867.512/212: Telegram

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

80. Your 92, January 15, 1 p.m.42 On basis of your no. 1352, December 26, Department of Commerce issued a strictly confidential announcement to its District offices early in January, stating that American exporters should be advised in confidence to verify conditions of their correspondents in Turkey before making further shipments, in view of capital levy tax. Erroneous reports subsequently reached the Turkish Embassy that the State Department had embargoed further shipments to Turkey in retaliation for discriminations of capital levy tax.

Department was able to correct false impression created. However, before suggesting to Commerce that a further warning to exporters be given as suggested in your 92, Department has discussed matter with Turkish Ambassador. Latter has requested urgently that no further notice be given until he can consult his Government. Department has agreed, and has informed him that while American Government has an obligation to keep American merchants informed of events abroad important to their affairs, Department is glad to avoid as far as possible embarrassment to Turkish Government at present time. Ambassador expressed hope that Turkish Government would agree to guarantee American exporters against loss if they continue to ship.

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