888.2553/8–2252: Telegram

No. 203
The Acting Secretary of State to the Embassy in Iran1

top secret

458. For Chief of Mission only. Fol two msgs dated Aug 20 from PriMinChurchill to Pres rptd for ur info only:

First msg:

  • “1. Thank you so much for ur deeply considered reply. Why do we not send a joint tel personal and secret to Musaddiq? It is true we cld not sign it with our Christian names because he has not got one. Nevertheless if we cld agree to say ‘If you Musaddiq will do [Page 448] (A), (B) and (C), we two will do (X), (Y) and (Z),’ and if this cld be put down shortly it might be a help to our common interests. If you think well of this idea, shall I try my hand at a draft or will you?
  • 2. We are dealing with a man at the very edge of bankruptcy, revolution and death but still I think a man. Our combined approach might convince him. The alternative is the US taking on the burden of being indefinitely blackmailed by Persia to the detriment of her greatest friend. It will be worse for you even than for us if what is called Persia thinks that she can play one off against the other.”

Second msg:

“I thought it might save time if I sent this draft to you which expresses our view of the policy we might perhaps put forward together.

Fol are my ideas of a possible joint msg:

If the Persian Govt will agree to

the submission to the Internatl Court of the question of the compensation to be paid in respect of the nationalisation of the enterprise of the Anglo-Iranian Oil Co in Persia and the termination of the 1933 Concession Agreement having regard to all the claims and counter-claims of both parties
appoint suitable reps to negot with the Anglo-Iranian Oil Co arrangements for the flow of oil from Persia to world markets, then
the UK Govt will agree on behalf of the Anglo-Iranian Oil Co to the submission to arbitration set out in (I)
the UK Govt will relax certain of the restrictions on exports to Persia and on Persia’s use of sterling
the US Govt will make their immed grant of $10 million to the Persian Govt
the UK Govt will arrange for the Anglo-Iranian Oil Co to take their part in the negots set out in (II).

When agreement on the submission under (I) and (a) has been completed, (II), (b), (c) and (d) will become operative.

Thus far the msg.

The form of words in (I) is not meant to be a precise formula for the reference to the Court. I do not think there will be any difficulty in our accepting the Nationalisation law as a fact. The terms of reference must not, however, prevent us from maintaining, as you put it, the validity of the 1933 Concession and claiming damages for its unilateral abrogation.

I should hope that further aid from the US wld be conditional on the progress of (II) and (d).

[Page 449]

When delivering the msg the UK and US reps shld pt out that the negots under (II) and (b) stand no chance of success unless the anti-Brit and anti-US campaign in Persia has been stopped.”

  1. Repeated to London.