811.20 Defense (M) Turkey/710: Telegram

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

1292. Embassy’s 1058, June 12, last paragraph. A thorough study of the effect on Turk economy of the cessation of unauthorized Anglo-American purchase indicates that the cessation would produce for [far] less effect than had originally been anticipated by same. While very little reliable data are available for a study of this matter, it would seem certain that cessation of such purchases (1) would have little or no effect on the general economic situation in Turkey and (2) would not, in view of Turkey’s present large holdings of gold and foreign exchange have important consequences insofar as Turkey’s financial position is concerned.

Foregoing represents the consensus of the British and ourselves. I may add for Department’s confidential information that the Embassy, USCC, UKCC and most of the British Embassy have never considered that cessation of unauthorized purchases would have any appreciable effect on Turk economy.