891.00/1926: Telegram

The Minister in Iran ( Dreyfus ) to the Secretary of State

339. Refer my 334, October 21. Soviet authorities in Iran have presented Iran Government formal request for purchase of 5,000 tons of wheat, 15,000 tons barley and 30,000 tons rice. British Minister is trying to exact from Soviets promise that if this request is met they will make no further demands until next harvest, that they will lend every assistance to Iran Government in collection of wheat in Azerbaijan and Khorassan and in its transport by rail or road to Tehran even to extent of providing military trucks to railhead and that they will help Iranians build up wheat reserve in Tehran to give Allies time to meet new situation caused by their purchases. In my opinion there is no assurance Soviets will refrain from making additional demands. For example Sheridan says they informed him that they wish to buy 15,000 tons of wheat.

British Minister telegraphed his Government requesting 20,000 tons wheat be sent Iran soon as possible to meet situation caused by Soviet purchases. In note to Soviet Embassy British Minister stated success this operation will depend on extent of Soviet cooperation and that if Soviets intend to request additional grain later this be made clear at once to British and American Legations. Note calls attention to fact that political situation of Allies in Iran is weakened by Soviet purchases and argument heretofore used that since Iran sorely needed its own wheat for its internal use Allies were not buying Iranian wheat is no longer valid.

This Soviet demand brings out into open what has been known for some time—that Russians, British and Poles are buying up large quantities of Iran food products to detriment of local food situation. [Page 166] It appears to me likely Soviets will not pay cash for grain but rather will offer to pay in cash or goods at some later date.

It is becoming obvious that frantic Iranian appeals for wheat in recent months have been based on more than avarice or caprice. British are slowly swinging around to view this Legation has held for several months, that a wheat shortage would probably develop and that we should be prepared to meet it. There are strong indications Iran’s food situation will become acute during winter and that it would be well in my opinion to begin wheat shipments to Iran without delay.