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53. Telegram From the Embassy in Iran to the Department of State1

804. Personal for Secretary from Ambassador Helms. Subject: IBRD Lending to Iran. Ref: Tehran 0739.2

Understand through back channels that Treasury is being most difficult on IBRD loan to GOI at session scheduled for today. I cannot emphasize too strongly how wrong I believe it would be for the US to take the lead in disapproving the loan at a time when we need to keep passions cool. The $75 million loan under consideration is miniscule by comparison with the other considerations we have in our relations with Iran. There is sufficient evidence to indicate extensive irritation on the part of the Shah and his Ministers as a result of the recent IBRD and US pressures concerning IBRD lending to Iran. This irritation could lead to snap actions against IBRD and US which we obviously want to avoid. If we wish to bring Iran along in any international considerations of energy policy, then it seems to me we can afford to agree to extend the present loan and work quietly for an accommodation of our various positions. But in any event please do not permit action to be taken in IBRD meeting today which we may all live to regret.3

Helms
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 603, Country Files—Middle East, Iran, Vol. VI, January 1974–. Secret; Niact; Immediate; Nodis; Cherokee.
  2. Not found.
  3. Telegram 19865 to Tehran, January 30, forwarded the text of a letter to Shultz from the Chairman of the House International Finance Subcommittee, Henry Gonzalez, in which he argued against an IBRD loan to oil-rich Iran. (National Archives, RG 59, Central Foreign Policy Files, [no film number]) According to telegrams 1604 and 1673 from Tehran, February 27 and March 2, the Iranian Government proposed to help establish a soft loan fund with its increased oil revenue, administered through the IMF and the World Bank, to aid less-developed oil-importing countries. Iran would also purchase IBRD bonds and lend to the IMF. (Ibid.) The plan, Helms wrote in telegram 1726 from Tehran, March 4, was devised in response to U.S. pressure during Iran’s loan negotiations with the World Bank. (Ibid.)