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

811.5151/282

Memorandum of Conversation, by Mr. W. Leonard Parker of the Division of Near Eastern Affairs

[Washington,] July 15, 1943.

Participants:	Dr. Henry [Harry] White, Assistant to the Secretary of the Treasury.
	Mr. Bernstein, Treasury Department.
	Mr. Luxford, Treasury Department.
	Mr. Glendinning, Treasury Department.
	Mr. Murray, PA/M98
	Mr. Jernegan, NE
	Mr. Parker, NE

At Dr. White’s request Mr. Murray, accompanied by Mr. Jernegan and Mr. Parker, attended a meeting in Dr. White’s office for the purpose of discussing this Government’s financial policy in the Near East.

[Here follows discussion of general financial policy for the Near and Middle East area as a whole, not printed; also section dealing with Saudi Arabia, printed on page 875.]

Dr. White then took up the question of the proposal to extend a $50,000,000 loan to Iran. He said that first of all there are certain Iranian monetary laws about which we must know before we can proceed. It was agreed that this factual information can be obtained speedily from our Legation. Dr. White expressed the opinion that we can make a stabilization arrangement with the Iranian Government under which we would buy a given quantity of rials and receive a deposit in Iran instead of Iranian currency. He pointed out that Sir Frederick Phillips had indicated that the British are interested also in making a loan to Iran and probably would wish to participate. We could tell the British that, obviously, they could not participate in our stabilization arrangement. However, if the British should insist upon some form of participation we could make a stabilization arrangement covering, say, $25,000,000 and the British could make an outright loan of the other $25,000,000 if they continued to insist upon participating. Mr. Murray expressed satisfaction with Dr. White’s suggestion that we deal with Iran independently with regard to financial matters and keep our transaction separate from the British transaction. He pointed out that we should not engage in combined Anglo-American operations with Iran if we expect to get results, in view of Iranian distrust of the British. It was also pointed out that a joint loan might involve us in complications if there should be any difficulty in collecting the loan. Dr. White said the Treasury will investigate the practicability of entering into a stabilization arrangement with Iran and that, if it can be done, we will tell the Iranians that we are willing to come to their assistance with a stabilization fund. If the British learn about it, we can tell the British that, since they cannot participate in a stabilization agreement between the United States and Iran, they can make an independent British loan.

[Here follows section on India.]

98. Wallace Murray, Adviser on Political Relations.