840.50 Recovery/1–1548: Telegram
The Ambassador in Turkey ( Wilson ) to the Secretary of State
36. Foreign Minister and Secretary General Foreign Office have spoken to me separately and at length re “profound disappointment” felt here over indications Turkey is not to participate in credit under ERP for economic development which would permit Turkey make contribution to European recovery. Indications to which they refer are (1) press item, source unidentified, to effect State Department published estimate of requirements various countries under ERP beginning with Britain and ending with Greece at dollars 473 million but no mention of Turkey; (2) copy received at Foreign Office of “outline of a European recovery program” in which it is stated Switzerland, Portugal and Turkey had quick dollar resources as of June 30, 1947 equal to or in excess needs and will be presumed meet any western hemisphere deficit out of own dollar resources.
They told me President Inönü is “dismayed” at news Turkey is “left out”. They quoted President as stating countries like Belgium, Netherlands, et cetera, receiving credits under ERP are “thousand times” more developed economically and industrially than Turkey and that unless Turkey received outside assistance for economic development, Turkey, which is having resources drained away by necessity heavy military expenditures against Soviet threats, will suffer economic collapse.
I told them I had no confirmation of press item to which they referred. As regards statement in “outline of recovery program”1 re Turkey’s gold and dollar holdings, thought this a factual statement [garble] representatives which indicated that in these respects Turkey was in fact in better position than most of other sixteen countries. I said I felt their remarks revealed misconception purposes and nature [Page 364] ERP. My understanding of purpose ERP is that it is to cover overall deficits of European countries arising from cost essential imports from western hemisphere after allowing for possibilities financing from other sources than US. I pointed out ERP was not intended to provide for general economic development on what might be termed normal basis. Financing for such purposes should be obtained from International Bank.
Furthermore, ERP reports specifically contemplate US meeting part of overall deficit through International Bank financing and as I read ERP documents Turkey is one of countries expected to resort to International Bank for assistance required in developing sound projects which would enable Turkey make positive contribution to European recovery. Outstanding projects which occurred to me were modernization rich coal mining basin at Zonguldak which should permit Turkey export three or four million tons of coal to western Europe, and modern agricultural machinery for increase cereals production.
In this connection, I recalled my constant urging during past year that Turkey present limited number sound economic projects such as coal mining to International Bank. Foreign Minister referred to statements made by Bank spokesman December 16 to effect Bank would take no further action on loans to nation involved in ERP until further progress made in plans for European recovery.
I pointed out this was logical statement and nothing in it implied that if Turkey presented to Bank sound projects related to ERP Bank would refuse to give them consideration. I also recalled Department’s message (Deptel 684, December 22) as clearly indicating Bank prepared give consideration requests from Turkey.
I again urged Foreign Minister lose no more time in getting Turkey’s requests before Bank. He said budget debates during December prevented completion study Turkey’s economic development plans but assured me coal mining and perhaps one or two other sound projects would be presented to Bank for informal discussion without further delay.
Secretary General said Minister of Finance prepared statement on Turkey’s gold and dollar holdings and liabilities against these for communication to our Government. I will cable this information when received.
In meanwhile, I should appreciate Department’s comments and views on foregoing, particularly indication nature Turkey’s participation in ERP as presently envisaged by Department and whether it is contemplated Turkey will receive under ERP credits for projects [Page 365] presented to CEEC such as modernization coal mines or other similar projects.