Eisenhower Library, Eisenhower papers, Whitman file

No. 367
Memorandum of Discussion at the 162d Meeting of the National Security Council, Washington, September 17, 19531

top secret
eyes only

Present at the 162nd meeting of the Council were the Vice President of the United States, presiding; the Acting Secretary of State; [Page 795]the Secretary of Defense; the Director, Foreign Operations Administration; the Director, Office of Defense Mobilization. Also present were the Acting Secretary of the Treasury; the Acting Attorney General (for Items 4 and 5); the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (for Items 2, 3 and 6); the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force (all for Item 2); the Chairman, Joint Chiefs of Staff; The Chief of Staff, U.S. Army (for Item 2); the Chief of Naval Operations (for Item 2); the Chief of Staff, U.S. Air Force (for Item 2); the Commandant, U.S. Marine Corps (for Item 2); Capt. C. C. Kirkpatrick, USN, Col. D. O. Monteith, USAF, and Carroll Hinman, Foreign Operations Administration (all for Item 2); the Director of Central Intelligence; The Assistant to the President; Robert Cutler, Special Assistant to the President; C. D. Jackson, Special Assistant to the President; the NSC Representative on Internal Security (for Item 4); the Acting White House Staff Secretary; the Executive Secretary, NSC; Hugh D. Farley, NSC Special Staff Member; and George Weber, NSC Special Staff Member (for Item 2).

There follows a summary of the discussion at the meeting and the chief points taken.

[Here follows discussion of items 1–4, including significant world developments affecting United States security, a report on the status of United States programs for national security as of June 30, 1953, and a progress report on internal security.]

5. Progress Report on Iran (NSC Action No. 891)2

Secretary Smith reported that Herbert Hoover, Jr. was now on duty as the Consultant for handling the oil problem, in accordance with NSC Action No. 891-b. He cited the two main problems we now face: to get a settlement between Iran and the UK, and then to get Iranian oil on the market. Mr. Hoover had accepted the appointment on two conditions, Secretary Smith said: (a) if he could be assured of the cooperation of the big oil companies in making room on the market for Iranian oil; and (b) if he could be assured of the cooperation of the Department of Justice in not pressing the cartel suit.

Secretary Smith said that Mr. Stassen had dug to the bottom of the barrel to find the $45 million for Iranian aid, and that General McClure was asking that additional military equipment be expedited. Secretary Smith said he felt that the key to stability in Iran was the Iranian army.

[Page 796]

Secretary Smith then mentioned the reluctance of the big oil companies to open the market, and suggested we must look forward to providing some kind of an operating syndicate, without risk of running afoul of the Attorney General.

Secretary Smith concluded his report by stating that we apparently had snatched victory from the jaws of death, and he was optimistic now.

Mr. Stassen said that the $45 million would probably hold for about 6 months, until the oil got moving. He added that the Army pay had to be increased. General Smith seconded the importance of raising Army pay in Iran, and mentioned that they have only one uniform apiece now. He felt that the UK and Iran were very close now, as were the UK and Egypt; and it is important that we do not miss our chance.

In response to Secretary Wilson’s question, Secretary Smith said that Iranian oil was about 5% of world production. Mr. Stassen added that if the oil went into non-dollar markets it could find its own room, and added that this was possible in Europe.

Secretary Smith cautioned that some of the oil must, however, go into the dollar market.

The National Security Council:3

a.
Noted an oral progress report by the Acting Secretary of State on developments with respect to Iran.
b.
Noted that Mr. Herbert Hoover, Jr., had been appointed as a special representative of the United States to deal with problems related to an Anglo-Iranian oil settlement, in accordance with NSC Action No. 891–b.

[Here follows discussion of items 6–7, armaments and American policy and the status of NSC projects as of September 14.]

Hugh D. Farley
  1. Drafted by Hugh D. Farley, Assistant Executive Secretary of the National Security Council, on Sept. 17.
  2. See footnote 5, Document 358.
  3. Paragraphs a–b constitute NSC Action No. 911. (S/SNSC (Miscellaneous) files, lot 66 D 95, “Record of Actions by the NSC, 1953”)