891.24/201: Telegram
The Minister in Iran (Dreyfus) to the Secretary of State
[Received 2:30 p.m.]
175. Department’s 133, May 23.
1. General. I concur in Department’s suggestion that tires be consigned to this Legation or Central Supply Committee and distributed under Committee’s supervision although this procedure will be bitterly opposed by UKCC. Committee will hold first meeting today and will appoint Transportation Subcommittee to consider this problem. I will report on results of meetings which I will attend.
Prime Minister16a suggests that the Food and Supply Administrator whom he has requested Department to obtain for Iranian Government17 might with an adequate staff direct distribution of tires, spare parts, and trucks as well as foods and other commodities. He states he will cable his Legation in Washington again today concerning employment of this expert. British Legation informs me Department is considering Mr. Acheson18 for this post but that no action taken because Iran has not made formal request.
2. British attitude. UKCC is insisting on obtaining monopoly on import and distribution of tires, trucks, and spare parts in order control all road transport. This coupled with control of other imports through MESC and British control of railways would complete [Page 132] their strangle hold on Iran economy. British Commercial Secretary, on return from MESC meeting in Cairo, without consulting this Legation or Iranians, delivered to Iran Government a note setting forth quotas for next 6 months and told Minister Finance verbally that Iran must accept the quotas or receive nothing. These quotas provide for no trucks for Iran and that tires and spare parts importation and distribution be monopoly of UKCC. I am forwarding copy of this note and enclosures19 by air today.
3. Iranian view. I have discussed matter at length with Prime and Finance Ministers who are indignant at British attitude and leave no doubt that they will refuse to accept the tire and truck procedure suggested. While they wish to receive tires and trucks themselves, they are willing to deliver percentage to be agreed on to trucks for vital war work. Remainder they wish to distribute but are willing to submit to control by an American expert or any committee we suggest. They complain with reason that British already monopolize 90% of railway capacity and that more than half country’s trucks are laid up or under contract to UKCC. This leaves Iran without sufficient transport and fully at UKCC mercy. Result will be depletion of Iran’s road transport.
4. My opinion. I consider the British attitude in general and the UKCC position on tires and trucks in particular to be highhanded and completely lacking in consideration for Iranians. The result of such procedure could only be to embitter British-Iranian relations, which have recently been improving, and to reduce greatly our own high prestige. I do not propose giving Iran more than the bare minimum needs. I do propose however to hear the Iranian side and keep an open mind until the matter can be seriously discussed by the committee. I have therefore asked the Ministers of Finance and Commerce to comment freely and fully on the British note. I feel frankly that the British are endeavoring to turn Iran’s unfortunate position to their advantage and to our disadvantage. I don’t for example see why UKCC should get 2500 Lease-Lend trucks while Iranians received one or why distribution of any commodity should be turned over to a foreign agency against Iranian wishes. While my relations with British Legation to date have been excellent I realize they may be harmed by my opposition in this matter and that I lay myself open personally for attack. This will not deter me although will make every effort to be tactful and friendly.
I recommend (1) that tires be imported and distributed as suggested in first paragraph, (2) that trucks and spare parts be similarly treated and (3) that we keep an open mind as to Iran’s needs until the matter can be seriously considered.
[Page 133]5. Staff. I will need no extra staff if Acheson or some other person comes with an adequate staff to take over these duties.
If this is not done I would need one or two officers experienced in commercial matters and some additional subordinate personnel.