891.5151/248: Telegram
The Secretary of State to the Minister in Egypt (Kirk)
Washington, September
8, 1943—10 p.m.
1303. From the Secretary of the Treasury for Gunter:
- 1.
- Treasury is willing to enter into a stabilization agreement with the Government of Iran and is prepared to begin discussions promptly with the Minister of Iran in Washington.
- 2.
- Under this agreement the Treasury will purchase rials from the Government of Iran, payment to be made in dollars deposited to the account of the Government of Iran or the Bank Mellie at the Federal Reserve Bank of New York. No interest will be paid on the dollar balance in such account. The dollars so acquired by Iran may be converted into gold to be held under earmark at the Federal Reserve Bank of New York.
- 3.
- The Treasury will undertake to purchase rials under this agreement so long as the rials it holds do not exceed at any one time the equivalent of $30 million. The rials so acquired will be held as a time deposit in the Bank Mellie. Interest will be paid on the average daily balance of rials at the rate of 1½ percent per annum. At the end of each 90–day period, the Government of Iran will repurchase the rials accrued as interest at the average rate of exchange at which [Page 598] the rials on which such interest has accrued were acquired. The Secretary of the Treasury may require the repurchase of any rials previously purchased by him. Beginning 90 days after receipt of notice to repurchase, the Government of Iran will repurchase at the end of each succeeding 30–day period ½ the amount required to be repurchased. The rials repurchased will be paid for in dollars at the Federal Reserve Bank of New York at the rate at which the rials were previously acquired by the Treasury. Either gold or dollars equivalent to the rials shall be pledged as security for the repurchase of the rials.
- 4.
- This agreement will terminate on June 30, 1945, subject to earlier termination at any time with respect to the acquisition of additional rials.
- 5.
- No change in the dollar-rial rate of exchange may be made by the Iranian Government during the term of this agreement without prior consultation with the Treasury of the United States. Under any circumstances, it is expected that consultations will be held periodically in connection with this agreement. [Morgenthau.]
Repeat to Tehran as Dept’s No. 455.
Hull