891.24/10–3047: Telegram
The Ambassador in Iran (Allen) to the Secretary of State
most immediate
1056. Qavam’s request conveyed to me through Deputy Izaz Nikpey since Qavam is confined to bed, was supported by statement that Iran having categorically refused Soviet oil request had now definitely aligned itself with democratic powers against totalitarian bloc and had placed itself in same category as Greece and Turkey. He pointed out that Iran was conspicuously open to Soviet aggression and that there was, therefore, no longer any reason for US to hesitate to aid in strengthening Iran’s defenses or for Iran to hesitate to receive our aid. In fact he saw every reason in our own and Iran’s mutual interest for our doing so. He emphasized urgency of matter and stressed determination of Iran to resist any Soviet aggression with all energy it could.
[Page 975]I pointed out limitations under present US legislation, which might make it difficult for us to accord more favorable terms than those already accorded. I agreed, however, to report request to Department and ask for urgent reply.
While I am fully aware of many complications involved in this matter, I strongly recommend that we take this occasion, following Iran’s clear action in resisting Soviet pressure on oil to show that we support nations which take resolute action to defend their own independence. Iran has now definitely aligned itself on side of free nations. Our failure to make any response would be interpreted as leaving Iran to suffer consequences alone and would discourage not only Iran but others similarly situated. I consider it highly important for us to do something quickly.1
Principal difficulty Qavam faces in obtaining Majlis’ approval for arms credit is our requirements that repayments be made in dollars especially when so much more favorable terms have been accorded Turkey and when Iranians feel that Iran and Turkey are now in analogous situations with Iran even more likely than Turkey (in their opinion) to be attacked.
I do not recommend that Department seek special legislation to accord Iran $25 millions worth of military supplies free (although Congressman Merrow said when here several days ago that he would be inclined to take initiative himself in Congress to request $50 million gift to Iran for this purpose). I consider it preferable for Iran to show its clear desire for our help through a request for loan ratified by Majlis. At same time I urge that I be authorized to inform Iran Government that we will not require repayment in dollars. I hope we can do so under our present legislation. There are good grounds for Majlis deputies to question wisdom of incurring large obligation for arms purchases repayable in dollars since such payment would diminish civilian goods Iran can purchase from US for industry, public welfare, et cetera. I suggest that we assure Iran that Iranian currency will be accepted in repayment of credit and that currency will be used by US for purposes such as that of the Fulbright Act, acquisition of property, strategic materials, et cetera.
Earliest feasible reply desirable, for greatest effectiveness generous terms than those contained in agreement signed in Washington June [Page 976] 29 [20] regarding military credit. He would like for Iran to be given $25 million worth of supplies outright, in terms similar to those accorded Turkey. If this is not feasible, he urges that we at least allow them to repay in local currency.
- In a letter of October 8 to Mr. Henderson, Ambassador Allen stated, in part: “Perhaps I am too close to the scene here to judge the over-all situation properly, but it seems to me, and to all the other responsible American officials here, that Persia, even more than Turkey, should be the keystone in any effort to construct a barrier against a Soviet aggression in the Middle East.” (891.001 Pahlavi/10–847)↩