711.67/106: Telegram

The Minister Resident in Iraq (Knabenshue) to the Secretary of State

2. The Department’s démarche of December 35 and British and Greek victories against the Italians, and the Turkish démarche culminating as reported in my telegram No. 1, January 2, were undoubtedly the deciding factors in averting a serious crisis between [Page 487] Iraq and Great Britain. The President’s radio address of Sunday last6 has been a further important contribution to the same end. The Regent6a is reported to be withholding his signature to practically all documents sent to him by the Cabinet.

However, the Prime Minister,7 supported I am told, by the Mufti8 is still persisting in his efforts to remain in power, while the Minister of Defense8a who is also acting as Minister of Economics is reported to be endeavoring to defeat British refusal to provide dollars by seeking authority to force Iraqi exporters to turn over their dollar exchange to the Government for dinars in order to provide the Government with the dollars necessary for their purchases of war materials in the United States. This would, of course, adversely affect our normal trade with Iraq.

  1. See telegram No. 56, December 3, 1940, 5 p.m., to the Minister Resident in Iraq, Foreign Relations, 1940, vol. iii, p. 716.
  2. Address by President Roosevelt, December 29, 1940, Department of State Bulletin, January 4, 1941, p. 3.
  3. Emir Abdul Ilah, maternal uncle of the boy King, Faisal II.
  4. Rashid Ali al-Gailani.
  5. Grand Mufti of Jerusalem, Haj Amin al-Husseini, a political refugee from Palestine.
  6. Gen. Taha al-Hashimi.