Memorandum Prepared in the Division of Middle Eastern Affairs 45

[Here follow “Background Facts” to be considered in making a decision regarding American responsibilities with respect to the Iranian State Railway, and “Summary Comments”.]

[Page 564]

III. Recommendations.

a. The Department may wish to consider discussing the over-all matter of financial responsibility for the ISR with the British in the course of the current financial conversations. It is understood that the British may wish to include this matter on the agenda of unsettled US–UK financial enterprises. Since the Russians have paid nothing for its war-time benefits from ISR operations, an approach by one or both of its Allies in Iran may be in order.

If the matter is discussed with the British, there should be emphasized the urgent political considerations which require that the ISR receive such compensation for war-time use of the Railway as to assure its financial solvency and operational stability.46 In this connection, this Government may wish to propose a joint plan by the United States and the United Kingdom, and the Soviet Union if it sees fit, which might guarantee efficient transportation through Iran in the future.

b. The Department may wish to point out to the War Department that the military nature of the American operations in Iran suggests that this Government might appropriately absorb all operational expenses already made by the PGC, as an American contribution to the over-all war effort. In anticipation of the possible assumption by this Government of freight charges, the Department may wish to explore with War the possibility of using War Department appropriations for this purpose.

  1. Drafted by J. Harold De Veau and William C. Dunn of the Division of Middle Eastern Affairs and initialed by Harold B. Minor, Acting Chief of that Division.
  2. In telegram 287, June 8, 1945, 6 p.m., to Tehran, the Department stated: “War [Department] states that P[ersian] G[ulf] C[ommand] is turning railway back to British who apparently are turning it over immediately to Iranians. British have informed War that they will accept no individual responsibility for finances of railway after June 30 but will consider any such problems which arise as allied rather than British.” (891.77/5–2945)