891.00/1936: Telegram

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

359. A reply to my No. 350, October 30, is urgently requested as local situation continues to deteriorate and is rapidly reaching critical stage. Prime Minister informs me Allied delay in this matter is very embarrassing to him and is causing local situation to become hourly more critical. There have been a number of bread riots and suicides in last few days.

Prime Minister has placed another 100 million rials of the 500 millions recently voted by Majlis at disposal of Allies. This should last a maximum of 10 days [at] which time currency crisis will become acute. Allied food declaration should no longer be delayed. Its publication would not only relieve political situation somewhat but would also strengthen hands of Government in obtaining Majlis’ approval of pending currency bill.

It is quite possible that British are deliberately delaying solution of food and currency problems by making additional demands and suggestions, such as those outlined in my No. 350. I should not be surprised if they intend to occupy Tehran on pretext that Iranians have not lived up to agreement to furnish rials. This would be done with large forces which are now at Qum, having arrived there ostensibly for winter quarters and to make room in Kermanshah area for Polish troops.