888.2553/8–2251: Telegram
No. 74
The Special Assistant to the President
(Harriman) to
the Department of State1
priority
736. From Harriman to President and Secretary. No distribution except by direction of Secretary’s office. This morning (Tuesday2) in our talk with Mosadeq it appeared to Stokes and myself that there was little if any chance to come to a workable arrangement with him.3 He stated that he wanted the Brit staff to continue working in Iran for NIOC just as they had before for the AIOC and then completely refused to accept any arrangement which wld make it possible for them to work. Stokes offered to abandon the proposal for an operating agency and to develop a plan by which the staff wld continue under a general manager reporting to and [Page 145] under the direction of NIOC. Mosadeq also refused this idea, repeating a suggestion he had made yesterday that some 20 section heads, all to be Brit, wld report directly to the Board of Directors. The Board of 12 members would consist of 4 Iranians and 8 oil experts selected from continental European countries. Stokes and I tried our best to explain the chaos which wld result from such a scheme and to convince him that no responsible person wld accept employment under such conditions. His only answer was that the Iranian people wld not agree. He said he wld call together the Majlis and put up to it Stokes’ proposals. Stokes refused to permit such a move and withdrew his 8-point proposal. He explained that he was dealing with the PriMin and not the Majlis and that nothing cld go from him to the Majlis which had not been endorsed by Mosadeq and his Cabinet.
Stokes has given Mosadeq until tomorrow (Wednesday) noon to express his willingness to negotiate on practical basis or he will return to London. This he later confirmed by letter to Mosadeq.
Mosadeq expects foreign staff to work on his terms, foreign oil companies to buy and distribute oil on his terms, and Iran to get all of the profits with compensation only to owners for property taken over. In his dream world the simple passage of legislation nationalizing oil industry creates profitable business and everyone is expected to help Iran on terms that he lays down.
He appears to ignore all of the info and advice Levy and I have been trying to give him and his associates during the past weeks.
I was told Mosadeq wld call Majlis tomorrow and explain negotiations in a highly colored manner. I therefore decided to write him a temperate letter reviewing the positions I have taken, and am releasing it to the press. Text has been telegraphed to Department.4
I have just learned that Stokes has a letter from Mosadeq asking him to state in writing for consideration by Iranian Govt his definite proposals for retention of Brit staff. Stokes will consult me tomorrow morning on how to reply to this letter. Difficulty is that whatever Stokes writes will probably be used against him by Mosadeq with Majlis to obtain vote of confidence.
- Repeated to London eyes only for the Ambassador.↩
- Aug. 21.↩
- On Aug. 20 Mosadeq, Stokes, and Harriman had had their first conversation, discussing sales, compensation, and employment of the British staff. Mosadeq stated during the discussion that he would submit the British proposal to the Majlis if agreement was not reached and would ask for a vote of confidence. Harriman indicated that it was too early to judge whether there was a real chance for agreement or whether there was a way to prevent Mosadeq from using a break in the negotiations to strengthen his position in Iran. (Telegram 724 from Tehran; 888.2553/8–2051)↩
- Telegram 734 from Tehran, Aug. 21. (888.2553/8–2151) For text of this letter, see Department of State Wireless Bulletin, Aug. 23, 1951, p. 7.↩