Memorandum from Brigadier General E. K. Wright to President Harry S. Truman

the ECRET CENTRAL INTELLIGENCE GROUP NEW WAR DEPARTMENT BUILDING 21st and VIRGINIA AVENUE, N. W. WAI. WASHINGTON, D. C. 19 March 1947 MEMORANDUM FOR THE PRESIDENT The threatened withdrawal of T.W.A. from the operation of Iranian Airways not only impairs U.S. prestige in Iran and the Near East, but also presents to the U.S.S.R. an opportunity for further penetration of that area. Iranian Airways, an Iranian corporation, operates an ex- tensive network of air lines covering Iran and reaching to Basra, Baghdad, and Cairo. It has also an approved route through Cairo to Paris and London and landing rights at Dahran in Saudi Arabia. T.W.A. owns a 10 percent interest in Iranair and operates its lines on a management fee basis, with U.S. personnel. Iranair has operated at a loss and was unable to meet a 13 March deadline for payment to T.W.A. of accumulated fees for management and services amounting to $340,000. Because of its own weak financial position, T.W.A. thereupon decided to withdraw from the venture. It has ordered its pilots with Iranair to report out at Cairo no later than 28 March. In these circumstances Iranair must liquidate, find additional capital, or find a new operating agency. According to the Iranian Director of Iranair, the U.S.S.R. has now offered to acquire a 25 percent interest in the company (including T.W.A. 's 10 percent) and to furnish all needed technical supervision and maintenance. Should Iranair be compelled to take this way out of its present difficulties, the U.S.S.R. would be en- abled to operate Soviet-manned aircraft not only throughout Iran, but also to Dahran, Cairo, Paris, and London. Soviet operating control of Iranair would be most unwelcome to the Iranian Government. Alternative solutions, such as the in- vestment of additional Iranian capital, are being sought. The re- ported Soviet offer, however, meets the previous objection of the Iranian Government to foreign participation in Iranian concerns in excess of a 25 percent interest. Its rejection would create ad- ditional tension between Iran and the U.S.S.R. at a time when Iran DECLASSIFIED Authority NLT- 82-5 TRUMAN C.A LETTER 1-4-63 age ARCHIVES for ONATIONAL AND By He NLT Date 1-2--33 RECORDS SERVICE' Ps SECRET