320. National Security Council Report1

NSC 5510/1

NOTE BY THE EXECUTIVE SECRETARY TO THE NATIONAL SECURITY COUNCIL

The National Security Council, the Secretary of the Treasury, and the Director, Bureau of the Budget, at the 238th Council meeting on February 24, 1955, 2 adopted the statement of policy on the subject contained in NSC 5510, subject to the amendments thereto which are set forth in NSC Action No. 1338–b.3

The President has this date approved the statement of policy in NSC 5510, as amended and adopted by the Council and enclosed herewith as NSC 5510/1, directs its implementation by all appropriate executive departments and agencies of the US Government, and designates the Operations Coordinating Board as the coordinating agency.

The enclosed statement of policy, as adopted and approved, supersedes NSC 36/2 and NSC 109. 4

James S. Lay, Jr.
5

[Enclosure]

STATEMENT OF POLICY ON TURKEY

General Considerations

1. Turkey is of particular political and strategic importance to the United States because:

a.
It has a world outlook closely corresponding to that of the US and is thus a natural ally.
b.
It is the most stable and anti-Soviet country in the Eastern Mediterranean and Near Eastern area, thus making possible multiple security agreements of great value.
c.
It is located astride the water passage from the Black Sea to the Mediterranean. It also commands the most direct land route from the USSR to the Suez. Turkey borders the Soviet Union and Bulgaria, and lies within striking distance of important targets within [Page 621]Communist borders. It has granted the US important military facility rights.
d.
Its armed forces are strong, patriotic, well-disciplined, and determined to resist infringement of Turkish rights or territory.

2. Turkey is a target for Soviet ambitions. In 1945 the USSR presented claims to two eastern provinces of Turkey (Kars and Ardahan) and in 1946 proposed a new regime for the Straits to be established only by Turkey and other Black Sea powers, with joint defense of the waterways by Turkey and the USSR. Turkey consistently and firmly rejected these claims. Although Soviet aggressive demands have recently been toned down, there is no reason to suppose that Soviet objectives have changed. However, a direct attack upon Turkey by armed forces of the USSR, or its satellite Bulgaria, is unlikely unless the USSR is prepared to risk general war.

3. Turkey is consistently endeavoring to broaden and strengthen its ties with Western Europe and the United States, and has made great progress. It has taken a firm stand in the UN against Soviet acts of aggression and obstruction and is participating in other international organizations (NATO, Council of Europe, OEEC, EPU) in cooperation with the US and Western European countries. Turkey is extremely sensitive to its national security problem and alert to the need for collective defense. In 1939 Turkey, the U.K., and France signed a Treaty of Mutual Assistance 6 which, at Turkish insistence, was recently reaffirmed by the U.K. and France. Turkey, with US support, pushed its candidacy for membership in the North Atlantic Treaty Organization, which it entered on February 18, 1952.

4. On February 28, 1953, Turkey, Greece and Yugoslavia concluded a Treaty of Friendship and Cooperation, confirming the close economic and diplomatic collaboration which had been developing between the three countries and providing for contingent military planning. 7 On August 9, 1954, after consultation by the Turks and Greeks with the North Atlantic Council, this agreement was supplemented by a Treaty of Alliance8 which provides that aggression against one would be considered aggression against all, and that in such an event the Governments would take the measures they deemed necessary, including the use of armed force, to counter aggression. Although Yugoslavia is committed only in the event of an attack on Turkey or Greece, it has committed itself to consult [Page 622]with Turkey and Greece in case of an attack on another NATO country. Despite the lack of a formal link of Yugoslavia with the NATO system, for all practical purposes a good defensive system for the Southeastern European area is being added to the NATO defense system. There has been some discussion of Italy’s eventual participation in the Turkish-Greek-Yugoslav Alliance. The basis has therefore been laid from which a continuous Western defense system from Northern Europe to Asia Minor might ultimately develop.

5. On April 2, 1954, Turkey and Pakistan signed an agreement providing for continuing consultation on mutual security problems. 9 This agreement, overtly originating in the region but given impetus by US encouragement, provides for accession by other states in the area. It may, therefore, eventually serve substantially the same purposes as were envisaged in the still-born Middle East Defense Organization sponsored by the UK, France, and the US and strongly supported by Turkey.10 In that event, Turkey will become of even more importance as a link between formal collective security arrangements of the Western world and the Middle East. Turkey has in fact been playing a leading role in seeking Middle East defense arrangements, particularly expansion of the agreement with Pakistan. A recent step looking toward the development of a northern tier was a statement by Turkey and Iraq on January 13 [12], 1955, of their intention to negotiate a security alliance.11

6. Turkey is undergoing one of the most successful social, political and intellectual revolutions of modern times. Turkey desires to become a fully modern state based on western cultural ideas and has been developing democratic forms of government and institutions. From an inefficient, tyrannical and theocratic state, it has reached a point where, in some respects, it can well serve as an example of peaceful evolution for other underdeveloped areas.

7. From FY 1947 through FY 1954 the US expended $704.3 million in military aid to Turkey; from April 1, 1948 through FY 1954 the US expended $262 million in economic and technical assistance to Turkey. With this aid Turkey has undertaken major programs to modernize its military establishment and to develop its economy. Expenditure estimates for the FY 1955 aid program total about $348 million ($258 million military aid; $90.3 million economic and technical assistance).

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8. Although the Turkish armed forces have made great progress, present plans for building up Turkey’s armed forces in accordance with US interests will require continued substantial US assistance over a period of years. During FYs 1950–54 the US allocated one billion dollars for expenditure in those and following years on a program to build up the Turkish Army, Navy and Air Force. In June 1954 the Prime Minister of Turkey submitted a proposal to the Director of FOA for the partial conversion of the Turkish Army by 1958 to modified US Tables of Organization and Equipment along lines desired by NATO planners and the Joint Military Mission for Aid to Turkey. The cost of this partial conversion, estimated by the Joint Military Mission for Aid to Turkey at approximately $800 million, would be additional to the billion dollar program referred to above. By an aide-mémoire dated June 4, 1954,12 the US Government indicated to the Prime Minister that the US was prepared, subject to certain caveats, for FY 1955 to “increase the presently approved military assistance program by an amount to meet one-fourth of the unfunded US screened requirements of the Turkish armed forces to achieve NATO goals,” but there has been no common agreement between the countries as to the amount and rate of this increase. Nevertheless, the Turks consider that the US Government has made a firm commitment and, based chiefly upon the US-Turkish conversations, have in mind as implicit in the commitment the Joint Military Mission for Aid to Turkey $800 million four-year program. While the qualitative improvement of the Turkish Army along these lines would seem to be desirable from a strictly military point of view, implementation of such a program is open to question at the moment because of the lack of available US funds when global military assistance commitments are taken into account, and because of the impact of such a program on Turkish economy and the questionable ability of the Turkish armed forces to convert to greater mechanization so rapidly.

9. Based on current estimates, the maximum new money which can be made available for the Fiscal Years 1955 and 1956 would be something less than $300 million, and may be substantially lower, as compared with the over $600 million which would be required if the material called for by the $800 million augmentation plan were to be delivered by the end of FY 1958. The Department of Defense estimates that the funds required for the Turkish augmentation program can be found only at the expense of other military or economic assistance programs under already-approved policies, or by supplemental appropriations.

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10. If, however, the proposed augmented program were completed (assuming the US provides the necessary military maintenance dollar costs, which are estimated at $80–100 million per year), the continuing annual cost of maintaining Turkey’s converted forces ($610 million)13 would be, commencing about CY 1959, about double the total Turkish defense budget of CY 1953 ($366 million).13 Expenditures of this magnitude by Turkey from her own resources beginning in CY 1959 are unlikely. Consequently, there would be required a considerably higher level of US economic assistance than the $70 million currently programmed. It is estimated that total US aid, military and economic, might run as high as $200 million per year. In connection with the ability of the Turkish armed forces rapidly to absorb an augmented program, there are indications that the Turks will have increasing difficulty in maintaining equipment because of inadequate numbers of trained technical personnel and insufficient warehousing and maintenance facilities, as well as the general low level of experience in logistics management. Correction of these deficiencies will require considerable effort.

11. The Turks have attempted to carry out an economic revolution comparable to their social and political revolution, but their eagerness to modernize the country, combined with their unhesitating acceptance of military force goals suggested for them by NATO and the United States, has brought serious economic difficulties. In the early post-war years considerable economic progress was made and productivity increased substantially, in large part as a result of US aid and a succession of good crop years. However, Turkey has increasingly lived beyond its means; with the result that in the last two years foreign exchange resources have been exhausted, a burdensome external debt has been accumulated, and inflation has developed internally. Imports have been stimulated by foreign firms seeking markets, by importers’ hopes for quick profits spurred by the rising price level, and under the assumption that there would be a continuing US support of the Turkish economy. By and large, exports are no longer competitive in world markets, domestic private capital can no longer be successfully channeled into the most productive uses, and foreign investors are now unwilling to risk much long-term capital in Turkey, even though the Government has passed legislation highly favorable to private enterprise and foreign capital. In the last six months Turkey’s situation has been aggravated still further by a serious crop failure which has compelled Turkey, recently an exporter of wheat, to import cereals. At the same time, [Page 625]European suppliers are becoming less anxious to extend further commercial credits. Thus, the time appears to be approaching when Turkish imports may decline as suppliers cease to ship until paid in cash.

12. The restoration of economic stability in Turkey and the maintenance of a sound economic development program will require either curtailment of the total rate of investment or the level of military expenditures, or both, unless the gap is met by additional aid from abroad.14 Most, if not all, of the adjustment needed to restore stability at the present level of US military and economic aid and the present level of Turkish defense spending could be obtained through fiscal and financial measures which would reduce investment and curtail credit but still allow a reasonable rate of economic progress. The problem is that the Turkish Government, while it has made some gestures in the direction of controlling inflationary pressures, has been reluctant to recognize the seriousness of the situation and to accept reasonable limitations on the rate of economic development. The Turkish Government has already turned to the United States in an attempt to obtain additional aid, and Turkish officials have taken the position that the US is committed to extend Turkey a $300 million loan. The US has made no such commitment. In this situation we must expect continued difficulty in persuading the Turkish Government to take the necessary actions. In view of Turkey’s special position as a staunch ally which has consistently withstood Soviet threats, the US must consider carefully the effect of pressures and actions that would offend Turkish pride and adversely affect this basic US-Turkish relationship.

Objectives

13. a. Continuance of Turkey’s independence, territorial integrity, identification with the free world, and will and ability to resist Communist invasion or subversion.

b. Turkish armed forces capable of repelling attack by a Soviet satellite or of providing maximum practical resistance to direct Soviet attack as part of a concerted allied defense.

c. Access by the United States and its allies to Turkish resources and military facilities necessary for the preservation and further strengthening of the free world.

d. Continued Turkish cooperation in NATO and in strengthening free world regional security arrangements in the Balkans and [Page 626]furthering the development of such arrangements in the Middle and Near East.

e. Improved relations between Turkey and the Arab States.

f. Achievement of a stable Turkish economy which, with maximum Turkish efforts, can support an increasingly greater share of its defense expenditures, while maintaining investment outlays at realistic levels.

Courses of Action

14. Encourage such continued development of democratic ideas and institutions in Turkey as would help to insure Turkey’s identification of interest with the western European and other free nations of the world.

15. Cooperate with Turkey as a full and equal member of the western European alliance of free peoples.

16. Encourage Turkey to participate in appropriate regional security agreements, so as to bring selected neighboring states into regional defense pacts aimed at resisting communist penetration of the area. Such agreements should provide for (a) integrated Southeastern European defense, (b) extension of security planning to include not only Pakistan, but also other selected states to the south and east of Turkey whose participation would be important to the defense of the Middle East and South Asia.

17. Continue a program of substantial military aid to Turkey which, when coupled with maximum Turkish effort, will serve the following military objectives:

a.
To implement existing military facilities agreements and assure the availability of Turkish facilities to the US and its allies in case of hostilities.
b.
In accordance with NATO-approved goals as accepted by the US, to achieve and maintain Turkish forces in a state of combat readiness, in order to be able to repel an attack by a Soviet satellite or to provide maximum practical resistance to direct Soviet attack as part of a concerted allied defense.

18. Reassess, in connection with the semi-annual reviews of military assistance programs called for by NSC 5434/1:

a.
Financial and force level implications for Turkey arising from its growing network of security arrangements.
b.
The resulting effect on US support for Turkey.

19. Expedite, in so far as practicable, deliveries under the FY 1950–1954 military assistance program in accordance with the US commitment to Turkey.

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20. With respect to the commitment made by the US to Turkey for FY 1955:15

a.
Determine by April 1, 1955, as part of the review of military assistance programs called for by NSC 5434/1, the nature of such commitment and action with respect thereto in the common interests of both countries, taking into consideration:
(1)
The amount of mutual security funds and equipment that can be made available without seriously affecting other country programs.
(2)
The extent of the ability of the Turkish armed forces to absorb the increased military assistance.
(3)
The necessity for not seriously harming the Turkish economy.
b.
Further action on such four-year program should be subject to a reassessment based on the combined US–UK–Turkey military staff talks and on the USRO (Holcombe) study now in preparation. 16

21. As an exception pursuant to NSC 5501, para. 55–b, be prepared to purchase from Turkey chrome for long-term strategic stockpile as part of a program to assist Turkey to meet its minimum essential civilian and military requirements.

22. a. In dealing with the impending economic crisis, rely primarily upon Turkey’s taking the necessary fiscal and financial measures, and in particular to limit the rate of its economic development to that consistent with a viable economy.

b. Pending the completion of the studies now underway, continue to provide economic and technical assistance at approximately existing levels, but do not agree under present circumstances to extend a long-term loan to Turkey.

c. Upon determination of the extent of US military assistance pursuant to para. 20 above and upon adoption by Turkey of the necessary fiscal and financial measures (subpara, a above), provide economic assistance based on the amount required to permit Turkey to fulfill its military program as approved by the US, while still allowing Turkey to carry out a reasonable economic development program.

23. Continue to encourage Turkey to improve the climate for investment in Turkey of both foreign and domestic private capital.

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24. Extend appropriate encouragement to Turkey in its efforts to exert such influence in the Arab world as might eventually have a stabilizing influence on the Arab States.

[Here follow Annex A, a copy of the Aide-Mémoire of June 4, 1954; a Financial Appendix; and a Staff Study comprising two parts: Part I, “The Strategic Importance of Turkey,” and Part II, “Economic Problems and Prospects.”]

  1. Source: Department of State, S/SNSC Files: Lot 63 D 351, NSC 5510 Series. Top Secret.
  2. See supra .
  3. See footnote 10, supra .
  4. Neither printed, but see footnote 2, supra .
  5. Printed from a copy that bears this typed signature.
  6. The Treaty of Mutual Assistance was concluded on October 19, 1939, at Ankara and ratified on November 16, 1939. For text of the treaty, see Cmd. 6165.
  7. On February 28, 1953, the Foreign Ministers of Greece, Turkey, and Yugoslavia signed the Treaty of Friendship and Collaboration in Ankara. For text of the treaty, see Documents (R.I.I.A.) for 1953, p. 271.
  8. On August 9, 1954, at a meeting of the Ankara Pact Foreign Ministers in Bled, Yugoslavia, Greece, Turkey, and Yugoslavia signed the Treaty of Military Alliance known also as the Treaty of Bled. For text, see ibid., 1954, p. 197.
  9. This agreement, known as the Turco-Pakistani Agreement for Friendly Cooperation, was signed in Karachi. For text, see ibid., p. 185.
  10. In October 1951, the United States, France, Britain, and Turkey proposed that Egypt participate in a Middle East Defense Organization plan (MEDO).
  11. For text of the Turco-Iraqi communiqué, see Documents (R.I.I.A.) for 1955, p.286.
  12. Attached as an Annex. [Footnote in the source text. The annex is not printed.]
  13. These figures represent Turkish lira expenditures converted into dollars at the official rate of 2.8 to $1. The current free market rate is about 6.8 to $1. [Footnote in the source text.]
  14. These figures represent Turkish lira expenditures converted into dollars at the official rate of 2.8 to $1. The current free market rate is about 6.8 to $1. [Footnote in the source text.]
  15. New crises could be expected to develop even with increased aid unless the Turkish Government applied more restraint than it has been willing to apply up to this time in the field of credit and investment. [Footnote in the source text.]
  16. See paragraph 8 above and the aide-mémoire of June 4, 1954, attached as an Annex. [Footnote in the source text.]
  17. Reference is to a report prepared by a team headed by John L. Holcombe of the Department of Defense and including European representatives of US agencies, dealing with Turkish defense requirements and capabilities. Dated May 22, the report has not been found.