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106. Memorandum of Telephone Conversation1

SUBJECT

  • Iran

PARTICIPANTS

  • Mr. Acheson
  • President Truman

I called the President at 10:30 this morning on the subject of Iran. I told him that I consider the situation to be very critical there and in an effort to save the situation I wished to take up with the British the possibility of proceeding immediately upon a plan that involved three basic points. I stated to the President that these points were as follows:

1. The US would make immediately available to Iran $10,000,000 in grant assistance.

2. The British would agree to purchase the oil presently stored in Iran at a suitable discount.

3. Mossadeq should agree that an international arbitration commission should be established to consider the question of compensation to the British.

I explained to the President that we had recently, in an effort to save the Qavam Government, considered with the various Departments the question of providing 26,000,000 in dollar assistance to Iran and recalled that I had mentioned this to him at the time. We had not proceeded upon this because Qavam fell before action could be taken. I indicated to the President that I had not had the time to clear with other interested agencies the question of the US now making available $10,000,000 and wished to know his views before I discussed the matter with the British.

The President approved proceeding with such discussions on the basis that the US Government would furnish this amount of assistance.

  1. Source: National Archives, RG 59, Central Files 1950–1954, 888.2553/7–3152. Top Secret: Security Information. Drafted by Byroade. Printed with redactions in Foreign Relations, 1952–1954, vol. X, Iran, 1951–1954, p. 428 (Document 193).