No. 29
Editorial Note

On June 11 and 12 the British Delegation, composed of Basil Jackson, Vice Chairman of the AIOC Board of Directors; N.R. Seddon, AIOC Chief Representative in Tehran; AIOC Directors Elkington and Gass; and the British Government representative on the AIOC Board of Directors, Gardiner, arrived in Tehran. The first meeting with the Iranian Delegation, composed of Minister of Finance Varesteh, Minister of Education Sanjabi, Minister of Posts and Telegraphs Moshar, Majlis Deputy Shayegan, and Under Secretary of the Finance Ministry Hassibi, took place on June 14. The Iranian Delegation immediately informed the British that further negotiations were conditional upon the issuance of instructions by the AIOC for the deposit of 25 percent of the oil revenues as a guarantee against future claims and for the remittance of the remaining oil revenues, less costs and the 25 percent, to the Iranian Government.

The British Delegation asked for time to consider this demand and the second meeting on June 17 was confined to technical matters. At the third meeting 2 days later Jackson put forward a proposal that, inter alia, recognized the Iranian nationalization law, offered Iran a 10-million-pound advance on oil revenues, promised [Page 66]a monthly payment of 3 million pounds, and provided for the vestment of Iranian assets of the AIOC in a new Iranian National Oil Company, but which did not accept either the remittance of the oil revenues or the 25 percent deposit. The Iranian Delegation considered this proposal for only 30 minutes before rejecting it because it did not comply with the “9-Point Law.” For the full text of Jackson’s proposal, see British Cmd. 8425, page 42.

Following receipt of the Iranian desiderata at the first meeting, the Department of State cabled London and Tehran stating that it considered “this position not only completely unreasonable but designed to remove all hope negots with Brit except on terms complete capitulation to Iran nationalization demands” and urging Ambassador Grady to see the Shah and point out the “grave dangers this attitude entails and request him to use his personal influence to have this position modified.” (Telegram 2393, June 14; 888.2553 AIOC/6–1451) On June 16 Grady reported that he would urge the Iranians not to be adamant about the demands which they had made at the first meeting, but on June 18 he cabled that Mosadeq still was thinking in terms of the British turning everything over to Iran. (Telegrams 3302 and 3318 from Tehran; 888.2553 AIOC/6–1651 and 888.2553/6–1851) The Department of State on June 19 again instructed Grady to call on the Shah and request him to use his influence to assure that the door to an agreement was not closed by the reckless action of Mosadeq’s government. In this same telegram, repeated to London, Gifford was instructed to convey to the Foreign Office the Department of State’s view that the British Delegation should not leave Tehran. (Telegram 2403 to Tehran; 888.2553 AIOC/6–1951) On the following day Secretary Acheson at his press conference expressed the hope that Mosadeq would reconsider the Iranian rejection of the British proposal.

The appeals of the Department of State apparently had no effect since the Iranian Delegation refused to reconsider the British offer, and the AIOC Delegation left Tehran for London on June 21.