337. Telegram From the Department of State to the Embassy in Turkey1

1468. There are disturbing indications that, despite Randall’s clear statements to Turkish officials of scope of his mission, Turkish Government still has lingering hope that his report and recommendations to US Government may result in some spectacular US gesture. Impression gained that Turks might expect US to produce solution their problems without their pursuing path of gradual but sound economic stabilization. Randall did not and does not intend report or recommend to US Government anything beyond his recommendations to Turkish Government. Although Turkish economic problems are serious ones they are of magnitude which, in his and our opinion, can largely be managed by Turkish Government facing up resolutely to period of belt-tightening and vigorously implementing stabilization measures to which it already publicly committed. In addition would seem wise for Turkish Government immediately act on Randall recommendation to consult IMF on financial and foreign debt problems. Delay in moving forward simultaneously on all stabilization lines can only aggravate already grave situation. This connection Randall, who was convinced of Turkish sincerity and resoluteness, fully expected that immediately following his departure Turkish officials would begin consultations with appropriate US officials as to needs and requirements of next few months. Officials in Washington disappointed at evident reluctance Turkish officials to get down to business.

As misunderstanding seems still to exist, Turkish Government should be immediately disabused of idea that US will come forward with massive aid or loan. US is prepared make available to Turkey full extent FY 1956 assistance in conjunction with successive steps in their own implementation of stabilization measures. US also prepared explore other avenues which might relieve situation, e.g., PL 480, release of counterpart, etc. Further US prepared consider possibility some additional economic assistance from ICA appropriations for FY 1956 but Turkish Government should not be under any illusions amount would be large in terms their previous loan request. FYI Possibility of need to increase current aid by $30 million has been envisaged by ICA for some time. End FYI.

Turkish Government should not lose sight of fact that US has staunchly supported Turkey politically, economically and militarily [Page 675]to significant extent over last decade. Our mutual interests and objectives dictate continuing support for Turkey of kind which will give country more solid economic base on which to continue building its strength and influence in area. This, we believe, can be accomplished only by sincerest cooperation and most earnest efforts on part of both countries to agree on programs that can be supported with resources available to Turkey including US assistance.

You are authorized to use any or all of foregoing information except figures in FYI portion in frank discussions with Prime Minister and other Turkish officials.

Hoover
  1. Source: Department of State, Central Files, 411.8241/3–856. Confidential. Drafted by Baxter.