Foreign Relations of the United States, 1947, The Near East and Africa, Volume V

867.20/10–247: Telegram

The Ambassador to Turkey (Wilson) to the Secretary of State

top secret

Bern, October 2, 1947—7 p. m.

973. From Wilson. Ankara’s 751, September 29 to Department. I submit following for Department’s consideration in formulating reply to Turk Foreign Minister’s request for financial assistance.

1. We are disturbed over this information that notwithstanding decision to release one class thereby reducing army expenditure by 150 million liras Turk Government believes necessary request $100 million financial assistance to cover contemplated budget deficit caused mainly by national defense expenditures. When Foreign Minister Hasan Saka raised with us question of size Turk armed forces (mytel August 17) it appeared that serious budget problem would arise only if decision were made to maintain armed forces at present strength thereby requiring 150 million liras additional for national defense. Now that Turk Government has decided reduce armed forces by about one-third it is difficult to understand why 140 to 150 million liras additional will nevertheless be required for national defense. We note Foreign Minister told Bursley that Ministry National Defense asking “enormous sum”. We would be interested in knowing details such request if Turk Government should think desirable furnish them to us. It has been our opinion based on information heretofore available to us that if Turk Government decided to save 150 million liras by releasing one class, this saving together with American military aid supplies in amount of $100 million should enable Turkish Govt reduce its national defense budget in 1948.

2. As Turkish Govt knows US Govt maintains deep and most friendly interest in Turkey’s problems and wishes to be of all possible and appropriate assistance to Turkey. Turkish Govt, however as member of Paris Committee of European Economic Cooperation will be aware of enormous financial demands being made on US to finance Europe’s economic reconstruction. Paris committee’s report¹ assumes high degree of self-help on part participating countries and US is confident that Turkey will wish to do its full part and will in particular, in order to maintain its own internal financial stability scrutinize carefully its budget appropriations in order to insure that only most necessary expenditures are approved. We are confident that Turkish Govt on reconsideration and with knowledge of extent demands on US financial resources to assist war-ravaged European countries to economic reconstruction will not expect US to give financial assistance to Turkey to cover budget deficit. US would, however, be glad to assist Turkey in studying Turkey’s budget problems and making suggestions, and US Govt would therefore be prepared send expert mission to Turkey for this purpose if Turkish Govt so desires (I hope we will be in position to offer this).

3. It is noted that part of $100 million requested might go for non-military purposes. In this connection US Government advised Turk Government over year ago that United States Government would be unable to extend credits for economic development to Turkey beyond the $25 million credit opened by Export-Import Bank, and that Turkey should present its request for economic credits to new International Bank. We understood some months ago that Turkish Govt had decided act on this advice and was preparing its case for presentation to International Bank. We should appreciate advice re status this. (For Dept’s information I have urged Prime Minister and Foreign Minister frequently in past weeks to expedite action before International Bank in order take advantage favorable atmosphere re Turkey).

4. We continue to believe that with United States aid program for Turkey which will relieve Turk budget of necessity paying for needed military equipment, and with assistance from International Bank for sound economic developments projects, Turkey should be able to maintain security of country without adding to economic burden, while at same time making healthy progress in development of country’s natural resources.

As Turk budget is now actively under preparation and must be submitted to Assembly before latter convenes November first I believe we should lose no time in transmitting reply to Turk Government and dispelling any illusion if such exists that United States may be expected to finance budget deficit. If Turk budget situation has suddenly deteriorated in unexpected and alarming manner (which I find hard to believe), then Turks should develop facts in detail in order to convince us of need for assistance.²

Sent Department 973; repeated Ankara as 5.

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Wilson

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1. For the General Report of the Committee of European Economic Cooperation, released at Paris on September 21, 1947, see Department of State Publication 2930.
2. In telegram 574, October 8, 6 p. m., to Ankara, the Department expressed its full agreement with the views of Ambassador Wilson as set forth in telegram 973, except for the sending of a mission to Ankara at this time suggested in paragraph 2 of his message. The Department’s disagreement was based on the practical difficulties of assembling such a mission. Otherwise the Embassy in Ankara was authorized to communicate the substance of the Ambassador’s message to the Turkish Government (867.20/9–2947).