891.51A/563: Telegram

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

355. Department’s 149, March 29.9 Sheridan10 informs me Minister of Food now states that notification of employment of Sheridan’s assistants cannot be telegraphed to Iranian Legation Washington until contracts approved by Majlis. This about face by Iranian Government is an indication not only of lack of cooperation but also of bad faith. I recommend Department make no further endeavor to hold these men. I have made it clear to Iran Government that this Legation and Department will support no further requests for American advisers until convincing truth [proof?] given that Iran Legation at Washington is authorized to negotiate.

This brings up the more important general question of position of our advisers in Iran. I am sorry to report there is widespread and [Page 519]impetuous obstruction of our advisers amounting almost to sabotage. Millspaugh is meeting serious obstacles in efforts to put reforms into effect and his necessary bill for full powers has been hanging fire in Majlis a month; he reports opposition is even coming from Minister of Finance Saleh. Millspaugh is of opinion that Iran is hovering on brink of a financial precipice. Present financial undertakings would require spending this year of 2 billion rials beyond revenue and Allied expenditures make it necessary to find an additional amount of 2½ billions. Although Iran is not in a position to meet these expenditures all efforts to effect economy especially in War Ministry meets with stiff opposition. Schwarzkopf and Timmerman11 contracts continue to be delayed for political reasons. It is generally stated Majlis will not approve employment of any more Americans.

There is mounting evidence this campaign against advisers is concerted and deeprooted. Campaign is widely attributed to Russians but I have obtained no evidence this is true. Whether or not Russians are to some extent responsible the deeper responsibility must rest on shoulders of Iranian political elements who in their predatory search for power and graft show no appreciation of country’s welfare. Saleh, that erstwhile friend of America12 in conversation yesterday with member of staff bitterly criticized United States policy stating that American prestige is rapidly sinking because of (1) hostile attitude of people toward Allied occupation forces (2) failure of our advisers to effect reforms (3) limited shipments of goods to Iran under Lease Lend13 (4) delay in shipping wheat14 and (5) failure of Americans to deter Russians in their use of pressure on Iran.15 Saleh stated many Iranians feel American advisers are not qualified to correct country’s ills and declared Majlis members feel America is interested merely in using Iran as a highway to Russia and will put Iranians off with vague promises of future assistance. Saleh’s opinion is typical of evergrowing group of Iranians who close their eyes to substantial aid already given Iran in wheat, trucks, tires, etc., and fail to recognize that reason our advisers are unable to accomplish more is because their efforts meet with complete lack of cooperation.

I have come to opinion that strong line with Iranians is now essential, a view with which Millspaugh is in full accord. He is making firm but restrained demand that his full powers will be passed and that [Page 520]certain other measures necessary for country’s financial salvation be put into effect. In absence of some earnest Iranian good will he is prepared if necessary to withdraw from Iran. Other American advisers are of similar persuasion. All of us agree that supreme effort should be made to make a success of our adviser program and every effort will be bent toward achievement of this goal. If, however, present bad will, lack of appreciation of true American position and political obstruction continue I believe that only dignified solution would be withdrawal of all (repeat all) our advisers. Iranians unfortunately cannot be made to realize seriousness of their financial situation which is driving them inevitably toward disastrous inflation nor do they appreciate fact that American presence in Iran is perhaps only guarantee against worst fear of Iranian upper classes—Russian domination. I will keep Department informed.

Dreyfus
  1. Not printed.
  2. Joseph P. Sheridan, American Food and Supply Adviser to the Iranian Government.
  3. L. Stephen Timmerman, City Police Adviser to the Iranian Government.
  4. Mr. Saleh had formerly been head of the Iranian Economic Mission to the United States.
  5. See bracketed note, p. 600.
  6. For correspondence on this subject, see pp. 600 ff.
  7. For correspondence on this subject, see pp. 331 ff., passim.