Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

Truman Library, Truman papers, PSF–Subject file

No. 195
Memorandum for the President of Discussion at the 121st Meeting of the National Security Council on August 6, 1952¹

top secret

August 6, 1952

The following notes contain a summary of the discussion at the 121st Meeting of the National Security Council, at which you presided. Mr. Bruce attended in the absence of Secretary Acheson from the city. The Attorney General, who was unable to attend the meeting, nevertheless participated in Council action on Items 5 and 6 by communicating his views through a memorandum.

[Here follows an oral briefing on the situation in the Far East.]

2. The Current Situation in Iran

The President asked Mr. Bruce to open the discussion of the subject.

Mr. Bruce stated that NSC 107/2² still covered the question of U.S. policy with respect to Iran. The Department of State did not feel that the time was yet ripe to revise that report, he added, so no written statement had been prepared for this Council meeting. Certain recent actions taken, he added, which he would describe, had been cleared with the President by Secretary Acheson prior to the Secretary’s trip to Honolulu.

Mr. Bruce explained that we still wished to coordinate our actions with the British, even though we apparently had quite a difference of views with them over the basic situation in Iran. The British have less fear than we that the communists would take over Iran if there were a change of government. We now appear to be faced with something that contradicts a main tenet of NSC 107/2 since the Shah demonstrated that he did not have the power to support Qavam. With respect to current talk of the possibility of a coup d’état, Mr. Bruce said he felt that was practically impossible, since there was no leadership capable of taking over, especially with the prestige of the army diminished.

The Department of State, Mr. Bruce said, was beginning to face the serious possibility that, if we could not obtain agreement on a line of action with the UK, we should get on with a policy of our own. Last week the Department had sought another means of agreement with the UK through an aide-mémoire, based on the support of Mossadegh. One proposal in the aide-mémoire was for us to make a grant of $10 million to Iran. Mr. Bruce said that Secretary Lovett had some question as to whether this should be a gift or a loan. Ambassador Henderson, he added, preferred a gift. A second proposal was that the British should buy current oil stocks in Iran. The third point was that we would not interpose objection to the subsequent sale by Iran of its oil. On this one, Mr. Bruce said Secretary Lovett had a question as to arrangements for the disposal of such oil, which presumably would consist of future production.

Secretary Lovett remarked at this point that he had been struck in reading the aide-mémoire, after it had been transmitted, with the following peculiar combination of proposals: we would be urging the British to buy the oil stocks, giving Iran $10 million, and then implying that Iran can sell to the Soviets, if they wish. This would be very difficult to explain, Secretary Lovett felt. Mr. Bruce agreed that the wording regarding subsequent sale of Iranian oil should, if possible, preclude sale to the Soviet bloc.

Mr. Bruce then said that the British Cabinet was scheduled to consider this recent U.S. proposal next week. Ambassador Henderson had concurred in the general principles contained in it, and the British Ambassador apparently agreed that Mossadegh was our best chance to hold Iran. Mr. Bruce concluded that if the British accepted these proposals, then we could proceed to negotiate with Iran. If the British refused, however, then we might have to go it alone, although Mr. Bruce said he was not yet ready to make any recommendations in this regard.

The National Security Council:

Discussed the subject in the light of an oral report by the Acting Secretary of State.³

[Here follows discussion of United States objectives and courses of action with respect to Japan, East-West trade, NSC 86/1, evacuation of selected key indigenous persons from danger areas, the position of the United States with respect to Turkey, and the status of NSC projects.]

1. Prepared on Aug. 7, presumably by the Secretariat of the NSC. According to the minutes of the meeting, which consist of a list of participants and a brief list of decisions taken at the meeting, the following members of the Council attended: President Truman, presiding; Acting Secretary of State Bruce; Secretary of Defense Lovett; Director for Mutual Security Harriman; and Chairman of the National Security Resources Board Gorrie. Others present at the meeting included Secretary of the Treasury Snyder; Acting Director of Defense Mobilization Steelman; General Bradley, Chairman of the Joint Chiefs of Staff; General Smith, Director of Central Intelligence; and Executive Secretary Lay and Hugh D. Farley of the NSC Secretariat. (Minutes of the 121st meeting of the NSC, Aug. 6; Truman Library, Truman papers, PSF–Subject file)
2. Document 32.
3. This final paragraph regarding the current situation in Iran was adopted verbatim as NSC Action No. 659. (S/S–NSC (Miscellaneous) files, lot 66 D 95, “Record of Actions by the National Security Council, 1952”)