Memorandum of Conversation with Secretary of State Dean Acheson, Ambassador of Turkey Feridun Erkin, and William O. Baxter, with Attachment

S/S DEPARTMENT OF STATE Memorandum of Conversation 282 SECURITY INFORMATION DATE: September 22, 1952 SUBJECT: Turkish Request for MSA Aid to Meet EPU Deficits. PARTICIPANTS: Mr. Feridun C. Erkin, Turkish Ambassador. The Secretary Mr. William O. Baxter, Deputy Director, GTI. COPIES TO: s/s Ankara - BY STAMP S/MSA NEA u. s. GOVERNMENT PRINTING OFFIOE 16-61190-1 Ambassador Erkin called on me today at his request to present his Government's views on the serious problem facing Turkey as a result of large recent deficits in its EPU balance of payments. The Ambassador said he wished to refer briefly to the unprecedented improvement in various fields of economic endeavor in Turkey. He mentioned the rapid expansion of Turkish agriculture as evidenced by a large exportable surplus of wheat now being sold at vorld prices; the stability of price levels; industrial development projects; and a balanced budget. Despite these encouraging aspects, Turkey is faced at the moment with a serious but temporary dollar gap in its EPU balance of payments. As Turkey's exports are preponderantly agricultural, the summer and fall months are always a slack season in the Turkish economic cycle, and the present temporary imbalance is one which may be expected to persist until this year's crops get into export trade. Ambassador Erkin explained that, though he had tried to handle this matter without troubling me, his Government viewed its position with such concern that it wished to have the matter brought to my personal attention. In summarizing the background, he said that Turkey had requested MSA to authorize the use of Special Resource funds to meet current EPU deficits. In reply MSA suggested that EPU might help, but EPU recommended that Turkey turh to MSA. The Ambassador thought there was some mutual resentment between MSA and EPU which had the net effect of preventing any action to help Turkey. DECLASSIFIED As remedial O. 11652, Sec. 3(E) and 5(D) or (E) Dept. of State letter, 10-2676 Aug 2 1073 SECURITY INFORMATION Bz NLT. He NARS Date 11-2476