Memorandum, State Department Summary of Telegrams

OFFICE OF DECLASSIFICO THE SECRETARY OF STATE State y Dept. E.O. 12,065, Guidelines, Sec. March 3-402 6, 1982 WASHINGTON DEB NLT, Date 9-9-85 February 8, 1952 By SECRET SECURITY INFORMATION SUMMARY OF TELEGRAMS IRAN We have informed our Embassy in Tehran that a five-man - mission from the International Bank, headed by Vice-President Garner, will leave tomorrow for Iran to negotiate with Mosadeq. We believe the Bank's present proposal offers considerable hope for a settle- ment on all points except the question of management. With regard to the latter, the Bank (and the British) so far insist there must be effective control of oil operations by the Bank, which must be empowered to employ foreign technicians not excluding British. In our recent discussions with the Bank and British representa- - tives, including a member of the Board of AIOC, we have endeavored to obtain an agreement which would permit considerably greater flexibility in the Bank's approach to Mosadeq, particularly with regard to manage. - ment. We hope that the British position will be altered before the mission's departure or sufficiently soon thereafter so that its negotiating position will have maximum flexibility. In addition, we have suggested to the British that Garner be authorized, in the event efforts to reach an interim settle- - ment fail, to offer to buy the existing stock at Abadan at a 50 per cent discount. Our thinking is that this arrangement would at least buy time for consideration of a permanent solution; would preclude Iranian Govern- ment sale to other purchasers, including the Soviet bloc; and would have the advantage of getting oil moving and provide the Iranian Government with some revenue. We have urged upon the British the desirability of agreeing upon a type of long-range solution which should be put forward quickly if the Bank's efforts to obtain an interim solution fail. We have discussed with Britishrepresentatives the varying political appraisals which are the basic reasons for failure to agree upon a concerted plan for settlement of the oil question. TUNISIA Our Consul General in Tunisia reports that, according to a Neo- Destour (nationalist) source, the Tunisian note handed to the French on February 5 points out that: 1) present French "terrorist" measures greatly exceed those necessary to maintain public order; 2) the French note of SECRET SECURITY INF ORMATION