Memorandum of Conversation with Secretary of State Dean Acheson, Ambassador of Great Britain Sir Oliver Franks, Bernard A. B. Burrows, David K. E. Bruce, and John D. Jernegan

S/S 0455 TOP SECRET SECURITY INFORMATION DEPARTMENT OF STATE Memorandum of Conversation 125 256 DATE: August 12, 1952. SUBJECT: Reply to Mr. Eden's Message to Mr. Acheson on Iran PARTICIPANTS: Sir Oliver Franks, British Ambassador The Under Secretary Also Present: Mr. Burrows, Counselor, British Embassy NEA: Mr. Jernegan DECLASSIFIED COPIES TO: s/s STATE DEPT. LTR. 05-5-13 EUR G Project NLT 824 E GTI By NLT- HC NARS, Date 6.15.63 u. s. GOVERNMENT PRINTING OFFICE 16-61120-1 Mr. Jernegan and I called on the Ambassador to deliver the message and memo- randum which had been prepared by the Secretary in reply to Mr. Eden's message to him of August 9. After reading the documents carefully, Sir Oliver said that he was on the whole quite pleased that we had reacted in this way to Mr. Eden's message. He considered that our reply was friendly and well-reasoned, even though there might be points on which he would disagree. He thought the documents would make a good impression in London and that we might expect the British position to be modified in consequence, although he did not think our views would be accepted in their entirety. He commented especially that he liked the last sentence of our memorandum, (which stated that the Department of State could not agree that its agreements with the British Government should be passed upon by the Board of Directors of the Anglo- Iranian Oil Company). Mr. Burrows remarked that in one respect our reply seemed to differ from the line taken by the Secretary in his conversation with Sir Oliver the previous night. He thought the Secretary had suggested that the terms of reference for arbitration could include a provision that arrangements should be made by the arbitral tribunal to insure payment of the award. Mr. Jernegan explained that what the Secretary had in mind was a statement that the arbitral procedure should not be considered to be completed until arrangements had been made to insure payment. He did not mean that these arrangements should be made by the tribunal but rather was thinking in terms of a separate agreement between the British and the Iranians. The Ambassador and Mr. Burrows indicated they did not think this was likely to be a satisfactory arrange- ment but did not discuss the point further. I asked TOP SECRET SECURITY INFORMATION