891.002/6–2448: Telegram

The Ambassador in Iran (Wiley) to the Secretary of State

secret   priority

703. Prime Minister1 requested an appointment. I received him at Embassy residence yesterday morning. He remained one hour and half. (I am still confined with sandfly fever.)

Hajir started off on urgent necessity for raising standard of living of masses, reducing cost of living, and expressed deepest interest in pursuing seven year plan most vigorously. He wishes, however, to explore possibility of obtaining credits abroad (meaning US) for immediate importation of urgently needed foodstuffs, chiefly rice and sugar, cheap textiles and other consumer goods. He spoke in terms of some 40 million dollars. He discussed economic matters at considerable length and seemed to be somewhat hurt that International Bank is inclined to dole out any loan only when bank is convinced that funds are being well and wisely expended.2

He then rather anxiously raised question of Bahrein. He told me of very deep interest felt in Iran over the question. He said naturally it was question that involved both Great Britain, which had its treaty with the Sheik and the US which had the petroleum concessions. I added perhaps also Portugal which also had claims. He said “Yes, yes, they were there too.” What he specifically wanted to know from me was whether there was a favorable opportunity now officially to [Page 152] initiate international negotiations on the subject. I replied that we were not involved in any questions of sovereignty in Persian Gulf; he would have to work this question out with British. I personally did not think that outlook was very bright.

Then he said, “Indeed we have two international problems; the second problem is Afghanistan”. Just as he was about to swan-dive into the Helmand River,3 I interrupted. I said “I am afraid, Excellency, you have only one serious international problem, namely, your great neighbor to the north. You have received a series of high pressure notes from Moscow, followed by a series of serious frontier incidents.4 I think I would worry chiefly about that and would try to keep your nationalistic patriots who want to seize Bahrein and march against Afghanistan just as quiet as possible. The moment is most inopportune for Iranian jingoism. We are hoping and praying that you will be able to preserve your own frontiers intact.” He made no reply.

As Prime Minister was taking his leave, he asked if I thought it would make a bad impression if Iran entered into trade negotiations with Soviet Union. I replied that if it had to do with normal commercial exchanges I could see no objection; indeed, it would seem to me advisable that Iranian Government should leave nothing undone in view of tenseness of relations with Soviet Union to normalize if possible trade conditions.

  1. Abdul Hussein Hajir succeeded Mr. Hakimi as Iranian Prime Minister on June 13, 1948.
  2. Ambassador Wiley had a two-hour conversation with the Shah on July 2. He reported that the latter was “very eager that Hajir should accomplish some quick economic reforms in Iran with prompt reduction cost of living for underprivileged. He foresees it will be at least three years before anything results from seven year plan and does not want to wait so long. He is hopeful that they can shake down AIOC for future royalties. He seems to have no illusions about getting any quick credits from US.” (telegram 758, July 2, 3 p. m., from Tehran, 891.00/7–248)
  3. The reference is to the dispute between Iran and Afghanistan regarding distribution of the waters of the Helmand River; for information on this subject, see bracketed note, p. 486.
  4. London, on June 25, reported information from Mr. Pyman, citing an Iranian source, that, Soviet armor had for the past week made itself conspicuous east of Julfa. The source indicated that this activity might betoken serious preparations or might be part of the war of nerves while the new Iranian Cabinet was being formed (telegram 2802, 891.002/6–2548).