811.20 Defense (M) Turkey/588: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

3595. For Department and Board of Economic Warfare.

On May 21 Ministry of Economic Warfare called an ad hoc meeting, attended by Embassy, Foreign Office, trelmury [Treasury?] and UKCC, to consider whole question of the joint preemptive program in Turkey, particularly telegrams numbers 224, 225, 226, and 227 arfar [garbled?] from Ankara to London, repeated to Washington, which you have doubtless seen.
It was unanimous conclusion of the British representatives present that: (a) Authorized purchases restricted to the limits of allocations given us by Turkish Government have not been and will not be in sufficient quantities to damage the enemy; (b) it is inadvisable to endanger our larger political and military objectives in Turkey (including chrome) by attempting to supplement authorized purchases by a program of unauthorized buying; (c) therefore all preemptive purchasing in Turkey should cease immediately with the following exception; the two corporations should continue to make joint authorized purchases only when it appears that a large enough proportion of the exportable surplus to have preemptive value can be obtained. Only item which British think falls into this category at present is opium and it is unlikely that others will emerge in future. This recommendation, which the British will make formally to our Government, is not intended to affect in any way their purchases of Turkish chrome, which, although a major preemptive purchase, has not been associated with the joint program in previous discussions with the Turkish authorities.
The British recommendation to stop preemption is based on the following evaluation of the Turkish situation—that it would be folly to provoke a quarrel with an Ally by acting in violation of Turkish law (and in contravention of British assurances) thus possibly forfeiting the benefits of the obstructive tactics, which, in the British view, the Turks have shown themselves willing to use against Germany.
In developing this view, the British representatives adduced the following arguments:
It would be impossible to conceal from the Turks even for a very limited period of time unauthorized operations on the scale necessary to make preemption effective in the important commodities and remittances of foreign exchange for USCC account must pass through the Central Bank and will inevitably put Turks on the scent; news of [Page 1131] important commodity transactions cannot be kept from the market, and, as happened in the case of hazelnuts, the birliks themselves may complain to the Ministry of Commerce; further, the British feel that the Turks would not be long deceived by the USCC cloak for UKCC operations, since the two corporations occupy the same quarters and USCC purchases would still be carried out by UKCC agents and stored in UKCC warehouses;
the British in Ankara, if unauthorized purchases are deemed to be of sufficient importance to justify showdown if necessary with Turkish Government, feel that there would be real advantage in gaining 3 months’ time and depriving the enemy of Turkish commodities during this period, but the UKCC here states experience shows a greater time than 3 months elapses before delivery is actually taken of commodities purchased in Turkey. Thus we cannot hope to interrupt by this means deliveries to Germany during the period envisaged by Ankara;
the agreement governing the Anglo-Turkish special account provides that the 40 percent premium is only applicable to the purchase of goods destined for export to the sterling area. Thus the Turks would be on firm ground in holding the unauthorized purchases either by UKCC (since circular 45 states unauthorized purchases will not be given export licenses) or by USCC (since such purchases are prima facie not destined for sterling area) violate the terms of the special account premium. If this premium were withdrawn it would result in a sizable reduction in British purchasing power. Further, an extensive unauthorized purchasing program by USCC without utilizing British financial facilities would greatly increase Turkish dollar holdings, thus raising once again the question of the Turkish attitude toward such balances;
The representative of the Foreign Office stressed three factors:
That in no circumstances should we jeopardize developing Turkish good will by persisting in a policy of unauthorized purchases, the preemptive advantages of which would be minute in comparison with the larger benefits we hope to gain from Turkish cooperation.
That in any approach that might be made to the Turks economic threats or pressure could not be made the basis of requests for increased Turkish cooperation in securing economic warfare objectives.
That the present time is not propitious to make any sort of approach to the Turks.
The erd [garbled?] representative stated since chrome is of such paramount importance compared with all items in the preemptive programs, he could not endorse any buying policy the repercussions of which might result in the Germans getting more chrome.

The above is a summary of the British case for dropping full scale Turkish preemption. These views are being presented to our Government solely as British recommendations and not as an action of the Preemption Committee; as Embassy representatives reserved our Government’s position.

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In presenting the British views, we believe it appropriate to express our own opinion that any decision taken on the future of preemption in Turkey ultimately depends on an estimate of the situation to be made by the British and American Ambassadors on the spot. They alone can determine (a) the reality of Turkish opposition to unauthorized purchases and (b) the effect on our chrome and political objectives of any quarrel which might arise over such purchases.

If the Turks really intend to forbid unauthorized purchases, or retaliate seriously against us by requisitioning our stocks, forbidding all further operations by the two corporations, or facilitating chrome exports [to] the Axis, we feel it would be dangerous to continue unauthorized purchases, especially in view of the somewhat doubtful preemptive advantages to be gained therefrom. Further, we would advise against the use at this time of threats or pressure tactics to gain increased advantages over [the Axis?] from the Turks.

Our constructive view is that representations might be made to the Turks for increased allocations under a joint authorized program. As for the timing of such an approach, it should be noted that the Foreign Office seems to prefer to wait. In the absence of instructions we did not feel empowered to press the Foreign Office representative for an explanation of this policy. It appears that the desirability of an approach to the Turks and its timing must be decided at a high political level.