85. Telegram From the Embassy in Iran to the Department of State1
242. 1. I sincerely hope that Dept can move in matter of financial aid as Qavam suggested “with unprecedented speed” (Embtel 239, July 18).2
2. I had tentative chat with Middleton immed fol first visit of emissary from Qavam referred to in reftel and told Middleton of Qavam’s expressed hope that US wld be able at once to advance sufficient financial aid enable his govt meet payrolls and other urgent financial needs. We arranged for meeting this afternoon of reps two Embs to work out joint recommendations to Wash and London. Middleton said that it was his personal tentative opinion that in view peculiarities of situation it wld be helpful if US cld immed extend aid sufficient to tide Iran over financial crisis of ensuing weeks. In so stating he not (rpt not) undertaking speak for Emb or for his govt. Middleton referred to conversations in London in which he had expressed some doubt re advisability US Govt extending financial assistance immed to govt replacing that of Mosadeq. He said that at that time he had had in mind some weak govt—not (rpt not) strong govt of kind which Qavam was forming. Qavam’s govt cld afford take positive stand and need not (rpt not) worry about endeavors on part various groups to misinterpret American financial assistance. Middleton and I both were of opinion that it wld be advantageous to West if US cld make Qavam feel at outset that West was friendly. We also agreed that if US financial assistance was extended it shld be made clear to Iran and to rest of world that Brit fully approved such extension. Care shld be taken that impression not (rpt not) be created that difference of opinion re financial assistance existed between UK and US and assistance shld be accorded in such way as to build up good will for UK as well as for US.
3. More mature views of two Embs will, I hope, go forward to London and Wash this evening after conference this afternoon. In meantime I hope Dept can already be laying basis for quick action. Our joint tel this evening will probably contain estimate of amount which shld be given at this time.
4. One question which will be raised is whether financial aid shld be grant or loan and we hope Dept can be giving this question thot. [Page 269]This Emb inclined to favor grant at this juncture and feel confident Qavam wld not (rpt not) hesitate ask for grant if he shld believe any possibility grant wld be accorded.