888.2553/7–2251: Telegram

No. 50
The Special Assistant to the President (Harriman) to the Department of State1

top secret

322. From Harriman for the President and Secretary. No distribution except as directed by the Secretary’s office. Ala called me this morning2 at direction of Shah to inform me of developments. He said Shah had told Mosadeq that he must come to settlement of the oil problem since the economic welfare and development of Iran depended on oil income. Mosadeq asked if he should resign. Shah answered in the negative but that he wanted Mosadeq to work out settlement and Mosadeq agreed. Mosadeq then had meeting with Mullah Kashani and National Front leaders and obtained their approval. This has been confirmed to me by Busheri. Busheri also told me this morning that it had been decided to attempt through me to arrange for visit of British Cabinet Minister with representative of oil company accompanying if desired. He said he believed I would be so informed officially by the Mixed Oil Committee representatives who call on me this afternoon and this committee would discuss ways to make arrangement.

Later this morning the British Ambassador called to tell me he had protested to Foreign Minister account unjust charges against Seddon. He explained that they were not true and expressed hope of that in future Foreign Minister would advise him of any complaint against British residents before taking action. Foreign Minister maintained he himself knew nothing of the Seddon case till after incident and confessed inability to obtain such information as the Minister of Interior acted on his own without consultation with him. He agreed, however, to see what he could do to avoid further misunderstanding.

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British Ambassador then showed me two telegrams, one from the oil fields in which British manager expressed his concern over increasing interference with British personnel and urged immediate steps for phased withdrawal. The second was from British Foreign Office stating in substance much as they appreciate my efforts they did not feel they could refrain from early action account above information from field. Foreign Office asked for latest info as to my progress by Sunday evening so that Cabinet might consider it at meeting to be held Monday morning. I gave British Ambassador general substance of what I have reported above and asked him to urge few days delay. He said he would report what I told him and seemed much impressed particularly by Mosadeq’s meeting with extreme nationalist group. I emphasized need for secrecy on this point.

When I asked his advice on the best way to arrange opening of Iranian-British negotiations, he thought up all kinds of conditions on which his government would insist, such as status quo according to court decision, advance commitment that Jackson’s terms be accepted, etc. I told him bluntly he then might as well forget about the oil business. I pointed out Iranians had dropped insistence of 9-point law, and had accepted without contradiction my statements that this was the way Iranians felt and said they blamed the oil company and financial terms could not exceed those in other oil producing countries. I emphasized the particular concern of Iranians was to make sure that Iranian National Oil Company should control general policies but I told him I had insisted that day-to-day operations must be left to operating company under the agreed upon policies.

I told him in general terms Iranians felt rightly or wrongly that oil company had in the past interfered in internal politics. He agreed that this was the way Iranians felt and said they blamed the oil company for all ills of country.

I agreed, however, to take up with Oil Commission the question of relieving tension in oil fields and Abadan and suggested that then he himself could discuss detailed British complaints.

I maintained that the quicker British representative came to Tehran the better and that in my view was the only way to reach satisfactory solution.

If attempts were made for prior commitments, there would be endless sparring, whereas with the improving atmosphere here for quick solution, favorable results might be achieved through direct discussions. He made no comment to my statement that the visit of Cabinet Minister was in my opinion the only real way to reestablish favorable relations, and obtain quickest action.

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I hope that Washington and London will urge British in strongest terms to withhold action pending developments here, which are moving rapidly.3

  1. Repeated to London eyes only for the Ambassador.
  2. Saturday, July 21.
  3. This telegram was received at 2:13 p.m. At 10 p.m. the Department of State cabled Gifford asking that he see Morrison and urge him to accept the recommendations set forth in this telegram. Gifford was also informed that the same request was being made of Franks. (Telegram 511 to London; 888.2553/7–2251) On the following day Gifford reported that the British Cabinet had agreed to postpone any statement on Iran at least for 24 hours. (Telegram 428 from London; 888.2553/7–2351)