891.77/11–1849
Memorandum of Conversation by, the Secretary of State1
Subject: Request by the Shah of Iran for Help in Obtaining Railroad Equipment
| Participants: | The Shah of Iran |
| Hussein Ala, Iranian Ambassador | |
| The Secretary of State | |
| Willard Thorp, Assistant Secretary for Economic Affairs | |
| George C. McGhee, Assistant Secretary for Near Eastern, South Asian, and African Affairs | |
| John D. Jernegan, Director, Office of Greek, Turkish, and Iranian Affairs |
The Shah opened the conversation by saying that he was most anxious to obtain promptly locomotives, freight cars and rails to meet the immediate transport crisis in Iran. He was told that we had already made some inquiries with respect to locomotives and understood a large number in used condition were readily available. He replied that unfortunately these locomotives were not of the right type for use in Iran and, furthermore, they were not new. His Government had made inquiries in Germany and elsewhere and had found that new locomotives could be produced in Germany in about ten months, but Iran could not wait that long. He hoped that it would be possible to get quicker delivery in the United States. The rolling stock was needed in three or four months.
The Department’s representatives indicated that it would be very difficult to obtain new rolling stock in so short a time, especially in view of the fact that orders for steel were probably backing up as a result of the recent steel strike.
The Shah then asked whether it would be possible to obtain credit from the Export-Import Bank to finance whatever transaction might be arranged. In reply to a question he said that the Iranian authorities had not yet approached the bank. Mr. Thorp said that he saw no fundamental objection to an Export-Import Bank credit in this connection but he thought Iran would be well advised first to look to the International Bank for help. It was pointed out that the International Bank liked to make loans of this type and had in fact recently extended a credit to India for the precise purpose of buying railroad rolling stock. Mr. Thorp said that the Department of State would be able to give strong support to an Iranian request for an International Bank credit for purchase of the equipment in question. The Shah indicated that he would consider the suggestions regarding the means of financing the transaction but said that this was not the most important aspect of the question; the essential element was the time within which the equipment could be made available.
It was agreed that the Department would make every effort to locate locomotives, freight cars and rails of the sort which the Iranian Government wished to obtain.
- Drafted by Mr. Jernegan.↩