891.51A/860: Telegram
The Minister in Iran (Dreyfus) to the Secretary of State
[Received 11:25 p.m.]
989. Millspaugh informs me he intends to present to Prime Minister his formal resignation as Administrator General of the Finances as soon as it can be prepared and translated, probably [apparent [Page 538] omission] assistants with one possible exception have loyally and willingly agreed to follow his lead and present their resignations individually. Result will be complete withdrawal of American Financial Mission.
Millspaugh in letter to me states he now sees almost no possibility of success of his mission because of lack of staff, the uncooperative attitude of Majlis and the widespread graft, obstruction and sabotage with which he must contend in Iranian Government circles. He admits that his own illness has been a contributing factor.
I am inclined to agree with Millspaugh’s appraisal of the situation and his conclusion that it is probably beyond his power to prevent the failure of his efforts. I fully appreciate fact that Financial Mission was intended to play an important role in American policy in Iran, especially in furthering our practical objective of insuring the Russian supply corridor and advancing our altruistic aims assisting the Iranians to rebuild their shattered economic and political structure. Millspaugh would not suggest nor support withdrawal of Financial Mission if it were thought that these important objectives would be advanced by its continued presence. The turn of events is unfortunate but I can see no logical nor dignified alternative. It would seem tactically preferable to withdraw now and place the historic onus squarely on Iranians’ shoulders where it properly belongs than to continue unavailing efforts which would lead to ultimate failure. Millspaugh has worked unstintingly for Iran and has sacrificed himself to point of breaking his health. His self-effacing efforts have been sacrificed on the altar of Iranian greed and the treachery of self-seeking politicians.
In analyzing situation objectively I should attribute Millspaugh’s failure to following factors in order of importance:
- 1.
- Iranian obstruction and sabotage. This has taken form of absolute lack of cooperation on part of Majlis, obstruction of selfish merchants and landlords who tremble in fear of reduction of their exorbitant profits, and attacks in a venal partisan press. Majlis for example has not yet enacted the emasculated income tax law nor approved project for employment of 60 additional Americans.
- 2.
- Lack of American staff. This has prevented the carrying out of essential work and has overburdened the small staff to point of illness and discouragement. Speaks abandoned the ship after a few days and Robinson perhaps the only first rate man of the lot will have to leave shortly because he has ruined his health from overwork. An important contributing factor has been the unreasonable delay at the American end in selecting and obtaining priority for American personnel, a fact which has greatly impeded building up of an effective staff.
- 3.
- Breakdown in Iran Government. This is due to general demoralization and to the inflation which has made salaries insufficient even for bare subsistence. Result has been such wide-spread graft [Page 539] and inefficiency that accomplishment of anything constructive is rendered almost hopeless.
- 4.
- Lack of sympathetic understanding on part of American Army in Iran and of some Americans representing civilian agencies. These self-appointed makers of American policy blindly refusing to understand or further American aims in Iran have harmed Millspaugh’s efforts by their criticism. This spirit is evident also on part of MESC46 officials.
- 5.
- Millspaugh’s own weaknesses, notably his illness, his inability to inspire and lead his staff and his intransigence toward Iranian suggestions.
In addition to above five points it is common gossip in Tehran that the British and Russians are working covertly to bring about general failure of American missions. While I have no positive evidence to substantiate his [this] charge the fact that it is given great credence tends to encourage the opposition to bolder action.
I recommend that at least until situation is clarified Department suspend action on employment of additional Americans for any kind of position in Iran and hold up the departure from United States of all such Americans now awaiting transportation. I further recommend that negotiations for a stabilization agreement be held up.47 There would appear no valid reason at this time to suggest the withdrawal of the other American missions functioning in Iran.
It is possible that the Iran[ian]s who while sabotaging the efforts of the Financial Mission to put the Iranian house in order keenly desire the presence of Americans in Iran as a political buffer to British and Russian incursions, will endeavor to persuade Millspaugh to continue his mission on his own terms. Even in this eventuality he could not agree to continue unless the United States Government would undertake to furnish a large number of competent Americans within a fixed period of time.