331. Memorandum of a Conversation, Ankara, September 14, 19551

Meeting in Ankara with Prime Minister Menderes, Ambassador Warren, General Riley, Melih Esenbel, Görk, Zorlu

I. After an exchange of pleasantries, in an appropriate way, there was an opportunity for the Secretary to advise the Prime Minister that the request for a $300 million loan had been definitely refused and that no such loan was either possible or in contemplation. The reason why this was so was explained by pointing out the extreme burdens which the US had assumed; a somewhat unbalanced budget situation with loss of reserves; tax reduction resulting in decreased revenues and from a financial point of view balancing its expenditures with its demands with its income to protect its own economic situation even to the point of the most careful scrutiny of the most minor items, down to every million dollars or less. Mr. Hollister then explained that we were obligated to accomplish 64 countries in varying degrees and that he was under the strictest obligation to consider proper distribution of his funds among the countries so that every minor item required the most careful consideration.

The Secretary then continued to explain that although the $300 million loan was impossible, both now and for the foreseeable future, that we were very proud of our association with Turkey; we regarded them as one of our most important partners in the preservation of the free world, and that we had every intention of supporting them to the limit of our ability, both militarily and economically, in about the area of past years’ performance. However, such support would be undoubtedly declining as time went on and as our necessities and burdens became greater; that we thought it was only fair with a good partner to be perfectly frank with each other so that our partnership might endure on a firm and free basis, each knowing what to expect of the other and not to be deceived into impossible positions. It was further explained that all nations in the world are now facing the most difficult problem of balancing their military expenditures which they could afford with what their economy could support and that this was just as true of the US with [Page 651]its tremendous obligations as it was with Turkey. While we did not feel that our aid must terminate suddenly, nevertheless the time was approaching when all partners would have to be more nearly self-sufficient and balanced in their own economies. He explained that we were willing and anxious to proceed as rapidly as possible with determination of aid and in exact amounts and, to that end, we suggested information which we desired the Turkish Government to give to us to help us formulate our views; that there would be military matters discussed with the military; and economic information requested by the Ambassador, and as soon as the information from these various sources and particularly from them was available to us for study and consideration, we would look forward to meeting with them in Washington with all concerned to get the matter reduced to final figures. But that for the present and for today, all we can do is to reassure them of our intense support in their affairs; of how proud we were to be associated with them; and request that they proceed to help us reach a conclusion so that we both might have a definite basis for making plans for the immediate future. The Prime Minister responded with very complimentary comments of appreciation for past performances and hope for the future. There could be no possible misunderstanding that $300 million was not in the offing and that we were to resume conclusion of our mutual affairs in the area of previous performance.

Mr. Hollister stated that in the distribution of the funds available for the foreign aid program, the public relations was an important matter and that the events of the past few days in Turkey had raised some very serious questions, when a few hours of destruction might bring about loss equivalent to a whole year’s aid program.2 It was obvious that our country must see the whole picture in a new light before reaching any definite conclusions.

The Prime Minister stated that he regretted exceedingly the recent happenings and that it was his belief that the riots were largely the result of Communist activities and that the Government expected to take all necessary measures.

II. Just prior to lunch with the President, 3 in the presence of our Ambassador, Mr. Hollister and General Riley, and the Deputy Secretary General of the Foreign Office, and part of the time the Prime Minister, the President stated pleasantly but bluntly that he was greatly disturbed and his country had been seriously embarrassed by the manner in which their request for the $300 million loan had [Page 652]been handled and refused; that as a past banker, the method of handling the refusal of a loan was of prime importance to him. He referred specifically to the AP release on the subject from Washington and the embarrassment which its publication had caused him and his Government. … The Secretary told the President that we had had a long and fruitful discussion with the Prime Minister, during which we had gone into full details with respect to the $300 million loan and all of the reasons why it was not possible to grant it. He explained that if in the handling of the matter there had been some embarrassment to him or his government, he had our humble apology and our assurance that it would not be repeated, but as to the merits of the case, there was no doubt in our minds that the matter was closed and would not be reopened and we requested the Prime Minister to explain the matter fully to the President and ask that he give him time to do so. As others are waiting for luncheon, there was no time to get into this at the moment. The Prime Minister agreed to do this and you may rest assured he will do this. We then proceeded to lunch and had a very agreeable time. The President was very affable. There were 16 top officials (12 Turks and our party of 4) present. After luncheon the Secretary asked the President for another five minutes of serious discussion. It was immediately granted, and he, Mr. Hollister and an interpreter stepped into another office with the President.

The Secretary again explained to the President his regret that any embarrassment had been caused and he assured him of our great pride in association with him; that our desire to cooperate in every way within our powers, but everything we had said about the reasons why increased aid could not be granted was reinforced and we again requested that he very carefully consider the reasons we had so meticulously given to the Prime Minister, which we asked him again to allow the Prime Minister to explain at length to the President. The meeting ended with relations in a cordial vein.

Additional Information on Conversation with the Acting Prime Minister Zorlu and Ambassador Warren at the President’s Palace today

. . . . . . . . . . . . . .

The Prime Minister said he thought it would be a good idea in any case for the President to receive the Secretary and Mr. Hollister; to take over the luncheon which the Prime Minister had arranged; and to take advantage of the occasion to say to the Secretary anything that was on his mind relating to relationships between the two countries in the fields of finance and economics. The President then replied under the circumstances he would be very pleased to [Page 653]extend an invitation but that he intended not to hold his fire and to say everything that was on his mind. The President’s blunt, and at the same time agreeable, approach to the Secretary on meeting him before the luncheon, was the carrying out of the President’s intentions.

In conversation after lunch the President stated that it was his belief that higher authorities in Washington did not appreciate Turkey’s position, and that they were being misled by reports that did not take into account the broader views of the relations between the two countries and Turkey’s strategic position in the world. The Secretary assured the President that he was misinformed on this subject and absolutely wrong and that President Eisenhower and the highest authorities in Washington, all were fully aware of real conditions and they were not misled, and that the loan was impossible because of definite conditions affecting the US and its obligations. It was well understood by everyone in Washington as the Prime Minister would explain in detail to the President. The Secretary further explained that he and Mr. Hollister would cover the whole subject with President Eisenhower when they saw him within the next few days.

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  1. Source: Department of State, Central Files, 882.10/9–2455. Secret. Humphrey and Hollister were in Turkey to attend the 10th annual meeting of the Boards of Governors of the IBRD and IMF held in Istanbul. According to a note to Hoover of September 24 attached to the source text, Hollister indicated that the memorandum had been dictated on a return flight from Ankara. The language, particularly the use of pronouns, suggests that Humphrey and Hollister may have dictated the memorandum to Riley or another official who then transcribed it.
  2. On September 6 and 7, a series of violent anti-Greek and anti-minority rioting erupted in Istanbul and Izmir. The riots, primarily anti-Greek in character, resulted in widespread damage and destruction to Greek churches, shops, and other establishments.
  3. Celal Bayar.