891.51/570: Telegram

The Minister in Iran (Dreyfus) to the Secretary of State

661. My 608, June 11. Millspaugh has written letter to Prime Minister calling attention to seriousness of Iran’s financial situation and urging Majlis approval of income tax law, bill for issue of Treasury bonds and law approving contracts for six Americans for his Mission. Prime Minister95 has promised to present letter Sunday to secret session of Majlis in hopes of breaking the Majlis attitude of intransigence and indolence which has prevented action on numerous important pending bills.96

Millspaugh again urges overriding necessity of Allied loan but now states amount required is $50,000,000 which will enable him to grant essential increases in Government salaries and make it unnecessary for him to turn to Allies later for a second loan. Current financial situation is desperate and deficit for present and next month will probably be more than $10,000,000. He urges, therefore, that immediate advance of part of loan will be necessary if Government is to meet its obligations. In addition he is requesting Anglo-Iranian Oil Company to advance at once oil royalties of 4,000,000 pounds due during coming year. British Legation views Millspaugh’s position sympathetically and I am sure will recommend that British grant loan alone if United States will not participate. Millspaugh states that for obvious reasons it would be better to have American or Anglo-American loan. Soviet Ambassador still holds unrealistic belief that Iran does not need a loan. British Minister and I are discussing question with him tomorrow.

Dreyfus
  1. Ali Soheily.
  2. For correspondence relating to these matters, see pp. 510 ff., passim.