891.51A/6–2744: Telegram

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

461. Millspaugh conferred this morning with Prime Minister who urged him to accept compromise whereby his economic powers would not be curtailed but his measures in economic field would be subject to concurrence of Minister of Finance as is the case with financial measures under law of Millspaugh’s original engagement. Millspaugh flatly refused but put forward following formula as counterproposal. (1) He recognizes that Majlis has right to repeal any or all laws granting him power. However, if it revokes his economic powers, he must insist upon resigning. (2) He is willing to consult with Minister of Finance on all economic measures before taking action and give Minister full information. (3) Recognizing vast extent of administrative problems, he will appoint two Deputy Administrators General, Pixley to direct financial affairs and the other, Black to direct economic phases of mission’s work under Millspaugh’s overall supervision. (4) Committee including responsible Cabinet Minister should be formed to discuss questions of supply with MESC13 and Embassies so that Government could have opportunity to pre [apparent omission] receive information from authorities concerned with supply shipping and transport.

Prime Minister said he would discuss this with Cabinet and Majlis Deputies.

Millspaugh says Saed gave impression of a beaten man who rather expected to lose his post soon. There is in fact growing talk among Deputies and others to effect that Cabinet will fall. Hajir is prominently mentioned as successor to Saed.

Millspaugh has not yet appeared before Majlis but says he will go if small group is formed with which he could have satisfactory discussion.

  1. The Middle East Supply Center, set up by the British at Cairo in 1941 to control the supply and distribution of goods to the civilian populations of the Middle East; for correspondence regarding the decision of the United States in 1941 to participate in the Middle East Supply Center, see Foreign Relations, 1942, vol. iv, pp. 1 ff.