124.91/55: Telegram

The Secretary of State to the Chargé in Iran ( Merriam )

1. Your 4, January 21, 10 a.m. The Department of course welcomes any indication of improvement in our present relations with Iran and has been at all times prepared to assist in any appropriate way to that end. The Department does not, however, consider that there is any proper connection between the recently concluded oil and pipeline concessions and the appointment of a Minister to Teheran.

It is clear furthermore that the granting of the concessions in question was in no way impeded by the absence of Iranian representation in this country nor by the character of our present representation in Teheran. The transaction was purely a business one and concluded by the Iranian authorities because they considered it in their best interest to do so. The same will doubtless prove to be the case with respect to ratification. It may be added in this connection that, up to the present, press comments on the recent concessions appear to have contained nothing that could possibly prove objectionable to the Iranian Government.

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The essential problem in our relations with Iran remains, namely the extreme sensitiveness of the Shah to all American press comment however trivial that he may regard as derogatory to himself. In view of our own experience and the recent one of the French it would not appear that the mere request for an agrément at this moment would solve the problem. It will be recalled in this connection that the Shah’s decision to terminate all Iranian representation in this country was taken while Mr. Hornibrook was still at his post. The Department has furthermore been under the impression that the Shah might actually resent the request for an agrément under present conditions.

While, therefore, the Department is not prepared at this time to consider the appointment of a new minister, it does contemplate, in view of your desire for home leave, raising the rank of its representation in Teheran by the assignment of Mr. C. Van H. Engert as Counselor of Legation and Chargé d’Affaires pending the eventual appointment of a minister which it is hoped will not be long delayed. Such an increase in the rank of our representation would be an intermediate step to the appointment of a minister and thus in line with your present recommendations. It is expected that Mr. Engert will reach Teheran about the middle of May. As he is well and favorably known to Iranian officials by reason of his previous service in Iran, the Department suggests that this might be a favorable moment to advise the Foreign Office informally of Mr. Engert’s early assignment and the above stated reasons therefor.

In this connection you are informed that the Iranian Minister at Buenos Aires in the course of a conversation at that capital with the Secretary of State remarked that he was endeavoring to find some means of breaking the present impasse and that for that purpose he contemplated returning to Iran during the month of February. Such being the case, it seems possible that the Iranian authorities may discover some way out of their difficulty by that time.