Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

888.2553/1–454

No. 402
Memorandum by the Special Assistant to the President for National Security Affairs (Cutler) to the Secretary of State¹

top secret

Washington, January 4, 1954.

1. On January 2, 1954, I briefed the President in Augusta on the matters covered at the Meeting of the National Security Council on December 30, 1953.²

2. Included in my account of the discussions relative to Iran, I said that the following points were made:

a. The prospect of the consortium (replacing AIOC) to market Iranian oil inevitably bring the cartel suit to the foreground, because the American members of the consortium would almost certainly include the big oil companies now charged with violations of the anti-trust laws.

b. Approval of NSC 175 amounted in substance, though not literally, to adoption of a policy in the interest of national security which is contrary to the anti-trust laws of the United States.

c. There were two phases to settlement of the Iranian oil problem: (1) The phase of discussion or consultation now in progress, and (2) the phase of execution of plans. The Defense Production Act³ safeguarded those involved in the first phase from violation of the anti-trust laws. The second phase, implementation of plans, would almost certainly involve violations. Hence it would be necessary to go to Congress for legislation to provide relief.

d. Such legislation might be specifically directed toward the problem of the oil companies and Iran or more broadly to U.S. companies doing business outside the United States.

3. The President speculated for some time about the best procedure to follow in seeking to protect the national security by getting Iran on its feet through a resumption of oil operations. He made these points relative to the probable necessity of working out this problem through a consortium: (1) the President should have power to lay down conditions which would protect consumers; (2) would it be possible to deal with the problem through a treaty? (3) probably the best mechanics would be for the State Department to get together with the Foreign Affairs Committee and request the law as matter of primary concern to the national security, a procedure which he felt would be a better strategy than to have the request come up, as a legal matter, from the Attorney General.

He suggested that you and the Attorney General might wish to discuss this point together.

Robert Cutler

1. A copy of this memorandum was sent to the Attorney General.
2. See supra.
3. Reference is to the Defense Production Act of 1950, as amended.