Telegram from Ambassador Henry Grady to Secretary of State Dean Acheson, Number 589

WLT CRAFSUBT)314 INCOMING TELEGRAM Department of State 471 CORY / OF2 TELEGRAPH BRANCH D-X TOP SECRET A Action Control: 6289 NEA Rec'd: August 12, 1951 FROM: Tehran 11:05 a.m. Info broarge outa TO: SS Secretary of State our pe TU orges G EUR NO: 589, August 12, 9 11 a.m. E DCR PRIORITY SENT DEPT 589, RPTD LONDON 131, EYES ONLY AMBASSADOR EYES ONLY PRESIDENT AND SECRETARY; DISTRIBUTION ONLY AS DIRECTED BY SECRETARY's OFFICE. FROM HARRIMAN After consultation with London on general principles involved, Stokes has prepared for discussion with Iranian Government suggestion as to possible arrangement between British and Iranians. Plan was developed after detailed discussions with my staff, particularly with Levy on technical aspects. I have refrained from giving it my approval, but have said that it appeared to provide good basis for discussion. I believe it essential, in order to maintain a neutral position at this time, to avoid impression that I have endorsed any particular plan. Covering memorandum and suggested plan follow: beobre (A) Memorandum by British de legation "1. This document submitted by British delegation without prejudice to any party concerned. 2. British delegation on behalf of HMG and of AIOC, recognize principle of nationalization of oil industry in Iran, on basis of correspondence recently exchanged be tween two governments. brace 3. British delegation are accordingly ready to negotiate on basis of formula proposed by Iranian Government and agreed to by HMG, and in accord with this formula, to discuss manner in which law of 20th March should be carried out JUBOISL sa TC BUTATRU insofar as DECLASSIFIED DEPT. LTR. 6-9-93 Authority HIT NLT 81-22 By HC NLT Date 8-30-t3 TOP SECRET REPRODUCTION OF THIS MESSAGE IS PROHIBITED