Memorandum of Conversation, by Mr. John D. Jernegan of the Division of Near Eastern Affairs

Mr. Yekta30 called at the request of the Iranian Minister and handed me the attached note, the original of which the Minister is understood to have given to Mr. Harry White, Treasury Department, this morning.

Mr. Yekta said that the Minister, under instructions from his Government, had explained to Mr. White the need of Iran for imported supplies and had asked that a clause be included in the proposed American-Iranian financial agreement31 whereby the United States would undertake to do all in its power to provide articles essential to the Iranian economy. I understood that Mr. White had promised to take this request under consideration.

According to Mr. Yekta, the Minister wished this request brought to the attention of the Department as well as the Treasury Department.


It is in the interest of both countries to prevent the spiral rise of prices and to avert inflationary developments in Iran.

[Page 609]

The economic structure of Iran has been built up for its own needs, but we are facing now the further demand made upon it by our Allies in Iran. This demand, however, must be met, as far as possible, without upsetting the economic fabric of Iran and any further increase in the cost of living for the Iranians, whose earnings fall behind the rise of prices.

Our dollar or gold supply in America may be useful at a later date, but at present it would be no help to the Iranian economy. The only tangible help we can get from America for Iran would be the shipment of some most essential supplies. We understand the shipping problem, but some urgent needs could be met, and moreover there are many commodities which require very little shipping space yet are of great scarcity in Iran.

It is of utmost importance to consider the effect of this agreement upon Iranian economy as well as the interest of the United States in Iran.

  1. Abdol-Ahad Yekta, Second Secretary of the Iranian Legation.
  2. For correspondence regarding U. S. financial assistance to Iran, see pp. 561 ff