Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

888.00/10–1554: Telegram

No. 500
The Acting Secretary of State to the Embassy in Iran¹

secret
niact

Washington, October 15, 1954—4:26 p.m.

742. Your complete and prompt recommendations contained Embtel 874² appreciated. Interested agencies generally approve your recommendations. Believe however some tightening up of Iranian commitments in b and c of draft letter desirable. Suggested rewording of b and c follows:

• “(b) In interest of best uses of resources available to Iranian economy and orderly formulation and execution of development program Government of Iran intends through an appropriate coordination committee of its responsible officials to supervise closely the level of public expenditure for budgetary and developmental purposes, and to guard against expenditure for these purposes which are not in conformity with the priority needs of the economy.
• (c) Along same lines committee would also seek to conserve and make most effective use of all foreign exchange resources of Iran by managing these resources so as to (1) support and facilitate orderly economic development; (2) limit public and private imports to a level which is related to reasonable prospects for Iran’s long-term exchange availabilities, and which does not involve over-commitment of future resources by unlimited acceptance of foreign aid required. Iran, as a member of the International Monetary Fund will, of course, consult the Fund in accordance with its procedure in advance of effecting changes in the exchange rate.”

Concerned Washington agencies strongly urge alteration proposed letter along lines suggested above without necessarily adhering to specific wording.³

Hoover

1. Drafted by Crowl and approved by Jernegan after being cleared with Overby of Treasury, Deputy Assistant Secretary of State for Economic Affairs Kalijarvi, and FitzGerald.
2. Supra.
3. Telegram 893 from Tehran, Oct. 18, reported to the Department Iran’s agreement, with slight textual variations, to a letter of assurance on the additional aid package. (888.10/10–1854)