888.2553/2–1852: Telegram

No. 160
The Ambassador in Iran (Henderson) to the Department of State 1

top secret

3147. IBRD discussions continued throughout Sunday both in subcomite and with larger grp including Mosadeq.

Memo (Embtel 3137 Feb 17) agreed upon in subcomite with exception point one which bank agreed to drop. Mosadeq did not specifically comit himself but was generally understood memo acceptable to Iran Govt. Conversations largely devoted to question of price. [Page 356] Bank del explained at great length its reasons for believing 33⅓ percent discount which wld give Iran 50 cents a barrel excluding 37 cents to be placed in escrow represented best deal Irans cld expect at present. Bank said it was not necessarily committed to these figures and was willing to consider any counter proposals. These Mosadeq consistently refused to make. Garner tells us he pleaded with Mosadeq to set a figure Irans thought fair with only reply being that Iran wld insist on posted price of $1.75 at a discount they wld not specify.

Conversations while friendly were marked by several rather sharp exchanges particularly between Rieber and Hassibi such as Rieber’s remark “I like Mr. Hassibi, I consider him good friend of mine and an intelligently and patriotic Iran, I think his ideas are all cock-eyed and I have been trying to beat some sense into his … head for past six weeks”. This sort of exchange Irans took in good part and negotiating techniques of Garner and Rieber while unquestionably novel to Irans seem to have had favorable effect.

Question necessity return Brit techs raised frequently by Garner with, we gather, no appreciable progress. In this connection Ferguson has gained impression Bank del not in complete agmt and there is some thought among members of del that Garner has unduly emphasized this point. In summary I feel progress has been made since:

Irans have no objection to managerial control by IBRD.
While Irans obviously most unhappy re price proposed by Bank they have not so far refused it and seem to be heading in direction of instructing Bank to get best obtainable price.
Reluctant admission by Irans that Bank must take into acct interest of Brit which at outset of conversations they denied existed.
Clear desire on part of Irans to make every effort find solution through intervention case.
Attitude Mosadeq who appears at moment willing to let Senators carry burden of negots possibly to allow them to assume polit onus for unpopular settlement.

On other hand fol unfavorable factors still exist:

Question Brit techs. No progress has been made this point and there is some feeling that Garner has been overly insistent on it.
Lack of definite assurance Mosadeq will be bound by any agmts reached by his subordinates and/or Senators.
Reluctance Irans commit themselves on specific details.
Negotiating inexperience of Garner who possibly may be interpreting customary Iran courtesy to mean they are more agreeable to his proposals than in fact is the case.2

  1. Repeated to London for Linder and to Lisbon for the Secretary of State, who was scheduled to arrive in Lisbon for the Ninth Session of the North Atlantic Council, Feb. 20–25, 1952. Acheson concurrently held a number of Foreign Ministers meetings in Lisbon through Feb. 26. For documentation regarding these meetings, see vol. v, Part 1, pp. 107 ff.
  2. On Feb. 18 Ambassador Henderson reported that, in that morning’s discussions, Mosadeq had agreed to sign the aide-mémoire which Garner presented the previous day. On the issue of oil pricing, however, Henderson reported that no progress had been made, and that Garner was not optimistic that he could achieve an understanding concerning this matter. (Telegram 3162; 888.2553/2–1852)