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legalizing their status in this country for the duration of the war. In advancing his suggestion Entezam professed he was motivated by sincere desire to settle this question as simply and expeditiously as possible.

I gave no opinion as to what reception this proposal might receive from my Government but suggested that Entezam submit matter through his Minister in Washington to Department to which he agreed.

This initial telegram is for Department's information. I shall follow it up with further comments after I have had an opportunity to discuss question with PGC.41

MORRIS

REPRESENTATIONS BY THE UNITED KINGDOM FOR THE ASSUMPTION BY THE UNITED STATES OF FINANCIAL OBLIGATIONS IN THE OPERATION OF THE TRANS-IRANIAN RAILROAD 42

891.77/736

The British Ambassador (Halifax) to the Secretary of State

AIDE-MÉMOIRE Ref: 131/8/44

His Majesty's Ambassador presents his compliments to the Secretary of State, and has the honour to inform Mr. Hull that His Majesty's Government are anxious to proceed as soon as possible to the conclusion of a financial agreement covering Allied use of the Persian railway system.

41 In despatch 203, February 13, 1945, the Ambassador expressed his opposition to the Iranian suggestion that the status of American military forces in Iran be regularized by an act of the Majlis. He pointed out that although this course of action would provide legality for the presence of the troops from the viewpoint of Iranian domestic law, it might fail to give the United States adequate protection against possible Iranian claims for damages, taxes, customs duties, etc. The Ambassador concluded that he and Brig. Gen. Donald P. Booth, Commanding General of the Persian Gulf Command, believed it advisable to negotiate a formal treaty or agreement to handle the matter. (811.24591/2-1345)

No further action on the question of regularizing the status of American troops in Iran occurred until March 1945 when the Iranian Minister informed the Department of State that the Iranian Government no longer deemed an agreement necessary and considered the matter closed. No correspondence concerning this action by the Iranian Minister has been found in Department files. However, on September 29, 1945, the American Embassy in Iran issued a statement in reply to critical articles in certain Tehran newspapers about the presence of American troops in Iran and other matters. The statement noted the abrupt suspension by the Iranian Government of negotiations for an agreement governing the presence of American troops in Iran in December 1943 (see telegram 1103, December 10, 1943, from Tehran, Foreign Relations, 1943, vol. iv, p. 486), and stressed that the United States Government had repeatedly expressed willingness thereafter to reopen negotiations until the matter was closed by the action of the Iranian Minister in March 1945. The text of this statement was transmitted to the Department in telegram 789, October 2, 1945, 5 p. m. (891.24/10–245)

42 For previous correspondence, see Foreign Relations, 1943, vol. IV, pp. 437 ff. Signed at Tehran, January 29, 1942, British and Foreign State Papers, vol. CXLIV, p. 1017; for correspondence regarding interest of the United States in this treaty, see Foreign Relations, 1942, vol. iv, pp. 263 ff.

2. Under Article 4(2) of the Anglo-Soviet-Persian treaty 43 the Allied powers undertook to conclude such an agreement as soon as possible after the entry into force of the treaty. But owing to the new factor created by the transfer to the United States authorities of operational responsibility for the railway south of Teheran, two years have now elapsed since the signing of the treaty without appreciable progress towards a financial agreement about the railway.

3. From the practical point of view it has become urgently necessary to regularize the position as regards freight rates, payment of traffic bills, etc. The present lack of definition has led to considerable confusion besides provoking complaints from the Persian Government.

4. When the matter was raised at the Moscow conference 44 the Soviet representatives said that it was a question for the experts of the three Governments at Teheran. Mr. Eden 45 accordingly proposes to instruct His Majesty's Minister shortly to concert with his Soviet and United States colleagues with a view to preparing an agreed draft as a basis for subsequent negotiation with the Persian Government. It is suggested that the draft should be based on the following main principles :

(1) The Allies to pay rail charges for freight and passengers at 50 per cent of the public tariff. No change in the public tariff without prior Allied agreement.

(2) The Allies to guarantee a minimum annual revenue of 103,000,000 rials, the first year beginning 21st March 1942. The guarantee to be based on revenue for Persian year 1319,45a i.e. the year preceding Allied occupation. Any monthly excess revenue to be credited and monthly payments implementing guarantee charged to suspense. Payments to guarantee will be first charge on any credit balance. Any finál balance to be divided on a basis to be subsequently negotiated. The whole agreement including guarantee provision to be determinable at three months' notice.

(3) The Persians to pay hire charges for moveable assets (rolling stock) loaned to their railways.

(4) The Persians to pay for services of Allied military personnel loaned to railways.

(5) The Persians to grant equal facilities for Allied acquisition of land as obtain for the Persian Government.

(6) The Allies to reserve full rights regarding subsequent disposal of capital assets (it seems impossible to cover this point in the railway agreement in view of the major difficulties over other capital expenditure in Persia).

43

* For correspondence regarding the Tripartite Conference of Foreign Ministers held at Moscow, October 18-November 1, 1943, see ibid., 1943, vol. I, pp. 513 ff.

15 Anthony Eden, British Secretary of State for Foreign Affairs.

45a i. e., 1940.

5. Lord Halifax is instructed to request that the United States representative at Teheran may be instructed to concert action in this matter with his British and Soviet colleagues. A similar communication is being addressed to the Soviet Government.

WASHINGTON, January 31, 1944.

891.77/736 : Telegram

The Secretary of State to the Chargé in Iran (Ford)

WASHINGTON, February 10, 1944—7 p. m. 71. British Ambassador has requested that Legation in Tehran be asked to lend its support, in concert with British and Soviet diplomatic missions, in concluding the agreement for operation of railways. Please continue the efforts you are already making, in cooperation with your British and Soviet colleagues and the PGSC,46 to effect early conclusion of this agreement.

HULL

891.77/736

The Secretary of State to the British Ambassador (Halifax)

The Secretary of State presents his compliments to His Excellency the British Ambassador and has the honor, with reference to AideMémoire 131/8/44 of January 31, 1914, to inform the Ambassador that the American Chargé d'Affaires at Tehran has been instructed by telegraph to lend his support, in concert with his British and Soviet colleagues and the military authorities, in effecting the early conclusion of the railway agreement.

WASHINGTON, February 10, 1944.

891.77/737 : Telegram

The Chargé in Iran (Ford) to the Secretary of State

TEHRAN, March 4, 1944-9 a.m.

[Received 2:25 p. m.] 156. Reference Department's 71, February 10. British have submitted draft railway financial agreement for consideration by Soviet Embassy and this office. Substance of draft appears satisfactory to PGC and to me after careful study. Text will be forwarded by air pouch leaving March 8.47

FORD

46 Persian Gulf Service Command, the American military (services of supply) force commanded by Maj. Gen. Donald H. Connolly.

17 Text of draft agreement was transmitted to the Department in despatch 869, March 7, from Tehran.

891.77/739 : Telegram

The Secretary of State to the Chargé in Iran (Ford)

49

WASHINGTON, April 28, 1944–9 p. m. 264. Your despatch 869, March 7.48 War Department expresses view that it is inadvisable, unless there are urgent diplomatic considerations of which it is not aware, to enter into the proposed agreement covering financial responsibility for Iranian railways. Letter to Department from War Department 19 states that existing arrangement has proved satisfactory and there is no reason to believe the agreement would have effect of speeding flow of war supplies to Soviet Union; that agreement might cause confusion at a time when operation of railways at full capacity is essential; and that under existing arrangement British pay freight charges on all goods moved over railway on behalf of Russians including lend-lease goods, whereas under the proposed agreement new and complicated financial arrangements would have to be worked out.

Department understands that instructions were issued to General · Connolly last October authorizing him, jointly with Russians and

British, to work out such an agreement with Iranian railways provided the United States Government was not obligated to incur any expenditures in connection therewith. This latter type of agreement, if one is needed, would be preferable from point of view that any agreement entered into on a political level which included a minimum financial guarantee to Iran would require concurrence of the fiscal agencies of this Government and perhaps Senate approval.

Please inform Department, after full consultation with General Connolly, Colonel Stetson,5and your British colleague, of your views

50 and recommendations on subject. Please indicate extent to which Iranians have pressed for conclusion of this agreement and what their reaction might be to refusal of United States Government to participate. An indication of the attitude of the Russians would also be helpful.

You will have in mind, of course, that the question involved is not whether a general railway agreement should be concluded with Iran as one of the series of agreements contemplated by the Tripartite Pact 51 but merely whether the United States should be a party thereto.

HULL

48

See footnote 47, p. 375. 49 Dated April 8, not printed. 50 Col. John B. Stetson, Jr., Fiscal Officer of the Persian Gulf Service Command.

51 British-Soviet-Iranian Treaty of Alliance signed at Tehran, January 29, 1942, British and Foreign State Papers, vol. CXLIV, p. 1017.

891.77/740: Telegram

The Chargé in Iran (Ford) to the Secretary of State

TEHRAN, May 19, 1944–11 a. m.

[Received 5 p. m.] 350. We have had frank and full discussion of question raised in Department's 264 April 28 with General Connolly, Colonel Stetson, and other ranking officers of Persian Gulf Command. As result of this exchange of ideas, both PGC and Legation have revised previous opinion and now feel disadvantages of being signatory to agreement probably outweigh advantages. Following points pro and con, were brought out and are submitted for consideration by Department and War Department:

1. American adherence would place us in better position to prevent unfair Soviet or British exploitation of railroads to detriment of Iran, if our Government should wish to take a strong line in this regard. (Soviets have twice tried to force inequitable terms upon Iranian Government in connection with railway operations.)

2. American adherence would give us stronger basis for ultimate assertion of our rights and claims with respect to supplies and rolling stock furnished railroad and improvements made with our assistance.

3. On other hand, both foregoing points really concern long-range policy unconnected with war effort. (In any case, point No. 2 is probably adequately covered by Lend-Lease agreement 52 and fact title to United States Army goods has never been relinquished.) So far as immediate war effort is concerned, PGC does not believe agreement would facilitate American task in moving goods to USSR.

4. British and Iranians are parties who really stand to gain by agreement, since they are both interested in ensuring that Soviet's bear their proper share of financial burden of railroad operations, which they are not doing at present. Position of our War Department, as PGC understands it, is that British must pay all aid to Russia, expenses not paid by Russians; therefore British are anxious to pin responsibility definitely on Russians to pay their fair share. Iranians of course have same interest.

5. If we are to be party to agreement, logic and fairness will require us during the negotiations to support principle of Soviet payment and afterwards to insist that Russians live up to obligations assumed. If we are not party, onus of bringing Russians into line and keeping them in line will fall on British, which seems proper in view of fact that United States has never assumed any financial responsibility.

6. Importance of good relations with USSR in Iran and in overall prosecution of war that we should hesitate to place ourselves in position which will invite conflict with or in any way jeopardize our present or future relations with Soviets unless there are strong reasons for doing so.

52 Proposed in 1943; negotiations in 1944 and 1945 were terminated by the ending of the war, and no agreement was concluded.

554–184—65 -25

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