888.2553–AIOC/8–1850: Telegram
The Ambassador in the United Kingdom (Douglas) to the Embassy in Iran 1
priority
20. 1. I should like to assure you we are very conscious of difficult task which you are facing in Iran and of your strenuous efforts to [Page 584] strengthen situation there, which is in everybody’s interest. You may be sure that in your task you can as in all matters count on complete cooperation of this Embassy and that we will continue do everything within our power to be of assistance to you in the achievement of your objectives.
2. I regret very much that Embtel 839 August 10 should have been interpreted as conveying idea that this Embassy had impression Embassy Tehran has been encouraging Razmara in his intransigence (Tehran’s 16 to London August 15 repeated Department as 395). What I intended convey is that Foreign Office officials concerned with problem have formed impression, in absence any evidence of which they have knowledge that we are taking as strong a line with Razmara as we are with them, that our approach seems to be one sided, that Razmara knows it, and that he is thereby indirectly and involuntarily encouraged in his intransigence. But neither this Embassy nor anyone in it holds this view. Nevertheless, there is evidence that view is held among Foreign Office officials. Whenever any aspect of it has come up, we have tried hard to disabuse Foreign Office. See, for example paragraph 3 Embtel 399 July 18. But only way in which we will effectively allay suspicion and remove it as factor complicating to some extent present situation is to be able convince Britain we are exerting comparable efforts to encourage Razmara adopt conciliatory and understanding attitude. Since, as indicated by Tehran’s 16, we are doing more along this line than has appeared in telegrams previously sent this Embassy, we would appreciate receiving more details in order that we may be more convincing with HMG than we have been able to be in past.
3. I should also like to clarify further the doubts expressed in my 839 regarding the wisdom of our pressing the suggestion that the company make immediate payment of all or most of the amounts due under the supplemental agreement. Probably, as pointed out in paragraph 2 urtel 395, the lawyers could find formula for protecting company against small stockholders’ suits, but I feel that initiative and responsibility for this or any other type of remedial action should lie clearly and squarely with UK. I suggest in this connection that there is essential moral difference between our pressing on UK Government course of action which might result in loss private funds. So far as I am aware, there are no facts in present situation known to us which are not also known to Britain, including possibilities of Iran’s collapse and confiscatory action. We have pressed on them in strongest terms US estimate of nature and requirements of situation. From everything which we have been able to ascertain, they recognize [Page 585] the seriousness of situation and the need for some as yet undetermined action. I continue to feel the nature of this action should be left to them and that our representations should be confined to urging early and effective action without specifying what it should be.
4. Re paragraph 7, I am sorry if anything in our telegrams may have implied a need for renegotiation which we agree is not case. In fact we have told Britain we feel any concessions which are made by company should be outside the framework of the present supplemental agreement.
5. It would be of greatest aid to us in our efforts here to have Tehran’s and Department’s early views on following questions bearing on points which are bothering UK: a. When will Shepherd’s appraisal of the need for funds and the use to which they will be put be completed? (Embtel 933 August 142) As of yesterday, appraisal still not received from Foreign Office.
b. What, beyond certain general indications in paragraph 6 of Tehran’s 395, are detailed answers to preliminary points made by UK Treasury and AIOC?
- i.
- That any large scale loan or advance would probaly be dissipated one way or another.
- ii.
- That alternate sources of funds can and should be found to balance budget instead of using external loan.
- iii.
- That 7 year plan projects are not in sufficiently advanced state of readiness to absorb large amount of funds at present time.
- iv.
- That large loan would have undesirable inflationary effect on Iranian economy.
c. Given Razmara’s tactics as outlined paragraph 5 of Tehran’s 395, what effective assurances is he willing to give Britain re getting agreement through Majlis without demands for further concessions at later date, if they meet him satisfactorily now on question financial aid and other gestures?
d. In view US and UK of position renegotiation, which Razmara appears have in mind (Tehran’s 215 July 253), would Razmara be willing yield on this point if company made satisfactory gestures outside terms agreement?
6. I wish repeat that I am terribly sorry there has been misunderstanding. If after reading this message there are any points requiring further explanation, I hope you will let me know.
Sent Tehran 20; repeated information Department 1048.