Memorandum of Conversation with Secretary of State Dean Acheson, Camille Gutt, and Paul Nitze

Mr. Bruce 524 318 SECREL October 16, 1952 MEMORANDUM OF CONVERSATION Conf In Secretary Acheson's Suite Waldorf-Astoria, New York Present: Secretary Acheson Mr. Nitze Mr. Camille Gutt Mr. Gutt began the conversation by describing the origins of his mission in Iran. He said that he had been requested by Dr. Mossadeq to advise Iran with respect to two specific issues: one relating to their Bank of Issue problems; the other relating to their tax problems, particu- larly their methods of assessing and collecting taxes. He said that many reports had previously been made with respect to Iran. Van Zeeland had made a report, which he thought was not very good. The International Bank had made a report which he thought was really quite good, Others had made reports. He felt that the Iranians did not lack analy- ses by outside missions as to the nature of their economic problems. He felt that 1t was possible that Mossadeq Treally wanted the advice of someone who was neither British nor American with respect to the oil question. He had not been able through correspondence to make much progress in clarifying what it was Mossadeg wanted him to do. He, therefore, went to Teheran and had an extended conversa- tion with Mosadeq. Mossadeq told him that he wanted him to concentrate on Bank of Issue and tax problems and to advise him ithout having any staff. In discussing the matter with Mossadeq, Gutt had emphasized that one could not deal with Bank of Issue problens or with tax problems wi thout coming up against the oil question. Obviously the security for any note issue would, in the last analysis, depend upon oil revenues. Similarly, taxes could only be collected out of earnings, which, in turn, depended upon a renewed flow of oil. He, Gutt, did have expert knowledge in the financial field, but there were specialized fields in which he needed staff assistance. Mossadeq finally agreed that he should recruit a small, but compatent DECLASSIFYED staff and then return to Teheran. STATE DEOT, LTR. 5-5-13 Project NLT 82-4 By NLT- He NARS, Date 6-15-3 SECRET