Foreign Relations of the United States: Diplomatic Papers, 1943, The Near East and Africa, Volume IV

891.5151/247

Memorandum by the Director of Monetary Research, Treasury Department (White), to the Under Secretary of the Treasury (Bell)⁸⁰

[Washington,] February 4, 1943.

Subject: Proposed Stabilization Agreement with Iran

The Government of Iran now has an agreement with the British Government to provide such Iranian rials as the British Government needs for military and other purposes in Iran. The Iranian Government is prepared to conclude an agreement with us to provide Iranian rials for the needs of the United States. We have been informed by the War Department that there will be a considerable need for rials in the future although the precise amount is still undetermined. The Iranian Minister has received instructions from his Government to conclude an agreement with the Secretary of the Treasury for the provision of such rials.

A proposed agreement between the Secretary of the Treasury and Iran might include the following provisions:

(1) Iran would undertake to furnish rials for dollars to meet the needs of the United States at the rate of exchange in effect at the time of each such purchase of rials.

(2) The Secretary would undertake to sell gold for dollars in accordance with the provisions of the Gold Reserve Act⁸¹ and at the price of gold that is in effect at the time of each such sale of gold.

(3) The gold acquired by Iran would be earmarked in New York for the account of Iran without further cost to Iran except for actual costs incurred.

(4) The gold held on earmark for Iran could be exported subject to Treasury regulations in effect at the time of each proposed export of gold.

(5) Iran would undertake to sell us gold for rials acquired from Iran at a price based upon the rate of exchange in effect and the Treasury price of gold in New York.

(6) No change in the dollar-Iranian rial rate of exchange would be undertaken without giving an opportunity for prior consultation. From time to time the Secretary of the Treasury and the Iranian Government would name representatives to discuss the economic problems connected with maintaining stability of the dollar-Iranian rial rate of exchange.

(7) The agreement would terminate on June 30, 1943, subject to earlier termination by either party without prejudice to the rights of the other for transactions previously undertaken.

80. Copy forwarded on February 9 by E. M. Bernstein, Treasury Department, to the Assistant Chief of the Division of Financial Affairs (Luthringer).
81. Approved January 30, 1934; 48 Stat. 337.