882.00 R/3–551
Memorandum of Conversation by the Acting Secretary of State1
Subject: Turkey’s Request for Additional U.S. Economic Assistance as well as Assistance in Obtaining Wheat Supplies.
| Participants: | Mr. Feridun C. Erkin—Ambassador of Turkey |
| Mr. James E. Webb—Acting Secretary | |
| Mr. William Conrad—GTI | |
| Mr. C. Robert Moore—GTI |
Ambassador Erkin discussed with me the following two problems, on the instructions of his Government:
1. Turkey’s need for additional U.S. economic assistance to help cover the budgetary deficit for the new Turkish fiscal year beginning March 1, 1951.
The Ambassador commented that Turkey’s military expenditures have been absorbing almost 45% of national revenues, thus causing a constant drain on the budget and exhausting all available domestic resources. Consequently, the Turkish Government is confronted with a serious problem in this present fiscal year in covering a budget deficit in the proportions of $300 million. $180 million of this deficit will be met through the expansion of the tax program, through internal and external loans, and through the use of EPU quotas and ECA counterpart funds. The Turkish Government has requested additional aid from ECA to cover the remaining $120 million. It is appreciative, the Ambassador continued, of the understanding and spirit of cooperation shown by the Embassy and the ECA Mission in Ankara in their continuing consideration of the problem. The Government, however, considers it very important that an early favorable decision be reached and, therefore, has asked him to request my support in ensuring that appropriate action is taken to bring about the favorable conclusion of this problem.
[Page 1130]I informed the Ambassador that we were well aware of the heavy burdens which the Turkish people had been bearing to keep their country militarily strong. The Embassy and ECA Mission in Ankara, as he knows, have been in constant touch with appropriate agencies in the Turkish Government to explore the means by which the particularly heavy deficit for this year can be covered. I assured the Ambassador that I was confident they were doing their best to work out a solution to this problem with the Turkish Government, that they were keeping us informed of developments, and that every consideration would be given, both in Ankara and here, to this problem.
2. Turkey’s need for immediate shipments of wheat.
The Ambassador explained that there is a serious shortage of foodgrains in Turkey and that stocks presently at the disposal of the Soil Products Office are barely sufficient to meet the grain requirements of the country until the first of April. To provide for these requirements from then until the end of June, when the new harvest will become available, the Turkish Government urgently needs 100,000 tons of wheat and 25,000 tons of corn. The Ambassador, therefore, urged that the Department assist the Turks in obtaining grain in the U.S. for immediate shipment.
The Ambassador then adverted to the question of financing the purchase of the grain, suggesting one of several alternatives—1) that unused ECA allotments be made available and the funds thus spent be replaced later in the year when new ECA additional assistance is granted, 2) that an additional ECA allotment for this purpose be obtained now, or 3) that Turkey use its gold reserves and obtain reimbursement from ECA, if possible, when the amount of additional ECA aid to Turkey is determined.
I informed the Ambassador that the problem of meeting the wheat needs of the many countries which are calling on us for help is one of the most difficult that I have had to deal with during the past six months. We have rather suddenly found ourselves confronted with demands for very large quantities of wheat at a time when we are virtually without controls. There has been a progressive movement of controls, however, and we may soon be in a position to direct grain shipments to those countries which have the greatest need. Both ECA and the Department, as well as the Missions in Ankara, are keeping in very close touch with this problem and are trying to find ways to help the Turkish Government meet it. At the moment, no assurances can be given as to what it may be possible for us to do, although the Ambassador can be assured that the problem is receiving our sympathetic consideration.
The question of obtaining wheat supplies in the U.S., I continued, is quite a different one from that of ECA financing and, at the moment, the supply problem is the one that is most important to solve.
[Page 1131]The Ambassador stated that he had been asked to cable his Government by tomorrow on developments. He asked if a meeting could not be arranged for this afternoon, between representatives of the various departments concerned with this problem and his Financial Counselor,2 to explore again the possibilities of assistance. It was agreed that a meeting would be arranged, following which I would communicate with the Ambassador.
(Later in the afternoon, following a meeting on the subject attended by Department, ECA and Turkish Embassy representatives, I called the Ambassador to tell him of the discussions and to let him know that it would perhaps be the month of April before we could get as much as 9,000 tons of wheat through. The Ambassador thanked me but requested that a new effort be made to send at least two shipments between the 15th and the end of March. He said that Turkey was in a very difficult situation and he was afraid it would be too late if nothing arrived until April.
I made no commitment but referred to the meeting of the abovementioned representatives to be held on March 12, by which time I hoped that more definite information could be given him about shipment possibilities.)
GTI will keep in touch with these two problems.