Memorandum of Conversation with Secretary of State Dean Acheson, Ambassador of Great Britain Sir Oliver Franks, Paul Nitze, and Henry Byroade

CHORET - SECURITI INFORMATION 0340 DEPARTMENT OF STATE S/S Memorandum of Conversation 122 DATE: July 31, 1952 SUBJECT: Iran 250 PARTICIPANTS: The Secretary Sir Oliver Franks - British Ambassador Mr. Nitze Mr. Byroade E.O. 12065, Sec. June 3-402 12, DECLASSIFIED 1979 COPIES TO: s/s State STECT Dept. wer NARS, Date 5.20-1 s/P NEA By GTI u. s. GOVERNMENT PRINTING OFFICE 16-61120-1 Sir Oliver Franks called at the Secretary's request at 10:30 this morning on the subject of Iran. The Secretary gave Sir Oliver the substance of Henderson's last talk with Mossadeq and his conclusions as reported in EmbTel 460 from Tehran. The Secretary then outlined to Sir Oliver the evolution of our thinking on Iran which had led us to believe we were faced with three possible alternatives which had been given to the British in DepTel 585 of last Saturday to London. The Secretary stated that in view of developments since last Saturday we considered that we and the British should jointly approach Mossadeq as quickly as possible in an effort to reach a temporary solution to the problem. He indicated that we had no assurance that the plan he was proposing would be accepted but he thought it was important that it be tried quickly. He stated that in his view there were three criteria to any solution now possible. These were as follows: 1. Any plan given to Mossadeq at this stage should be exceedingly simple, and this of course meant that RECORD8, AMD of the solution sought would have to be temporary. 2. That oil must start flowing again in Iran as permanent and subsidization of Iran to meet the budgetary problems would be impossible, and 3. That any solution must preserve the principle of property compensation for the British. The Secretary then summarized our thinking as outlined in the attached Aide Memoire which he had submitted to Sir Oliver. After some discussion TOP - SHOURTTY