The possibility of an immediate American shot in the arm to bolster Iran’s tottering economy is being discussed at Tehran by United States Ambassador Loy Henderson and the new Iranian Premier, General Zahedi. [Fazlollah Zahedi] If, as appears likely, the United States is prepared to grant substantial assistance, it will not be the first time this country has lent Iran a helping hand.

In the Tehran declaration of December, 1943, the Big Three recognized that Iran had helped the Allied war effort and promised her postwar financial assistance. [Great Britain, United States, Soviet Union] American military missions which began during the war were kept on and in 1949 military supplies began to flow to Iran on credit. But for a brief interruption the flow has continued ever since. In 1949, also, the Iranian Parliament voted a seven-year reconstruction plan, which had been prepared with private American help and hired American management advisers to put it in.

However, the Shah soon discovered that oil royalties were going to be insufficient to finance his scheme. He came to this country seeking a loan and returned without it but armed with promises of continued military aid, Point 4 money and American backing for a large advance from the World Bank. The bank lent Iran $25,000,000, a disappointment to the Shah, who apparently failed to convince its directors that the country had sufficiently rid itself of corruption to risk a larger sum. Anti-American feeling ran high and Iran turned around and signed a trade agreement with Russia. In 1951 Iran failed to renew the contracts of the American consultants, who left the country, and the Seven-Year Plan was abandoned. This set the stage for ex-Premier Mossadegh’s expropriation of British oil interests at Abadan. [Dr. Mohammad Mossadegh]

In the confusion of the past two years official American interest in Iran has increased. The Embassy has grown so that it now ranks as one of our largest nonmilitary foreign posts. To date Iran has received a total of $47,000,000 in Point 4 funds (at least $23,000,000 more has been promised for the current fiscal year) plus undisclosed quantities of military supplies.

Though this is not large in comparison with our aid to European countries, it is large enough for this country to claim an investment in Iran’s future. A new grant, if it materializes, will be in the nature of reinsurance.