Foreign Relations of the United States: Diplomatic Papers, 1943, The Near East and Africa, Volume IV
741.9111/77
The Secretary of State to the Minister in Iran (Dreyfus)
Sir: There is enclosed a revised draft of the proposed agreement between the United States and Iranian Governments concerning the presence of American Armed Forces in Iran, which you are instructed to present to the Iranian Government.
The Iranian counterdraft submitted in your despatch no. 549 of May 8, 194357 received the most careful consideration by the Department of State and the War Department. Some of the Iranian proposals have been adopted, but those omitted from the enclosed draft have not been found acceptable to this Government.
You will note that the second sentence of Article I and the whole of Articles V and X of the Iranian draft are omitted from the enclosed draft. The fact that similar provisions are in the Anglo-Soviet-Iranian Treaty of Alliance has not been considered sufficient reason for their inclusion in the proposed agreement. If called upon to discuss the omission of these articles with the Iranian authorities, you may wish to emphasize the breadth of the undertaking in Article I to respect the territorial integrity, sovereignty and political independence of Iran.
There is also enclosed, for background information only, a copy of informal comments on the wording of the enclosed draft.
Very truly yours,
[File copy not signed]
Revised Draft Agreement With Iran
Preamble
[Here follows text of preamble as in draft printed on page 459, with omission of first “Whereas”.]
Article I
[Here follows text same as in draft printed on page 460.]
Article II
Units and individual members of the Armed Forces of the United States of America, the corporate and other agencies which it finds necessary to employ in connection with operations carried out by or under the direction of the Armed Forces, and the civilians employed by the United States of America or by any such agencies, together with all the supplies, equipment and installations necessary for their operations, may freely enter, operate, pass through or be maintained in Iran whenever and wherever entry, passage, maintenance or operation may be necessary to the prosecution of the war. [Here follows second sentence as in draft printed on page 460.]
Article III
All materials, equipment, supplies, articles, and installations brought, imported or erected by members of the American Armed Forces or by the agencies or employees aforesaid (including goods consigned to an American post exchange or commissary), whether owned by the Government of the United States of America or by the agencies or employees aforesaid, shall be exempt from payment of any tax, duty, or port, customs or other charge levied, assessed, or collected by the Imperial Iranian Government or by any subordinate governmental authority; provided that such materials, equipment, supplies, articles, and installations are for war purposes or for the consumption or personal use of the military personnel, agencies or employees aforesaid, and provided that such exemption shall not apply to articles brought or imported personally, for their personal use, by subjects of Iran who are not members of the American Armed Forces. No gross receipt, income, or like forms of taxes will be imposed, levied or collected by the Imperial Iranian Government or any subordinate governmental authority on the income heretofore earned or received in respect of such employment by any member of the Armed Forces of the United States of America, or by the agencies and employees aforesaid; and no gross receipt, income or like forms of taxes will [Page 474] be imposed, levied or collected by the Imperial Iranian Government or any subordinate governmental authority on the income hereafter earned or received by persons who have entered or may enter Iran as members of the Armed Forces of the United States of America, or as the agencies or employees aforesaid; provided that the exemption from taxation on income hereafter earned or received shall not apply to persons who are subjects of Iran and who are not members of the Armed Forces of the United States of America. No members of the American Armed Forces or agencies aforesaid shall be under any obligation to collect or make any financial contribution under any Workmen’s Compensation Act or other such law. The Government of the United States of America may establish, maintain and operate postal facilities, commissary stores, and post exchanges for the use of members of the armed forces, agencies and employees aforesaid.
Article IV
[Here follows text same as in draft printed on page 460.]
Article V
[Here follows text as in draft printed on page 461, with addition of words “improve, supplement” after the word “maintain”, and with following sentence added at the end of the article: “If necessary, arrangements to safeguard the rights of the Imperial Iranian Government in the railway, roads and other means of communication in question shall be made by direct conversations between the appropriate Iranian authorities and the authorities of the American Armed Forces in Iran.”]
Article VI
[Here follows text same as in draft printed on page 461, with addition of following proviso at the end of the first paragraph: “provided, that such right of reexport and exemption from charges shall not apply to articles imported personally, for their personal use, by persons who are subjects of Iran and not members of the Armed Forces of the United States of America.”]
Article VII
If necessary, a separate agreement or separate agreements will be concluded to settle any subsidiary questions which may arise in consequence of the presence of American Armed Forces, the agencies or employees aforesaid, in Iranian territory.
Article VIII
[Here follows text same as in draft printed on page 462.]
[Page 475]Article IX
The Armed Forces of the United States of America shall be withdrawn from Iranian territory not later than six months after all hostilities between the United States of America and Germany and her associates shall have been terminated. However, in the event that a treaty of peace between them should be concluded less than six months after the cessation of hostilities, the Government of the United States of America undertakes to withdraw its forces, as soon as possible. The expression “associates” of Germany means any other Government which is now engaged or may in the future engage in hostilities against any of the United Nations.
The present agreement shall terminate with the withdrawal of the American Armed Forces from Iran, except that Article VI shall remain in force until its provisions shall have been entirely fulfilled, without regard to the date of withdrawal of the Armed Forces.
Article X
This agreement shall come into force on the date of signature.
Comments on Revised Draft Agreement With Iran
Article I
This is the one sentence in the original draft. The Iranian counterdraft58 added a second (and the War Department added a third, to make it reciprocal) but the Legal Adviser considered the second sentence a departure from the general nature and purposes of the agreement, as we would be making commitments which might prove embarrassing and which would seem to have no place in an agreement relating to our military forces. Moreover, the essence of the added sentence seems to be amply covered by the article as it stands.
Article II
In the first sentence, the Department’s original draft spoke of “the agencies which it (the United States) finds necessary to employ in its operations”. The Iranian counterdraft omitted this phrase entirely, thus restricting the rights conceded to the Armed Forces and individual civilians employed directly by the United States Government. The War Department draft reads “the corporate and other agencies which it finds necessary to employ in its operations”. In the present revision, the War Department wording has been adopted with the addition of the qualifying phrase: “in connection with operations carried out by or under the direction of the Armed Forces”. It is [Page 476] thought that this qualification may make the provision more acceptable to the Iranians, by eliminating the possibility that we might use the authority to undertake commercial or other non-military operations, while at the same time retaining the freedom of action desired by the War Department.
The Iranian counterdraft inserts a sentence reading as follows: “Insofar as the strategic situation allows, the location of such forces shall be decided in agreement with the Iranian Government.” This corresponds to a virtually identical clause in Article 4 of the Anglo-Soviet-Iranian Treaty of Alliance. The War Department has rejected it, and, as it must necessarily be largely meaningless in practice, it seems preferable to omit such an undertaking. The remainder of the Article is identical in all three drafts.
Article III
This closely follows one of two alternative draft articles proposed by the War Department. There are three new points involved in this Article, namely:
- a)
- The orginal draft exempted from all forms of taxation all articles “brought or imported” by the Forces, agencies and employees in question. No mention was made in that draft of the use to which these articles were to be put. The Iranian counterdraft restricted the exemption to customs duties, omitting reference to other forms of taxation, and inserted the provision that the articles must be used for war purposes or for the personal use of the individuals concerned. The War Department has adopted this latter provision, which seems entirely just and even necessary, but insists upon exemption from all forms of taxation, which also seems necessary and equitable. However, it is thought that it would be unreasonable and unnecessary to extend the privilege of free importation to Iranian subjects employed as civilians by our forces. Such a step would open the way to serious abuses, in view of the large number of Iranians involved and the enormous profits which they could obtain through clandestine resale of articles imported. Such food and other articles as the American authorities may think necessary for the Iranian employees can be imported by the military authorities themselves. Accordingly, this Division has inserted an additional provision that the exemption shall not apply to “articles brought or imported personally, for their personal use, by subjects of the Imperial Iranian Government who are not members of the American Armed Forces.” It is hoped that this qualification will make the general provision acceptable to the Iranian Government.
- b)
- The Iranian counterdraft omits the clause permitting the United States Government to operate postal facilities, commissary stores, and post exchanges. The War Department draft retains this clause. We are unaware of the reason for the Iranian objection, but the right involved would appear to be necessary for the proper maintenance of our forces, and it is, therefore, thought proper to insist upon it.
- c)
- Neither the Department’s original draft nor the Iranian counter-draft mentions any exemption from income or similar taxes. This [Page 477] question arose recently in connection with General Motors operations in Iran, and it is understood that up to the present neither the Persian Gulf Service Command nor the American civilian agencies under its direction have been paying the Iranian income tax, either for their American personnel or the Iranians whom they employ. Since the number of men involved is substantial and may ultimately amount to more than 100,000, this is a rather extensive exemption and represents a fairly serious reduction in potential Iranian revenues, which are disastrously low at the present time. It is also difficult to justify on moral or legal grounds with respect to civilian Iranian employees. The War Department draft, accordingly, provides for a blanket exemption from all tax liability on income previously received but restricts the future exemption to persons “who have entered or may enter Iran as members of the Armed Forces of the United States of America, or as the agencies or employees aforesaid.” It is assumed that the intention is to avoid taxation on the profits of the non-Iranian organizations concerned or on the personal wages of non-Iranian employees or military personnel but to permit the collection of taxes on the incomes of Iranian civilians employed locally. To make this a little more definite, this Division has added a provision that the exemption shall not apply to “persons who are subjects of Iran and who are not members of the Armed Forces of the United States of America.” It is thought that this would avoid discrimination in cases where Iranian subjects might be employed in other countries and then sent to Iran, thus qualifying as persons “who have entered or may enter Iran”.
Article IV
This Article was originally suggested by the War Department. It closely follows the corresponding provisions of the Base Lease agreement with Great Britain.59 In the Iranian counterdraft, the clause giving our authorities “all powers which the appropriate Iranian authorities would possess” is omitted. The War Department draft, however, retains this, and it would seem to be an important right.
(Iranian Article V)
The Iranian counterdraft inserts an entirely new article at this point, whereby the United States would undertake to defend Iran against aggression by “Germany or any other power”. Iran would undertake to cooperate in such defense, but only to the extent of maintaining internal security. This proposal is modeled upon a virtually identical undertaking by Great Britain and Russia in the Anglo-Soviet-Iranian Treaty of Alliance. The War Department has positively rejected it, and it appears quite certain that this Government is not in a position to make such a commitment. Our Minister at Tehran reports that the Iranians will not insist upon this article.
[Page 478]Article V
Except for the final sentence, this is identical with the original draft, the Iranian counterdraft, and the War Department draft. The final sentence of the Iranian counterdraft is as follows: “An agreement or agreements shall be concluded as soon as possible between the Imperial Iranian Government and the Government of the United States of America in which the rights of the Iranian Government concerning the use made of the railway, other means of communication and roads will be safeguarded.” The War Department has asked that this Article be so worded as to make another agreement unnecessary. There would appear to be only two alternatives: a) to omit the final sentence entirely, as was done in the original draft, or b) to leave any necessary arrangements to be made informally by the people on the spot. It is thought that there will be, inevitably, many working arrangements to be established between the Iranian and American organizations in connection with our use of communications, and the “rights of the Iranian Government” could be taken care of in that way.
Article VI
This Article is identical with the Department’s original draft and with the War Department draft, except for the final clause of the first paragraph, which has been added to conform to the new provisions of Article II. The Iranian counterdraft conforms substantially to the first paragraph, except for the final clause, but differs radically with respect to the second paragraph. It proposes that fixed installations shall be given to the Iranian Government free of charge and that movable property which is not removed may be sold to the Iranian Government after agreement by a committee composed of representatives of both parties. This Iranian proposal has been rejected in toto by the War Department and is contrary to the policy which has been worked out by the Department, after careful consideration, in connection with our draft Lend-Lease agreements with Middle Eastern countries. It is believed that we should insist upon retaining the clause substantially as it stands.
Article VII
This is the wording of the War Department draft. The Department’s original draft, and the Iranian counterdraft speak only of “the presence of American Armed Forces or civilian personnel”, but it seems logical to include the word “agencies”.
Article VIII
This is the wording of all three drafts, and no change has been suggested.
[Page 479](Iranian Article X)
The Iranian counterdraft inserts an entirely new article at this point, reading as follows:
“The Government of the United States of America undertakes to exert its best efforts to safeguard the economic life of Iran against privations and difficulties arising as a result of the present war, and to start the necessary negotiations for this purpose with the Imperial Iranian Government as soon as possible, and to conclude corresponding agreements.”
This is substantially the same as Article 7 of the Anglo-Soviet-Iranian Treaty of Alliance. The War Department has expressed the opinion that its acceptance or rejection is a question solely for the State Department. A request for a similar declaration by this Government was made by the Iranian Minister a few months ago in connection with a proposed American-Iranian financial agreement. After consideration by NE,60 DM,61 ER,62 EA63 and Mr. Acheson,64 it was decided that such a declaration would be entirely meaningless and should not be made. The same reasoning and the same decision seem applicable to the present case.
Article IX
This incorporates part of the phraseology of the Iranian counter-draft (Article XI) which is obviously modelled on article 5 of the Anglo-Soviet-Iranian treaty. However, reference to an armistice has been omitted. We have been talking of unconditional surrender, which might or might not be in the nature of an armistice. It seems unnecessary to define the method by which hostilities may be suspended. The War Department draft called for withdrawal of our forces as soon as reasonably possible after the conclusion of peace, but we have maintained that the six-months feature is essential, even though transportation difficulties might prevent withdrawal of all the forces within that period.
Article X
No reference to ratification is made in this article on the ground that this is an agreement and not a treaty, and we should give no excuse for calling it a treaty. Ratification by the Majlis is not, of course, precluded.
- Despatch not printed, but see telegram No. 476, May 8, 5 p.m., from the Minister in Iran, p. 464.↩
- See telegram No. 476, May 8, 5 p.m., from the Minister in Iran, p. 464.↩
- Agreement with Great Britain for the use and operation of certain bases, signed at London, March 27, 1941, Department of State Bulletin, March 29, 1941, p. 387.↩
- Division of Near Eastern Affairs.↩
- Division of Defense Materials.↩
- Division of Exports and Requirements.↩
- Adviser on International Economic Affairs.↩
- Dean G. Acheson, Assistant Secretary of State.↩