891.00/1933: Telegram

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

350. Department’s 289, October 26. British Legation has received authorization from Foreign Office to proceed with negotiations for a tripartite declaration on basis of amended version of rift [draft] given in my 334, October 21. Copy of amended draft is understood to have been furnished Department by British Government.

However British Legation is now of opinion this declaration does not meet situation fully for while British and Americans would be bound to supply wheat until next harvest the Iranians could again resort to what British term “blackmail” when the 2 billion rials are exhausted within a few months. The Minister has therefore proposed to London the abandonment of present basis of negotiation and proceeding along following lines (1) British and American Governments undertake to insure Iran’s wheat supply until war’s end and to ship 25,000 tons soon as possible, (2) Iran to remove legal limit tonnage issue, to take out of hands of Majlis right to restrict note issue, and to set up currency board outlined my 333 October 20.

Draft declaration given in my 334 had weakness from American viewpoint that while we were bound to supply Iran with wheat, the Iranians were not bound in the event of a breach of the British-Iranian financial agreement to supply us with rials.

Reference paragraph 5 of Department’s 289. Reason for insertion of paragraph (b) was that Iranians are afraid their internal transport will break down and wish a firm Allied pledge to assist in transport if necessary. The Iranians are not unreasonable in this since their road transport is badly depleted and since Allies have done little to help build it up by furnishing trucks and tires. I understand that [Page 175] British Foreign Office objected to this clause but that they are prepared to go much farther and give some sort of direct guarantee of aid to Iranian internal transport.