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

No. 489

Sir: I have the honor to enclose a copy of Dr. Millspaugh’s first monthly report to the Iranian Government dated Bahman 1321 (February 19, 1943).7 This draft, Dr. Millspaugh explained to me in a confidential covering note, will be slightly revised for publication. I thought it wise to forward the draft without waiting for its revision or publication, because it contains information which will be of great interest to the Department.

Dr. Millspaugh’s factual and interesting report reveals how quickly and thoroughly he has taken up again the thread of Iranian life. Its frank recognition of Iran’s ills, its promises of reforms and benefits to come and, above all, its note of compassion and understanding for the Iranian people should insure it a sympathetic reception by the Iranians. Dr. Millspaugh’s plans for correction of this country’s many problems are still, he reports, in the nebulous stage of study. Among the more important are increased taxation to counteract inflation and tap excess profits, rent and price control, reduction of the budget, salary increases accompanied by radical reduction in the number of unneccessary government employees, sale of gold and silver in the open market as a means of combatting inflation, rationing of essential products, and an internal treasury loan.

Dr. Millspaugh’s mission consists of the following American personnel:

  • Dr. Arthur C. Millspaugh, Administrator General of Finances.
  • Dr. Paul M. Atkins, Director of Opium and Tobacco Monopolies.
  • Dr. Elgin Groseclose, Special Assistant, assigned temporarily to deal with personnel, money, currency, and gold.
  • Mr. James G. Robinson, Director of Administration of Internal Revenue.
  • Mr. Henry S. Shambarger, Director of Administration of Accounts and Audit.
  • Mr. Hugh C. G. Chase, Dr. Millspaugh’s private secretary.
  • Dr. Walter Gresham, Director of Customs, is enroute from the United States, and Colonel Richard W. Bonnevalle, Inspector General of Ministry of Finance, is about to depart from the United States, In addition to these Dr. Millspaugh has requested the Department to endeavor to engage Messrs Speaks, Pixley, Moon, and Shuckman.

Dr. Millspaugh’s high prestige in Iran has suffered no decline. His quiet manner, dignified bearing, calm self-assurance, swift action, and [Page 518] firm but friendly manner of dealing have convinced the Iranians that he means business and knows how to get what he wants. Iranians, realizing that his powers are almost unlimited, expect him to produce results. A few press comments concerning the Millspaugh Mission may be useful and interesting.

[Here follow reports on press comment and on personnel relations.]

Dr. Millspaugh’s liaison with this Legation has been good. He has sought advice on all matters which might affect Iranian relations with the United States and has asked me to seek the assistance of the American Government in a number of cases. The Department will have noted my recent telegrams on such questions as the possible sale of United States bonds in Iran and Dr. Millspaugh’s suggestion for the sale of gold as an anti-inflation measure.8 Dr. Millspaugh’s liaison with the British Legation has also been good. He has conferred on all of his proposed financial measures with Mr. Iliff, financial counsellor of the British Legation, as well as with representatives of this Legation. He has also conferred with visiting British officials.

I have been, on the whole, pleased with the quiet, active, and efficient way in which Dr. Millspaugh has taken over his task and am hopeful that he will achieve positive and early results. His monthly reports, accompanied by such explanatory comment as may be necessary, will be forwarded to the Department.

Respectfully yours,

Louis G. Dreyfus, Jr.
  1. Not printed.
  2. For correspondence on this subject, see pp. 561 ff.