691.1115/5
Memorandum of Conversation, by Mr. Gordon P. Merriam of the Division of Near Eastern Affairs
| Participants: | Mr. Schayesteh, the Iranian Minister |
| Mr. Domeratzky, Chief of the Division of Regional Information, Bureau of Foreign and Domestic Commerce | |
| Mr. Alling | |
| Mr. Lary, Finance Division, Bureau of Foreign and Domestic Commerce | |
| Mr. Merriam |
The Iranian Minister referred to the memoranda70 recently prepared by the Division of Regional Information and the Finance Division, Bureau of Foreign and Domestic Commerce, regarding the [Page 669] possibility of increasing Iranian exports to the United States and the choice of a general trading company in this country which could handle the trade in both directions. He briefly described the ideas of his Government along these lines. He said that the normal sources of supply to Iran of industrial equipment were not available owing to the war in Europe and to conditions arising therefrom, adding, however, that his Government desired to establish closer trade relations with the United States which would continue in effect after the war should terminate.
Mr. Domeratzky observed that the Iranian Government would have no particular trouble in obtaining materials and articles in this country, but that if Iran intended to pay for them with exports to the United States it would probably have difficulty in doing so in view of the size of the contemplated purchasing program on the one hand and the fact that it might prove difficult, if not impossible, for Iran to increase the sale of its products here to a comparable extent.
The Minister said he realized this but that money would be available to pay American suppliers even if the trade should not be balanced, since Iran had a favorable balance of trade with certain other countries.
Mr. Domeratzky said it had recently come to his attention that there was a market in this country for medium quality carpets owing to the fact that the Chinese supply had been cut off, and he inquired whether Iran was in a position to furnish rugs of this type or whether all Persian rugs were in the luxury class. Mr. Alling pointed out, in this connection, that perhaps the best way for Iran to increase the sale of carpets here would be to concentrate on the production of medium quality carpets, since there was bound to be a far larger market for them than for fine rugs which only a limited number of persons could afford to buy.
The Iranian Minister said he thought the point merited careful consideration, but that since Iranian rugs now had a reputation for high quality it might be questionable whether it would be advisable for Iran to make and export a type of rug which could bring about a loss of prestige for Iranian rugs in general.
Mr. Domeratzky said that he presumed Iran desired to make a choice of some American general trading company, and that the Department of Commerce was prepared to look into the matter and to make available to the Minister the names of several companies, without responsibility and without recommendation, one of which could be selected by the Iranian Government. Such a company would presumably work on a commission basis, and the commission charged would doubtless vary with the work accomplished. For example, a very small commission might be charged on making purchases of locomotives since that would be a relatively simple matter, whereas, [Page 670] if the company should, through its efforts, build up Iranian raw wool exports to this country from three to ten million dollars a year, a more substantial reward for its services would be in order.
Mr. Lary asked whether the plan was to have all Iranian trade in both directions handled by the company to be chosen, or whether commodity trade which was already well developed, would be left in the present channels. He said, in particular, that American wool buyers had expressed themselves as preferring not to work through such an organization but to make their trading contacts and arrangements themselves with the sellers in Iran.
The Minister replied that while nothing had definitely been decided it was his own view that it would be preferable to have all trade between the two countries centralized in the company, as the business would thereby be greatly simplified. In the case of wool, he thought that it also would be handled in this way, and that it would be a considerable advantage to have samples available with the company on the basis of which American buyers could make their purchases.
It was agreed that the Department of Commerce, through the New York office, would place the requirements of the Iranian Government before certain trading concerns, in a general way, and that the names of those companies which should manifest an interest therein would be communicated to the Minister, who said he fully realized that this Government was not in a position to concern itself more directly in this phase of the economic relations of the two countries.
- Dated February 16 and February 20; neither printed.↩