891.6363 Standard Oil/16

Memorandum by Mr. A. C. Millspaugh, Office of the Foreign Trade Adviser, Department of State

Memorandum of Conversation with the Persian Minister and the Counselor of the Persian Legation, December 16

The Persian Minister made it clear that he was speaking personally and not for his Government. He stated that he wished to return to Persia soon and that when in Persia he would work for the granting of an oil concession in the Northern Provinces to American interests. He stated, however, that the financial dependence of Persia upon Great Britain gave the British a whip-hand over the Persian Government. He said that if he could tell the Persian Government that they could obtain a loan from the United States he thought that there would be no doubt of the oil concession being granted as well as other valuable concessions. He said that he had already been approached by American bankers with reference to a loan. He now wished some information regarding the probable attitude of the Department if American bankers should come to the Department asking for the Department’s approval. He said that he had in mind purely a private loan and that he did not expect the Department or officials of the Government to initiate or participate in negotiations with private interests.

In reply I said that I was speaking personally and not at all for the Department, that in any event the Department would probably not wish to define its attitude before knowing all of the details, [Page 357] that opinions might differ with reference to what would constitute a favorable answer, that when the question came up for decision something might be asked for with reference to details that the Department could not approve, but that in my opinion if American bankers came to the Department with respect to a private loan to Persia the Department would be pleased and that generally speaking its attitude would be what the Department would consider a favorable one.

The Minister referred to his previous statement that Nicholson, a director of the Anglo-Persian, was going to Persia and asked me if we had informed Caldwell. I stated that we had. He asked if Caldwell had seen the new Prime Minister. I told him that I thought Caldwell had and had made clear the attitude of this Government to the Persian Foreign Office. I asked when the Medjlis would meet and he said very soon.

The Minister stated that British interests had bought the old Russian concessions, something that I did not know before. The Minister said that he had proof of this. I said that I hoped that an American oil representative would be in Teheran soon.

The Minister did not say that he would proceed with the financial negotiations and did not outline any of the steps that he proposed to take. I told him that I would prepare this memorandum, but I did not tell him that I would communicate further with him and I did not inform him that we had already given consideration to the subject of a loan.

The matter of a loan to Persia in connection with concessions was suggested some time ago to this Department in a letter from the Department of Commerce. Mr. Herring of the Bureau of Foreign and Domestic Commerce took up the matter with Mr. Warfield of the Standard Oil Company of New Jersey, but, as I understand it, nothing definite was decided.

I shall not take up the matter further with the Persian Minister, with the Department of Commerce, or with the Standard Oil Company of New Jersey, until I receive further suggestions or instructions.

It seems to me that the question is one of great importance and that it involves the formulation of a comprehensive policy toward Persia. Of course, the Minister may have been speaking indiscreetly and no doubt the matter would have to be handled with great care in view of British policy toward Persia.

A. C. M[illspaugh]