Foreign Relations of the United States: Diplomatic Papers, 1942, The Near East and Africa, Volume IV

891.5151/232

Memorandum of Conversation, by the Assistant Chief of the Financial Division (Luthringer)

[Washington,] April 28, 1942.

Participants:	Mr. Harry White, Mr. Hicks, Treasury Department;
	Mr. Livesey, Mr. Luthringer, Financial Division.

Mr. Livesey and Mr. Luthringer called on Mr. Harry White by appointment and presented him with a copy of the attached memorandum of conversation, dated April 27, 1942,⁴⁰ from which the last paragraph had been omitted. Mr. White said that he saw no objection to providing the British with rials which the Treasury had purchased if they were paid for by the British in dollars under arrangements which would prevent the Treasury from incurring any exchange loss. He was emphatically against any arrangement whereby we simply “turned over” rials to the British against some general British commitment to repay in the future or against some very general arrangement such as Lend-Lease in which this particular item would simply figure among the general British obligations to the United States. He said further that he thought that it would be out of keeping with the general nature and tenor of the arrangements which we were currently working out with the British for maintaining an adequate supply of dollar exchange to specifically pair their expenditures to us for rials against any specific source of increase in British dollar assets. Mr. White said that Treasury had recently worked out a specific arrangement whereby British dollar holdings had been increased by $70,000,000. He said that in effecting this arrangement Treasury very definitely had had in mind possible drains on British dollar assets for such purposes as purchase of Iranian rials.

Mr. Livesey and Mr. Luthringer expressed concurrence with Mr. White’s view and it was agreed that the best procedure at this point would be for the Department to inform Bewley and Hayter that we had discussed the matter further with the Treasury, that the Treasury through the stabilization fund or otherwise would, we believe, find it possible to purchase rials for resale to the British for dollars and that if this was agreeable to the British we suggest that they discuss the technical details with Mr. Harry White of the Treasury Department.⁴¹

40. Supra.
41. Notation by Mr. Luthringer April 29, 1942: “I telephoned Mr. Haider [Hayter] of the British Embassy and suggested that he might now take the matter up with Mr. Harry White.”