Memorandum, State Department Summary of Telegrams

NLT (Naval Add /408 the OFFICE OF DECLASSIFIED THE SECRETARY OF STATE E.O. 12065, Sec. 3-402 WASHINGTON State Depl. Guidelines, March 6, 1982 By DEB NLT, Date 9-10-85 October 14, 1952 TOP SECRET SECURITY INFORMATON SUMMARY OF TELEGRAMS IRAN Our Ambassador in London reports having informed Foreign Secretary Eden of our feeling that the British were not acting with sufficient energy and initiative to solve the Iranian problem. Mr. Eden, who was obviously disturbed, as- sured Ambassador Gifford that the British were very aware of the seriousness of the situation. In subsequent meetings with Eden and a Foreign Office official, Mr. Gifford was given the reaction of Prime Minister Churchill and other responsible Ministers to our latest proposals, which include a lump sum settlement of claims and counterclaims, with compensation to the UK payable in oil, and the organization of a new international company to purchase and re- sell Iran's petroleum products. While the British do not feel able at this stage to agree even in principle to our suggestions, they do not want to reject them out of hand and are anxious to continue to explore them with us. A major difficulty for the UK is the method of determining compensation, since the British are not prepared at this point to abandon the principle that compensation be determined by an impartial international body. In addition a number of details in our plan are not clear to the British, who would welcome a visit by a Department officer for further discussions as soon as possible. The Foreign Office, as well as our Ambassadors in London and Tehran believe the forthcoming trip to Iran by Camille Gutt, the Belgian financial expert, who will go to Iran at Prime Minister Mosadeq's request to advise on general financial and econ- omic problems, and possibly later on the oil question, may be help- ful. Ambassador Gifford believes that if Gutt could plant the idea in Mosadeq's mind that our plan is really his own idea there might be a chance of bridging the gap between the British and Iranian view- points. Meanwhile, Mr. Gutt is coming to New York briefly before leaving for Tehran and while here he will consult with President Black of the International Bank in the hope of reintroducing that in- stitution into the Iranian picture. In Tehran, Ambassador Henderson sees objections to our plan from both the Iranian and British view- points. Our envoy repeats his belief that no settlement will be TOP SECRET SECURITY INFORMATION