Office of the Historian

782.5 MSP/11–2852

No. 470
The Embassy and Mutual Security Agency Mission in Turkey to the Turkish Ministry of Foreign Affairs1

confidential
Ankara, November 28, 1952.

Aide-Mémoire

The Embassy of the United States of America and the Special Mission to Turkey for Economic Cooperation have received a joint communication from the Department of State and the Mutual Security Agency on the subject of the level of defense support assistance to be rendered by the United States Government to the Turkish Government.

While the decision upon a final aid figure for the fiscal year ending June 30, 1953 must understandably await completion of the North Atlantic Treaty Organization Annual Review, the Embassy is now in a position to give firm assurances to the Ministry of Foreign Affairs that such aid will not be less than forty-five million dollars. The use of this amount and the division between direct dollar aid and special resources through the European Payments Union are matters to be determined by the appropriate representatives of the two governments. Among the factors to be taken into account in this connection are the composition of the import program to be financed with such aid, and the availability of commodities, equipment and services which might be required.

Such special resources as may be made available will not be contingent upon a deficit position of Turkey in the EPU, but rather upon the procurement of mutually agreed imports required for high priority military and economic development programs, including the procurement of handling and transportation equipment to increase export capacity. Specific releases of special resources will be made to the Turkish Government EPU account periodically upon receipt of information by the Special Economic Mission that foreign exchange has been made available for the agreed upon imports. Appropriate representatives of the United States Government are, however, prepared immediately to assist in the development of a program for the entire amount embracing both dollar and special resources procurement.

It is recognized that the measures necessary for the maintenance of financial stability and trade balance are of course the responsibility [Page 909] of the Turkish Government, and that steps thus far taken have been effective in bringing about encouraging results. In this connection, the Embassy wishes to outline its understanding of several aspects of present policies of the Turkish Government which have a bearing upon the effective utilization of aid to be rendered under the program:

1)
That the Turkish Government is fully aware of the necessity of maintaining a manageable relationship between imports and foreign exchange availabilities;
2)
That among the actions taken to achieve this objective there are being and will be maintained over such a period of time as may be necessary, import credit restrictions, time limitations on the use of customs warehouse space, and registration of imports to retain qualitative and quantitative controls;
3)
That every effort is being and will be made to sell and export surplus commodities and that as part of this effort prices will be adjusted as necessary to accomplish this end;
4)
That the Turkish Government is fully aware of the current transportation, handling and shipping problems involved in the movement of export commodities and is taking specific steps to assure adequate facilities for this purpose;
5)
That the Turkish Government has indicated its willingness and readiness to take any steps which might be necessary to cope with inflationary pressures.

It is understood that the Ministry of National Defense has formulated a defense budget of 716 million lira for the Turkish fiscal year beginning March 1, 1953. The Joint Military Mission for Aid to Turkey considers that a sum approximating this amount is necessary if there is to be no diminution in the Turkish military effort. In planning the utilization of counterpart funds related to the implementation of the above-mentioned commitment for defense support during the current fiscal year, the United States Government would be willing to render such assistance as it can in meeting this expanded program. In this connection, it is suggested that as much as 100 million lira in counterpart funds from the current aid program be earmarked for this purpose, which would, on the basis of the above total defense budget figure, leave a minimum of 616 million lira to be financed from Turkish Government resources or from any additional means by which it might subsequently be determined that the United States can help in providing budget relief for this purpose.

  1. Handed to the Turkish Ministry of Foreign Affairs on Nov. 28. Copy transmitted to the Department of State in despatch 321 from Ankara, Nov. 28.↩