888.2553/7–2651: Telegram

No. 56
The Ambassador in the United Kingdom (Gifford) to the Embassy in Iran 1

top secret

29. For Harriman. Eyes only Grady and Harriman. I am just informed of Cabinet action. It is disappointing but perhaps not hopeless. Instructions have gone to Shepherd which he is to discuss with you before making any approach to Iran Govt. The instructions include a note for Iran Govt which in its opening conforms to substance of draft quoted first paragraph my 28 (rptd Dept 501) yesterday.2 However, Morrison feared, Cabinet insisted on some action on interference with British personnel before sending minister; moreover, it seems to me Cabinet went dangerously further in also saying sending minister cld not be done while company’s operations being interfered with. Also, Shepherd is instructed to make clear that UK cannot accept position under which the whole of the company’s operations have been brought to a standstill and I understand that Brit note wld say that UK wld expect Iran Govt to send instructions to their authorities in the sense that interference with company’s operations and restrictions with staff both be discontinued. I protested vigorously that this sounded like the ICJ decision allowing company resume operations as before and thought it might well be disastrous. I was told that it is deliberate that no criteria were set forth as to what was meant or what would be needed to meet British wishes in this matter of company’s operations. (Shepherd’s instructions do not in fact make any mention of ICJ ruling.)

On the whole, I concluded that the British wld like to see some concrete action in Khudistan that would show Iran is sincere in trying to work out deal with them. Shepherd will explain that earnest of Iranian good will wld be withdrawal of Makki and other [Page 119] trouble makers. It is important in showing that British hope negotiations will take place that Shepherd and Brit Consul General Khorramshahr have been instructed to try to persuade staff to stay on for present in spite of difficulties.

Morrison wished me to convey to you his great appreciation of what you have done and are doing. I urged in conclusion that speed was of the essence as I thought that favorable situation in Iran which you had created wld tend to degenerate with delay. No public statement is to be made by British today and there is no decision on when one will be made.3

  1. Repeated to the Department as 543 eyes only for Secretary Acheson; the source text is the copy in Department of State files.
  2. In telegram 28 Gifford reported that he and Morrison had considered a reply along the following lines:

    “The Brit Govt recognizes the principle of nationalization of oil industry in Iran and having been informed of Mr. Harriman’s discussions with Iranian auths is prepared to send Blank to enter into negots with Iranian Govt on behalf of AIOC and to discuss matters of mutual interest to the two govts.”

    Morrison told Gifford that the greatest difficulty would arise in the Cabinet meeting over the problem of interference with British personnel and indicated that he would recommend Gaitskell or Stokes as the Minister to go to Iran. (888.2553/7–2551)

  3. This telegram was received in the Department of State at 7:35 p.m. At 11 p.m. the Department of State cabled Harriman that the British response had caused “deep concern.” Since the principal British concern was physical interference with the oil operations, McGhee stressed to Ambassador Entezam, in a conversation on July 25, the importance of stopping such interference, and was awaiting Harriman’s views on whether anything further could be done to obtain Iranian concurrence without demanding additional formal concessions from Tehran. (Telegram 211 to Tehran; 888.2553/7–2551) A memorandum of McGhee’s conversation with Entezam is in file 788.00/7–2551.