888.2553/2–1953: Telegram

No. 299
The Secretary of State to the Embassy in Iran1


2145. Eyes only Ambassador. British have just delivered following message from HMG.

“Her Majesty’s Government agree that both proposals for the method of payment might now be put to Dr. Musaddiq. They would suggest that Mr. Henderson might speak on the following lines:

Mr. Henderson would remind Dr. Musaddiq that he had reported all their conversations to Washington and to London. The two Governments had the impression that Dr. Musaddiq was seeing difficulties where none existed and was quite unreasonably suspicious of British motives. The proposals put to Dr. Musaddiq on January 15th were a serious offer which world opinion would recognize as just and equitable. Dr. Musaddiq should look at these proposals again. In drafting them, our Governments had done all they could to meet Dr. Musaddiq’s public relations difficulties, and Mr. Henderson would hope that Dr. Musaddiq would, on reflection, find the proposals acceptable. At this stage, Mr. Henderson would no doubt mention the minor changes listed in the final enclosure to this Embassy’s memorandum of January 18th which Her Majesty’s Government were prepared to introduce in a further effort to meet Dr. Musaddiq.
Mr. Henderson could add that finally Her Majesty’s Government were also ready to meet his point in regard to the need for a maximum period within which the arbitral award would be paid, and that Dr. Musaddiq would see that the formula suggested would have that effect. Mr. Henderson would make it clear to Dr. Musaddiq that both Governments had said their last word and that Dr. Musaddiq could not expect any further modifications.
Her Majesty’s Government would hope that the State Department will see their way to instructing Mr. Henderson in accordance with the above suggestions.”

[Page 670]

Minor changes referred to in last sentence of paragraph 2 above to which HMG are prepared to agree are as set forth below. They are of course already included in drafts sent you but FYI British recapitulation was as follows:

“Proposals of January 15th.

Following are the modifications in the proposals of January 15th to which HMG have agreed.

Her Majesty’s Government to be a party to the arbitration instead of the AIOC;
Omission of reference in preamble of arbitration agreement to previous history;
Omission of provisions for Court’s procedure in arbitration agreement;
Definition of the Anglo-Iranian Oil Company in DMPA Agreement and Arbitral Agreement as ‘United Kingdom registered company which formerly operated in Iran, hereinafter to be referred to as the Company’.

Two further changes which mainly concern the United States are:

Substitution of another United States Governmental Agency for the DMPA.
Omission of the provision for the payment of interest in the MDPA Agreement, provided that the essential characteristics of that Agreement remain unchanged.”

Our comments in immediately following cable.2

  1. Repeated to London eyes only for the Ambassador. Drafted and signed by Byroade.
  2. Telegram 2146 to Tehran, Feb. 19, reported that the Department was not certain that the British tactics were best in light of the immediate situation. Henderson was authorized to proceed with Mosadeq on the basis of such tactics as he considered wise, bearing in mind the British views. (888.2553/2–1953)