Foreign Relations of the United States, 1950, Western Europe, Volume III

CFM Files: Lot M–88: Box 151: Secto Cables

The United States Delegation at the Tripartite Preparatory Meetings to the Secretary of State

secret

London, May 6, 1950—midnight.

Secto 186. Fourth and final US–UK Bipartite Sub-Committee meeting on Near East took place yesterday with Furlonge, Evans and Rogers for UK and Hare and Palmer for US.

Group considered following questions:

(1) Arms and stability statement. Hare inquired re present UK status. Furlonge said text had been referred various Near East posts and to Bevin, who is considering question. Meanwhile, reactions coming in from field, some of them questioning wisdom such statement.

(2) Saudi Arabia. Hare inquired whether UK had been able give any further consideration our suggestion direct negotiations between Saudi Arabia and sheikhs. Furlonge replied Foreign Office legal experts studying this suggestion.

Re UK proposal to accept SAG’s suggestion for fact finding commission under circumstances and conditions set forth paragraph 4 Secto 98, British suggested joint Anglo-American approach might be made to King Ibn Saud after issuance joint Anglo-American statement welcoming the appointment of such commission, expressing hope final settlement would speedily be reached after it had reported. We said would bear in mind.

(3) Iran. Hare outlined our general appraisal of Iranian situation, as contained Section II of D–8.¹ Furlonge stated UK analysis agreed completely with ours and that he felt there was no doubt re symptoms and nature of disease. He emphasized, however, that, despite Shah’s failure exercise effective leadership, there is still great loyalty, on part Iranian people to institution of throne. He entirely agreed with us that our principal task in Iran should be one of bolstering morale.

Hare stated that we had been cudgeling our brains in search of some action which would catch imagination of Iranians and emphasized to them that they were not forgotten. He would like to give the British some indication of what we had in mind, even though it was still in planning state. He then outlined steps contained Section III (a) of D–8.² Having told UK representatives what we had in mind, Hare said we would want UK support and would like to have their opinion our ideas. In addition, and bearing in mind close US–UK relationship we would like to know what assistance we could look for from UK. In particular, we felt speedy conclusion of AIOC negotiations would help enormously toward solution Iran’s present difficulties. We hoped very much UK will do everything in its power to bring matter to speedy conclusion. In this connection, we had understood question of reserves had been matter of contention between AIOC and Iranians and suggested UK might give special attention this aspect of problem. More generally, we would like to feel that UK as government and as participant in AIOC would fully explore ways in which present situation with regard to ratification of agreement might be loosened.

Furlonge replied Iranians had never requested specific modifications AIOC concession. It now looks as if concession may come before Majlis in next six to eight weeks. Foreign Office has been encouraging AIOC to explain provisions of concession to key people in Iranian Government, many of whom are opposed though uninformed. So far as AIOC concerned, it takes attitude government made concession and should stick by it. If Iranians approached company requesting modification, latter would obviously have to consider question, but company would not want to take initiative in question. While Foreign Office agrees political considerations inherent in problem, nevertheless it seems concession should also be on fair commercial basis. UK Government glad have our comments and suggestions on this question, which it would note and consider.

Re general internal situation, Furlonge said Foreign Office feels long-term objectives should be pursued through seven year plan. In view decline morale, however, there was need for short-term measures. There are five points which UK has in mind urging Shah to take action on: (a) redistribution crown lands; (b) absentee landlordism; (c) interference with free trade unions; (d) anti-corruption campaign; (e) better labor legislation. If progress could be made in these fields, UK considers it would go far toward convincing peasants that Shah and government had their interests at heart. British Ambassador Tehran³ has suggested that US and UK should consider issuing joint statement at end of conference to buttress Shah and government. After issuance statement, two Ambassadors might see Shah and express their concern re general situation, their appreciation his good intentions and urge him to take at least some of foregoing actions. This matter now being considered by Foreign Office. He thought this action could be complementary our proposed program.

Hare stated our Ambassador in Tehran⁴ had made similar suggestion. He recalled series of statements on Iran, including recent joint statement by Shah and President.⁵ We are a little doubtful about just another statement without being able to tie it to something of substance. For that reason we thought necessary any statement should be linked with some announcement of tangible assistance. We wondered what UK could do on its side to give ballast to statement.

Furlonge asked if ratification AIOC agreement would not help considerably. Hare replied he definitely thought it would, but ratification might not take place for some time. Was there anything else UK could do? UK representatives had no suggestions but agreed preferable statement be related to some tangible development.

Committee also briefly reviewed question economic development Near East and agreed that type of Anglo-American cooperation in this field which was worked out in 1949 should be continued.

Sent Department Secto 186, repeated Paris 786.

1. FM D D–8 dated April 27, not printed (CFM Files: Dot M–88: Box 149: May FM Meeting C, D Series). In section II the paper reported that a general depression in business and farming had allowed the outlawed Tudeh Party to organize and exploit the situation. The Shah and the Iranian Government seemed unable to meet the situation or to cope with the growing crisis. In addition the Iranians felt they had taken great risks to place Iran in the Western camp and had now been left to face the Soviet threat alone.
2. Recommendation of loans to Iran from the Export-Import Bank on economically justifiable projects in the 7-year plan, Iranian economic reforms, a mission in Iran to control the use of Export-Import Bank loans, increase in military assistance to Iran, strengthening of United States representation in Iran, and hope that the United Kingdom would pursue the negotiations between Iran and the Anglo-Iranian Oil Company (AIOC) with the aim of obtaining greater concessions for Iran.
3. Sir Francis M. Shepherd.
4. John C. Wiley.
5. For the text of the joint statement by President Truman and the Shah of Iran, released to the press on December 30, 1949, see Department of State Bulletin, January 9, 1950, pp. 54–55.