888.2553/10–1252: Telegram

No. 225
The Secretary of State to the Embassy in the United Kingdom1

top secret

2593. London eyes only for Gifford. Burrows has given us the substance of Mr. Eden’s telegram of October 11 to Sir Oliver Franks and the draft UK note to Mossadegh.2

We had fully anticipated the note to Mossadegh would be of the general nature contained in the draft and have no comment to make with respect to it.

We fail to see the point of the last sentence of Mr. Eden’s telegram as given to us, “Mr. Acheson and his department have repeatedly recognised the fairness of the joint proposals and have declared they do not wish to urge us to accept or offer anything going beyond them.” Our last note to Mr. Mossadegh contained the statement [Page 492] that there were doubtless other equitable methods of arriving at a settlement of claims and counter-claims than the method put forward in the joint proposal. The British note contained similar language. What we are trying to do is to see whether another equitable and workable method can be developed. Since Mr. Acheson’s conversation with Sir Oliver, we have done further work on our side and now believe that it may be possible for us to work out a procedure by which we could in a matter of days make available up to $100,000,000 as an advance against oil purchases. We further believe it may be possible for us to do this through Anglo-Iranian, or a subsidiary of Anglo-Iranian, which might eliminate the necessity for American private participation in an oil distributing company.

It may also be that it would not be substantially more difficult to persuade Mossadegh to offer a lump sum settlement of 50,000,000 tons of oil than to persuade him to offer 30,000,000 tons of oil.

Burrows also stressed a continuing joint approach to the Iranian problem. To us a joint approach implies a full exchange of information and an effort to try to solve the problem. The question is how do we propose that the problem be solved. Do we really believe that Mossadegh or any other Iranian leader can or will accept the joint proposals as originally formulated? What ideas could the “suitable person” have? What is within the realm of the possible? Can a settlement really be conceived of without some substantial advance to Iran? How is this advance to be made unless it is against future oil purchase? Who is going to make this advance if the United States does not participate in it? What is the British analysis and how does it differ from ours?

If the conclusion were that the matter is insoluble, we would find that an unacceptable basis for a joint approach. If Mr. Eden thinks it would be helpful for someone from Washington to come over to London to discuss these matters, we will be prepared to do so.

There are two minor points which might merit clarification. Mr. Acheson did not say the possibilities of a settlement by intergovernmental negotiation are probably exhausted. Obviously no settlement is possible without intergovernmental negotiations of some sort. He said he thought the possibilities of negotiation as to the principles underlying a settlement of compensation are probably exhausted and that the best hope probably lay in a specific lump sum settlement. Also he had had no thought that Mr. Eden should commit himself in advance to any specific proposal; he made the reverse clear. He did, however, wish to exchange views promptly as to the general concepts involved.

Copy of above is being given to Burrows.

Hope you will have earliest opportunity discuss this with Eden.

[Page 493]

Text of extract from telegram dated October 11 from Eden to Franks follows.3

  1. Repeated to Tehran eyes only for Henderson. Drafted and signed by Nitze.
  2. For text of the British note as handed to Mosadeq on Oct. 14, see Document 227.
  3. See telegram 2592, supra.