811.20 Defense (M) Turkey/240: Telegram

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

57. Your 51, January 8, 3 p.m. With reference to numbered paragraph 1 of your telegram under reference, the Department understands from the British Embassy here that it has been proposed to make payment for unaccepted ore above ground on January 8 on the basis of 60 percent upon declaration, 20 percent upon delivery, and balance upon completion of assay. While the advantages of certification of inflated stocks are obvious, it would appear that if the inflation exceeded a given percentage, the incentive of the producer to deliver in order to obtain the balance payment of 40 percent would be removed. This of course would be accentuated if the certificates also overstated the quality of the ore. The Department assumes that this aspect of the plan has been carefully considered.

With further reference to the suggestion originally contained in paragraph 2 of the Department’s 557 of Oct. 29,45 the Department and BEW46 suggest that such a proposal, if and when made, be coupled with the offer of a higher price than that to which the Germans have agreed.

Hull