891.51/522
Memorandum of Conversation, by the Chief of the Division of Near Eastern Affairs (Murray)
With reference to my memorandum of September 27 on the above subject, Mr. Warren Lee Pierson, President of the Export-Import Bank, called me by telephone this morning to report the outcome of his conversation with the Iranian Chargé d’Affaires.
Mr. Pierson said he told Dr. Daftary quite frankly that, entirely aside from other considerations, the Bank had no money available at the present time for any loans, but that even if funds were available he had serious doubts that his trustees would consider any commitments in Iran at a time like this. In order, however, not to let the Chargé down too abruptly Mr. Pierson said he informed Dr. Daftary that he would discuss the matter further with his trustees and see what it might be possible to work out at a later time, perhaps around next January. To this Dr. Daftary replied that his Government could not wait that long since the Shah wanted the money at once.
[Page 540]I was not surprised to be informed by Mr. Pierson that Dr. Daftary was wholly without the necessary information as to what, if any, purchases the Iranian Government would intend to make in this country with the funds realized from any eventual loan. It appears that Dr. Daftary informed Mr. Pierson that he had no information on that subject and that he assumed his Government would wish to be entirely free to dispose of the money as it might see fit.
As a result of the above developments Dr. Daftary came to see me this morning and we arranged for him to call upon an official of the Securities and Exchange Commission tomorrow morning with a view to obtaining information as to private banks which have within recent years floated foreign loans. Our purpose in making this suggestion was in order to enable Dr. Daftary to establish direct contact with any banks that might wish to consider his Government’s proposal. In this connection I may say that according to Mr. Pierson’s view it is highly unlikely that any bank would consider for a moment making a loan to the Iranian Government today in view of the sorry experiences of banks with their previous loans of the 1920’s.
Dr. Daftary seemed very much disappointed that the Department was not able to pave the way for his discussions with private banks regarding the loan and that we did not look with favor upon his request for a “letter of recommendation.” He mentioned the possibility of speaking to Dr. Millspaugh14 about the matter, but dropped the idea because he said he was not aware of whether Dr. Millspaugh was in the good graces of the Shah at the present time! Mr. Morgan Shuster’s15 name was then suggested, but Dr. Daftary seemed unimpressed when he was informed that Mr. Shuster is at present in the publishing business.
All in all the developments of the day do not present a very promising outlook for the Iranian hopes of obtaining a loan in this country in short order.
- Arthur C. Millspaugh, formerly Administrator General of the Finances of Persia, 1922–27. See Foreign Relations, 1927, vol. iii, pp. 523 ff.↩
- Financial Adviser to the Persian Government, 1911. See Foreign Relations, 1911, pp. 679 ff.↩