Foreign Relations of the United States, 1950, The Near East, South Asia, and Africa, Volume V

788.5 MAP/1–2650

The Department of State to the Iranian Embassy ¹

Aide-Mémoire

The Department of State has read with great care and interest the Aide-Mémoire left at the Department by His Excellency, the Iranian Ambassador, on November 29.²

Since this Aide-Mémoire raises questions of great importance and since it appears from several of the statements it contains that the position of the United States has not been understood, it has been felt desirable to go into the various points raised in the Aide-Mémoire at some length.

With regard to the dollar amount of military assistance which may be provided to Iran during the current fiscal year, it is recalled that the President and the Secretary of State told His Majesty, the Shah, that the United States Government would give consideration to this question, although the heavy demands being made upon the limited resources of the United States from all sides and the restrictions written into the Military Assistance Act would make substantial readjustments difficult. The Department wishes also to recall previous discussions with the Ambassador in which it was pointed out that the dollar amount is not so significant as the amount and practical utility of the military equipment itself, which may be provided. The quantity and types of equipment, of course, will depend in part on the specific needs of the Iranian armed forces, in part on the physical availability of items in the United States, and only in part on the amount of money which may be available. Whether or not any large proportion of the equipment to be furnished Iran can be provided from excess stocks or at prices lower than present manufacturing costs will, again, depend upon the exact types of equipment involved. If American excess stocks do not contain items of the type required by the Iranian forces, these items could only be obtained from new procurement at consequent higher costs.

The reference by the Ambassador to extension of the Truman Doctrine³ to Iran indicates that there is some misunderstanding as to the nature of that Doctrine. In his Message to Congress of March 12, 1947,⁴ the President stated that:

“I believe that it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.

“I believe that we must assist free peoples to work out their own destinies in their own way.”

This statement of policy which has become known as the Truman Doctrine is clearly directed toward all free nations of the world, including Iran, which may find themselves in danger of losing their independence as a result of aggression. It has been with this end in view that the United States has been endeavoring to furnish certain military assistance to Iran and to utilize its facilities and good offices to further Iran’s economic and social development.

The present attitude of the United States toward the creation of a regional arrangement among Middle Eastern nations on the order of the North Atlantic Treaty arrangement was explained to His Majesty by the Secretary of State. Insofar as such an arrangement, involves only the nations included within the region itself, the United States Government considers that it is a matter exclusively for those states to decide. The United States would not wish to be in a position of either encouraging or discouraging such a development. At the present time, however, this Government is not in a position to associate itself with any new regional group.

The Department also wishes to clarify its understanding of the Declaration of Tehran of December 1, 1943,⁵ signed by President Roosevelt, Prime Minister Churchill and Marshal Stalin. That Declaration was of course a statement of the policies of the three Governments. Its primary purpose was to assure the Iranian Government and people of the desire of the three Great Powers for the maintenance of the sovereignty, independence and integrity of Iran. The United States has given ample evidence of its sincerity in this regard.

Secondarily, the purpose of the Declaration was to assure the Iranian Government and people that the three Great Powers would continue to do their best to assist Iran in the economic difficulties which it faced at that time, along with every other nation in the world, as a result of the then existing conditions of world-wide conflict. It should be noted in particular that the Declaration said that the three Governments would furnish assistance to the extent possible in the light of their world-wide military operations and the world-wide shortage of transport, raw materials and civilian supplies. This circumstance, coupled with the fact that the Declaration was issued at a time when the War raged unabated on every major front with the end not in sight, makes it clear that the promised assistance related exclusively to the Wartime period and not to the then distant postwar period. The United States did, in fact, continue to assist in making available to Iran the shipping space and the essential goods necessary to preserve the Iranian economy from collapse during the Wartime period when circumstances made it impossible for nations and individuals to obtain such goods and services in the ordinary way.

Thirdly, the Declaration was intended to assure Iran of full participation along with all other members of the United Nations, in post-war international conferences and organizations which might be established to assist in the restoration of normal economic conditions. So far as the United States Government is aware, Iran has been afforded the opportunity to participate in every conference and international organization in the economic field which was of interest to the Iranian Government.

Therefore, the Department hopes the Ambassador will agree that there is no unfulfilled promise of economic assistance contained in the Tehran Declaration. Quite apart from any question of the Declaration, however, this Government has on a number of occasions indicated its interest in the economic problems of Iran. Any specific assistance rendered is of course dependent on the specific needs of Iran in relation not only to its own resources but also to the relative needs of other countries. In this framework, the Department wishes to make the following observations on the five specific forms of economic assistance suggested by the Ambassador in his Aide-Mémoire under reference:

1. The inclusion of Iran in the Act for Aid to Greece and Turkey, Public Law 75, 80th Congress, would not be practicable nor useful at the present time. Since July 1, 1948, all economic aid to Greece and Turkey has been furnished under the provisions of the Economic Cooperation Act of 1948, as amended, known as the “Marshall Plan” or “European Recovery Program”. The Congressional authority and appropriations under Public Law 75 have been confined to purposes of military aid to Greece and Turkey. The Mutual Defense Assistance Act has provided additional funds to carry out the purposes of this law. With respect to the inclusion of Iran in other legislation to provide economic assistance to foreign countries, the Department had hoped that the position of the United States was made clear in its Note of September 22, 1949,⁶ in which it was pointed out that the favorable balance of payments enjoyed by Iran and its consequent apparent ability to obtain and repay credits from appropriate institutions, such as the International Bank, would not warrant the American Government in extending direct grants of assistance to Iran for economic purposes. It is the established policy of the American Government that grant assistance from this Government should be extended only to such countries as could not reasonably be expected to meet their minimum needs for dollar exchange from older sources.

2. In furtherance of the Iranian Economic Development Plan, this Government believes that every effort should be made by Iran to enlist the cooperation of private investors from abroad. It recognizes, however, that the nature of some of the development projects will require public financing. It is desired to recall the previous suggestion made by officers of the Department that in these circumstances Iran should look to the International Bank for foreign exchange requirements in excess of those supplied through Iran’s current earnings, since that institution has been established for the purpose of assisting in the economic development of underdeveloped or devastated nations. As the Iranian Government has been previously informed, the Department of State will endeavor to arrange for the United States Government, through its representatives on the Board of Governors of the Bank, to support Iranian requests for credit assistance in carrying out sound economic projects. It is the hope of the Department that the International Bank will be able to provide the assistance needed to permit Iran to progress rapidly in its economic development. The question of loans from the United States Export-Import Bank was discussed in recent conferences with His Imperial Majesty and the Ambassador by the Assistant Secretary of State for Economic Affairs and it is believed that this Government’s position was made clear in the course of these conversations. With respect to guarantees for United States private investment in Iran, the Department calls to the attention of the Iranian Government that authority for making such guarantees has not yet been secured from the Congress, and that therefore no procedures or requirements have yet been established.

3. The Department had not been aware that Iran still finds itself in need of additional imported wheat supplies to meet the conditions of scarcity created by the relatively short wheat crop in Iran during the past season. It had been understood that the Iranian Government had purchased a substantial amount of wheat from various sources and that this amount was considered sufficient to make up the domestic deficit. With respect to a possible barter or lend-lease agreement for the supply of additional wheat, the United States Government is of course prepared to consider any suggestions made by the Iranian authorities for a barter arrangement, subject to the rather rigid limitations imposed by law on the authority of the Executive Branch of the United States Government to engage in such transactions. It will be recalled that negotiations for an exchange of wheat against opium were undertaken but could not be brought to conclusion because of inability to agree on a price at which the two commodities were to be exchanged. In addition, the quantity of opium which the United States Agency concerned could accept was relatively limited, owing to the limiting nature of its appropriations and the necessity for stockpiling many other commodities in addition to opium. The lend-lease authority was, of course, a wartime measure and has long since expired. A loan of wheat to be repaid in kind at a later date, as was suggested at one point, would seem to offer insuperable difficulties from the point of view of the United States Government.

4. The Department has long had in mind the desirability of furnishing technical assistance to Iran, when and if requested by the Iranian Government, under the provisions of the proposed “Point IV Program”⁷ as well as through whatever other mechanisms may be available. Although the proposed program still awaits Congressional approval and no concrete action can be taken until such approval is given, the appropriate agencies of this Government are already studying the ways in which technical assistance might best be furnished to Iran. If the Iranian Government desires, it is possible that a small beginning in the field of technical assistance can be made under the authority of the Smith-Mundt Act, Public Law 402, 81st Congress, which authorizes the detail to foreign countries of United States Government technicians under certain conditions. It is suggested that discussions might well be initiated with the American Embassy in Tehran. It is desired to emphasize, however, that any program of American technical assistance should be carefully coordinated with technical assistance received through other Governments, through international agencies and through private sources. It is hoped that the Iranian Government itself will establish machinery for reviewing and coordinating all requests from all Iranian sources for assistance of this nature.

5. It is understood that numbered paragraph 5 of the Aide-Mémoire refers to the speech delivered by the President on November 8, 1949 before the Women’s National Democratic Club⁸ in which he suggested that the valley of the Tigris and Euphrates Rivers could be developed in order to turn it once again into the “Garden of Eden”. As the Ambassador is aware, this statement was made in connection with the discussion of the “Point IV Program”, and the possible development of the Tigris-Euphrates Valley was cited merely as an example of the benefits which could be obtained by the proper use of technical assistance in conjunction with the application of available capital. The plan in question is one which has long been projected by the Government of Iraq, which is understood to be interested in obtaining financial assistance for it through the International Bank. The United States Government hopes that the project can be successfully carried out but has not itself participated in the plans. So far as the Department is aware, there is no reason why similar development plans could not be executed in Khuzistan under the auspices of the Iranian Seven-Year Plan Organization, and the United States Government would of course be prepared to furnish technical assistance in this connection just as it is prepared to do so in connection with other Iranian projects. Whether any advantage would be gained by linking such a project for Khuzistan with the development scheme for the Tigris-Euphrates would seem to be a matter for consideration first by the Iranian and Iraqi Governments and secondly by such technical advisers as they might wish to consult.

Should the position of this Government as set forth above still not be clear, it is earnestly requested that the Ambassador so inform the Department.⁹

Washington, January 26, 1950.

1. This paper was handed to Iranian Ambassador Hussein Ala by George C. McGhee, Assistant Secretary of State for Near Eastern, South Asian, and African Affairs on January 26; see supra.
2. The aide-mémoire under reference is printed in Foreign Relations, 1949, vol. vi, p. 585.
3. For documentation on the origin of United States military and economic aid to Greece and Turkey in 1947 (Truman Doctrine), see Foreign Relations, 1947, vol. v, pp. 1 ff.
4. Department of State Bulletin Supplement, May 4, 1947, p. 829 or Public Papers of the Presidents of the United States: Harry S. Truman, 1947 (Washington, Government Printing Office, 1963), p. 176.
5. Foreign Relations, The Conferences at Cairo and Tehran, 1943, p. 646.
6. For text of the note under reference, see Foreign Relations, 1949, vol. vi, p. 558.
7. For documentation on the genesis of the Point Four Program, see Foreign Relations, 1949, vol. i, pp. 757 ff.
8. Public Papers of the Presidents of the United States: Harry S. Truman, 1949, p. 555.
9. In a conversation with Department of State officials on February 7, Mr. Ala raised the question of the Department’s aide-mémoire of January 26, which he said he had transmitted to his Government. He stated that while the letter of the Tehran Declaration of 1943 did not commit the United States to assist Iran in the postwar period, the spirit did. He stressed the fact of Iran’s exclusion from the Marshall Plan. Mr. Jernegan replied that “the United States had lived up to the spirit of the Declaration and its interest in and support of Iran had been demonstrated on several occasions in the past and continued in the present.” He also said that the purpose of ERP was to alleviate the dollar shortage in certain countries. Since Iran possessed an adequate supply of dollars, its inclusion was not warranted. (Memorandum of conversation, February 7, by Mr. Ferguson, 788.5 MAP/2–750)