811.20 Defense (M) Turkey/625: Telegram

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

1058. Department’s 495, June 4. The following represent the joint views of the British Ambassador and myself as well as the views of the individuals connected with both Embassies who have been dealing with Anglo-American preemptive purchases in Turkey.

We are unanimous that an approach to Turk Government on the line suggested by London would be worse than useless. It would certainly have no more favorable response than before and granted present attitude of Turk Government might result in premature forcing of the issue of neutrality. Moreover it would create an impression of undue dependence on Turk Government and savor of asking favors—a course which we deprecate at present time from point of view of the attainment of the ultimate objective of our Turk policy.

We have therefore considered the alternative course suggested in last sentence of paragraph 6 of London’s telegram 2305 to British Embassy in Ankara. The principal ground for the recommendation to abandon the joint preemptive program appears to be the effect which the continuation of unauthorized purchases might have on the Turks. Although in telegram 227 of May 18 from British Embassy to London attention was drawn to the risks involved, we think the fears expressed in London under this head are exaggerated. The [Page 1135] reasons are: (a) the Turks have certainly been aware of unauthorized purchases for several months; (b) the resulting funds and credit balances are welcome from point of view of war and postwar needs; (c) Germans are also making unauthorized purchases though on a small scale; (d) had the Turks taken serious exception to unauthorized purchases one would have expected their warning to be on a higher level than from Minister of Commerce to USCC; (e) the warning was possibly “for the record” only. That is to say to reserve Turk Government’s position against the possibility of taking action later if and when it should be considered desirable. Risks certainly exist but because of Turkey’s self-interest we doubt whether they are really serious. It is at least possible that Turk Government may prefer to shut its eyes to unauthorized purchases rather than be faced with official demands for higher allocations.

We note London’s particular fears about chrome but do not share them and feel that it would be unjustifiable to stop unauthorized purchases on that ground alone unless and until there was concrete evidence that they are reacting on chrome.

In the light of the foregoing, the question arises whether we should not continue our present practices as suggested in paragraph 6 of telegram No. 227 from the British Embassy to London.

Before abandoning unauthorized purchases it seems necessary at all events to examine more closely the effects of their cessation on: (a) preemption; and (b) Turkish economy. Although no foreign trade figures have been published for 2 years we estimate that during the last 6 months the joint unauthorized purchases represent very roughly one-half of Anglo-American purchases and one-quarter of foreign sales of Turkish products.

As to (a) the importance of preemption in Turkey, the relative value to our and damage to Axis war effort can only be assessed in London and Washington and it would help us greatly to have an authoritative estimate. Recent telegrams suggest that with the exception of chrome the value is relatively small. In view of Turkey’s commitments under agreements with the Axis and Axis-controlled countries it is not improbable that we are only buying what these countries either do not want or cannot obtain owing to limitations of transport and purchasing power. Cessation of unauthorized purchases by us would obviously give the Axis greater freedom of purchase. Whether they could take advantage of this and so increase exchanges with Turkey would depend mainly on their ability to increase transport facilities and their exports to Turkey. In any case they would concentrate on those Turkish products of which they are most in need and it is from this point of view that the appreciation referred to above would be most useful here.

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As to (b), the effects on Turkish economy. They might be to some extent beneficial to Turkey in the sense that prices of less important Turkish products would fall. It is probable also that thanks to our supply purchases, Turkey would still have enough funds to buy obtainable requirements of those Anglo-American products which she has to pay for. On the other hand certain products may become a drug on the market and their producers suffer accordingly. It seems certain that the Axis could not take up all the slack and it is possible that the Turks would come to us for assistance in disposing of certain products. We should be then in a better position for obtaining larger official allocations of products which we ourselves want or of which we wish to deprive the Axis and Turkish Government would realize their dependence on us which they are increasingly inclined to forget.

We are having the question of the effect on Turkish economy examined in greater detail. But prima facie it seems that cessation of unauthorized purchases might be no trivial matter for Turkey and might be unwelcome to her. It may even be that in unauthorized purchases we have discovered a useful political weapon. When the investigations of our economic advisers are completed we may revert to this point.