888.2553/7–2951: Telegram

No. 61
The Ambassador in Iran (Grady) to the Embassy in the United Kingdom 1

top secret

90. For Harriman and Gifford. Saw PriMin at 10:45 this morn and discussed with him fully content of London’s 33 July 28.2 He was most cordial and expressed his very great desire to have the oil question promptly settled. He understands that discussions and conditional reply of Brit to Iran Govt is matter of deep secrecy and Brit reply will only be submitted when there are assurances from him that it is acceptable. He made no difficulty about the wording and was agreeable to having in the Brit reply and Iran reply ref to importance of relieving present tensions which exist in south. He says there is no tension of serious nature there and he is perfectly willing under circumstances to agree that what tension exists shld be relieved in every way possible.

He has called the mixed comm and Cabinet for meeting at once and will give me more formal reply this evening or first thing tomorrow morn. In meantime, he authorized me to tell Mr. Harriman that he has no objection to proposed exchange of notes and their publication and will welcome the coming here of a mission headed by a Cabinet min of Brit Govt. However, he asked me to say to Mr. Harriman as his own views prior to meeting of mixed comm and Cabinet the fol: That he assumes Mr. Harriman has brought to the attn of Brit Govt and Brit understand and accept [Page 125] the minutes of Cabinet meeting which he read to Mr. Harriman on July 23 (ref Embtel 340 to Dept July 24 rptd London 653) He read 3 points from document in his files:

Brit Govt must recognize on behalf of AIOC principle of nationalization of southern oil.
The Iran understanding and definition of “principle of nationalization” is that “discovery, extraction, exploitation of oil must be in hands of Iran Govt”. He said the sale of this oil falls under pertinent article of the nine-point nationalization law.
Brit Govt must understand Iran Govt rejected Jackson’s proposal and cld not accept any proposal along same lines.

He rptd several times that he assumes Mr. Harriman had informed Brit of foregoing so that Brit mission wld not come out to Iran and say they have only accepted their interpretation of “principle of nationalization”. PriMin said he is quite willing accept Mr. Harriman’s statement that Brit understand and accept above 3 points and does not require Brits to write anything to this effect in their formal reply to Iran Govt.

You may be sure I urged him not to put conditions as prerequisite of negots whether these are done directly or indirectly thru Mr. Harriman, but he insisted there was no use of Brit mission coming unless Iran position was clearly and definitely understood.4

Will wire at once any further word we get from Mosadeq.5

  1. The source text is the copy repeated to the Department as 424 for President Truman and Secretary Acheson.
  2. Supra .
  3. Document 52.
  4. A more extensive record of Grady’s conversation with Mosadeq was transmitted as an enclosure to despatch 131, July 30. (888.2553/7–3051)
  5. At 11 p.m. on July 29 Grady cabled London the following Iranian Government reply which had been handed to him by Mosadeq at 9:40 that evening:

    “The Imperial Govt of Iran is pleased to note that in accordance with the formula dated Monday July 23, 1951 (Tirmah 31, 1330) which was submitted to His Excellency Averell Harriman, his Britannic Majesty’s Govt on its own behalf and on behalf of the former oil company formally recognizes the principle of nationalization of the oil industry in Iran. The Iranian Govt expects that this formal recognition shld be openly brought to the knowledge of the public and it is pleased that the Brit Govt intends to send a mission to Tehran on behalf of the former oil company to negot with the govt and with the competent authorities, and at the same time to discuss with the Iran Govt the method of execution of the law insofar as it refers to the mutual interests of the two countries. The Iran Govt believes that no tension exists in Khuzistan and is sure that the formal recognition of the principle of nationalization of the oil industry will create a more favorable atmosphere in order that the negotiations referred to above may be conducted with a spirit of sincerity and good will.” (Telegram 425 from Tehran; 888.2553/7–2951)