891.24/193
Memorandum of Conversation, by Mr. John D. Jernegan of the Division of Near Eastern Affairs
| Participants: | Mr. Hayter, British Embassy; |
| Mr. Bewley, British Treasury; | |
| Mr. Murray; | |
| Mr. Alling;39 | |
| Mr. Jernegan. |
Mr. Bewley and Mr. Hayter called to present the British reply to the proposition made to them by Mr. Berle on April 20, 1942, whereby the Department suggested that the British purchase Iranian currency with dollars rather than pounds sterling, on the understanding that the United States would endeavor to find means of insuring the maintenance of adequate dollar balances by the British Government.
Mr. Bewley said that London entirely agreed with our view that the application of economic pressure on the Iranian Government in connection with the dispute should be avoided if possible. The British Government, therefore, was disposed to give favorable consideration to our proposal. However, for reasons of prestige, London felt that it would be preferable if the actual purchase of rials could be made by the United States rather than by the British. That is, London proposed that we should obtain the rials and turn them over for British use in Iran. In theory, at least, the British would repay us for these rials by a transfer to the United States in some form or other of the equivalent in dollars.
Mr. Bewley and Mr. Hayter did not attempt to set forth the exact procedure which might be followed in carrying out this operation, and it was agreed by all present at the meeting that this would be a matter for consideration by the Treasury.
Mr. Bewley and Mr. Hayter were informed that the British proposal would be referred immediately to the appropriate officers of the Department and to the Treasury and that we would let them know our views at the earliest possible moment, it being understood that the question is urgent in view of the fact that British supplies of Iranian currency will probably be exhausted within some ten days.
[Page 307]With respect to the question of obtaining certain surplus Iranian military supplies, Mr. Bewley said that the British Government gladly fell in with the American offer to purchase this material with dollars and transfer it to the British forces under Lend-Lease procedure. He was told that we would take this up immediately with the proper officers of the Department and the Lend-Lease Administration. Mr. Murray pointed out, however, that it would not be desirable from the point of view of either Great Britain or the United States to purchase Iranian transport equipment such as trucks in so great an amount as to weaken seriously the country’s transportation facilities. Mr. Hayter and Mr. Bewley agreed and suggested that this could be borne in mind by our own representatives on the ground who would be charged with making the purchases.
- Paul H. Alling, Chief of the Division of Near Eastern Affairs.↩