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The Role of the Tobacco Trade in Turkish-American Relations, 1923-29

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The Role of the Tobacco Trade in Turkish-American Relations, 1923-29 University of Richmond UR Scholarship Repository Master's Theses Student Research 12-1988 The oler of the tobacco trade in Turkish-American relations, 1923-29. Robert Carey Goodman Follow this and additional works at: http://scholarship.richmond.edu/masters-theses Recommended Citation Goodman, Robert Carey, "The or le of the tobacco trade in Turkish-American relations, 1923-29." (1988). Master's Theses. Paper 540. This Thesis is brought to you for free and open access by the Student Research at UR Scholarship Repository. It has been accepted for inclusion in Master's Theses by an authorized administrator of UR Scholarship Repository. For more information, please contact [email protected]. The Role of the Tobacco Trade in Turkish-American Relations, 1923-29 by Robert Carey Goodman III Candidate for the Master of Arts in History University of Richmond, 1987 Thesis Director: John D. Treadway This study of the tobacco trade between Turkey and the United States provides new perspectives on two major themes in Turkish-American relations between 1923 and 1929: the effect of Turkish nationalism on American interests in Ataturk's Turkey, and the effort to restore Turkish- American diplomatic ties broken during World War I. The marked rise in American cigarette consumption after World War I made the tobacco trade a crucial link between Turkey and America because it required the importation of aromatic tobacco. During the Turkish Republic's first decades, the value of American tobacco imports from Turkey exceeded the value of all American exports to that country. The tobacco trade survived Turkish nationalism and unsatisfactory diplomatic relations because of the financial benefits it brought to both states. This analysis of the events affecting the Turkish-American tobacco trade between 1923 and 1929 is an inquiry into the interplay of commerce and diplomacy. The study reveals the neglected importance of economic factors in Turkish-American relations. THE ROLE OF THE TOBACCO TRADE IN TURKISH-AMERICAN RELATIONS, 1923-29 By Robert Carey Goodman III Approved Associate c. Bogle John L. Gordon THE ROLE OF THE TOBACCO TRADE IN TURKISH-AMERICAN RELATIONS, 1923-29 By ROBERT CAREY GOODMAN III B.A., Davidson College, 1980 A Thesis Submitted to the Graduate Faculty of the University of Richmond in Candidacy for the degree of MASTER OF ARTS in History December, 1987 Richmond, Virginia ·Preface This study examines the role of the tobacco trade in Turkish-American relations during the six years after the Turkish Republic's establishment in 1923. The significance of the years 1923-29 lies in the rapprochement achieved between the Turkey and the United States despite the revolutionary changes in Turkey; diplomatic relations were restored in 1927 and the first treaty between the two states--a commercial treaty--was signed in October 1929. A study of the tobacco trade illuminates the interplay of commerce and diplomacy in Turkish-American relations for two reasons. First, the effect of Kemal Ataturk's reforms on America's chief economic interest in Turkey was of considerable diplomatic import. Second, a study of America's foreign commerce in this period is necessarily a study of American diplomacy, due to the controversy surrounding America's role in the international community. The basis of the Turkish-American tobacco trade was American importation of aromatic tobacco. Aromatic tobacco is a relative of the plant native to the Americas, and its rich flavor makes it ideal for blending with other tobaccos in cigarettes. At one time, the modifier "Turkish" generi­ cally described aromatic tobacco. This designation derived ii from the leaf's place of cultivation: the formerly Ottoman Turkish lands of Greece, Macedonia, Bulgaria and modern Turkey. In this study, "Turkish tobacco" denotes the tobacco produced in Turkey, while "aromatic" refers to a type of tobacco. The growing popularity of cigarettes made from blends including aromatic leaf markedly increased American importation of aromatic tobacco in the twentieth century. As a result of the spectacular rise in cigarette consump­ tion, especially after World War I, aromatic tobacco came to comprise more than half of all American imports from Turkey during the interwar period; the value of Turkish tobacco exports to the United states exceeded the value of all American exports to Turkey. To purchase Turkish tobacco, American companies developed extensive organi­ zations in Turkey, points of direct contact between Turks and Americans. Purchasing aromatic tobacco, however, was not the only important aspect of this trade; Americans also directed the preparation of this tobacco in Turkey. Aromatic tobacco needed to be "manipulated" before use, a process that included sorting, cleaning, grading, and baling. Manip­ ulation required considerable manual labor and companies employed thousands of workers, especially women, to prepare their tobacco. To reduce costs, companies usually iii preferred to manipulate the tobacco in its country of origin; Turks preferred to manipulate this tobacco as well, because of the many jobs the industry created. Thus, manipulation represented a separate, but related, American interest in the Turkish-American tobacco trade. A third aspect of the trade lay in its potential to attract American capital to Turkey. A monopoly designated by the Turkish government regulated the tobacco trade in Turkey. For the fifty years prior to the Turkish Republic's creation, the Turks had granted this monopoly as a concession to foreign investors. Not only had the exploitation of this monopoly proven profitable to the concessionaire--one attraction to American investors--but the possibility of controlling one of the major sources of a valuable raw material through the acquisition of the monopoly concession also provided incentive for American capital investment in Turkey. Thus, the three aspects of the tobacco trade were of great importance both to Turks and to Americans, and conse­ quently, to the Turkish-American relationship. Yet the American commercial presence in Turkey was both wanted and not wanted. On the one hand, the high economic stakes ensured that the new regime in Turkey would want to exploit fully the tobacco trade; the American presence in Turkey helped make this possible. On the other hand, the iv nationalistic philosophy of Ataturk's government supported the anti-foreign sentiments in Turkey that posed potential threats to the tobacco companies. The tobacco trade, therefore, was a subject of diplomatic as well as economic concern, as the United States government, in its efforts to protect the American commercial interests, had to cope with this nationalist challenge. Though the tobacco trade was statistically quite significant, its role in the broader Turkish-American relationship has received scant attention in the historical literature--a fact that initially piqued my curiousity and prompted this study. My objectives are threefold: to examine the effects of revolutionary changes within Turkey on the Turkish-American tobacco trade; to determine how trade affected--and was affected by--diplomatic relations between the two states; and thus, to provide a more thorough evaluation of the tobacco trade's economic and political significance in Turkish-American relations. v Acknowledgements I wish to thank the staffs of Boatwright Memorial Library and the Academic Computing services at the University of Richmond for their courteous and efficient service. I owe a special debt to the Dean of the Graduate School at the University of Richmond, John L. Gordon, for financial assistance that enabled me to gather materials for this study. While I was a student at Richmond, Professor Emory c. Bogle sparked my interest in things Turkish, and his comments gave this study shape and direction. I greatly appreciate the time that both of these two gentlemen gave as readers of this thesis. Several men in the tobacco industry were kind enough to discuss with me the Turkish tobacco trade, including: Ed Leight, a long-time tobacco buyer in Turkey for R. J. Reynolds Tobacco Company; w. K. Greer, the director of oriental leaf purchasing for R. J. Reynolds; Irving Finold, a veteran of Eastern European tobacco markets; and Richard English, the director of international leaf purchasing for Philip Morris USA. The insights I gained from these gentlemen augmented the depth and character of this study. I would like to thank Cameron Munter for his instructive criticism of my efforts. My family has vi provided unfailing support for my academic efforts, and I cannot thank them enough.· My sincere gratitude is due to Professor John D. Treadway, who introduced me to the pleasures of archival research, taught me much about the art of writing, and has become a good friend. Most of all, though, I would like to thank my wife, Helen, for her intelligent assistance, endless proofreading, and loving patience throughout this long and tedious process. vii TABLE OF CONTENTS Preface ii Acknowledgements vi List of Tables ix A Note on Names x Chapter I Historical Background 1 II The Crop and the Market 29 III The Lausanne Conference, 1922-23 48 IV Lausanne: The Immediate Aftermath 65 v More Changes, New Conflicts, 1924-26 94 VI New Beginnings, 1927-29 129 Conclusion 157 Appendix 160 Bibliography 165 viii List of Tables 1 Tobacco Production in Turkey 160 2 Tobacco Exports from Turkey 160 to the United States (Turkish Statistics) 3 Total Exports from Turkey 161 to the United states 4 Tobacco Imports into the 162 United States 5 Profits of the Turkish 163 Tobacco Monopoly 6 Tobacco Imports from 163 Specified Consular Districts 7 Tobacco Imports from Trieste 164 ix A Note on Names To avoid confusion on names of places, I have consistently used the modern names of Turkish cities: Izmir for Smyrna, Istanbul for Constantinople, Bursa for Brusa, et cetera, except where titles of source material used one of the older forms. The American Departments of State and Commerce began using the modern names for these places only in 1930; therefore, the old names are used in numerous notes in this study.
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