867.51/6–146: Telegram

The Acting Secretary of State to the Ambassador in Turkey (Wilson)


472. Urtel 621.39 Careful consideration indicates limit of Eximbank credit $25 million, but no assurance of that amount. It would include loans referred to as exporter credits. These are discounted without recourse by exporter at Bank and hence are really credits by Eximbank to borrowing government granted at government’s request for projects government considers essential. Role of Am supplier secondary. Loans are not granted without authorization of borrowing government which has decision regarding identity of project to be financed and of supplying firm. These are foreign government obligations to Bank and could not be excluded. Impression that Bank has $200 million free funds erroneous. Regret embarrassment, but review of files shows repeated statements to Turkish representatives that loan on large scale impossible. When application filed with Bank Turkish representatives told that use by Turkey of foreign exchange in development program should be considered in connection with the loan application. Use of portion of these assets would permit substantial development.

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Airport credit arranged prior to application and probably would not be included in total. If Turkey buys surplus ships credit by Maritime Commission possible for three quarters of purchase price. Few, if any, ships now available are adapted to Turkish needs. Some ships useful to Turkey may be classified as surplus in coming months. Expect other nations also will be interested in these ships.

Assume Turkish loan application will be kept in active file, if desired, but see no likelihood of large, if any, additional credit. Believe further embarrassment likely if Turkish Govt receives impression large Eximbank credit will be available at later date. Hence Dept will not ask Bank to send letter to Turks types suggested urtel 621 and Bank has indicated that it would refuse to send such a letter. Dept has requested Bank to send letter indicating that in view of heavy demands for reconstruction and development the relatively favorable economic situation of Turkey and limited lending power of Bank $25 million is maximum possible, and suggesting that International Bank is especially designed to handle loans for development plans of Turkish type. Suggest you point out that International Bank for Reconstruction and Development now in process of organization the important future source of development loans.

  1. Not printed; it reported a request by the Turkish Government for reconsideration of their application for a loan exceeding $25,000,000 (867.51/6–146).