The Secretary of
State to the Embassy in
1648. It wld appear desirable reply Mosadeq’s ltr Jan 29 to Pres before beginning Garner’s discussions with Iran Govt. Aside from question of undue delay in responding to PriMin reply now might influence his attitude in negots. Pres has approved fol reply to Mosadeq (urtel 2849 Jan 292) which you are requested to deliver unless you perceive overriding objections. In latter event tel comments soonest.
“I have rec ur Excellency’s ltr of Jan 29, 1952 concerning the desire of the Iran Govt for a loan from the US to relieve the pressing finan situation in which the Iran Govt finds itself at the present time.
In my reply of Nov 14 to ur earlier communication on this subj, I stated, as you have recalled in ur present ltr, that ur request wld be given most careful consideration in the light of the well-known desire of the US to be of assistance to the people of Iran. I need not reiterate to ur Excellency that the US wishes to be in a position to render Iran all proper and necessary assistance.
As you know, Mr. Robert Garner, Vice Pres of the Interntl Bank for Reconstruction and Development, is proceeding to Tehran accompanied by a group of experts from his org to discuss with you suggestions for an arrangement which wld permit resumption of the operation of Iran’s oil industry. I attach the greatest importance to Mr. Garner’s mission, and I am confident that you and he will be able to agree upon some workable formula. The Bank is an internatl org whose sole interest in this matter is to be helpful in finding a solution to the controversy which has brought a great industry to a complete halt.
Shld it be possible with the Bank’s assistance to find at least an interim solution, Iran wld have the resources necessary to overcome the present finan difficulties. I am sure that you will understand that the exec branch of the USGovt cld not justify to the Cong nor to the Amer people a loan of the nature which you have requested at a time when Iran has an opportunity of obtaining oil revenues of a very great magnitude.
I wish to assure you, Mr. PriMin, that the US remains committed to its well-known policy of desiring to see a free, stable and prosperous Iran, and that it will take every measure it properly can to carry out this policy. Iran needs will always be given the [Page 349]most careful study in keeping with the desire of the US to see its Iran friends on the road to a stable and prosperous economy.”
In delivering foregoing msg to Mosadeq, you may in ur discretion pt out that US is presently bearing a heavy finan burden throughout the world in its efforts to build a stable and lasting peace, and it wld be most difficult to undertake additional commitments for finan loans to country which has immediate means of helping itself. Sentence to this effect has been omitted from President’s msg since its inclusion wld tend to make denial of Mosadeq’s request more categoric than perhaps wld be desirable at present time.
FYI we do not intend publishing exchange.