Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

888.2553/6–154: Telegram

No. 478
The Secretary of State to the Embassy in the United Kingdom¹

secret

Washington, June 17, 1954—6:24 p.m.

6903. Deptel 6477, Embtel 5443.² Burgess and members of State and Treas. met with British Amb, Rickett and Hall-Patch concerning proposed restrictions upon Iranian use sterling proceeds from consortium. US position was that discrimination against dollar imports within 40% convertibility limit was unnecessary and undesirable and could have unfortunate consequences. US also proposed dollar debt service and amortization be met with convertible sterling without necessity UK approval.

With respect first question British Amb said they were motivated by two factors: (1) necessity holding down dollar burden and (2) relations with other oil-producing countries such as Iraq and Kuwait.

US side pointed out special circumstances surrounding Iran and requested British to review necessity requiring undertaking by Iran convert sterling only when necessary to procure goods and services essential to Iranian economy and when such goods and services cannot be obtained elsewhere on equivalent terms.

British promised to raise above matters with London. It was emphasized Secretary Humphrey had taken strong interest in this matter.

Dulles

1. Repeated to Tehran. Drafted and signed by Corbett.
2. See Document 472 and footnote 6 thereto.