output in these 3 years shortly after having refused to contract with Germany for any part of output during same years.

When reference was made to fact that unless production of mines in 43 is substantially greater than it has been in 42 there will be little chrome for the British after the provisions of the Clodius agreement have been met, Saraçoğlu blamed the British for the decline in production since 1940 stating that they had failed to provide the necessary material to maintain production and clearly implying that he believed this policy to have been carefully calculated to restrict the output. He then suggested that he [would] agree to furnish Britain with 100,000 tons of chrome in 1943 against deliveries of 100,000 tons of wheat. When asked how he expected to suddenly double the current production of the mines he replied that he would do it “even if I have to use a division of soldiers for the purpose”.

The Prime Minister rejected a suggestion that he enter into a contract with the British for 90,000 tons in 1943 and a like amount in 1944 with the understanding that if production in either of these years failed to total 180,000 tons Germany and Britain each receive one half of the actual production. He said that in view of the present limited production such a contract would be regarded by the Germans as deliberately intended to undermine the specific obligation of the Turkish Government under the Clodius agreement. However, he categorically agreed that no chrome would be provided for Germany in 1943 or 1944 other than the amounts stipulated in the Clodius agreement.

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Towards the close of the discussion, Saraçoğlu referred to the great disparity between the price of 140 which the British are obligated to pay for deliveries to January 8, 1943 and the price of 270 which the Germans have agreed to pay after that date pointing out that there is already a tendency at the mines to still further restrict production in anticipation of the higher price to be received after January 8. He urged Hugessen to meet the German price immediately, notwithstanding the terms of the existing contract, and thereby stimulate production at once if the British desired larger quantities of chrome prior to January 8.

I understand that London already authorized Hugessen to offer 270 for all new chrome mined prior to January 8 but is not agreeable to paying more than the contract price of 140 for chrome already mined. In view of the fact that the mines are not under surveillance and that the stock piles can readily be tampered with, I am of the opinion that this distinction between new and old mined chrome will not serve the desired purpose. I regard it as highly desirable that Hugessen be authorized as soon as possible to pay 270 for all chrome mined prior to January 8. Failing such action, I am convinced only low grade ore will be furnished British prior to January 8 and a considerable amount of high grade ore mined prior to that date will be secreted in order to obtain benefit of much higher price to be paid by Germans after January 8.

I should appreciate Department’s views and instructions on the general subject of a new chrome contract as Hugessen’s negotiations have reached a stage at which the cooperation of our Government would be most helpful.