Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

Eisenhower Library, Eisenhower papers, Whitman file

No. 318
Memorandum of Discussion at the 136th Meeting of the National Security Council, Washington, March 11, 1953¹

top secret
eyes only

Washington, March 11, 1953

Present at the 136th meeting of the Council were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; and the Director for Mutual Security. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (for Item 1 only); General Collins for the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Administrative Assistant to the President for National Security Matters; the Special Assistant to the President for Cold War Operations; the Military Liaison Officer; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a general account of the main positions taken and the chief points made at this meeting.

[Here follows discussion of items 1 and 2 concerning policy questions surrounding the development of practical nuclear power and the effect of Stalin’s death in the Soviet Union and throughout the Communist world.]

3. Developments in Iran Affecting U.S. Security (NSC Action No. 729-b; NSC 136/1)²

Mr. Cutler briefed the Council on the latest available information on Iran, which included the probability that Mossadegh was about to turn down the latest plan for settlement of the oil controversy. Mr. Cutler also outlined to the Council the three questions which Mossadegh was thought to be about to present to Ambassador Henderson by way of eliciting what assistance this Government was prepared to give to his regime.³

Secretary Dulles then stated that he had just received that morning a telegram from Ambassador Henderson, stating that he had now reached the conclusion that Mossadegh would not solicit an answer to these questions unless he judged that he could expect a favorable reply by the United States.⁴ We should not, said Secretary Dulles, in his opinion give any hint to Mossadegh that he could expect a favorable response to these questions. Any proposal that the United States purchase Iranian oil at this time would constitute a terrific blow to the British. In discussing this idea with him during his visit, Foreign Secretary Eden had told Secretary Dulles that if we even sent technicians to assist in reopening the Abadan refinery, Eden would be unable to survive as Foreign Secretary. Anything more than the technicians would, of course, be that much worse. It was the feeling generally in the State Department, continued Secretary Dulles, that we should not encourage the Iranian Government as to any hope of reactivating the refinery or of buying Iranian oil. We might, however, give some slight added technical and military aid in order to assure the Iranian Government of our friendly intentions.

Mr. Cutler raised the questions of the repercussions if the Iranian Government, as it easily could, should determine to slash the price of Iranian oil. There were plently of tankers available to carry it, and the effect would be chaotic on the world price of oil.

Secretary Wilson speculated as to whether Prime Minister Mossadegh had not framed his three questions in anticipation of a negative response from this Government. The monkey would then be on our back, and Mossadegh could point to United States as hostile to Iranian aspirations. Secretary Wilson, however, agreed that there was no alternative but to say “no” to these questions. If we replied in the affirmative we would not only help to destroy what was left of the idea of sanctity of contracts, but if we entered into an agreement to purchase oil from Mossadegh we ourselves would quickly be swindled. Secretary Wilson did say, however, that it seemed to him from his knowledge of this problem, that the Iranians felt that in all past negotiations with the British on oil settlement, the cards had been constantly stacked against them. Could we not, therefore, as a friendly gesture, offer to look over these past procedures in order to reassure the Iranian Government that their interests had not really been overlooked or would not be overlooked in further negotiations?

Secretary Dulles responded by saying that we had already taken pains to do this. He went on to say that of course if the British were completely shut out from Iran and from the negotiations, it would not probably be difficult to get results from Iran, but the United Kingdom was involved deeply in concern for its own prestige, and this was a much more difficult thing to deal with than any mere matter of compensation. It seemed to Secretary Dulles that we must somehow try to become senior partners with the British in this area and work in that context.

Secretary Wilson expressed agreement, and said that our real objective was to try to secure a settlement while at the same time saving British face.

Mr. Cutler asked Secretary Dulles to explain the latest terms which had been offered to Mossadegh and which he was about to turn down.

Secretary Dulles did so, and explained at some length the Iranian fear that if they submitted the issue of compensation to arbitration at The Hague, they would undergo a protracted economic bondage to Great Britain. But Secretary Dulles was inclined to think that even if the Mossadegh regime refused to accept the latest proposals, these were not the last possible terms. We might yet be able to meet this Iranian dread of indefinite tutelage to the British. In any case, continued the Secretary, we cannot force the British hand. They have suffered in recent years terrible blows to their prestige—in the Suez, in the Sudan, and elsewhere.

Secretary Humphrey also agreed with Secretary Dulles that we could achieve our objectives if we could negotiate alone with the Iranians, but that we could not afford to achieve our objectives in Iran if we “did in” the British at the same time.

The President said that he had very real doubts whether, even if we tried unilaterally, we could make a successful deal with Mossadegh. He felt that it might not be worth the paper it was written on, and the example might have very grave effects on United States oil concessions in other parts of the world.

. . . . . . .

The National Security Council:⁵

a. Noted an oral report by the Secretary of State on possible courses of action with respect to the current situation in Iran, and agreed:

(1) That the three questions which the Iranian Prime Minister had been considering asking the United States Government, should not be answered in the affirmative if they are actually presented.

(2) To give economic and technical assistance to Iran on a modest scale, if necessary, in order to maintain the present government.

(3) That no proposal to buy Iranian oil should be made at the present time.

(4) To explore the possibility of more equitable procedures for an Anglo-Iranian settlement.

. . . . . . .

Note: The action in a above subsequently transmitted to the Secretary of State for implementation.

[Here follow discussion of a decision to postpone consideration of United States objectives and courses of action with respect to Latin America until the next scheduled NSC meeting and a report on the status of NSC projects as of March 9.]

S. Everett Gleason

1. Drafted by Gleason on Mar. 12.
2. For NSC Action No. 729, see footnote 8, Document 312. For NSC 136/1, see Document 240.
3. See Document 315.
4. Reference is to telegram 3644, Mar. 11, supra.
5. Paragraphs a–b and the note constitute NSC Action No. 735. (S/S–NSC (Miscellaneous) files, lot 66 D 95, “Record of Actions by the NSC, 1953”)