Memorandum of Conversation, by the Chief of the Division of Near Eastern Affairs (Murray)

The Iranian Minister came to see me yesterday by appointment and said that he desired again to touch upon the question of the extension of credit to the Iranian Government by the Export-Import Bank.

Mr. Schayesteh referred to his conversation with Mr. Pierson, President of the Bank, some little time ago, and to Mr. Pierson’s statement that if and when the lending authority of the Bank was extended by congressional action it might be feasible to give further consideration to the requests of the Iranian Government. Mr. Schayesteh had in mind the recent extension of the lending authority of the Bank to $100,000,000, and he is obviously hopeful that in view of this development favorable action may be taken upon the Iranian Government’s request for the extension of credit in connection with the very considerable purchases ($75,000,000 has been mentioned) which that Government proposes to make in this country. The Minister quoted Mr. Pierson as having had a favorable impression of Iran’s credit position, and he mentioned in this connection the accomplishment of the Iranian Government in financing the Trans-Iranian Railway, costing nearly $150,000,000, out of current revenue. He added that the firms employed to do this construction had not had the slightest difficulty in collecting from the Iranian Government.

I told the Minister that it was my understanding that the Export-Import Bank extended credit to American exporters upon the presentation of a concrete proposal to the Bank and that it would therefore seem that the Bank might expect to have before it such proposals before serious consideration in this matter could be given. The Minister emphasized, however, that what he had in mind was the establishment of a given credit which could be drawn upon by American exporters or by American firms when they would have come to an agreement with the Iranian Government regarding specific purchases.

The Minister expressed the earnest hope that the Department would interest itself in this matter not only because it considered the Iranian Government’s request to be a good “business proposal”, but also because of the larger political aspects of the situation affecting Iran. He stated in this connection that since the Bank had financed certain [Page 639]exports to Sweden he saw no reason why the same assistance should not be rendered in the case of Iran.

I promised the Minister that I would not fail to bring his views to the attention of Mr. Pierson and suggested at the same time that he discuss the matter further with him in person.