867.5017/23: Telegram

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

1166. The Turkish Government devoted its whole attention last week to the economic difficulties confronting the country. Two important measures introduced by the Government were enacted by the Grand National Assembly. The most radical of these was a tax on wealth designed to reduce the amounts of money in circulation which has been steadily increasing since the outbreak of the war and is now approaching 700,000,000 Turkish pounds. This tax is to be levied a single time on rich persons and on those who have realized extraordinary profits such as merchants, real estate owners and wealthy farmers. The amount of the tax to be collected from each person is to be fixed by commissions appointed in each community comprising representatives of the Government and of the municipal councils, chambers of commerce and agriculture. The law provides that the assessments must be made within 15 days and the tax collected within the following 15 days. Persons who fail to pay tax within 1 month will be obliged to perform forced labor. The Government considers that in addition to increasing the purchasing power of Turkish money the tax will eliminate popular animosity against speculators and bring about a lowering of prices as a result of the forced sale of large stocks of merchandise in order to raise money to pay the tax.

[Here follows section on other aspects of the economic program of the Turkish Government.]