391.6363/12–2946: Telegram
The Ambassador in Iran ( Allen ) to the Secretary of State
us urgent
[Received December 30—11:35 a.m.]
1636. Dept’s 1061, December 26.44 Proposed oil purchase and pipeline agreement which was described briefly to me by a visiting oil man some weeks ago and which was subject of telegram British Ambassador subsequently received from London, seems a good arrangement in principal as far as American interests here are concerned. It will provide a large westward outlet Iranian oil and consequently contribute to the economic stability of Iran for which we are working.
Arrangement of the magnitude contemplated will inevitably give US an increased interest in AIOC affairs and Iranian public will probably attach some responsibility to US for AIOC operations in future, no matter how much we insist that arrangement is a private commercial one without political significance. Many Iranians who would welcome American participation in Iran petrol development either through separate operation or through participation in British concession, will regard agreement as step in latter direction. I gather from remarks British Ambassador has made that certain, especially Empire-minded, directors of AIOC, were hesitant about agreement for this very reason.
I hope Department will be able to insist on American domicile for pipeline company. British insistence on British domicile for various oil companies operating in Persian Gulf area has placed American interests in Bahrein, Kuweit and Iraq at disadvantage. American domicile for new corporation would tend to even score somewhat. AIOC has generally been difficult to deal with. It refuses at present, [Page 49] for instance, to discuss with FLC the question of large amounts of US Lend Lease supplies which company is still using without having paid any rent or principal, on specious argument that company is responsible only to British Army although latter has approved direct discussions. AIOC record does not encourage one to rely on its generosity towards US.
Repeated London 192.