Telegram from Ambassador Henry Grady to Secretary of State Dean Acheson, Number 442

NLT(PSF-SUBT) 324 INCOMING TELEGRAM Department of State copy / OF2 TELEGRAPH BRANCH 14-B-X A Action Control: 15586 NEA Rec'd: July 30, 1951 FROM: Tehran 10 a.m. Info SS TO: Secretary of State DECLASSIFIED G EUR NO: 442, July 30, 3 p.m. E. O. 11652, Sec. 3(E) and 5(D) or (r) 981 D.p. of State letter, 4-4-78 E By NLT. NO 75 DCR HK .NARS NIACT SENT LONDON (EYES ONLY FOR HARRIMAN AND GIFFORD) 93; RPTD NIACT DEPT 442. FOR PRESIDENT AND SECRETARY STATE e (NO DISTRIBUTION IN DEPT EXCEPT AS DIRECTED BY SECRETARY's OFFICE) . I gave to the Prime Minister early this morning a memo based on your number 36 July 30. The Prime Minister expressed surprise and wanted to know, "Then Mr. Harriman finds our proposal unacceptable?" He said he could not (rpt not) understand Mr. Harriman's reaction since the Persian reply said nothing more than he had said to Mr. Harriman. He said, "Itains now (rpt now) up to Mr. Harriman to tell me where our formula is not acceptable. Mr. Harriman understood that we would accept the British mission only on the basis of the formula and that formula was clearly defined in the min- ute of the Cabinet minutes with which Mr. Harriman is fami- liar." The Prime Minister again went over a number of the points which I made yesterday morning (EMBTEL 90 July 29). After leaving the Prime Minister, I got in touch with Mr. Busheri and discussed the whole matter with him. He had been with the Prime Minister and at once returned after our conversation. The Prime Minister called a Cabinet meeting and has just sent for me and given me a note in which he asked me to ascertain from Mr. Harriman "what sentence in the Persian reply last night (EMBTEL 91 July 29) has created difficulty and caused him to think that the HMG does not (rpt not) facilitate resumption of negotiations. I said that Mr. Harriman, in his wire to me (EMBTEL London 36). had suggested that the Iranian Government rephrase its reply in accordance with suggestion EMBTEL London 33. He felt that the suggested reply by the Iranian Government was too simple and abbreviated -- that he thought it most essential The that the British understand and accept the Persian formula with the elaboration in the minute. BOVER He said that on the question of tension he feared that this might be interpreted to include actions which the Iranian Government REPRODUCTION OF THIS MESSAGE IS PROHIBITED