Memorandum, State Department Summary of Telegrams

NLTCNoval Aidel 394 OFFICE OF DECLASSIFIED THE SECRETARY OF STATE E.O. 12065, Sec. 3-402 WASHINGTON State DCP NLT, Date 9-10-85 Dept. Guidelines, March 6, 1982 September 15, 1952 By TOP SECRET SECURITY INFORMATION SUMMARY OF TELEGRAMS IRAN: Ambassador Henderson reports that on Thursday he received Dr. Hjalmar Schacht, the German "financial wizard" who arrived in Tehran last Tuesday at the invitation of Mosadeq. Schacht told Henderson that Mosadeq had been urging him to come to Iran for several months, but Schacht had been postponing the visit on the grounds that there was no use trying to make financial and economic plans for Iran until the oil question was settled. In response to a particularly urgent request from Mosadeq he had agreed to make this short, one- week visit. In his first conversation with Mosadeq last Tuesday, Schacht reiterated that a settlement of the oil question was a prerequisite for any financial and economic remedy; Schacht told Mosadeq that he was making a mistake in insisting on re- ceiving 50 million pounds in advance as a condition precedent to submission of claims and counterclaims to the International Court. Schacht also pointed out that until the question of com- pensation had been submitted to the Court, Iran's international credit position would be hopeless. During their first conversa- tion, Mosadeq indicated that he would be willing to let the matter of the 50 million pounds ride for a year or two, but in a subse- quent conversation he reverted to his erstwhile stand, even in- sisting that this sum would have to be convertible into dollars. Schacht told Henderson that in his opinion if the AIOC would agree to limit its claims to its physical assets in Iran at the time of nationalization and not claim damages for the termination of the agreement before its expiration, the question of compensation could be disposed of, but he feared that if the British did not make this concession there was no possibility in the foreseeable future of breaking the present impasse. Schacht also told Henderson that Mosadeq has asked him to accompany Maki to the United States as Maki's financial adviser during the latter's conversations with members of the TOP SECRET SECURITY INFORMATION