867.00/799½
The Ambassador in Turkey (Morgenthau) to the Secretary of State
[Received January 17, 1916.]
My Dear Mr. Lansing: Since I wrote you last (November 18th), I cabled that Enver Pasha, the Minister of War, had asked me to communicate to the President through you that better peace terms could be secured by the Entente Powers if arranged for, before the complete annihilation of Servia and the invasion of Egypt.75 He had a long talk with me about the matter and wanted me to inform the President that this was a most opportune time for him to offer his good offices.
I did not cable at once, as I felt that it was simply his own idea and not backed either by his entire Government or by any of their Allies. Two days later, while I was with the Austrian Ambassador, the latter asked me what I had done about the matter and told me that Enver had reported our conversation to him and given him to understand that I would communicate with the President. The Austrian Ambassador informed me that he knew absolutely nothing officially of the wishes of his Government, but that he individually felt convinced that Austria was not disinclined to entertain negotiations for peace.
[Page 770]After I received your answer that the matter had been submitted to the President, I called on the Minister of War and informed him thereof and asked him whether the suggestion he made had emanated from him alone or who else stood sponsor for it. He replied that it was entirely his idea but he felt convinced that he had expressed the feeling of all the Central Powers. He then informed me that he was about to meet Falkenhayn and others at some convenient place. (I have since ascertained that they met at Ossova, the boundary line of Roumania and Bulgaria). He stated that now that Servia had been almost completely destroyed and was in the hands of the central Powers, they would consider at this conference the details of the invasion of Egypt and what big guns and artillerists and other equipments were needed by the Turks and are to be furnished by Germany and Austria. He told me he would talk to Falkenhayn and get an expression from him what Germany’s views are as to peace negotiations.
I have since had several talks with the new German Ambassador, Graf von Metternich, and he also has talked to me about the possibilities of peace. Among other things he stated that England ought to be ready to talk peace as they have not lost any territory and have established their supremacy of the seas, annexed Cyprus and Egypt, have a foothold at Gallipoli and are in possession of part of Mesopotamia and all the German colonies excepting one in China. From my conversations with him I gathered that Germany is quite willing to talk peace.
To-day Enver Pasha took lunch with me at the Embassy, and we had a long talk about the peace matter. He reported to me what had taken place at Ossova and stated that Falkenhayn did not favor that Germany should state her peace conditions at present, as he feared it would be taken as a sign of weakness, but that Germany would willingly consider any proposition made by England, in other words, they wanted England to state her conditions first.
I told Enver that this was impossible and that the only probable way by which the two sides could make a start in the peace negotiations would be if both of them simultaneously present their proposed terms to the President of the United States and have him then and there inform the other what those terms are. Both parties would have to obligate themselves that their demands would be a bona fide statement of what they expected to accomplish and not an exaggerated one with a view to compromising. He thought well of the idea and agreed to telegraph Falkenhayn about it. He would have preferred to have me telegraph the President and request him to make the suggestion to the German and British Ambassadors in Washington. I declined to do this, as I deemed it unwise to take any steps until Germany had assented to the proposition.
[Page 771]Enver informed me that they had agreed upon all the plans and details of their Egyptian campaign and had also discussed various other matters. He told me that his brother was in command of some troops that were approaching Egypt from the West, and had already taken 100 prisoners. He said Falkenhayn felt sure that by next August they will have completed the defeat of the Allies. They expect to annihilate the Russian army first and then make a determined attack on the West front. He felt quite positive that in a short time they would drive the English out of Mesopotamia. He told me that his forces there were about four times as large as the British.
I have felt that if I could in some shape be instrumental to hasten peace, my conduct would have the approval of the President and yourself. I do not intend to take any definite steps in the matter without telegraphing you. Enver started this matter and I am trying to twist it into something tangible before cabling further to you. It seems to me that both factions would be willing to make peace if they could do so without jeopardizing their standing in their respective countries and without sacrificing their pride. I told Enver that when people wish to submit a matter to an appellate court, it is customary for both factions to simultaneously submit their statements of facts and briefs.
I believe that although the authorities in this country are of the opinion that they are going to succeed, still they realize the necessity of an early peace to prevent conditions from reaching in the immediate future such a desperate state as may cause internal difficulties and lead to revolution, which would displace the men that are now in authority. As I wrote you before, these men are willing to do almost anything to retain their power.
Their financial condition is worse than ever, and they realize the danger of possible bankruptcy. Their revenues which formerly were about twenty-eight million pounds Turkish, will be diminished to about fifteen millions. On their import duties alone, they lose four million pounds, as all their harbors are blockaded and only very few foreign articles were brought in via Dedeagadj during 1915.
Of the forty-five million pounds worth of merchandise that were usually imported into Turkey, twenty-four millions came from countries with whom they are now at war; and that portion of the remaining twenty-one millions which came from the United States, Switzerland, Holland, and other neutral countries, has also been largely reduced.
Their collections for internal taxes have also been considerably curtailed through their destruction of the Armenians in Turkey and the reduction of the income tax owing to the diminished incomes of the population. The large receipts from taxes on sheep, camels, [Page 772] buffaloes, horses, etc., have been greatly affected on account of so many of the animals having been requisitioned for military purposes.
The finances of the country were assisted by the proceeds of their exports which have usually been about twenty-four million Turkish pounds annually. Of this amount, about fifteen millions were sent to countries with which they are now at war; of the rest about one and a half million used to reach America according to Turkish statistics. Owing to the fact that all their ports are closed, there has practically been no exports. As a result all the people employed in raising export articles are in a terrible condition because the little that they have sold was disposed of at one third of its value and below cost of production. As you probably have noticed from our communications, we have been unable to obtain for them permission to export their figs. Within the last few weeks some Austrian and German merchants have purchased some wool and mohair.
Their railroads have been used almost exclusively for military purposes. This has left the crops where they were raised and has caused a large increase in prices of all products in the larger cities. Here in Constantinople, nearly everything is from three to ten times as expensive as in normal times. Petroleum, which used to cost 17½ piasters or 70 cents per tin, is now selling for 140 piasters or $5.60 a tin. Sugar, which used to cost 10 cents an ŏke, is now selling at from 80 cents to one dollar an ŏke, and even then very difficult to secure. Strange to say, even vegetables, which are raised in the immediate neighborhood of Constantinople, have all increased from 100 to 200%. This is due to the fact that none come from the outlying districts and many of the vegetable growers are in the army and their farms are neglected. Next year conditions will be still worse.
The deportation of the Armenians has caused great economic damage. The sections where they have been deported from are in a terrible plight because they had been depending on the Armenians for all skilled work; and the sections where the surviving Armenians have been moved to are in similar predicament because they have had so many additional consumers thrown upon them and their resources have not been increased as these poor people have come there without funds and without clothing and are really a charge upon the communities where they now are.
I doubt if any other country is in as bad an economic condition as Turkey is at present. In Constantinople merchants are simply eating up their capital and very often it is not their own but belongs [Page 773] to their creditors. Nearly all the prosperous foreigners of the belligerent and neutral countries have left Turkey. This has greatly diminished the money in circulation here, as these people were the ones that patronized the stores, restaurants, tailoring establishments etc. Their absence is very noticeable.
Since the last few weeks all the gold has disappeared from circulation. The Government has issued paper money or so-called Treasury Bonds which, having no gold reserve back of them, have caused hoarding of gold, and while two months ago gold was circulating freely, at present everything is paid with paper money.
The Turkish authorities are still continuing their efforts to make everything Turkish. I do not know whether you are aware that they have taken possession of nearly all public utilities for which concessions had been given to citizens of the belligerent countries. I refer to the Water Works, the Docks, the Telephone, the Railroads, Lighthouses. All the foreign employees have been dismissed from the services of these concerns, and many of them have left the country.
Some months ago the authorities compelled everyone throughout the city to remove all signs in any foreign language, so that to-day it is difficult, if not almost impossible, for a foreigner (and many natives) to locate the various shops. This week they ordered the street railway lines to remove from their cars all Roman lettered signs of the names of the places to which they go. The Railroad Company, in order to enable the people who do not read Turkish to distinguish their different cars, has adopted a system of signs of which I enclose you a sketch.76
They have also compelled all Ottoman corporations to keep their books in Turkish. The Director of the Tram Lines and the Electric Light Company, who is a Belgian, said it is utterly impossible for him to conduct his business that way and consulted me about it. I advised him to keep two sets of books, one in Turkish and one in French.
Last week Mr. Rosenthal, representing the largest ammunition factory in Austria, lost the agency, although he was an Austrian, because the officials here insisted that they would transact business only with a Turk, and the agency was given to a friend of one of the high officials. I am writing you these few instances to show you the trend here.
With my very best personal regards [etc.]
- Apparently the reference is to the cable of Nov. 3, 1915, printed in Foreign Relations, 1915, supp., p. 67.↩
- Not printed.↩