321. Memorandum From the Deputy Under Secretary of State for Political Affairs (Murphy) to the Chairman of the Joint Chiefs of Staff (Radford)1

SUBJECT

  • Economic Situation in Turkey

As you know, we have for some time been concerned over the deteriorating economic situation in Turkey which, if allowed to continue, will, we believe, jeopardize the economic stability which is so necessary to the attainment of investment and defense goals in Turkey.

In an effort, therefore, to assist the Turkish Government in improving its economic and financial position, this Government readily acceded to a proposal by Turkish Deputy Prime Minister Zorlu that a Turkish-United States Economic Consultative Group be constituted in Turkey to survey the situation as a basis for determination of future policy. Simultaneously an Interagency Committee on Turkish Economic Problems, composed of representatives from the Departments of Defense, Treasury, and State and FOA, was established in Washington to develop policy guidance for the US representatives on the Ankara committee.2 In accordance with instructions from Washington, Turkish officials were informed that it was anticipated that the US-Turkish consultations would proceed [Page 629]within the context of the availability of present resources and that no increase in the level of US assistance was contemplated (Tab A). 3

Turkish Prime Minister Menderes reacted violently when he was informed of this US limitation on the discussions, stating that, given this premise, they could result only in a suggestion to retrench on investments and/or defense, neither of which he would consider. The Prime Minister subsequently agreed, however, that the proposed consultations were necessary and, despite continued bitterness over the “imperious approach”, the Turks have decided to begin the formal discussions (Tab B).4

Mr. Hoover has requested that I send you the foregoing information as well as a copy of a memorandum of March 2, 1955 (Tab C),5 transmitting to him a report of the work of the Washington Interagency Committee (Tab D).

Robert Murphy
6
  1. Source: Department of State, Central Files, 882.00/3–155. Secret. Drafted by Snyder on March 11. An identical memorandum was sent to Robert B. Anderson, Secretary of Defense. None of the tabs was found attached to the source text and none is printed.
  2. In accordance with a decision made by Hoover on January 12, an Interagency Committee on Turkish Economic Problems was established in Washington to formulate policy guidance for the Joint Turkish-US Consultative Group, which recently had been established in Ankara.
  3. Telegram 959 to Ankara, February 16. (Department of State, Central Files, 882.00/2–755)
  4. Telegram 986 from Ankara, March 1, reported Menderes’ reaction to the US limitation. (Ibid., 882.00/3–155)
  5. Tab C was a memorandum from Waugh to Hoover, March 2. (Ibid.)
  6. Printed from a copy that bears this typed signature.