891.24/179: Telegram
The Minister in Iran (Dreyfus) to the Secretary of State
[Received April 7—8:46 p.m.]
97. Following answers to numbered paragraphs of Department’s No. 80, April 1.
- (1)
- British Minister1a assumes the 17,000 tons referred to by Department consists of 8,000 tons and 8,800 flour (half of latter for Polish army in Iran) to be delivered in April only. None has arrived but first consignment expected shortly.
- (2)
- Iranians allege that British promises of 8,000 tons monthly not being fulfilled, only about 6,000 being received. British express annoyance that Iranians would prefer Allied seamen to risk lives to bring wheat rather than make local hoarders disgorge.
- (3)
- All of above wheat for Iranian Government which is responsible for distribution.
- (4)
- British state they have furnished Iran 40,000 tons since August mostly from India. They are now sending 3,000 tons monthly to East Iran from India. Iranian Government has purchased some 6,000 or 7,000 tons from Soviets and 10,000 tons bought in United States by Saleh.
- (5)
- British and Iranians do not agree on minimum needs. Latter place minimum needs up to end of July at 60,000 tons of which 20,000 immediately. They further estimate they will need to import 100,000 tons from July 1942 (harvest time) to July 1943. British believe that promised April deliveries plus whatever they can send in May plus other Iranian purchases should tide Iran over until new crop comes in. British Minister informs me confidentially that in his opinion very little wheat need be imported after new crop comes in and that small amount needed might be obtained in Iraq where there should be surplus.
- (6)
- Although Iranian estimate of 60,000 tons needed up to July seems high it may be that British estimate is too low and that some wheat from United States will be required. No estimate of needs after July can properly be made until new crop comes in. Iran although normally self-sufficient in wheat may have to continue importing as sowings this year were subnormal due to disturbed conditions.
This matter of economic assistance for Iran must be approached carefully since it involves not only our relations with Iran but also the British and hence our war effort. British as Department knows have had great difficulty with Iranians and have had to use question of supply of essential goods as a weapon to obtain some degree of cooperation. British relations with Iran have arrived at a critical stage as result of present dispute over issue of currency and exchange control (see Department’s No. 552 and my 82,3 83, 87 and 934). Iranians finally increased note issue by 700 million rials but refused to issue currency against sterling holdings because of lack of confidence in both British and sterling. Instead new issue is backed by gold and crown jewels.
[Here follows further report on exchange situation.]
I have consistently recommended avoidance of undue pressure on Iranians and advised against joining British in representations to Iran Government unless such action essential to war effort. I feel that present Iranian intransigence toward British is potentially harmful to war effort and I recommend we work in close harmony with British in question of supplies for Iran. While British themselves are somewhat responsible for their bad relations with Iran we cannot escape fact that Iranians by refusal to cooperate with our Allies are creating potentially harmful situation. Our economic policy with regard to Iran should dovetail with that of British in order to avoid placing our Allies in disadvantageous position and to prevent appearance of backing Iran against British.