891.6363/9–646: Telegram
The Ambassador in Iran (Allen) to the Secretary of State
[Received September 6—1:50 p.m.]
1192. During conversation with Prime Minister yesterday subject turned to oil, which Qavam considers chief Soviet aim in Iran. If USSR can obtain its desires both as regards oil and Azerbaijan it will do so but if forced to choose between the two he feels confident Soviets will drop Azerbaijan.
In response to my request for information regarding basis for his discussion of oil with Soviet authorities in face of law which apparently forbids such discussion, he said he could not discuss “concession” but there was no difficulty about discussion joint development arrangement.
I remarked that American Government felt that as long as law remained on books, we should respect it and not embarrass Iranian officials by attempting to discuss subject. I added that as long as Iranian case remained on agenda of UN, we did not wish to have our motives in supporting Iran impugned. Qavam said he appreciated our reasoning and our attitude, adding cryptically that Soviet angle should be cleared up in another couple of months. As regards the law, he said he could discuss joint development arrangements with any one at any time. He then said, significantly and pointedly, that if he had in hand at the moment an American proposal based on a model development contract, his hands would be strengthened materially in dealing with Soviets since he could show Soviets what a just and proper proposal was like.
While I had not intended to get on subject of oil when I requested interview and I received no indication during conversation that Qavam [Page 515] had planned his remarks, yet the rapidity with which he seized opportunity to make his point and earnestness with which he spoke shows he has had in mind talking with us about oil.
Qavam’s remarks could well be taken as an invitation to us to make a petroleum proposal and as such they deserve considerably more attention than the similar suggestion recently made to me by Shah,83 since Qavam has power to carry out his ideas.
[Here follow Ambassador Allen’s thoughts regarding possible formation of a joint company to develop Iranian-Baluchistan oil.]