890D.51/9–1045
Memorandum of Conversation, by the Director of the Office of Near Eastern and African Affairs (Henderson)
The Syrian Minister45 called on me today. He said that his Government had requested him to endeavor to effect arrangements of some kind With the American Government whereby twenty million dollars would be made available to Syria immediately to purchase supplies in the United States for which Syria was in desperate need.
He pointed out that during recent years Syria had been unable to satisfy its normal needs for foreign products and that as a result the country was in a critical situation so far as both capital and consumers’ goods were concerned. He said that the Syrian Government had been depending upon the French for dollars up to last spring [Page 1216] when what almost amounted to a rupture took place between France and Syria and that at the present time the Syrians felt impelled to turn to the United States direct for their dollars.
I told the Minister that the Syrian need for dollars had already been discussed in the Department and that informal conversations on the subject had also been held with appropriate French officials. The French had assured us that they were still ready to furnish Syria with a reasonable amount of dollars and that if the Syrians would make application for the dollars through the usual channels, they would have no difficulty in obtaining them. It would be difficult to prevail upon the appropriate American authorities to approve the loan of dollars to Syria for the purchase just now of broad categories of imports in the absence of evidence that the French Government was unwilling freely to make dollars available to Syria in accordance with arrangements effected some time ago between France and Syria. I asked the Minister if the Syrian Government had formally applied to the French for dollars and had been refused.
The Minister said that he could not answer my question. He was of the opinion, however, that if the Syrians had not approached the French, their failure to do so had been based either upon their conviction that the French would ask for political concessions involving sacrifice of the sovereignty of Syria in return for the dollars or upon their determination not to approach the French Government for favors at a time when French-Syrian relations were strained. He said that in any event the Syrian Government did not desire that its currency continue to be based upon that of the French. The Syrian Government felt that it should be financially independent of a country which obviously was endeavoring to deprive it of its political independence. It was the hope of the Syrian Government that the Government of the United States would be willing to take steps which would result in Syria’s having more complete financial independence. He added that he would appreciate it if arrangements could be made for the financial expert of the Syrian Legation to have talks with the appropriate experts in the Department of State.
I told the Minister that I would be glad to take steps for such conversations to take place. I said, however, that so far as I was aware, the only means available for the granting of loans to foreign countries such as Syria were through the Import-Export Bank and that this bank might have hesitation in advancing foreign loans unless there seemed to be some likelihood that such loans could eventually be paid in dollars. At the present Syria’s dollar income was limited and it appeared that it would be difficult to expand that income in the next few years to any appreciable extent.
[Page 1217]The Minister said that this problem was one of several which he would like to have his expert discuss with the members of the Department.
- Nazem al-Koudsi.↩