No. 243
Memorandum by the Acting Secretary of State to the President

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  • Iranian Oil Problem

Attached is a suggested letter which you may wish to send to the Department of State. This letter is designed to carry out the decisions which you made on November 7 in endorsing a memorandum in respect of the decisions necessary to move forward towards a solution of the Iranian dispute.

Since last I talked with you on this subject, we have had further conversations with the British which make it appear probable that [Page 539] the participation of our major oil companies will be necessary if we are to achieve a solution of the Iranian oil problem.

David Bruce


Draft Memorandum by the President to the Secretary of State1

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As you are aware, I am considering a new approach to the Iranian oil dispute, which seriously threatens to deprive the free world of the oil resources of Iran on which depends the integrity and political independence of Iran itself. The approach would include the utilization of the authority granted me by the Congress in section 708 (a) and (b) of the Defense Production Act of 1950 as amended. Under these sections I am authorized to approve a voluntary agreement or program, under which one or more United States companies, acting in cooperation with the Anglo-Iranian Oil Company, would purchase and market Iranian oil and oil products.

In order that I may determine what type of agreement and program would be most likely to contribute to the national defense by leading to a solution of this situation, I hereby request you urgently to engage in exploratory discussion with representatives of United States oil companies and with the Anglo-Iranian Oil Company for the purpose of determining what type of action by me would produce the result desired. You will, of course, consult with the Government of the United Kingdom and such other countries as you consider necessary. You should also keep informed the Attorney General, the Defense Production Administrator, the Petroleum Administration for Defense of the Department of the Interior, and the Defense Materials Procurement Administrator, and such other agencies as you think necessary.2

  1. At the bottom of the record copy of this memorandum appears the handwritten notation, “OK H.S.T.”
  2. On Dec. 3, Acting Assistant Secretary of State for Economic Affairs Linder addressed letters to Attorney General McGranery, Defense Production Administrator Fowler, Defense Materials Procurement Agency Administrator Larson, and Secretary of the Interior Chapman informing them of the President’s decision to proceed under Sections 708(a) and (b) of the Defense Production Act of 1950 as amended and enclosing for their information copies of the President’s memorandum of Nov. 26 addressed to the Secretary of State. (888.2553/11–2652) The text of the Dec, 3 letter to McGranery is in The International Petroleum Cartel, the Iranian Consortium and U.S. National Security, prepared for use of the Subcommittee on Multinational Corporations of the Committee on Foreign Relations, United States Senate, Feb. 21, 1974 (Washington, Government Printing Office, 1974), p. 25.