891.51A/1173: Telegram

The Chargé in Iran ( Ford ) to the Secretary of State

439. Prime Minister summoned me yesterday afternoon and informed me it had been decided to introduce bill in Majlis repealing Millspaugh’s plenary economic, as distinguished from financial, powers. Project to create new Ministry of Economy had been dropped temporarily, he said, and it was planned that economic divisions of Millspaugh operations should continue independently under present American heads, while Millspaugh confined himself to financial matters.

I noted Department’s remarks to Shayesteh, as reported in Department’s 357, June 8 and reiterated the various arguments I have previously advanced in talking to Saed. I pointed out, as Saed himself had virtually admitted, that Millspaugh would almost certainly resign if his powers were reduced. If Iranian Government were really aiming at ousting Millspaugh completely, it would be fairer to ask for his resignation, rather than force him out by this method. Saed denied any desire to have Millspaugh go, and insisted Iranian Government wanted him and entire mission to remain. If the Doctor should leave, he hoped rest of mission would remain.

Millspaugh is to see Prime Minister today, at which time Saed will inform him of Government’s intention. Saed expressed hope to me that friendly agreement with Millspaugh would still be possible.