Telegram from Ambassador Walter Gifford to Secretary of State Dean Acheson, Number 648

INCOMING TELEGRAM Department of State 239 TELEGRAPH BRANCH NLT (PSF-SUBJ)323 14-D-X TOP SECRET copy lof2 Action Control: 272 NEA Rec'd: August 1, 1951 FROM: London 12:08 p.m. Info SS TO: Secretary of State G EUR NO: 648, August 1, 2 p.m. E DCR PRIORITY PRIORITY SENT TEHRAN 42, EYES ONLY FOR HARRIMAN AND GRADY RPTD INFO DEPT 648. EYES ONLY SECRETARY; DISTRIBUTION ONLY AS DIRECTED BY SECRETARY'S OFFICE. Cabinet agreed this morning to exchange of messages as set forth your 99, repeated Dept 458 without any change in wording, provided that: (A) By the "formula" was meant the language "in the case of the British Government, on behalf of the former AIOC, recognizing the principle of the nationalization of the oil industry in Persia, the Persian Government wld be prepared to enter into negotiations with representatives of the British Government, on behalf of the former company, which the UK wld be free to cite publicly; (B) By the "principle of nationalization" was meant nationalization on the basis of the law of March 20; (c) In the reference to the essentiality of creating best possible atmosphere the Iranians know that British mean the need for relaxation of tension in the south. The Cabinet is, of course, primarily concerned that the foregoing interpretations are those understood and accepted by the Iran Government. However, the Cabinet will accept your assurances on the foregoing points without further reference of them on your part to the Iran Government if you think this unnecessary, as it would in fact seem to me. The British Government will await your reply to foregoing before taking further step, but on receipt satisfactory reply from you will immediately send Stokes and publish exchange notes. Stokes will depart Thursday night and arrive Tehran Friday DECLASSIFIED E.O. 13526 Although official LP.HST 2013-010 #2 Authority NARA PMH Date 1/15/2016 TOP SECRET REPRODUCTION OF THIS MESSAGE IS PROHIBITED