888.2553/7–2551: Telegram

No. 54
The Special Assistant to the President (Harriman) to the Department of State1

top secret

380. From Harriman for the President and Secretary. No distribution except as directed by the Secretary’s office. I am naturally concerned over two subjects. First, whether British Government fully understands disastrous consequences of failure to accept in friendly manner gesture of Iranian Government contained in proposal for negotiations through government mission and whether British will not try to spar on conditions which I believe will get them nowhere and will destroy atmosphere essential to successful negotiations.

British shld realize extent Iranian Government has retreated from previous rigid positions: (a) Non-insistence on prior acceptance of nine point nationalization law; (b) Readiness to negotiate manner in which first general nationalization law of March 20 is to be carried out; (c) Agreement to negotiate with British Government instead of oil company although insisting that such negotiation be on behalf of company; (d) Apparent readiness to negotiate for foreign-owned company to operate within Iran as agent for National Oil Company; (e) Recognition of Iran’s dependence upon good will of foreign companies for shipping and foreign outlets; (f) Readiness to negotiate after clear and repeated statement by me that government cannot expect greater income than other producing countries under comparable circumstances; and (g) Acceptance of principle that they must deal with AIOC in working out above arrangements in spite of widespread hatred and distrust of company.

I earnestly hope you and Gifford will continue to use maximum influence to prevent British from trying to settle any substantive question before Minister’s arrival Tehran or to discredit Iranian Government before people by demands such as for returning management of oil operations to British before negotiation. Report coming to me from objective American newspaper correspondent recently returned from south is that, although morale of British is extremely low, this is due to discouragement that British Government has not taken direct action and to indignities of having Iranians “push them around.” Incidents have been magnified by company officials whereas correspondent calls them to considerable [Page 116] extent “pin pricks to pride.” It is difficult in Tehran to appraise charges and countercharges as between British and Iranians although there is no doubt that Iranian Government has acted unwisely to say the least, and extremists such as Makki have been arrogant and provocative.

Secondly, if British agree to send mission, the selection of Minister to head it is of utmost importance. I can think of only two, Morrison or Gaitskell.… Some Iranian officials who knew Shawcross at UN speak well of him but I have had no direct dealings with Shawcross and therefore have no opinion. I feel perhaps Gaitskell wld be best man. On other hand Morrison has more prestige.

  1. Repeated to London eyes only for the Ambassador.