The Secretary of
State to the Embassy in
2139. Eyes only Ambassador. British Ambassador today gave us UK reaction to our latest proposals on Iran (ref Deptel 1953 to Tehran, rptd London 5148, as amended by Deptel 2063 to Tehran, rptd London 53602).
We informed British that we could accept their suggestions with exception of the question of tactics under Para 7. We stated we believe this would put you in impossible position as conversations based upon 15 January drafts as now modified, but excluding alternative section on method of payment and the concession on the matter of interest payments, would be certain to be of extremely short duration. This would place you in position of then offering Mosadeq a concession which you were obviously holding up your sleeve. We stated that in view of time limit we felt only possible solution was for you to present drafts which would contain both alternatives on the question of method of payment. Makins is urgently cabling London and he expects have their answer by early morning. We will contact you immediately when decision is reached.
As a minor point in above text, believe you should know that the conclusion stated in first sentence of Para 6 is in our opinion true only under most unusual circumstances regarding flow of oil, etc. It would be more accurate if this sentence indicated that the new suggested formula “might” constitute a heavier burden, etc.
Although still not perfect from our point of view, we believe the British have attempted to meet our latest suggestions and have now come to a point where we can no longer press them on matters of real principle. British agreed that in your presentation you could explain their formula meant in effect 20 years. British Ambassador was informed that, if they would agree to our suggestion on tactics, this would constitute in our opinion the final proposals to be placed before Mosadeq in this series of negotiations and that we could stand on principle thereafter. We did not, of course, rule out reconsideration of minor points that Mosadeq might raise.[Page 669]
Text of British Memorandum is being wired separately to Tehran in our immediately following telegram.3 We assume Embassy London will have received copy from Foreign Office.