Memorandum by the Under Secretary of State (Phillips)

The Iranian Minister called this morning to say that he had received further instructions from his Government to press for a trade agreement with the United States. He said the situation had so developed in Iran that it had become necessary to stimulate their export trade and that they were ready, therefore, to make an advantageous agreement with us; he reminded me of the extensive road building that had been going on and of the demand for American automobiles;—they were on the free list, as were also automobile parts; their principal request would be reduction of the tariff on Iranian rugs; the duty was exorbitantly high, but, in spite of that fact, he added, seven million dollars worth of rugs had been brought into this country last year. The Minister also mentioned that they would request a reduction in the duty on dried fruits.

We discussed the difficulties surrounding both these items and the Minister mentioned the third item in which his Government was particularly interested, namely, caviar. He said that a large part of the so-called “Russian caviar” was, in fact, Iranian, which was exported to Russia by Russian-Iranian companies and again exported from Russia to the United States; it was the desire of the Iranian Government now to inaugurate an export trade of caviar directly to the United States.

The Minister said that he had discussed this whole matter with Mr. Sayre, who had promised to give it careful consideration. I explained that we were, of course, interested, but that, in view of the pressure of work of the Trade Agreements Section owing to the negotiations which we were now engaged in and the preparation of diserata [desiderata?] for other agreements, I had some doubt whether we were in a position to undertake a serious study at once of an Iranian trade agreement; I could assure him, however, that, in view of his Government’s interest, we would give the matter our most serious consideration.

William Phillips