891.24/210: Telegram
The Minister in Iran (Dreyfus) to the Secretary of State
[Received June 26—4:47 p.m.]
214. Department’s No. 158, June 18, midnight. There was, as Department indicated, considerable deviation from original understanding of Legation as to constitution of CSC. I was, as shown in despatch 272,30 presented with fait accompli as to quotas and organization of Committee and the Iranians also were not consulted. I have not accepted this arrangement as final but have been in constant negotiations with Iranians and British to find some suitable plan. Delay in arriving at agreement has been caused principally by Iranian reluctance to accept licensing system because of what they consider inadequate quotas and because Iranians did not appoint representatives to discuss question. The matter has now been settled along following lines, if Department agrees thereto:
The CSC will consist of eight persons as indicated in the British note attached to despatch 272 but it has been agreed that in all matters considered, the opinions of the British and American Ministers will be the deciding factor. This I believe takes care of our preoccupation about being outvoted 7 to 1. At the first meeting of the CSC on May 29, two subcommittees were formed:
- (1)
- Permanent subcommittee for doing routine work of CSC consisting of delegates of following: MESC (chairman), American Legation, UKCC, MEW,31 Imperial Bank of Iran and British Legation.
- (2)
- Transport subcommittee to consider transport problems and supplies, consisting of Anglo-Iranian Oil Company official as chairman, American Legation, UKCC, MESC, MEW, Transportation Directorate and British Legation. Minor32 represents Legation on both committees and sits with me unofficially on CSC.
Question of having Iranian delegates on CSC proper was given serious consideration but it was consensus of opinion that discussion of vital war work such as shipping position and supplies to Russia made this [un?] desirable. Since I insisted on Iranians being heard, the Iranian Government was invited to form a committee of its own to meet with permanent subcommittee. After much delay following strong committee of five was named: Director General Ministry of Commerce, Director General of Customs, head Imports Department, official of Ministry of Commerce and head Foreign Transaction Department.
Committee met with our permanent subcommittee on Monday in atmosphere of cordial understanding and another meeting will be held today. Iranian committee agrees in principle to institution of licensing system although details have yet to be worked out. They have taken immediate steps to ascertain outstanding orders placed abroad by Iran merchants and action on this preliminary phase is expected soon. I believe formation of this committee meets our desire to have Iranians fully heard. I might say that Minister of Finance expressed his satisfaction with this arrangement—Iranians do not care about machinery but are interested only in results. Although a good atmosphere now prevails I must warn Department that great difficulty will be encountered soon since Iranians are dissatisfied with quotas and finally consented to cooperate only on promise of reconsideration of many items. I am in a difficult position between intransigent British on one hand and grasping Iranians on other. It seems likely the increasingly difficult shipping situation will preclude any possibility of radical readjustment upwards of quotas. However Iranians should be given satisfaction on matter of tires and trucks (see my 175, May 29).
The only present discordant voice is that of UKCC which not only wishes to monopolize Iranian transport and distribution of tires and trucks but seems reluctant to submit to CSC on grounds that it is governmental agency. I have been, and intend to continue to be, adamant on this point—nothing can be accomplished unless CSC is supreme in matter of supplies to Iran. UKCC apparently does not want to give up its private trade which is lucrative for present and holds promises for British trade for future. I do not object to UKCC trade if British Government desires that procedure but I [Page 140] insist that UKCC submit to UKCC [CSC?] as would any other trader. If they do not I would suggest we counter with reservation of right to proceed outside CSC with Lend-Lease goods. I might add that UKCC are receiving 4000 Lease-Lend trucks and intend that none be allotted to Iranians.