891.51/519
Memorandum of Conversation, by the Chief of the Division of Near Eastern Affairs (Murray)
The Iranian Chargé d’Affaires10 came to see me at my home yesterday evening to say that he had received an urgent telegram from his Government directing him to approach this Government immediately with a view to ascertaining whether the Iranian Government would be able to obtain a loan of fifteen million dollars in this country and, if so, what security would be required.
I expressed my surprise at this unusual action of the Iranian Government and inquired of the Chargé how he would explain it. He said he had no information but that he supposed it resulted from the difficult situation now facing Iran as a result of the outbreak of hostilities in Europe. In particular, he referred to the clearing agreement between Germany and Iran which had suddenly become inoperative as a result of the war.
I pointed out to the Chargé that there could of course be no question of a loan by this Government to the Government of Iran in the absence of specific authorization by Congress, which was highly unlikely. Assuming, therefore, that if any loan were obtainable in this country it would necessarily be a private one, I asked him whether the rather substantial oil royalties accruing each year to the Iranian Government from the Anglo-Iranian Oil Company’s operations in South Iran would be available as security for any loan that might be floated in this country. Dr. Daftary stated that he assumed that such was the case. I reminded him, in this connection, that the British Government had raised objection about fifteen years ago to the utilization of the oil royalties as security for a loan which Iran was seeking at that time in connection with the granting of an oil concession to an American company.11 The Chargé replied that, while England might have endeavored to deny Iran the right to use its oil royalties as it saw fit in 1924, during the capitulatory days, it was inconceivable that she would dare to raise objection today in view of the entirely changed situation in Iran due to the far-reaching reforms accomplished by His Majesty since he came to the throne.
I told the Chargé that we would look into the matter and talk with him further within the next few days.
- Ali Akbar Daftary.↩
- See Foreign Relations, 1924, vol. ii, pp. 539 ff.↩