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

888.2553/1–2953: Telegram

No. 417
The Ambassador in Iran (Henderson) to the Department of State¹

secret
niact

Tehran, January 29, 1954—1 p.m.

1659. Noforn. For Hoover.

1. I do not understand precisely why Foreign Minister thus far has not frankly told Wright what he has told me, that is that Iranian Government would not wish any single company to have as much as 50 percent shares in consortium (London telegram 132, January 29 [28], paragraph 7 Department 3230). Foreign Minister told me on January 27 that during afternoon that day he would informally discuss with oil policy group message which Wright had given him on January 23. I asked Foreign Minister if he had as yet asked Wright meaning of words “in which AIOC would have an appropriate share”. He replied he had preferred not to discuss with Wright specific points that message until he had opportunity talk with Prime Minister and other members Cabinet. It his intention discuss message further with Wright morning January 30. Foreign Minister told me by telephone this morning he still planned talk with Wright January 30. I cannot be sure that during this conversation he will raise point re amount AIOC participation. I believe, however, he still of opinion expressed to us last fall that no company should own as much as 50 percent of shares. If British in London continue insist Iran is prepared agree AIOC have 50 percent participation you might care state that both Prime Minister and Foreign Minister were quite explicit last fall in stating their views in this regard and suggest that Wright be instructed to obtain clarification in order make sure plans for organization consortium would not be formulated on false assumption.²

2. Re paragraph 6, reference London telegram. In our opinion it would be unfortunate if “small top-level consortium group” dominated by AIOC should come to Iran to determine desires Iranian Government re participation and other points. Such group might present Iranian Government with AIOC views rather than with those of other member companies and of HMG. Group thus dominated might make bad impression on Iranian public and discourage Iranian circles including members government who are anxious find reasonable and durable solution. Certainly Fraser or a person of his type should not head group this kind. It would be preferable if head could be UK Government official prepared give consideration to all factors involved.

3. We hope not necessary indicate too much annoyance re fact Wright spoke to Government Iran re additional US budgetary support. We believe he trying cooperate loyally with us and merely made mistake judgment (Deptel 3906 to London).³

Henderson

1. Sent to London as telegram 519 and repeated to the Department.
2. Ambassador Henderson informed Hoover in telegram 523, repeated to the Department as 1668, Jan. 30, that Foreign Minister Entezam that morning had told him that he, Entezam had not informed Wright that the Iranian Government did not wish any single company to have as much as 50 percent participation in the consortium because neither the Shah nor the Prime Minister had authorized him to disclose this information. (888.2553/1–3054)
3. In telegram 3906, Jan. 29, the Department informed Hoover that he could express the Department’s annoyance that Wright had informed the Iranian Government that the British Government had approved of the United States possibly providing additional budgetary support to Iran in the absence of an oil settlement. As the Department was uncertain of finding funds to meet such an eventuality, Wright’s statement could prove extremely embarrassing. (Telegram 3906, repeated to Tehran as 1619; 888.2553/1–2854)