Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

888.2553/4–954: Telegram

No. 455
The Secretary of State to the Embassy in the United Kingdom¹

secret
niact

Washington, April 9, 1954—12:37 a.m.

5304. Limited distribution. As result conversations today between Koegler of Standard NJ and Barnes and Emmerglick of Justice, with State representative attending, it has been agreed here following language could be substituted for paragraph 2(b) Deptel 5231 to London repeated Tehran 2022:

“If a member transfers by assignment or otherwise the whole or part of its interest in the consortium the obligation of the member to make payments as set out in subparagraph a and b above shall, unless otherwise agreed, continue unaltered. For the sole purpose of computing the amounts of these payments, crude oil and products owned or sold by any successor of any original member of the consortium and exported from Iran shall be computed as if owned or sold by such original member, and exported, without, however, any effect upon such successor’s right to have complete and unhampered disposition by sale, exchange or otherwise of such crude oil or products. If a member or successor transfers the whole or part of its interest in the consortium to another member of the consortium, the transferor shall, to the extent of the interest transferred, be relieved of its obligation to make the payments as set out in subparagraphs (a) and (b) above.”

It has also been agreed here that opening phrase of small paragraph 4 of addendum to agreement shall be revised to read:

“If there were more than one transferee they would agree to designate one common agent to cast a single vote as to all matters relating to the consortium, etc.”

Basis Koegler’s initial presentation was telegram he had received from Monaghan in London suggesting certain textual changes to meet both Justice and British views. Agreement was reached here on text substantially similar suggested language and Koegler then checked by telephone with London. British reportedly had some further objections and text quoted preceding paragraphs represents best effort here to meet objections. Koegler has telegraphed separately advice to companies to accept language and move ahead.

Advise urgently if any obstacles still remain to initialling memo understanding. Of course want to know immediately when consortium team sets firm date departure for Iran.²

Dulles

1. Repeated to Tehran. Drafted and signed by Stutesman after being cleared with Assistant Attorney General Barnes.
2. On Apr. 9 the Embassy in London informed the Department that the British companies had agreed to the language proposed in telegram 5304, that the American companies had confirmed this, and that the consortium memorandum of understanding would be initialed that day. (Telegram 4461; 888.2553/4–954)