890D.51/9–1845

Memorandum of Conversation, by Mr. Adrian B. Colquitt of the Division of Near Eastern Affairs

Participants: Dr. Nazem al-Koudsi, Syrian Minister
Mr. Sawwaf, Syrian Counselor
Messrs. Luthringer, McGuire and Ansara, FN46
Messrs. Merriam, Satterthwaite, Kohler and Colquitt, NE47

A meeting was held in Mr. Collado’s48 office on September 18 to hear and discuss a request of the Syrian Government for a loan of twenty million dollars to be used for the purchase of supplies in the United States.

[Here follows discussion of Syria’s financial situation, similar to that recorded in the memorandum of September 10, supra.]

In reply to the observation that, according to information furnished to the Department by the French authorities, a substantial and reasonable amount of dollar exchange was available at Beirut for the asking, Dr. Koudsi stated that his Government did not wish to utilize those funds because it felt that the French would seek in return to impose political conditions that would limit Syria’s independence. Mr. Merriam suggested that, as the French seem disposed to make the money available, and as the established machinery already exists, it would seem a good idea for the Syrians to utilize the offer and see whether the French actually would try to couple the dollar exchange with political demands. Dr. Koudsi said his Government objected to France having its finger in the control of Syria’s foreign exchange.

Mr. Collado cited examples of other countries short of dollar exchange that found it necessary to have a finger in the control of foreign exchange in cases similar to Syria’s. Summing up, Mr. Collado said there appeared to be two problems to be considered, (1) how could Syria realize on its existing assets which were convertible into francs [Page 1218] or sterling but not dollars, and (2) if there was any scope for considering a long-term program of developing the national economy. He thought that anything on these lines would have to be considered separately, and that Syria’s immediate needs should be met through approach to the French. The manner in which long-term assistance could be given would require study, as it was a broad problem not limited to Syria. The facilities of the International Bank for He-construction and Development could be looked into, and it would also have to be determined whether assistance from this source would be on a bi-lateral basis or on a broader United Nations basis. Mr. Kohler called attention to the fact that, although Syria “came of age” too late to be a signatory to the Bretton Woods agreement,49 the matter of admitting new members would be opened when the Bretton Woods Fund is established. Mr. Collado said that, under international agreement, reasonable and non-discriminatory exchange controls could be maintained for a period of three to five years during the transition period. Mr. Luthringer remarked that Syria’s future exchange situation depended largely on the condition of the franc and the pound, and that Syria would be in a good position if France and England eventually freed back balances.

  1. George F. Luthringer and Paul F. McGuire, Chief and Assistant Chief, respectively, of the Division of Financial Affairs, and James M. Ansara of the same Division.
  2. Gordon P. Merriam and Foy D. Kohler, Chief and Assistant Chief, respectively, of the Division of Near Eastern Affairs, and Joseph C. Satterthwaite of the same Division.
  3. Emilio G. Collado, Director of the Office of Financial and Development Policy, who was also present at this conversation.
  4. The United Nations Monetary and Financial Conference met at Bretton Woods, New Hampshire, from July 1 to 22, 1944, and formulated the Articles of Agreement of the International Monetary Fund (Department of State Treaties and Other International Acts Series No. 1501; 60 Stat. (pt. 2) 1401) and of the International Bank for Reconstruction and Development (Treaties and Other International Acts Series No. 1502; 60 Stat. (pt. 2) 1440). The Agreements were signed by the United States on December 27, 1945, and entered into force the same day. For documentation on the Conference, see Foreign Relations, 1944, vol. ii, pp. 106 ff.