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611.9131/145 Memorandum of Telephone Conversation, by Mr. Cecil T. White of

the Division of Commercial Policy and Agreements

[WASHINGTON,] May 10, 1941. The Minister 40 telephoned to inquire whether we could give him our answer to the Iranian draft proposal of September 3, 1940.

I replied in the negative, but informed the Minister that the basic studies now have been completed and I thought it likely that our reply would be ready within the next two weeks.

611.9131/159
Memorandum by the Chief of the Division of Near Eastern

Affairs (Murray) 41

[WASHINGTON,] November 5, 1941. Reference is made to Tehran's despatch No. 115, of September 10, 1941, with which there is enclosed a copy of instructions to the Iranian Economic Mission to the United States. These instructions, which came into the possession of the Legation, indicate that the Mission will press for the conclusion of a trade agreement. It may be recalled that such a trade agreement was under consideration prior to the occupation of Iran by British and Russian military forces, 43 but discussions pertaining thereto were discontinued shortly before the occupation because of the uncertainty and apparent instability of conditions obtaining at that time in the Near East. The Economic Mission has now arrived in the United States, and it may be assumed that the Mission will revive the question of the trade agreement.

It is the recommendation of the Division of Near Eastern Affairs that these trade agreement negotiations be resumed for reasons of political expediency and in order to safeguard American trade interests in Iran during the post-war period.“

A large area in northern Iran is now under Russian occupation. It has been established in reports received by the Department that the Russians in that area have engaged in political activities inconsistent with assurances given to respect the political independence and territorial integrity of Iran. These assurances, as you will recall, were referred to by the President in his telegram of reassurance to the Shah at the time of the occupation.95 It is considered that the conclusion of a trade agreement with Iran would be consistent with this message of reassurance in that it would serve as a restraining influence upon possible Russian attempts in the future to dominate the economy and foreign trade of Iran. In view of these circumstances it is believed that a trade agreement with the United States would be welcomed by the Iranians and that, for this reason, the present time is propitious for the negotiation of a trade agreement favorable to American interests.

40 Iranian Minister Mohammed Schayesteh.

Addressed to the Assistant Secretary of State (Acheson) and the Secretary of State.

- Neither printed. 43 See pp. 383 ff.

* The Secretary of State, the Assistant Secretary of State, and the Chief of the Division of Commercial Policy and Agreements agreed with the recommendation. 47 Wallace Murray, Chief of the Division of Near Eastern Affairs. 48 Paul H. Alling, Assistant Chief of the Division of Near Eastern Affairs.

It may be assumed that both the Russians and the British will seek to utilize the occupation as a means of strengthening their economic ties with Iran. The occupation, therefore, might well provide an opportunity for either Russia or Britain, or both, to enter into trade agreements with Iran which would prove harmful to American trade in the post-war period. The conclusion of a trade agreement between the United States and Iran would anticipate such moves and would serve to safeguard American trade with Iran after the war.

Mr. Saleh, the head of the Iranian Economic Mission, is a highranking Iranian official of ability and integrity, and he is well known to the Division of Near Eastern Affairs. He was educated in American mission schools in Iran and is favorably disposed toward the United States. In view of his pro-American attitude it is considered fortunate that it is he who has been selected by the Iranian Government to conduct trade agreement negotiations.

WALLACE MURRAY

ENCOURAGEMENT BY THE DEPARTMENT OF STATE OF THE RESUMPTION OF AMERICAN MISSION SCHOOLS IN IRAN; 4 IRANIAN REQUEST FOR AN AMERICAN EDUCATIONAL MISSION

391.1163/123

Memorandum of Conversation, by Mr. Gordon P. Merriam of the Division of Near Eastern Affairs

[WASHINGTON,] October 10, 1941. Participants: Mr. Herrick Young, Presbyterian Board of Foreign

Missions, New York, N. Y.
Mr. Murray 47
Mr. Alling 48
Mr. Merriam

45

46

Dated September 2, p. 446.

For previous correspondence regarding the expropriation of American missionary schools in Iran, see Foreign Relations, 1940, vol. III, pp. 693 ff.

Mr. Murray observed that the abdication of Reza Pahlavi 49 and other developments in Iran resulting from the international situation,50 had recently given rise to an entirely different state of affairs, and that it appeared desirable to discuss them in a purely informal and preliminary manner with a view to determining whether the Board's educational work in Iran might not be resumed.

The following were advanced by Mr. Murray as some of the principal factors for consideration:

1. The sum of $300,000 has been paid by the Iranian Government toward acquiring the Board's educational properties. While this is a substantial amount, it nevertheless falls far short of the total amount of $1,200,000 agreed upon as the purchase price. It is unlikely that the Iranian Government will repudiate the remainder of this debt as the installments fall due, but it is highly improbable that further payments can be made. The new Government is weak, the tribal districts have risen, and the Soviets occupy the richest provinces, in which it will doubtless be impossible for the Iranians to collect taxes in any appreciable amount. In other words, the sum already received is all that can or will be paid.

2. With the disappearance of the authoritarian régime of Reza Pahlavi, which was highly nationalistic and had a strong element of xenophobia, a more liberal attitude toward foreign institutions is to be anticipated. The present Shah received education abroad, and the present Cabinet was chosen with a view to appeasing the British and the Soviets.

3. An important negative element in the situation is the fact that the Iranians would hardly readmit American schools if to do so would entail the opening of Russian schools. One of the major reasons for the elimination of the American schools was the fact that so long as they were in Iran the Russians could claim an equal right to have schools. With the Russians actually occupying large areas in Iran, the Iranians are bound more than ever to refrain from giving the Russians any excuse to establish schools. In consequence, it might be advisable as an interim measure for the Americans to operate ostensibly under the control of the Iranian Government.

4. A second negative factor is the possibility of a military debacle in Russia, in which case the British might not find it possible to make a stand in Iran to the north of, say, Isfahan. In such an event the Presbyterian teachers, should they return, would find themselves in German-occupied areas and in a difficult position in view of the progressive worsening of German-American relations. On the other hand, the Iranians might be eager to hand back the educational properties to the Americans because under the American ownership the chances of preserving them in the face of either Russian or German occupation would be enhanced. The fact was brought out that at the present time the Russians are using for their headquarters the Board's former educational properties at Tabriz.

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5. A small number of American hospital workers are still carrying on in Tabriz, and the arrival of teachers would reinforce them. Moreover, their special and continuing relationship to students and parents would enable the teachers, in the light of their long experience of Iran, to obtain intimate and accurate knowledge of what is going on. In short, the resumption of American educational work in Tabriz, in particular, would have a marked restraining influence upon Soviet separatist and ideological activities in that area, of which much has already been heard.

By way of comment on the foregoing, Mr. Young said that he and his colleagues had been thinking along somewhat the same lines. The Iranians had cut up into building lots the property lying between Alborz College and the main avenue on which it fronted. This land was extremely valuable and he was inclined to consider it even an offset to the amount of $300,000 which had been paid in.

Mr. Young thought the main question which the Board would have to answer would be whether the prospect would justify the necessary investment in personnel. The educational personnel formerly employed in Iran was now pretty well scattered, but a small nucleus was still present in Iran. He thought there might be a disposition on the part of the Board to wait until March when the next payment became due. If it was not paid, the Board might feel justified in making a move looking to the repossession of the properties.

Mr. Murray stated that in his opinion it was desirable to look at the matter in a much broader way. Iran had now fallen upon evil days. The Presbyterians in the United States had a long record of help and friendship to the people of Iran, and the question now was whether the Presbyterians would not wish to be of assistance in Iran's hour of need, provided further exploration of the matter should make it clear that a resumption of educational assistance was feasible at the present time. Iran badly needed education, the existing white collar class was likely to be hard hit, and there was excellent human material in the tribes which had never been properly developed.

Mr. Young said that he would be glad to discuss these questions with his colleagues and that for the purpose of further discussions in the Department he would like to bring Dr. Dodds 51 with him.

It was agreed that any formal step in the matter should take the form of a request from the Iranian Government.

61 J. L. Dodds of the Presbyterian Board of Foreign Missions.

391.1163/124 Memorandum by the Acting Chief of the Division of Near Eastern

Affairs (Alling) 52

[WASHINGTON,] October 15, 1941. Attached is a memorandum of a recent conversation 53 held in the Near Eastern Division with Mr. Young of the Presbyterian Board of Foreign Missions, at which the possibility and desirability of the resumption of the Board's educational work in Iran were discussed. The matter is now being considered by the Board, and we expect to hear from it in the near future.

Mr. Murray has discussed this matter orally with Mr. Berle 54 and stated that the idea of the re-entry into Iran of this American educational mission, which up to June 1940 had been active for more than a century, has Mr. Berle's enthusiastic endorsement.

It will be recalled that the President's message of September 2 to the former Shah 55 took note of the British and Soviet declarations that they have no designs on the independence or territorial integrity of Iran, and stated that this Government maintained its traditional attitude with respect to the basic principles involved. It is our understanding that the President signed this message, which was drafted in the Department, in a spirit of thoroughgoing approval.

As you are aware, the actions of the Russians in the Iranian territories which they occupy have given rise to distrust on the part of this and the British Government which has already been made known to the Soviet Government. This Division considers that the re-entry of our educationalists into Iran would afford an additional clear indication of our desire and intention to support free institutions in that country.

PAUL H. ALLING

891.42/84 : Telegram

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

TEHRAN, October 15, 1941–11 a. m.

[Received 1:16 p. m.] 190. The Minister of Education informs me that he has invited Doctor Paul Monroe of Columbia University to come to Iran as head of a commission to make a survey of Iran's educational problem. He

5 Addressed to the Under Secretary of State (Welles) and the Secretary of State.

53 Supra.

64 Adolf A. Berle, Jr., Assistant Secretary of State. 55 Post, p. 446.

409021-5925

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