Memorandum by George H. Emery to the Director of International Security Affairs (Cabot)

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Subject: Proposed Increase in Turkish Forces.

Col. Ofsthun and I met with Mr. Halaby and his associates yesterday to discuss further the problems involved in the proposed increase of the Turkish armed forces. There seem to be two difficulties involved which caused some doubt in the minds of those in ECA as to the desirability of the suggested program. These are: (a) the use of ECA money to “hire” foreign soldiers, and (b) the possibility that ECA funds might be used indirectly to increase a foreign country’s reserves.

As a result of the many discussions which have been held on this subject, I believe that perhaps our approach has been faulty. The emphasis has been placed too strongly on additional soldiers and not strongly enough on essential imports. Our missions in Ankara first proposed that the U.S. finance an increase in the Turkish armed forces by making imports available which would generate local currency to pay for those forces. On the other hand, our missions also have said that serious deficiencies exist in certain importable items that back up the Turkish military effort, such as uniform cloth, POL, medical supplies, etc.

I suggest, therefore, that the proposal might be more palatable to all concerned if we agree that semi-military import deficiencies, in fact, do exist and that ECA funds should be made available to meet those deficiencies. The local currency thereby generated could be used by the Turkish Government for any purpose, but in negotiating the additional aid we could “suggest” to the Turks that it might be desirable to use these funds for additional non commissioned officers or additional recruits for the armed forces. It seems to me that this puts the shoe on the proper foot if, as we are told, serious deficiencies in terms of imports to back up the military effort do exist. Furthermore, I believe that a very good case can be made for the use of ECA funds to supply items needed by the military forces of any country as distinct from the use of ECA funds to “hire” soldiers.

In my memorandum of March 31, it was pointed out that there are two categories of imports involved in the Turkish proposal. In the first, amounting to $22,200,000 and listed under Column A, are those items which the Turks propose to import with free Turkish foreign exchange regardless of any action taken by the U.S. with respect to increase aid. In the second category, amounting to $13,800,000 and listed under Column B, are those items which will be imported to meet major deficiencies if the U.S. will supply the financing.

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It was agreed yesterday in ECA that financing by the U.S. of the $13,800,000 of imports under Column B will not affect the Turkish reserve position in any way because the foreign exchange to meet those imports is not available. Therefore, if it is found to be necessary to compromise with ECA’s point of view, it might be possible to agree that the Turks should finance the imports listed under Column A as originally planned in their budget and that ECA finance the imports listed in Column B. Under this procedure some 40,000,000 TL would be generated through American aid. This, of course, is substantially less than the 88,000,000 TL requested by the Turks. However, it must be remembered that the total cost of keeping 40,000 additional men under arms for a year is estimated to be 23,200,000 TL. The balance of the 88,000,000 TL requested was designed for improved support of the army as a whole through services such as maintenance of air fields, local construction work, etc. If eventually it is determined that these services are of such importance that they deserve a higher priority than some of the projects now being carried out under MDA in Turkey, ways and means could be found to schedule them through a revision of present priorities.