891.51A/159

Memorandum by the Under Secretary of State (Fletcher)

After dinner at the Persian Legation last night, I had a conversation with the Minister on the subject of the appointment of an American financial adviser to Persia. The Minister informed me that his Government was very anxious to appoint an American financial adviser, and that he had been told by the State Department in conversations with Mr. Dearing, Mr. Robbins and others that a list was being prepared and would be submitted to him. I told him that I had understood that the matter had been discussed with him, but that on mature reflection, the Department felt that it would be inadvisable to have a financial adviser appointed before the arrival of the American Minister in Persia. I told him that Mr. Kornfeld6 enjoyed the confidence of the President; that in view of our previous experience in Persia I felt that we should proceed with the utmost caution so that whatever was done would be to the permanent benefit of both countries. The Minister seemed very disappointed, and said that he felt, because he had already telegraphed his Government that an adviser would be suggested by the State Department, that his Government would not understand and would criticize him. I told him I would be very glad to explain through our Chargé at Teheran any difficulty arising on this score.

He then asked if it would be possible that an adviser would be selected who might accompany our new Minister to Persia. I told him that I was not inclined to approve of this course either, as I wished to have the new Minister make a thorough investigation of conditions there, so that the State Department could act intelligently in its dealings with Persia. I pointed out to him that any loan which might be floated in this country would need to be approved by the State Department, and that our approval would necessarily be contingent upon the reports of the new Minister, and that I did not see that any time would be gained by the appointment of an adviser at this time. The Minister asked whether it would be necessary to have the Government’s approval of a loan made by private companies. I replied that if private companies wished to make a loan or advance from their own resources the approval of this Department would not be necessary. The Minister said that he had already employed Mr. Shuster,7 who was helping him with his negotiations [Page 640] with the oil companies and others who might be interested in Persian concessions and Persian finance.

I promised the Minister that he would have an opportunity to confer with Dr. Kornfeld, who is expected in Washington within the next week.

H[enry] P. F[letcher]
  1. Joseph Saul Kornfeld, appointed Minister to Persia Nov. 9, 1921.
  2. William Morgan Shuster, Financial Adviser to the Persian Government, 1911–1912; see Foreign Relations, 1911, pp. 680 ff.