891.5151/195
The Chargé in Iran (Engert) to the Secretary of State
[Received October 19.]
Sir: In confirmation of the Legation’s telegram No. 101, September 8, 10 a.m.19 I have the honor to transmit herewith the translation of Note Verbale No. 25885/3248 dated September 4, 1939, in which the Iranian Ministry of Foreign Affairs informs the Legation that Iranian debtors will be authorized to purchase the necessary foreign exchange for the purpose of satisfying their American creditors. This is to be done by means of their procuring export certificates of third class merchandise to the value of their indebtedness. These certificates will then be submitted to the Exchange Commission which, in turn, will issue the necessary permits for the purchase of the corresponding exchange.
The Department will recall that these blocked accounts are due to American firms for merchandise sold and shipped to Iranian importers before March 1, 1936, i. e. before the present Iranian Exchange Law went into effect, and are payable in dollars.
On several occasions in 1938 and in the early part of 1939, the Legation, in cooperation with the Consulate, discussed the problem with the appropriate officials of the Iranian Ministry of Foreign Affairs and of the Ministry of Finance. But when apparently nothing could be obtained except vague promises that the matter would be studied, I decided to write a formal note to the Foreign Office in which were set forth the pertinent facts and stated that it would be greatly appreciated if the question were to be referred to the competent authorities and the Legation were informed of the probable date when payments would be permitted.
[Page 544]This note was sent on April 5, 1939, and although I repeatedly mentioned its contents to the Minister of Foreign Affairs and to other officials of the Foreign Office I was unable to obtain a reply. On August 6, 1939, I therefore sent another note to the Foreign Office in which I pointed out that four months had elapsed since my last note and requested that an answer be expedited.
It is to this reminder (No. 892, August 6, 1939) that, after a delay of another month, the Ministry of Foreign Affairs finally replied by the attached Note of September 4, 1939.
The only difficulty—apart from further delay—which I now anticipate is that the Iranian debtors, who will have to purchase dollars at the unofficial rate (which is over 100% higher than the official one) will plead inability to do so because the merchandise was, of course, long ago sold at prices based on an exchange rate of about Rls. 16.00 to the dollar which prevailed in March 1936. However, considering the tangled muddle in which the entire Iranian exchange situation finds itself—especially since the outbreak of hostilities in Europe—it will be impossible to foresee the effect of the decision of the Government until a concrete case presents itself.
Respectfully yours,
- Not printed.↩