Telegram from Ambassador Henry Grady to Secretary of State Dean Acheson, Number 340

INCOMING TELEGRAM Department of State copy / OF2 TELEGRAPH BRANCH 17-X map OLORET 705 A Action Control: 12409 Tl NE A Rec'd: July 24, 1951 FROM: Tehran 11:06 a.m. Info SS TO: Secretary of State and G E NO: 340, July 24, 11 a.m. (SECTION ONE TWO) EUR DCR NIACT SENT DEPT 340, LONDON EYES ONLY AMBASSADOR 65. FROM HARRIMAN FRO THE PRESIDENT AND SECRETARY NO (RPT NO) DISTRIBUTION EXCE PT AS DIRECTED BY THE SECRETARY': OFFICE. Iranian Cabinet met most of Monday over questions which Oil Committee discussed with me on Sunday and reported in my telegram 324 of July 23. Finance Minister and representatives of 0il Committee met with me late Monday afternoon. They reported to me Cabinet had agreed to inclusion of the word "principle" and gave me draft of formula for meeting with British a,s follows: 'In case the British Govt on behalf of the former Anglo-Iranian Oil Company recognizes the principle of nationalization of the oil industry in Iran, the Iranian Govt would be prepared to enter into negotiations with the representatives of the British Govt on behalf of the former 1Y company. They explained omission of reference to discussion of any other matters of mutual interests 'referred to in my above telegram was only because 0il Committee had no (rpt no) competence in anything except oil but that govt would, of course, be ready to discuss any such matters. They then said in order that I might be fully informed of attitude of Iranian Govt and Cabinet had decided that I should be given translation of minute of meeting at which above decision was made and approved by entire Cabinet and Oil Committee. This minute, in addition to setting forth as point (1) the above quoted statement, included the following points: (2) before sending representatives to Tehran British Govt should make formal statement of its consent to principle of lationalization of oil industry on behalf of former oil company, and (3) by the principle of nationalization of oil industry is meant proposal which was approved by special Oil Committee of Majlis CECLASSIFIED TRUMAN E o. 11632. Sec. 3(E) end you 5-31-71 3. ARCHIVES NATIONAL and confirmed by AND Dent. of State NLT H-3 KECORDS By NLT. HC NARS D 1027H SERVICE" TOB OBCREI REPRODUCTION OF THIS MESSAGE IS PROHIBITED