891.51/8–2548: Telegram
The Secretary of State to the Embassy in Iran
841. In exploratory conversation Eximbank, Dept obtained Bank’s reaction contemplated Iranian request loan (urtel 993 Aug 251). Bank will consider application if accompanied by supporting documentary evidence purpose loan (including detailed statement types equipment needed, prospective US suppliers, and specific end use), unavailability private financing, proposed terms repayment, and analysis prospective capacity repay. Bank’s consideration application does not necessarily imply its approval because in general each application judged basis its: economic merits.
Bank policy does not permit large-scale credits for long-range development projects which are expected to be handled by International Bank. Dept believes Iran would be well advised limit initial ExIm Bank application to request for approx one million dols for purchase well-drilling machinery and irrigation pumps to be used satisfy obvious, immediate economic need and as demonstration projects prefatory to large-scale agricultural development in which Int Bank might be asked assist. Dept will support loan proposal along above lines.
Next step would appear to be approach ExIm Bank by Iran Emb-Wash. It would be helpful if Ebtehaj, in forthcoming visit US, would come prepared support strongly, or even to present, well-documented credit application.
Re possible ExIm Bank credit water projects, Iranians might wish take advantage Smith–Mundt authority permitting Sec State detail Dept Agri experts assist this year in such pilot projects, preferably conjunction Near East Foundation. Since Congressional appropriation for such assistance not expected to be available before fiscal 1950, Iran Govt would have to pay. Apparently it can afford payment from funds mentioned first para urtel 993.
- Not printed; it advised that the Council of Ministers the day before had voted to sell foreign exchange at the official rate for agricultural machinery, irrigation pumps, well-drilling machinery, etc., up to the equivalent of 600,000 pounds and had authorized the Minister of Agriculture to open negotiations with the Export-Import Bank for credits so that the full amount need not be used. Ambassador Wiley expressed his belief that “some tangible evidence of American economic support to Iran would be very beneficial at this time. It would provide good offset to frequent criticism that only American help has been to supply arms. I recommend that we support this loan proposal assuming it is consistent with ExIm Bank policy.” (891.51/8–2548)↩