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

888.2553/8–2552: Telegram

No. 210
The Acting Secretary of State to the Embassy in Iran ¹

top secret
niact

Washington , August 25, 1952—10:54 p.m.

481. For Chief of Mission only.

1. Pres has agreed with PriMin Churchill on joint approach to Mosadeq along lines Deptel to Tehran 475 (to London 1310).²

2. Accordingly you are instructed to concert with Middleton to deliver together fol texts jointly from Pres and PriMin Churchill as soon as practicable after Middleton receives instrs to proceed. Cover msg:

“We have reviewed the msgs from our two Embs in Iran regarding recent talks with you, as well as ur communication of Aug 8 [7,] 1952 to the Brit Govt.³ It seems clear to us that to bring about a satisfactory solution to the oil problem will require prompt action by all three of our Govts. We are attaching proposals for action which our two Govts are prepared to take and which we sincerely hope will meet with ur approval and result in a satisfactory solution. We are motivated by sincere and traditional feeling of friendship for the Iranian nation and people and it is our earnest desire to make possible an early and equitable solution of the present dispute.” Proposals to be attached to foregoing msg:

• “(I) There shall be submitted to the ICJ the question of compensation to be paid in respect of the nationalization of the enterprise of the AIOC in Iran, having regard to the legal position of the parties existing immediately prior to nationalization and to all claims and counterclaims of both parties.
• (II) Suitable reps shall be appointed to represent the IranGov and the AIOC in negots for making arrangements for the flow of oil from Iran to world markets.
• (III) If the IranGov agrees to the proposals in the foregoing two paras, it is understood that (a) reps of the AIOC will seek arrangements for the movement of oil already stored in Iran, and as agreements are reached upon price, and as physical conditions of loading permit, appropriate payment will be made for such quantities of oil as can be moved; (b) HMG will relax restrictions on exports to Iran and on Iran’s use of sterling; and (c) the USGov will make an immediate grant of $10 million to the IranGov to assist in their budgetary problem.”

3. Shld Mosadeq upon receiving foregoing indicate that $10,000,000 grant inadequate, you may, personally and without making any commitment on part of US Govt, give him line of thought contained in pertinent portions Embtel 804, Aug 22.⁴ (FYI Any additional aid would probably have to be loan rather than grant. See Deptel 460 Aug 22.)

4. In commenting on (3) (b) of annex to msg to Mosadeq, BritEmb made pt that by “relax” “abolish” was not meant; and that the relaxations in question were those set forth in Annex B msg from Churchill to Amb Franks quoted in Deptel 463, Aug 22.

5. BritEmb has agreed question of publicity shld for present be handled in accordance numbered para 5 Pres’ msg to Churchill quoted in Deptel 452, Aug 21.

6. US and Brit Govts are confident Mosadeq will agree that it would be difficult to conduct successful negotiations in an atmosphere charged with anti-Brit and anti-US propaganda. They therefore hope that Mosadeq will exert best efforts to suppress anti-foreign statements and demonstrations.

7. Brit Govt is instructing Middleton on oral comments he is to make re (a) special arbitration agreement, (b) Brit financial aid, (c) advantages of conducting negotiations outside Iran, and (d) qualifications of Iran reps.⁵

Bruce

1. Repeated to London. Drafted and signed by Richards; cleared with Acting Secretary of State Bruce, Matthews, and John H. Ferguson.
2. Document 207.
3. See footnote 2, Document 197.
4. See footnote 7, Document 206.

5. On Aug. 27 Ambassador Henderson reported that he and Middleton had an appointment to see Mosadeq that morning. The Ambassador also enclosed the following minor drafting changes in the documents to be handed Mosadeq in order that the American and British versions were identical:

   “(A) ‘Communication of August 7’ for ‘communication of Aug 8’ in paragraph 1; (B) ‘sincere and traditional feelings of friendship’ for ‘sincere and traditional feeling of friendship’ in paragraph 1; (C) ‘if the Iran Govt agree’ for ‘if the Iran Govt agrees’ in section three of annex; (D) ‘immediate grant of 10,000,000 dollars’ for ‘immediate grant of dollars 10,000,000’ in subsection C of section three of annex.” (Telegram 872; 888.2553/8–2752)