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NLT (PDF-SUBJ.)302 INCOMING TELEGRAM Department of State Copy 1002 TELEGRAPH BRANCH 593 D-X TAP SECRET A Action Control: 9977 Rec'd: August 19, 1951 NEA FROM: Tehran ARCHIVES SERVICE RECORDS 'NATIONÄL AND 3:35 p.m. Info TO: Secretary of State DICLASSIFIED SS E.O. 11652, Sec. 3(E) you G NO: 709, August 19, 7 p.m. Dept. of State letter, EUR Ex E pa anz. He SECT Nans NLT Kitz H DC) PRIORITY FROM HARRIMAN TO FRESIDENT AND SECRETARY. NO DISTRIBUTION EXCEPT BY DIRECTION OF OFFICE. Fol is substance of remarks which I made a.t mtg between Brit mission and Iran negot comite this morning, as reported in my earlier tel today : "Prior arrival Brit del I repeatedly stated, and Levy explained in detail, that: (A) Iran oil industry in order to be able to sell its oil in world markets, must make arrangements with large organiza- tion that cld make avail transport and distr for marketing Iran oil on world -wide basis. Iran cannot obtain higher income from its oil operation than other producing countries in comparable circumstances Otherwise, company wld make such arrangements but wld buy or develop oil in other producing countries. Brit interests are only ones that are in position to market large quantities Iran oil. (B) Iran Govt, a.s it has stated itself, depends on fon technical assistance for operation its oil industry within Iran, and must have continuous access to ever advancing oil technology of world. I have constantly stated this on technical assistance cannot be obtained thru employment individual technicians but that competent management org is required, working under contract for and on behalf of NIOC. This arrangement well known and accepted throughout world not only in oil industry but in other business rela tionships. Aside from Iran's need for management, technicians themselves wld not come to Iran or any other country except under arrangements satis to them. They are free men. Brit proposals provide good basis for negot for fair settlement. They conform to formula, submitted thru mes under which Brit were asked to come to negot. Iran Govt in its reply has read into proposals concepts which were not intended. Brit proposals contemplated negots to work out specific arrangements under principles stated Iran Govt REPRODUCTION OF THIS TOD SECRET MESSAGE IS PROHIBITED