McGhee Files: Lot 53 D 468: “Turkey 1948—Memoranda”
Memorandum by the Director of the Office of Greek, Turkish, and Iranian Affairs (Rountree) to the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee)1
Subject: Your Appointment with Russell Dorr, ECA Mission Chief in Turkey.
I understand that Mr. Dorr is coming to see you at 4:30 this afternoon. He will probably touch upon a problem which has very considerably disturbed the Turks, but which appears to be resolved by virtue of action being taken today by ECA. Briefly, the factors are the following:
1. Turkey has been running very substantial deficits with the EPU during the first quarter of fiscal year 1952. ECA Ankara had been vigorously pressing for the Turks to draw up an import program for the year, which would include necessary military and other priority imports and which would give a clearer idea of the EPU deficit which was likely to result for the year as a whole. The Mission was also seeking to get the Turks to take vigorous measures to control this balance of payments problem.
2. ECA made available $12.5 million in July 1952 as an advance against the amount which Turkey would expect to get through EPU [Page 1182] during fiscal year 1952. This advance was exhausted in July. In August the deficit was $9.8 million, which the Turks had to settle in gold (or dollars). In September the deficit was approximately $9.5 million. The Turkish Government made vigorous appeals to ECA for an advance of this amount so that it would not have to sell gold to balance the account.
3. The settlement date for the September deficit was October 22. As a result of somewhat encouraging evidences of Turkey’s willingness to cooperate in drawing up a satisfactory import program and controlling payments, ECA Washington took an increasingly favorable view of the Turkish request. However, by the time all of the facts of the situation had been laid before OSR Paris, which had previously objected strenuously to the advance, the deadline had been reached and ECA was forced to tell the Turks that they could not make the advance.
4. Russell Dorr arrived in Washington yesterday. Further factors that have subsequently become known to OSR Paris and to Washington have resulted in ECA agreement to make an additional allotment of $9.5 million for EPU purposes. The Turkish Financial Counselor2 is being informed this afternoon and Dorr may see Ambassador Erkin at three o’clock at some ceremony and may have the opportunity to inform him of the news. A letter is going to the Ambassador from Bissell, officially informing him of the allotment and, by implication, giving Dorr a great deal of the credit for the change in the ECA position.3 The letter comments on Dorr’s report of the vigorous measures now being taken by the Turkish Government to adjust its expenditures to its resources and to the inclusion of military and other priority imports in their import program. ECA Washington is rather pleased at the outcome of this exercise as they feel it will give Dorr a great deal of credit with the Turks for accomplishing the change in its position and it will also indicate fairly clearly the importance of Mission recommendations in these problems which should be primarly fought out between the Missions and the local Government.
5. Ambassador Erkin is quite bitter against ECA at the moment as a result of the ECA turn-down several days ago and commented to Bob Moore yesterday that if he ever wanted to be sure of having something unfavorably considered, he had only to take it up with ECA. At that time he admitted that he had expressed his displeasure about ECA to Constantine Brown, which led to the latter’s article in the Washington Star regarding “Turks Resent ECA Interference”. Erkin expressed his regrets to Moore that Brown had written such an article.
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