888.2553/2–353: Telegram

No. 295
The Acting Secretary of State to the Embassy in the United Kingdom1


5147. For Secretary and Holmes. Representatives British Embassy presented last evening British reply to our latest comments on draft agreements as contained Deptel 4774, rptd Tehran 1783.2

British stated their preferred alternative was that there be no further approach to Mosadeq. We should instead sit tight waiting for Mosadeq to request resumption conversations, which should be based upon documents presented to him on Jan. 15th. They stated they realized we might interpret proposals made by Mosadeq in conversation of Jan. 28th3 as counter-proposals which needed some reply on our part. If we could not agree therefore that no further approach should be made they would reluctantly agree to go ahead with alternative 2.

Alternative 2 would be approach by Henderson to Mosadeq which would be designed to get conversations back on basis they were prior to January 28. Following paragraph on tactics is taken verbatim from FonOff message to Brit Emb: [Page 660]

“Mr. Henderson might try to bring Dr. Mossadegh back to considering the proposals of January 15th. I do not mean that Mr. Henderson should produce any new documents. The more documents we give Dr. Mossadegh the greater the danger of his publishing them in the event of a breakdown and the greater the danger that no future Persian Government would be willing to resume where Dr. Mossadegh had left off. Mr. Henderson could ask Dr. Mossadegh to forget their conversation of January 28th and to address himself to the proposals of January 15th which were a fair and reasonable offer. Mr. Henderson would have to explain that these proposals must be taken as a whole and sprang from Dr. Mossadegh’s acceptance of the principle of international arbitration and a claim to compensation for loss of profits. He would make it perfectly clear that he was not authorized to discuss proposals on any other basis, though pure points of drafting would be a matter for discussion and mutual accommodation.”

Dept officials pointed out that their assumption we would not like alternative 1 was indeed correct. We further stated that we were quite disappointed at their suggestion on tactics proposed in alternative 2. Considerable progress had in fact been made on many points since documents had been given Mosadeq on Jan. 15th. In the conversations, for instance, was Henderson to imply that British were not willing to see dispute classified as between States, which was a Mosadeq suggestion that greatly reduced complexity of documents? There were other points of similar nature in compensation agreement which had been clarified since 15th. This was the case as well with DMPA contract in which we were willing meet Mosadeq’s objections on nomenclature of US agency involved and on the point on interest.

For above and other reasons we stated we believed it essential that Henderson have our latest views on text of documents that would be acceptable prior to seeing Mosadeq. If we adopted without change British position we felt there was great chance of complete rupture in conversations. The discussion on this point was inconclusive.

We stated our disappointment that British had apparently not taken into account our latest suggestions contained in Deptel 5076, rpted Tehran 19194 prior to sending us their comments. We pointed out that in our approach we had picked out only those elements of Jan. 28th conversation on part of Mosadeq that seemed to us reasonable, or in fact advantageous to British. While British reps made several comments upon our latest suggestions in above message, it was obvious they were without detailed instructions thereon. British representatives were informed that in view of nature [Page 661] their proposals serious thought would have to be given to next steps and we would be in touch with them later.

We regret loss of momentum which obviously has occurred in London on this problem. As seen from here we would suspect British have again come to conclusion it is impossible to deal with Mosadeq and we must admit his shifting positions give rise to such conclusions. We also believe, however, that British are uncertain as to what point US will stop pressing them to make concessions. There may be some feeling that they are on “slippery slope” in which US will eventually succeed in getting them to drop matters of real principle. We have attempted to assure British on this point here orally but have not been able to do so in writing as we would thereby get ourselves into a position of backing to the end every last word and comma of documents yet to be agreed for next approach. We would, to certain extent at least, be again in “joint approach” rut. On other hand we do feel that British position is relatively close to rock bottom on principles and have no intentions of pressing them much further.

In view of all above we believe it best that next approach by Henderson be on documents that British are not committed to. There is no doubt that under present tactics, with British committed in advance to a particular paper, Mosadeq is in position of continuing to whittle away at the package. On Henderson’s next approach he could state that Mosadeq’s changing positions have really made it impossible for us to continue attempt get prior agreement from British as to what we think he will accept. US (or Henderson himself, if this seemed preferable) had therefore attempted to put on paper an offer which seemed reasonable from our point of view. If Mosadeq could agree to it we would then see if British could agree, but he should understand that we were not certain under present circumstances that their agreement would be forthcoming. It is our thought that we should make documents as close as possible to present British drafts and with only such changes as correspond to points Mosadeq has raised which we consider reasonable. We would show documents to British but would not expect more than a “no objection” to our proceeding on this basis. If Mosadeq rejected principles of our offer we should probably be in a position of withdrawing from negotiations.

The above approach, with corresponding documents, is transmitted at this time in view of possibility of talks on Secretary’s level in London5 and the desire to obtain quick comments from Henderson.6 [Page 662] As we consider this general approach, although perhaps modified somewhat in light of further study, preferable to either of British alternatives, we recommend in event Eden raises this subject that Secretary attempt keep matter sufficiently flexible in his talks to allow come back to British along these lines.7

Texts of documents for above approach will follow separately.8

  1. Repeated to Tehran for Henderson. Drafted and signed by Byroade.
  2. Document 288.
  3. See Document 293.
  4. Supra.
  5. Secretary of State John Foster Dulles and Mutual Security Agency Director Harold E. Stassen were in London in the midst of an orientation trip to Western Europe, Jan. 31–Feb. 8. For documentation regarding this visit, see vol. v, Part 2, pp. 1548 ff.
  6. On Feb. 4 Ambassador Henderson commented that he was certain that Mosadeq, although he had shifted his position on other matters, would continue to refuse to accept a compensation formula that would involve Iranian payment of future profits. Therefore, if the British wished to continue to insist on such a solution, Henderson thought that he and the Department should be considering how the conversations with Mosadeq could best be terminated from the Western point of view. Moreover, Henderson, like the Department, thought the first British alternative was out of the question. He also disliked the second alternative, claiming it would be a waste of time for him in the future to go back to Mosadeq and to discuss the Jan. 15 proposals, since he would merely be repeating statements already made to Mosadeq. Nor did Henderson believe the Department’s approach outlined in telegram 5147 would result in a solution of the oil dispute, although he did feel it was a suitable way to bring the present conversations to a close. (Telegram 3035; 888.2553/2–453)
  7. According to a memorandum of conversation dated Feb. 4 between Secretary Dulles and Foreign Secretary Eden, this subject was not raised, although other matters pertaining to Iran were discussed in an inconclusive fashion: whether Alton Jones’ technicians should continue to be delayed from going to Iran, and whether Iran would go Communist in the near future. (611.41/2–453) For further information, see footnote 3, Document 314.
  8. Transmitted in telegram 5148, Feb. 3, not printed. (888.2553/2–353)