891.51/10–2246: Telegram
The Ambassador in Iran (Allen) to the Secretary of State
most immediate
[Received October 23—10:17 a.m.]
1400. Ebtehaj called again today to press for reply to enquiry regarding credits, reported in Embtel 1262, September 21, 2 p.m.7
It would be most helpful at this juncture, when Iranian Govt has made gesture of independence from foreign domination by eliminating members of Cabinet who were under foreign control, if I could be authorized to offer some encouragement on subject of credits. I believe present is psychological moment for US to show that its assurances of economic assistance, given over signature of late President Roosevelt, are genuine. Frequent inquiries I received on this subject from Shah, Prime Minister and Ebtehaj are becoming embarrassing.
Ebtehaj said today that Iranian Govt contemplates utilizing first its own available resources in carrying out economic development plans for country, and that these resources may be sufficient to provide half the funds needed for overall project. He thought it might be up to 2 years before foreign credits will actually be needed. However, the Iranian Govt is unwilling to embark on the considerable plan contemplated until it submits detailed project to Eximbank and World Bank and obtains assurances that the remaining credits necessary will be forthcoming. Ebtehaj has in mind that perhaps $250,000,000 will be needed in foreign credits. He hopes that something like 100,000,000 will come from Eximbank and 150,000,000 from International Bank. He realizes that amount suggested from Eximbank is larger than that bank is accustomed to lend but he feels that Iran should be considered in special category in view of political position of Iran and promises of economic assistance. Current negotiations between Iranian Govt and British officials and AIOC are expected to increase materially dollar availabilities to Iranian Govt with which to repay credits. This subject will be covered in following telegram.8
[Page 540]One important means US Govt could help immediately would be to make possible overall economic survey and engineering studies, which Ambassador Ala reports will cost $225,000 plus expenses. This survey is necessary before Iranian Govt can properly document and support its applications for credits to Eximbank and World Bank.9
[In telegram 1456, November 11, 1946, 11 a.m., the Ambassador in Tehran reported that on November 9 the Iranian Council of Ministers had approved financial settlement with the British which provided that sterling accretions between March 2 and October 31, 1946, would be 60% convertible into gold and subsequent accretions would be 100% convertible to gold until July 1947, when sterling would become convertible under Anglo-American financial agreement. The telegram also noted that the British had sold £5,000,000 worth of gold to the Banque Mellie in final settlement of the Anglo-Iranian financial agreement which expired on March 2, 1946. (891.51/11–1146)]
- Not printed; it conveyed an urgent plea from Mr. Ebtehaj for a more encouraging attitude by the United States Government toward economic assistance in Iran (891.51/9–2146).↩
- Telegram 1404, October 24, 1946, not printed.↩
- The Iranian Ambassador, on October 24, notified the International Bank for Reconstruction and Development that his Government had decided to make application for a long-term credit of $250,000,000. A copy of the letter was sent to the Department by the Bank on October 30. (800.515 BWA/10–3046)↩