888.2553/4–2051: Telegram

No. 14
The Secretary of State to the Embassy in Iran1

top secret

1909. Eyes only Ambassador Grady.

[Here follows a summary of the talks with the British and an outline of the plan which Ambassador Franks explained to McGhee at the meeting on April 17 (see Document 12).]

Shld Brit make offer in its present form and you are asked for comments by Ala, Dept wld appreciate ur taking line:

Offer taken by itself has some good pts.
It is important to find some formula upon which negots can begin.
You regret you cannot comment specific details of proposal or its implications vis-à-vis Iran demand for nationalization.2

Dept realizes ur position will be most difficult in view unfortunate publicity given conversations here and hopes you will be able to make clear US not intervening. Shld Brit alter proposal along lines suggested by Dept, nature of support we wld extend wld depend on circumstances existing at time but present Dept contemplates you, as you have suggested, working discreetly behind scenes [Page 43] with Shah and Ala with public US position remaining as at present. Dept informed Brit while it cld not support present proposal, it wld adopt policy of “benevolent neutrality” and it is important to avoid impression US opposes offer. Silence as reflected in “no comment” reply to Irans might be interpreted as opposition and hence, in this event, wld be important include points one and two above in reply. Dept aware extreme difficulty maintaining position this sort in Iran and hopes therefore Brit will be able to make proposal we can earnestly support, though in quiet diplomatic approach.

Aside from specific question of oil, Dept discussed polit situation at some length with Brit.3 Dept expressed its opinion Ala doing competent job and he and Shah shld have full support both US and UK.…

Irans have not as stated in reftel been informed of substance conversations. Dept told Entezam Apr 19 discussions were, as he had been informed earlier, purely informal exchange of views and included such matters as effect Iran nationalization on world economy, technical petroleum aspects situation and, under no circumstances, cld be interpreted as meeting for adoption common policy or attempt intervene in matter which cld only be settled elsewhere by parties directly concerned. Dept informed Entezam it has conveyed to Brit Ala’s appeal against use of force and assured him we are confident nothing of this nature wld be attempted.4

Essential that all of above be treated with great caution. Dept wld appreciate distribution being limited only to those officers of Emb whose duties require their being informed.

Ur tel comments requested soonest. Full report fols by mail.

  1. Drafted by Ferguson and cleared by the Bureau of European Affairs and the Office of the Assistant Secretary of State for Economic Affairs. Repeated to London.
  2. For text of the aide-mémoire containing the British proposals as delivered to Prime Minister Ala on Apr. 26 by Ambassador Shepherd, see British Cmd. 8425, pp. 28–29.
  3. In a subsequent telegram, Grady was informed that the Department of State was disappointed that the talks with the British had been confined almost exclusively to the AIOC problem and that they had failed to put forward any positive ideas on other political and economic aspects of the Iranian crisis. The British had seemed only moderately interested in U.S. plans to render increased assistance to Iran and had disclosed no similar plan. (Telegram 1930, Apr. 23; 888.2553/4–2351)
  4. No further record of a conversation with Ambassador Entezam has been found in Department of State files; however, a memorandum from Rountree to McGhee, dated Apr. 19, refers to an expected meeting with the Ambassador at 4 p.m. that day and suggested that McGhee should assure him as follows:

    “(1) The talks were purely informal exchanges of views; (2) that no joint policy was even discussed; and (3) that both the United States and British Governments fully realize that the solution to the oil question can only be found by the Iranian Government and the oil company.” (888.2553/4–1951)

    According to Ambassador Entezam who talked to newsmen late in the day on Apr. 19, he had met with McGhee that afternoon and been assured that no negotiations were going on between the United States and the United Kingdom regarding the AIOC dispute with Iran. (Department of State Wireless Bulletin, Apr. 20, 1951, p. 7)