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

Participants: Commander Jackson, Executive Director of MESC40
Mr. Hayter, First Secretary, British Embassy
Mr. Murray, PA/M41
Mr. Ailing
Mr. Merriam
Mr. Jernegan

Commander Jackson, who had very recently arrived from Cairo and expected to return within a few days, said that the general supply [Page 618] position in the Middle East had improved somewhat. Arrangements to meet the basic needs of most of the territories were pretty well in hand. The difficult spots, he said, were Syria and the Lebanon, Ethiopia and Eritrea, and Iran. The problem in Syria and the Lebanon was largely one of implementing a control system in the face of opposition on the part of selfish local landowners. In Ethiopia and Eritrea there were various problems, including the control of raw products, such as rubber, which the country could furnish to the war effort.

Iran, Commander Jackson said, was considered the prime problem of the entire area and was being given the most earnest consideration by the MESC. Its immediate importance was twofold, as a supply route to Russia and as the source of the petroleum products needed for the Allied forces in India and elsewhere. Both were vital and both could be safeguarded only by preventing collapse in Iran. During the past year, Iran’s economy had been maintained and starvation avoided only by the narrowest of margins. At one point the situation had been saved only by the diversion to the Persian Gulf of 20,000 tons of grain destined for the Red Sea. In the end, partially thanks to the Russian shipment of 25,000 tons to Tehran, the food needs of the country had been barely met, but Commander Jackson felt that it was most unwise to operate so close to the borderline. He felt that it was short-sighted to take risks of this kind merely for the sake of saving two or three ships for other uses, and he intended to press this point in London on his way back to Cairo. For the coming year, he hoped the Ministry of War Transport and the War Shipping Administration would take a more liberal view, especially since the general shipping position was improving.

The new harvest in Iran was promising to be very large, more than 2,000,000 tons, Commander Jackson explained. Of this, the Iranian Government must gain control of 350,000 tons, in order to assure the supply of the cities until the next harvest. This could not be done, MESC felt, by any rigid, elaborate plan of organization and the promulgation of decrees; the administrative machine in Iran was too weak. The only possibility was to send out as many good men, as soon as possible, into the countryside to buy grain before it disappeared into hoards or was smuggled across into neighboring countries. Mr. Sheridan was not following this policy as yet, but Dr. Millspaugh42 agreed that it was the proper one. It might appear economically and commercially an unsound procedure, but it was the only practical one MESC could visualize under the circumstances. If it were adopted energetically, Commander Jackson believed Iran [Page 619] could be self-sufficient in food during the coming year, even if no large quantities of grain should be obtained from the Soviet-occupied areas.

Commander Jackson spoke repeatedly of Dr. Millspaugh as the key man and main hope of stability in Iran. He said that MESC was in close touch with him and was prepared to give him everything he asked for in the way of supplies and believed it would be possible to provide as much as Millspaugh could receive and distribute under his new economic powers. Mr. Murray said that the Department was very glad to hear this, that we agreed as to the vital importance of Dr. Millspaugh in the Iranian picture. We ourselves were doing everything possible to assist him and welcomed the interest and support of the British. Together, we should be able to carry the day, whereas alone we might not.

In this connection, Commander Jackson emphasized the importance of solving the immediate financial difficulty of the Iranian Government. He said he had had a conversation with Mr. Bernstein of the Treasury on this subject and was glad to learn that the problem was receiving attention. He was also glad to hear that additional American assistants for Dr. Millspaugh were being sent out, including a man (Lieutenant Colonel Speaks) to replace Sheridan in charge of the food administration.

With respect to supplies other than food in Iran, Commander Jackson said that the oil shortage at Tehran had been relieved; he thought cotton piece goods and sugar would come forward satisfactorily, and, with the end of the grain shortage, railroad shipping space would become available to move other miscellaneous non-food articles.

Commander Jackson spoke of the attitude of General Connolly, head of the Persian Gulf Service Command, whose policy in general seemed to ignore the civilian situation in Iran. Commander Jackson felt that MESC and the British and American Legations at Tehran should make a determined effort to enlist the interest of General Connolly in Iranian problems, through a gradual process of education in the relationship of those problems to the unimpeded movement of supplies to Russia. He cited one case in which diversion of civilian oil supplies to military movements had resulted in a stoppage of power and industrial plants in Tehran and had ultimately forced an equal diversion of military transport to replenish civilian stocks, thus nullifying the original gain to the military movements. He also spoke of the danger to the whole Allied position, military as well as political, if there should be a real internal collapse in Iran.

Mr. Murray spoke of the Russian attitude, which was not only uncooperative but indicated possible ambitions in the country. Speaking personally, Commander Jackson expressed the opinion that the Soviets [Page 620] were much interested in the demonstration being provided of the utility to them of a warm-water port on the Persian Gulf, where supplies could be received the year round. He made no suggestions, however, regarding British or American policy toward the Soviets in Iran.

The relations between the British and American authorities in Iran, Commander Jackson said, appeared to have improved, although he felt that there was still room for greater understanding and cooperation.

Mr. Murray and Mr. Jernegan asked whether he could give any explanation of the reiterated Iranian complaints against MESC, especially the charges that Iran was not given equal treatment with other territories. Commander Jackson said that this complaint was common to all the territories, each one being convinced that its neighbors were better treated, and he could state positively that there was no discrimination against Iran.

Mr. Murray closed the conversation by asking Commander Jackson to keep the Department fully informed of problems as they developed, in order that we might be in a position to lend our support and have data upon which to base our representations to other agencies.

  1. Middle East Supply Center.
  2. Office of the Adviser on Political Relations.
  3. Arthur C. Millspaugh, American Administrator General of Finances in the Iranian Government; for correspondence on the Millspaugh Mission, see pp. 510 ff.