The Special Assistant to the President
the Department of State1
352. From Harriman for the President and Secretary. No distribution except as directed by Secretary’s office. I gave the British Ambassador this morning formula for meeting as proposed by Iranian Government and translation of Iranian Cabinet minute; also my language of (a), (b), and (c) included in mytel 340,2 which Iranian Government has authorized me to pass on to British Government. In addition, I went over with him the substance of all of matters included in my telegram referred to above and supplementary telegram referring to Court decision.3
He said that he thought his government might well wish to have included “and to discuss matters of mutual interest to two governments”. I told him I felt sure Iranian Government would agree. He thought his government would question the language “on behalf of the AIOC”. He pointed out “the lesser (AIOC) was included in the greater (British Government)”. I explained the significance I thought the Iranians attached to this was on account of their prior position that dispute was with oil company and not British Government. He said this was no time to take legalistic position. I also told him that I felt sure Iranian Government would interpret my use of the word “law” in (c) as abbreviation for language of third point of Cabinet minute: “The proposal which was approved by Special Oil Committee of Majlis and was confirmed by law of March 20”, the text of which was quoted.
He appeared to agree when I said that present atmosphere was more favorable to satisfactory settlement than was likely to exist again.[Page 114]
He responded to my explanation of Iranian worry about alleged AIOC political activities by saying that this could be worked put between governments.
I emphasized importance to Iranians that AIOC cld not appear to be returning only in a different form. His first response was that in fact if not form this was inevitable. I said that in my opinion a change of both form and substance was necessary; that on form use of language conforming as far as possible to Iranian public sensibilities was particularly important; and that on substance British should negot with flexibility, bearing in mind necessity of efficient operations but recognizing that Iranians must have more participation in policy principles than contemplated by Jackson proposal for several directors in operating company.
He showed particular interest in what Levy and I had constantly told the Iranians regarding essentials which they would have to accept as basis for arrangement and asked if Iranians had accepted these. I told him I could not give a definite answer but pointed out that Iranians were asking for meeting even though they know clearly my position and had frequently stated that if the British mission came to Tehran, they were hopeful a solution could be negotiated.
When I told him I was prepared to go to London if advisable, he agreed there would be a “psychological let-down” if I left here.
He said he would get all of the above off to London. Although his general attitude appeared to be receptive, I obtained no clue as to what his recommendations will be regarding British reply.
I hope Gifford, without awaiting instrs from Washington, will now inform British that he is prepared to discuss Iranian proposal with them after they have received message from their Ambassador here and hope they will not formulate reply before he had had opportunity to discuss it fully with them. I suggest Gifford urge British reply in form and spirit which Iranians can accept and be conducive to most friendly atmosphere for negotiations on arrival British mission.