867.512/215: Telegram

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

119. Department’s 40, January 13. Although the date for the final payment of the capital levy tax expires today in Istanbul less than 25% of the total assessed in that city (344,000,000 Turkish pounds) has been paid, according to the press the total amount assessed in the whole country is approximately 455,000,000 Turkish pounds, of which about 170,000,000 have been paid. Seizures of both movable and immovable property [apparent omission] but the full measure of the burden imposed on the minorities will not be apparent for another week or so. The evidence of discrimination against minorities is so irrefutable—although not provided for in the law itself—that there can be no question but that the local boards assessing tax were following a general Government directive. High Government officials deny this in private conversation but admit that injustices have occurred in many individual cases which should be remedied.

The law excludes any appeal from assessments made by local tax commissions. Consequently the only remedy against injustice is the constitutional one of a petition to the Grand National Assembly. The press reports that more than 3000 such petitions have already been [Page 1080] received by the Assembly and that they have been referred for examination to the Ministry of Finance in accordance with the usual parliamentary procedure. However, the Assembly adjourned January 15 sine die without providing any relief for the petitioners and the new Assembly will not meet until March 8. Announcement was made at the same time that the filing of petitions for relief will not operate to suspend the penalties provided for under the law.

Regulations for the application of the articles of the law imposing compulsory labor on those who do not pay the amount of the tax levied were published in the Official Journal of January 12. These regulations give wide discretionary powers to local officials and are susceptible of being administered with great rigor toward delinquents.

Practically all of the diplomatic missions in Ankara have submitted formal protest against the law (either general in nature or covering specific cases), based on either treaty rights or on discrimination and confiscation. It is reported that the German Embassy and Swiss Legation are providing the funds to assist those of their nationals who are unable to pay the tax. It is also reported that the Bulgarian radio has threatened reprisals against Turkish minority in Bulgaria should Bulgarians be unjustly taxed. In reply to the protests the various diplomatic missions have received similar long notes from the Minister of Foreign Affairs41 apparently identical, denying that there has been any discrimination against foreigners in the imposition of the tax and pointing out that the only relief is through petition to the Grand National Assembly.

The substance of the note received by the Embassy is as follows: The difficulties occasioned by the war have caused many governments to impose severe restrictions and privations which the Turkish Government although almost completely mobilized was able to avoid for a long time. Recently however the peasants were required to surrender 25% of their produce far below prevailing price. Mine workers have been subjected to obligatory labor and now the Government finds itself obliged to tax wealth which at the same time affords an opportunity of striking at the war profiteers. The tax imposed on wealth has been applied in accordance with the principles of justice and equity, the only purpose being to alleviate the extraordinary burdens growing out of the war. No clause of the law can be considered as in any manner discriminatory against foreigners. In its application the law makes no distinction between nationals and foreigners. In levying the assessments consideration was given not so much to the individual’s salary or the capital of a firm as to the general wealth of the taxpayer. The provisions of the law preclude any review, the obligation to pay within a fixed period of time being [Page 1081] peremptory. However, without suspending the operation of the law, individuals may petition the Grand National Assembly in cases of manifest error which are supported by conclusive evidence. It is for the Grand National Assembly to decide whether the application for relief is well founded. In conclusion the note expresses the hope that the Embassy will appreciate the Turkish Government’s efforts to stabilize conditions in the country and will make its contribution to that end in the interests of the welfare of all of the inhabitants of Turkey.

The Embassy has presented three notes of protest to the Ministry of Foreign Affairs. The first on behalf of the firm of Sadullah, Mandel and Levy of Istanbul of which the last two named are American citizens and own 70% of the firm. As previously reported this firm has been taxed 300,000 Turkish pounds on a capital of 140,000 Turkish pounds. The second protest has been made on behalf of Nicholas Balladur, an American citizen employed by the Socony Vacuum Oil Company who was assessed 1,500 Turkish pounds although Turkish employees of the company receiving much higher salaries were not taxed at all. The third note was presented on behalf of the Socony-Vacuum Oil Company objecting to double taxation to the amount of about 120,000 Turkish pounds.

The injustice arising out of the application of the capital levy tax continue to be the principal topic of conversation in Turkey. Even the Prime Minister in interviews which he has given to the press admits that mistakes have been made and injustices committed in individual cases which he states should and will be remedied. It remains to be seen what action the authorities propose to take.

  1. Numan Menemencioglu.