Memorandum of Conversation, by the Director of the Office of Near Eastern and African Affairs (Henderson)36

Participants: The Turkish Ambassador
Mr. Henderson—NEA
Mr. Jones—NE

The Turkish Ambassador called this afternoon at his request, having indicated that he desired the latest information regarding the proposed loan to Turkey.

Mr. Henderson said that he regretted that it had not been possible to give the Turkish Ambassador a definite reply at an earlier date and that as a matter of fact he could not give a definite reply. He explained that a variety of changes have taken place in the economic [Page 907] and financial divisions of the Department which had greatly delayed work in progress. He cited, as an example, the transfer of Mr. Collado to the American Directorship of the International Bank.37

Mr. Henderson said that he had talked only this morning with Mr. Luthringer38 regarding the proposed loan to Turkey and that although he had no authority to do so, he was in a position to indicate to the Ambassador that chances were fairly good for a $25,000,000 loan to Turkey. Mr. Henderson said that the Department had done its best to increase this figure to approximately $50,000,000 but that the Department had been unsuccessful in its efforts because of the Bank’s shortage of funds and previous commitments.

The Turkish Ambassador expressed his thanks and asked whether he was at liberty to report that a loan for $25,000,000 was likely and that an increase to $50,000,000 was possible.

Mr. Henderson said that this would convey an erroneous impression. The chances were good for a $25,000,000 loan, but he could not hold out any hope of an increase beyond this figure.

The Turkish Ambassador then asked whether he might report that a loan of $25,000,000 was likely but that he (the Turkish Ambassador) was endeavoring to have it increased to $50,000,000.

Mr. Henderson said that there would be no objection to his putting the matter to his Government in this way.

As a matter of information the Turkish Ambassador said that while in New York recently he had lunched with a number of high officials of the Chase National Bank, which is the principal correspondent in the United States of the Turkish National Bank. He said that these bankers had told him that because of the political situation they doubted very much whether any commercial loans could be floated for Turkey in the United States at this time either long or short term. The Ambassador said that he was bringing this to Mr. Henderson’s attention because in an earlier conversation Mr. Henderson indicated that Turkey had not suffered the ravages of war and consequently was in a better position to seek private financing than countries like Greece and Poland which had suffered so much destruction.

Mr. Henderson said that he would take note of the fact that the Export-Import Bank was the only source of credit now open to Turkey in the United States.

The Ambassador expressed his thanks for the interview and took his departure.

L[oy] W. H[enderson]
  1. Memorandum drafted by the Assistant Chief of the Division of Near Eastern Affairs (Jones).
  2. Emilio G. Collado had been Director of the Office of Financial and Development Policy and Deputy on Financial Affairs to the Assistant Secretary of State for Economic Affairs (Clayton).
  3. George F. Luthringer, Director of the Office of Financial and Development Policy.