867.51/10–2846: Telegram
The Ambassador in Turkey (Wilson) to the Secretary of State
[Received 11:26 p.m.]
1147. Considering severe curtailment of Exim Bank loan to Turkey due shortage funds, and in view apparent present availability $50,000,000 Exim Bank funds once earmarked for Czechoslovakia, are prospects favorable for additional $25,000,000 loan Turkey as recommended mytel No. 621 dated June 1,45 provided it employed for specific and approved projects? This would be in line Secretary’s statements press conference October 22 on future loans and would appear confirm our desire for strong Turkey which now in difficult period of adjusting economy to post-war conditions and still burdened with heavy expense maintaining large armed forces.
Since devaluation date and freeing of foreign exchange for many long-needed imports, Turkey’s gold and exchange reserves have been used at rapid rate. An original large industrialization program must be drastically cut. However, status of several programs important to national economy necessitates financing of early stages prior to final receipt of foreign exchange from increased exports. Projects especially in fields of improvement railways and harbors after severe war time decline amount and condition of equipment, modernization of communications, especially for international operations, road construction, development of coal and other minerals, (Petroleum Attaché, Cairo, is recommending $3,000,000 loan for petroleum exploitation) and probably program for technical advance agriculture might well employ such funds for benefit Turkish national defense and economy. Turks have not yet raised subject after sharp and widespread disappointment over receipt relatively small part their original application.
If prospects granting such additional loan favorable, I shall appreciate instructions re procedure Turk Government should follow in making application, detailed data it should submit with application, and any action I should take.