888.10/12–2752: Telegram
No. 255
The Ambassador in Iran (Henderson) to the Department of State1
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2430. 1. During my conversation of December 25 with Mosadeq he inquired regarding status Export-Import bank loan. I told him I had had several talks with officials of Bank regarding loan and had learned that they were hesitating to go through with loan primarily because they thought they might be charged with extension of [Page 558] loan to a government which had no way in sight of refunding it. These officials had pointed out that Export-Import Bank was supposed to make loans only when borrower was clearly in position to repay. Loan had been negotiated at time Iran deriving revenue from oil. At present without any oil revenue in sight it might be hard for bank to explain how Iran would be in position to repay.
2. I told Mosadeq I had suggested to Bank that Iran had sufficient oil resources to refund loan many times larger than $25,000,000; that at some time or other if Iran survived as an independent country this oil bound to find its way to world markets and that when it did Iran should be in position to pay back what it had borrowed; and that if Iranian oil would not begin to flow Iran might well lose its independence and that such an eventuality would be so disastrous to US and free world that failure of Export-Import Bank to receive repayment of loan would be of little significance. I added that Bank officials had seemed most sympathetic and sincerely desirous of helping Iran. I understand that they intend renew matter for purpose ascertaining if some way could be found in framework Bank’s charter to extend loan in existing circumstances. I was hoping that they would find it possible to resume discussions with Iran regarding loan in near future. I told Prime Minister, however, that he should not be too optimistic regarding outcome of Bank’s reconsideration of loan since scope of Bank’s transactions was rather severely restricted by legislation which had created it. I told him, however, that I was confident that decision of Bank would be based on purely banking and not on international political factors.
- Repeated to London.↩