Memorandum from Burton Berry to Secretary of State Dean Acheson

NLT (PSF-5UBT)300 000852 DEPARTMENT OF STATE ASSISTANT SECRETARY TOP. August 20, 1951 To: The Secretary s ARCHIVES NATIONAL AND Through: s/s (8) a is RECORDS SERVICE From: NEA-Mr. - Berry Subject: Latest Developments in Iranian Situation. At the beginning of last week, the British submitted to the Iranians an eight-point proposal. A summary was given in my memorandum of August 13 to Mr. Webb, a copy of which is attached. In mid week, the Iranian Deputy Prime Minister without the Prime Minister's approval stated to the press that the British proposals had been categorically rejected. This statement, however, was not regarded as having the Iranian Government's sanction and therefore did not affect the course of the negotiations. Mr. Harriman, however, got the impression that the Iranians were definitely planning to reject the British proposals. He therefore saw the Shah and the Prime Minister and induced them to arrange for an Iranian negotiating team to sit with the British. He agreed to participate in the discussions. At last Saturday evening's meeting, the Iranians submitted to the British a communication which the Iranians intended to make public last night. In the Iranian statement, the Iranians rejected outright the British proposals, saying that the proposals did not conform to the formula which Mr. Harriman had developed to bring both parties together. Among other things, the Iranians objected to the following points in the British proposals: 1) The Iranians contended that the purchasing organization envisaged in the British proposals would give the British a 25-year monopoly over the export sales of Iranian oil. 2) The formula suggested for the pricing of oil and the division of profits was not acceptable. DECLASSIFIED 3) The E. O. 11652, Sec. 3(E) and D 4-4-74 pt. of State prosetz NLT 7F.2 Bg NLT. HC NARS 9.28.4