891.5151/236
Memorandum by the Assistant Chief of the Financial Division (Luthringer) to the Chief of the Financial Division (Livesey)
Mr. Livesey: Telegrams nos. 2269 from London43 and 127 from Tehran, both under date of April 29, indicate that the British have adopted a far more conciliatory attitude toward the Iranians than had previously been indicated in London’s 1697 of April 8, reports from the American Minister at Tehran or by the British Embassy at Washington. The American Minister at Tehran had previously reported that the situation was at an impasse. The telegram of April 8 from London specifically states that the British are opposed to sending gold to Iran and indicates a British opinion that a firm stand must be taken on the issues with Iran. The British Embassy at Washington twice requested that we join the British in putting pressure on Iran.
The last telegrams from London and Tehran indicate that, whether as a result of our conversations with the British or for other reasons is not clear, the British have modified their views as to the desirability of putting pressure on Iran and are now willing to offer concessions which, had they been put forward sooner, might have prevented the situation from getting strained. Thus, according to Waley of the British Treasury, the British are now offering to send some gold to Iran. In addition, the British Legation in Iran apparently is willing that the gold value of Iranian sterling balances be guaranteed, and even further the British offer to convert Iranian sterling into dollars to the extent that is necessary to purchase imports for Iran.
It is not clear to what extent the British Treasury and Foreign Office will go along with the British Legation in Tehran. It also is not clear to what extent the British Embassy at Washington has been kept informed of the apparently altered views of the British Treasury. I suppose there is a further possibility that the British Treasury and British Foreign Office have not been meshing on the matter. To add to this somewhat confused picture, Waley asserts that the British [Page 310] Treasury is discussing the question of making gold available to Iran with our Treasury, whereas, as you know, the first intimation which Mr. White had of these Iranian difficulties was London’s telegram of April 8 and the Department’s subsequent discussion of the matter with him.
I do not know, however, that the apparent confusion arising from more or less simultaneous discussions in three different capitals has caused any real harm. So far as our Department is concerned, we have: (a) secured agreement on our main political point that we think it inadvisable to coerce the Iranians on this question, and (b) have cleared the way with the Treasury for participation by that Department in some arrangement whereby rials may be secured for the British with dollars, if the British do not prefer to purchase rials with dollars directly on their own account. I should think that both this Department and the Treasury would be glad to have the British make concessions to Iran which would reduce the amount of rials which it would be necessary to purchase with dollars, or at least would have no objection to such arrangements. Since we have advised Haider [Hayter] to get directly in touch with Mr. White on the technical financial arrangements, I do not believe that at present there is any further action which we need to take in the matter. If the British still want the assistance of our Treasury Department, they will doubtless make the request directly to the Treasury.
If our Treasury is requested to purchase rials for British account, I suppose that either in the course of setting up such an arrangement with an Iranian bank, or through this Department, the Treasury will wish to make sure that there is nothing in the Iranian exchange control regulations which would prevent our sale of rials to the British.
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