Telegram from Ambassador Henry Grady to Secretary of State Dean Acheson, Number 425

NLT(PSF-SUBJ.) 329 INCOMING TELEGRAM Department of State copy / of 2 TELEGRAPH BRANCH M-X mon SECKET 858 A Action Control: 15427 NEA Rec'd: July 29, 1951 FROM: Tehran 5:13 p.m. Info SS TO: Secretary of State G DECLASSIFIÉD E NO: 425, July 29, 11 p.m. E. o. 11652, Sec. 3(E) and 5000 EUR Pept. of State letter, 5-31-74 DCR Eg NLT. He NARS Date 10.2.7t WLT 7A, NIACT. SENT LONDON 91; RPTD NIACT DEPT 425. FOR HARRIMAN AND GIFFORD; DEPT FOR SECY. DISTR IN DEPT ONLY AS DIREC TED BY SECY'S OFFICE. Fol is text of Iran Govt reply (London's tel 33 July 28) which was handed to me by PRIMIN Mosadeg at 9:40 this 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. 83 The foregoing statement is the official reply. s. *MATIONAL RECORDS ARCHIVES AND is SERVICE PRIMIN stressed the fact as I advised in MYTEL 90 that his statements this morning, though he requested me to transmit them to Harriman, were unofficial. Since noon the cabinet and the mixed comm have been meeting almost continuously. My wire London 90 July 29 specifically states that Mosadeq stressed the point that if Harriman has called the cabinet minute to TOP REPRODUCTION OF THIS MESSAGE IS PROHIBITED