788.13/7–952: Telegram
No. 186
The Ambassador in the United Kingdom
(Gifford) to the
Department of State1
153. In conversation today, FonOff expressed extreme disappointment at way events have transpired last few days in Iran, but derived some satisfaction from agency msgs that large number of senators had abstained on vote of inclination, which FonOff feels indicates that opposition to Mosadeq still basically strong in Senate.…
Embassy officer referred to Henderson’s comment (para 8 Tehran’s 98, July 7) that his inability and that of Middleton to give any definite assurances to Shah re our intentions on financial problem and oil settlement were undoubtedly instrumental in Shah’s current attitude. Embassy officer felt that Shah wld probably be unable move until we were in position say something to him on this score. FonOff official then suggested that UK might be able get itself into negotiating posture soon and to give Shah indication that it wld be willing negotiate a long-term settlement along management agency lines with a reasonable successor govt. Suggestion to this effect now being considered by FonOff. If this cld be done, did Embassy officer then think Dept wld consider intervening with Shah to encourage him replace Mosadeq?
Embassy officer said he cld not, of course, judge what Dept’s reaction wld be. He felt there were two important elements, however, which wld enter into Dept’s decision:
- 1.
- Dept wld undoubtedly want to know much more re proposals which UK wld put forward in negotiations and their likelihood of success. He recalled five points which Secretary had mentioned in fourth bilateral as type thing on which we wld have to have more detail.
- 2.
- Secondly, there was question of timing. If Mosadeq accepts Shah’s firman and forms new govt, he will undoubtedly enjoy initial recrudescence of strength. Until that strength begins dissipate again, it wld seem unlikely Shah, judging by his recent actions, wld feel himself able to move against Mosadeq even if definite assurances received from US and UK re intentions to successor govt. Question of timing therefore wld be most important one and, in this connection, verdict of Hague Court wld probably have important bearing, since Iran victory wld undoubtedly give Mosadeq another popular boost. FonOff official said re first point that FonOff now actively studying points raised by Secretary and hopes be in [Page 414] position shortly communicate its views through British Embassy Washington. It is also giving further consideration to Nitze’s suggestion for management agency unconnected with oil industry. It will be unable give Dept its further views on these questions, however, until discussions have taken place with AIOC. (In reply question by Embassy officer, FonOff official said he did not think even Cabinet approved decisions on principles long-term settlement had yet been discussed AIOC.) Re second point, official agreed question of timing wld be important. He expressed optimism re Hague Court either accepting jurisdiction or agreeing to hear merits of case before passing on question of jurisdiction. Either wld be victory for UK.2
Comment: Foregoing optimism re Hague Court decision at variance with reliable but confidential indication we have had that Sir Eric Beckett very gloomy re UK’s chances of obtaining favorable decision. We understand verdict now not likely until end of this month.