811.20 Defense (M) Turkey/350: Telegram
The Secretary of State to the Ambassador in Turkey (Steinhardt)
152. 1. British Embassy here has informed Department that the form of a contract covering such Turkish chrome production for 1943 and 1944 as we can secure is under discussion by you and the British in Ankara. For the purposes of this new contract, the British report that you are suggesting a price of 300 shillings, whereas their suggestion is that the British Commercial Counselor should be given discretion to agree in the new contract to such price as the Turks propose to demand from the Germans in their contract for the 135,000 tons.
2. The Department and BEW recognize the necessity of at least meeting any price the Germans in future may offer. We feel reluctant, however, to propose at this time an increase over the price of 270 shillings, because of the possible effect such an increase might have on either (a) the incentive of the producers to proceed to make up from current production deficits under their declarations of stocks or (b) the temptation for producers to claim as new production our stocks. We are even more opposed to agreeing in advance to an unknown price based on a Turkish assertion of what they intend to propose to the Germans. It is our suggestion that the figure of 270 shillings be used in the new contract. Practically, we recognize the necessity of meeting the bid if the Germans in their future contract settle on a higher price and we would thereupon immediately consider unilaterally increasing the price. In your discretion the Turks might be given a strong intimation that it is not our intention to be outbid by the Germans. Please telegraph urgently your views and recommendations on the above.
3. We have told the British here that the negotiation of the contract in all its detail should clearly be the equal concern of both our Embassies, and that therefore we would prefer not to accord exclusive discretion in this matter to the British Embassy in Ankara.