Table of Contents

TABLE OF CONTENTS

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Chapter I The Background of British Enterprise in Persia, 1901-47 36

1. The Persian Setting and the D’Arcy Concession Strategic importance of Persia and origins of Anglo-Russian rivalry there—Persian oil struck in 1908—Mr Winston Churchill stimulates governmental purchase of controlling interest in Anglo-Persian Oil Company and Bradbury Letter of 1914 defines its relationship with His Majesty’s Government—the Armitage-Smith royalty agreement of 1920—declining British influence in Persia and the Soviet Persian Treaty of 1921. 36

2. Cancellation of D’Arcy Concession and negotiation of the Concession of 1933 39

Firm reaction of His Majesty’s Government to arbitrary Persian cancellation—the dispute brought before the League of Nations (1932)—Reza Shah intervenes to reach agreement with Anglo-Persian Oil Company (1933)—benefits for Persia and safeguards for AngloPersian Oil Company in 1933 agreement—increased American stake in expanding Middle East oil production. 3. Allied occupation of Persia in the Second World War and the Aftermath 42 Anglo-Russian intervention in Persia and abdication of Reza Shah (1941)—anti-British reactions in Persia—Dr Musaddiq opposes Russian demand for oil concession (1944)—President Truman’s strong diplomacy facilitates Persian negotiation of Russian evacuation of Azerbaijan (1946)—the Majlis oil law of 1947 a potential threat to Anglo-Iranian Oil Company—British show of force from India during riots at Abadan (1946). 4. The post-war position of the Anglo-Iranian Oil Company in Persia 46 Mr Bevin urges reform of relationships between His Majesty’s Government, Anglo-Iranian Oil Company and Persian Government (1946)—attitude of His Majesty’s Government to foreign nationalisation and settlement of oil nationalisation dispute with Mexico (1947)—paternalistic social policy of Anglo-Iranian Oil Company in Persia. 5. The post-war position of Great Britain in the Middle East 50 British military and economic weakness relative to United States—Mr Attlee’s contested proposal for disengagement by evacuating the Middle East (1946-47)—British position there weakened by relinquishment of India and Palestine—growing American influence in Middle East during the cold war and secret Anglo-American understanding of 1947 for mutual support.

Chapter II The Negotiation and Non-Ratification of the Supplemental Oil Agreement, October 1947-June 1950 56

1. The Supplemental Oil Agreement of 1949 Persian grievances over British dividend limitation imposed by Treasury (1947-48)—possible alternatives to the Supplemental Agreement—M. Makki opposes the agreement in the Majlis. 56

2. British objection to modifying the Supplemental Agreement early in 1950 59 Persian and American suggestions for modifying the agreement— rumour of higher royalty for Saudi Arabia (Aramco). 3. The Anglo-American Conversations of May 1950 61 Failure to obtain American intervention in favour of the Supplemental Agreement, or undertaking, pending its ratification, to postpone American financial aid to Persia.

4. The low level of British publicity in Persia in 1950 Absence of British propaganda for the Supplemental Agreement—M. Shahrukh urges Anglo-Persian cooperation in publicity. 5. The reintroduction of the Supplemental Agreement in the Majlis and the advent of General Razmara in June 1950 Further Persian requests for modification of the agreement and suggestion of a 50-50 agreement—Sir Francis Shepherd’s warning on the National Front —the Persian social scene—appointment of Majlis Special Oil Commission under Dr Musaddiq—fall of M. Mansur. 62

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Chapter III The Government of General Razmara and the Withdrawal of the Supplemental Oil Agreement, June-December 1950 68

1. War in Korea and Anglo-American military consultations regarding Persia 68 At secret Anglo-American talks in July defence of Persia recognised as primarily a British responsibility—defence Committee’s concern for protection of Middle East oil—plans of Chiefs of Staff for defence of Persia—Shah’s anxiety for Anglo-Persian staff talks on defence of oil installations—American reservation regarding possibility of British forces entering Persia—the Shah’s opening not exploited. 2. Anglo-American cooperation and divergences in Persia regarding propaganda and economic aid Difficulties of Anglo-American cooperation—the incipient dichotomy in British economic policy towards Persia—Foreign Office support for loan to Persia before ratification of Supplemental Agreement. 3. The prospects of the Supplemental Agreement and the Foreign

Secretary’s conversation of August 12 with Mr Lewis Douglas Sir Francis Shepherd proposes AIOC should offer a Persian directorship—negative reaction of AIOC to General Razmara’s request for an advance and additions to oil agreement—Mr Bevin’s defence of British policy. 74

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4. The bearing on the Supplemental Agreement of activities of the Iraq

Petroleum Company and of Aramco 79

Unfortunate coincidence of new IPC agreement with General Razmara’s decision to put Supplemental Agreement before Majlis (August)—AIOC disagree with Sir Francis Shepherd’s recommendation for revision of agreement (September)—Foreign Office reception of hints at Aramco’s negotiations with Saudi Government—attitude of State Department to British oil companies— warnings from Mr McGhee of the State Department on delay in ratifying Supplemental Agreement. 5. The question of sweetening the Supplemental Agreement Further modifications proposed by General Razmara (October)—Mr Bevin advises the company to be forthcoming—Sir William Fraser of AIOC proposes certain concessions to Persia—General Razmara rejects Mr Bevin’s offer of a loan (November). 84

6. The Supplemental Agreement surpassed by the Aramco Agreement of

December 1950 88

Acceptance of suspension of Persian relay of British and American broadcasts—further warnings of advanced terms of new Aramco agreement—General Razmara suggests a 50-50 agreement—the Majlis Oil commission opposes the Supplemental Agreement and ventilates oil nationalisation—the Aramco 50-50 agreement. 7. The Attlee-Truman conversations of December 1950 and British military planning for Persia 91

The strategic and economic setting—Plan Accleton—delay in world oil survey and further military planning for South Persia. 8. Withdrawal of the Supplemental Agreement in December 1950 93 Growing support in Persia for oil nationalisation—the Shah vainly proposes to intervene—inter-departmental consideration of aid to Persia if Supplemental Agreement rejected—British reaction to withdrawal of the agreement—Sir Francis Shepherd’s review. 9. The perspective of British policy regarding Persian oil in 1950 98 Difficulties and possibilities for British policy—progressive deterioration of affairs.

Chapter IV The Threat of Persian Oil Nationalisation and the Assassination of General Razmara, January 1-March 7, 1951 1. Reactivation of the Majlis Oil Commission and resignation of M.

Furuhar, January 1-14 Rising nationalism in Persia and concern of Shah—Britain’s adverse economic prospects—Sir Francis Shepherd’s analysis of Persian grievances and his proposals. 2. Consultations in London between the Foreign Office and the Anglo-

Iranian Oil Company, January-February 7 103

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Foreign Office urges an imaginative approach in the light of the Aramco agreement—the company fighting for its life—Mr Bevin’s concern regarding the prevailing system—the Treasury, unwilling to press the company—the company’s attitude towards a 50-50 agreement—Sir Francis Shepherd to represent British concern to General Razmara—reduction of impetus in London—internal criticism of AIOC.

3. General Razmara’s 50-50 proposal and first British reactions to the threat of Persian oil nationalisation, February 7-24 Unproductive conversation with Mr Rountree of the State Department—proposal for concerted propaganda by the Foreign Office and AIOC—Sir Francis Shepherd advocates strong warning against nationalization —initial doubts in Foreign Office as to opposing Persian nationalisation—the parliamentary statement of February 21— General Razmara requests lip-service to nationalisation. 4. From the British note verbale of February 24 to the assassination of

General Razmara, February 24-March 7 British legal stand on the Concession of 1933—ministerial direction under handicaps—stronger line now taken against Persian nationalisation—damaging BBC broadcast of March 4—General Razmara’s assassination possibly due to his nearing success on a 50-50 agreement—alleged implication of Dr Musaddiq. 113

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Chapter V Deterioration for British Oil Interests in Persia during the Government of M. Husein Ala and the Failure of Anglo-American Conversations in Washington, March 8-April 28, 1951 1. The Government of M. Ala and approval by the Majlis of proposed oil nationalisation, March 8-15 Growth of Tudeh and of National Front—Mr Morrison sees situation as dangerous—M. Ala appointed Prime Minister as against British preference for M. Sayyid Zia—British note of March 14 fails to prevent Majlis vote for nationalisation. 2. British and American reactions to the opening of the crisis over Persian oil, March 15-25 American criticisms of British opposition to nationalisation—British naval movements—Mr Morrison instructs consideration of possible, including military, action—meeting under Sir William Strang on March 20. 123

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3. Strikes at Abadan and consultations in London, March 26-April 9 132 Tudeh exploitation of strike at Abadan—British naval movements— military planning to protect British interests in South Persia—Foreign Secretary’s memorandum of March 29—revision of relations with AIOC—British objection to proposal by Mr McGhee for joint AngloAmerican statement on Middle East oil—increased burdens on Foreign

Secretary—Earl Mountbatten’s proposal for prompt visit by a British minister to Tehran is held over.

4. Failure of the Anglo-American conversations on Persia in Washington,

April 9-19 141

Leakage of Mr McGhee’s criticisms of British policy—differing appreciations of problem of Persian oil—proposed British offer to M. Ala insufficiently radical to obtain American support. 5. Further deterioration in Persia and deliberation in London, April 8-25 147 M. Ala’s reply to British note of March 14—British subjects killed in riots at Abadan—American pressure for a soft British line— consideration in Foreign Office of legal and political implications of military intervention in Persia—unsatisfactory publicity on AIOC— Cabinet decisions on opening negotiations with Persian Government— Lord Mountbatten’s criticism of British proposals. 6. The British aide-mémoire of April 26 and resignation of M. Ala, April 26-28 157

M. Ala’s reaction to the British proposals—American criticism of British reaction to Majlis resolution to dispossess AIOC—failure of M. Sayyid Zia to become Prime Minister.

Chapter VI Persian Nationalisation of the Oil Industry and British Appeal to the International Court of Justice, April 28-May 26, 1951 1. The advent of Dr Musaddiq and the Persian Nine-Point Law nationalising the oil industry, April 28-May 2 Character of Dr Musaddiq—Persian misapprehension of British support for oil nationalisation—earlier contact with Dr Musaddiq— tribute to Sir Francis Shepherd. 2. British and American reactions to Persian nationalisation of the oil industry, April 30-May 7 Mr Morrison expresses concern to Mr Attlee—formation of Ministerial Committee on Persia—American legal disagreement with basis of Mr Morrison’s statement of May 1—view of Minister of Defence— military planning in light of probable Persian opposition to British intervention (Plan Midget)—AIOC’s instructions regarding Persian control—Sir Francis Shepherd’s conversation of May 7 with Dr Musaddiq. 3. Correspondence between the British and Persian Governments, and

American stimulation of British recognition of the principle of Persian oil nationalisation, May 8-19 Sir Reginald Hoare recalls his firm line in 1932—consideration of economic sanctions against Persia—Cabinet considers implications of military intervention in Persia and decides to consult American Government on draft British note to Persian Government—reserved American reaction to possible British use of force and advocacy of British recognition of principle of Persian oil nationalisation—Mr 160

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Morrison’s wish for stiffer American attitude and his exchanges with Mr Attlee concerning formula for British recognition—Dr Musaddiq acts to implement nationalization—effect in Tehran and Washington of rumoured British troop movements—British willingness to consult American Government on use of force—American unwillingness to provide Persia with technicians—communication to Persian Government of formula on British recognition of principle of nationalisation—British approaches to French and other Governments—American economic aid to Persia.

4. Further British consideration of, and American objection to, military intervention at Abadan, May 18-25 Public American dissociation from use of force in Persia—Chiefs of Staff instruct planning for seizure of Abadan—Foreign Office view that military intervention might lessen risk of global war—Chiefs of Staff conclude small, quick operation could not now hold Abadan— Foreign Office objections to large, slow operation. 5. British appeal to the International Court of Justice against Persian oil nationalisation, May 20-26 Further Persian moves to dispossess AIOC—discussions on appealing to The Hague Court or Security Council—objections of State Department to approaching Shah to dismiss Dr Musaddiq—factors influencing Anglo-American relations—implications for British policy of legal action against Persia—ministerial approval of AIOC policy of accepting under protest Persian moves at Abadan—increasingly active American policy in the Middle East.

Chapter VII Failure of the Mission to Tehran of the Anglo-Iranian Oil Company, May 26-June 19, 1951 1. Persian aggravations of May 28-30 and President Truman’s message to the Prime Minister Persian denial of jurisdiction of The Hague Court and issue of regulations for enforcing nationalisation—President Truman urges negotiation—Dr Grady’s blunder. 2. Further British consideration of military intervention in South Persia and consultation with the United States Defence Committee’s decision on June 4 on protection of British lives (Operation Midget) and action if Communist rising occurred in Persia (Plan Y)—warnings on American attitude to use of force. 3. The decision to send to Tehran a mission of the Anglo-Iranian Oil

Company Hopes that AIOC mission would gain time and Dr Musaddiq would fall—failure to prevent Temporary Board of National Iranian Oil Company going to Khuzistan—doubts on composition of AIOC mission—Mr Berthoud suggests sending secret envoy to Persia—Sir Norman Brook’s plea for constructive ideas—possibility of offering 180

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Persia 60-40 division of profits—further indications of Dr Musaddiq’s intransigence. 4. The darkening scene at Abadan and the appointment of the British Oil

Supply Advisory Committee, June 6-14 Anti-British feeling in Persia—growing Persian interference at Abadan—lack of Indian and American support for Britain—successful British prevention of supply of Western oil experts to Persia— cooperation between British and American oil companies in planning supplies—Persian flag hoisted on AIOC offices. 5. Failure of the Anglo-Iranian Oil Company’s Mission to Tehran (Jackson

Proposals), June 14-19 Persian demands on AIOC—Colonel Wheeler and Mr Zaehner to proceed to Tehran—Persian determination to drive out AIOC and rejection of Jackson Proposals—Mr Eden’s suggestion for escorting a British tanker through Suez Canal to Haifa. Chapter VIII From the Persian Anti-Sabotage Bill to the Interim Injunction of the International Court of Justice, June 20-July 5, 1951 1. The Persian Anti-Sabotage Bill and the departure from Abadan of the

British general manager, June 20-25 Persian actions towards taking over AIOC at Tehran and Abadan— ministerial decisions on evacuation of British staff and application to The Hague Court for interim injunction—oil from Abadan mostly replaceable at high dollar cost—Cabinet notes political risks of holding Abadan by force—parliamentary speeches by Mr Eden, Mr Sandys, Lord Dunglass, Mr Crossman and Mr Morrison—Persians accuse Mr Drake of sabotage. 2. The possibility for British diplomacy, June 20-25 Difficulties of the British position—propaganda value of Persian AntiSabotage Bill. 3. Expanding British military planning and limited American support, June 25-30 Suggestion by Sir Donald Fergusson stimulates stronger military planning (Operations Lethal, Midget Reinforced)—recommendation against economic sanctions—Mr Julius Holmes suggests caretaker administration at Abadan—Mr Morrison asks Mr Acheson for public support—HMS Mauritius at Abadan—ministerial decision to withdraw tankers and Fields staff—military preparations authorised—Mr Churchill favours holding Abadan island—Mr Drake urges military intervention—Mr Acheson’s anodyne statement. 204

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4. British contacts with friendly Powers and propaganda to Persia 231 Sir Frederick Hoyer Millar’s proposal to seek support in NATO not pursued—intensified British propaganda—effects of Persian crisis on British position in the Middle East.

5. British reactions against the Persian Government about the end of June 235 Serious Persian interference at Abadan and Tehran but Anti-Sabotage Bill withdrawn—Cabinet considers American moratorium proposal and anxious British economic situation—criticism of American Ambassador in Tehran—strong British note to Persia unsupported by action—proposals for replacing Dr Musaddiq—the Shah’s doubts and objection to Mr Sandys’ speech—the Russian angle on the crisis. 6. Questions of British withdrawal from the Fields and intervention at

Abadan, July 1-5 242 Differences of opinion on withdrawing from Fields—Cabinet decides against withdrawal and overt military preparations. 7. British resistance to American pressure, July 4-5 246 Mr Churchill’s appeal to President Truman—Mr Acheson proposes that Mr Harriman be sent to Tehran—adverse Cabinet reaction of Cabinet to such mediation—Conservative pressure for strong British policy in Persia. 8. The interim injunction of the International Court, July 5 249 Success of the British application—board of supervision indicated.

Chapter IX British Deliberations and American action on the Persian Rejection of the Interim Injunction of The International Court of Justice, July 5-15, 1951 1. Initial British reactions to the interim injunction, July 5-7 Legal advisers propose request to Persian Government to cease interference—proposed nomination of British members of board of supervision—consideration of appeal to Security Council—formal British acceptance of the injunction. 2. British failure to prevent American proposal for intervention by Mr

Harriman, July 7-8 Mr Morrison rejects proposal for Harriman mission and appeals for American support—British acceptance of Mr Harriman’s mission to urge Dr Musaddiq to accept the interim injunction—qualifications in Mr Truman’s letter to Dr Musaddiq. 3. Fluctuating British counsels, July 8-12 Reaction of Chiefs of Staff to Foreign Office view against military intervention other than to cover evacuation—Mr Churchill and Lord Dunglass advocate holding Abadan—conflicting views of Lord Chancellor, Attorney-General and Mr Fitzmaurice on legality of using force to protect property—Commanders-in-Chief, Middle East, consider they could hold Abadan—Operation Buccaneer—Mr Harold Watkinson’s suggestion that British technical troops take over refinery—decision of Mr Attlee and Mr Morrison against use of force to protect property—Mr Morrison’s recommendations for withdrawal of staff from Fields and appeal to Security Council are not pursued. 250

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4. The British failure to exploit the interim injunction, July 5-12 264 Potentialities of legal recommendations of July 6—limitations of British propaganda—contrasting attitudes of Canada and Australia— possible advantages of distancing His Majesty’s Government from unpopularity of AIOC, and of American participation in Persian oil industry—exchange between Mr Morrison and Mr Gaitskell on British economic action in Middle East—M. Sayyid Zia encouraged by Shah but handicapped by Harriman mission. 5. Preliminaries and economic background to the Harriman Mission 270 Sketch of Mr Harriman—Mr Churchill criticises effects of Sir Francis Shepherd’s Press conference: Mr Gaitskell’s estimate of Mr Harriman’s anxiety to keep Russians from north Persian oil—nonimplementation of economic sanctions against Persia—consideration of long-term effects of loss of Abadan and collaboration with American oil companies—Mr Morrison’s strong reaction to possible American economic aid to Persia —Sir Francis Shepherd advocates withdrawal of British staff—further deterioration at Abadan.

Chapter X The Mission to Tehran of Mr Averell Harriman, July 15August 3, 1951 1. Reactions to recommendation by the British Commanders-in-Chief,

Middle East, of military action at Abadan, July 16-25 Commanders-in-Chief propose British troops should enter Abadan (Operation Buccaneer) on July 27—divergent views of Vice-Chiefs of Staff and Chiefs of Staff—ministerial Committee decides on withdrawal of Fields staff and military preparations—Mr Churchill again urges holding of Abadan—Mr Lewis Douglas critical of American policy and favours strong action (the African angle)—Mr Morrison’s memorandum re-examines military action to protect property—views of Attorney-General, Sir Gladwyn Jebb, Sir Oliver Franks and Sir Francis Shepherd on its dangers—Cabinet defers consideration of use of force. 276

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2. The Harriman Formula 288

Persian view of the crisis—withdrawal of Fields staff delayed—His Majesty’s Government’s four preconditions for sending mission to Tehran)—Sir Francis Shepherd’s efforts towards remedying exasperating conditions in the south—tacit bargain not to refer to interim injunction if Persians dropped insistence on May 2 law—Mr Harriman’s seven points—Cabinet would despatch mission if Persian Government instructs against interference with AIOC—differing legal opinions on use of force. 3. The journey of Mr Harriman from Tehran to London, July 27-28 296 Mr Harriman’s strong reaction to Cabinet decision of July 26—failure to prevent his flying to London.

4. Discussions in London with Mr Harriman and Mr Levy, July 28-30 299 Mr Stokes to head mission to Tehran—discussions on British acceptance of Harriman Formula—Mr Harriman refuses to transmit Persian reply thereto—Mr Levy’s suggestion for American participation in Persian oil—brief for Mr Stokes on offering Persians more than 50-50.

5. Announcement of intention of His Majesty’s Government not to withdraw entirely from Abadan, July 30-31 Parliamentary criticism of British policy by Mr Winston Churchill and Mr Harold Macmillan—Lord Chancellor announces that His Majesty’s Government accepts all implications of Prime Minister’s statement on Abadan. 303

6. Anglo-Persian agreement on the despatch to Tehran of a British official mission, August 1-3 Cabinet accepts Persian conditions for negotiation—failure to secure improvement at Abadan—the refinery closed—resignation of General Zahedi from Persian Government—possibility of a Qajar restoration rejected in Foreign Office—legal advisers not consulted on latest recognition of principle of nationalisation—limited expectations of Mr Stokes’ mission. 306

Chapter XI Failure of the Mission to Tehran of the Lord Privy Seal, August 3-23, 1951 1. The Mission of the Lord Privy Seal up to his presentation of the Eight-

Point Proposals, August 3-13 Mr Stokes’ conversations with Dr Musaddiq and Shah—Mr Levy’s new scheme for oil settlement—Dr Musaddiq in effect repudiates understandings on which Mr Stokes came to Tehran—Sir Donald Fergusson explains British nationalisation—legal advice on His Majesty’s Government’s veto on AIOC and use of ‘without prejudice’ formula—Mr Stokes urges British naval withdrawal from Abadan—his meeting with M. Kashani—concessions in British memorandum of August 11—the Eight-Point Proposals communicated to Persians before amendments received from London.

2. Persian negation of the Eight-Point Proposals, August 14-19 Mr Stokes’ complaints to Dr Musaddiq—Mr Harriman avoids indicating support for British proposals till too late—alleged antiBritish feeling in American Embassy in Tehran. 3. British policy with regard to the failure of the Mission of the Lord Privy

Seal, August 20-23 Dr Musaddiq’s unchanged attitude and unacceptable offer on British staff—differing opinions on further British concessions—Mr Stokes’ new proposal on British management and withdrawal of Eight-Point Proposals, August 21—question of responsibility for breakdown— equivocal American attitude—recommendations in Whitehall and 310

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ministerial decisions of August 22 on issues of British staff at Abadan and use of force—Chiefs of Staff’s views on Operation Buccaneer— Mr Stokes suspends negotiations after Dr Musaddiq’s further offer on management—criticism of Mr Stokes’ negotiations—Shah’s views on Persian political developments—President Truman’s statement of August 23 and Mr Attlee’s appeal for his support—British reversion to The Hague ruling—withdrawal of Fields staff—effects on British position of Harriman Formula and Stokes Mission.

Chapter XII Failure of British Pressure Against Dr Musaddiq, August 24-September 17, 1951 1. The Expectant Pause, August 24-September 1 Further British action deferred—Shah communicates renewed management offer from Dr Musaddiq—Mr Stokes disagrees with Sir Francis Shepherd on opposition to Dr Musaddiq—Persian Press Counsellor’s enquiry on British determination to remain at Abadan— Mr Harriman advises deliberation and criticises Anglo-American cooperation in Tehran—criticisms of AIOC policy—Mr Berthoud envisages an international consortium—consideration of approach to Shah to dismiss Dr Musaddiq—differing views on prospects of M. Sayyid Zia. 2. Mounting Anglo-Persian tension before the British representation to the

Shah and Anglo-American conversations in Washington, September 1-11 British and Persian positions restated—AIOC successful in preventing Persian oil sales—Dr Musaddiq threatens to cancel British residence permits—views of Attorney-General and Foreign Secretary on use of force—arguments by Sir Donald Fergusson and Sir Francis Shepherd for strong British action—Mr Attlee’s indication regarding use of force—possible British courses—Sir Francis Shepherd’s view that Persian Government might soon fall—repercussions in Egypt of Persian crisis—Persian dominance at Abadan—embarrassments and opportunities for British policy—British financial predicament— British financial action against Persia—Mr Morrison’s conversations in Washington—doubts of Mr Harriman and Mr Stokes on suggesting M. Sayyid Zia to Shah—Shah’s reaction to Sir Francis Shepherd’s message. 3. American rebuffs to Dr Musaddiq and the Shah’s refusal to dismiss him,

September 11-17 Mr Harriman’s strong reaction to Dr Musaddiq’s threatening message—American withdrawal of loan to Persia—Mr Morrison’s misgivings on Foreign Ministers’ statement on peaceful settlement of disputes—Mr Stokes agrees with Aga Khan’s criticism of AIOC’s high profits—Shah transmits verbal offer from Dr Musaddiq, who retained power. 337

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Chapter XIII British Rejection of the Persian Proposals of September 19 and Persian Announcement of Expulsion of British Oil Workers in South Persia, September 18-25, 1951 369

1. Political developments in Great Britain and in Persia, September 18-19 369 Dr Musaddiq’s hopes of agreement with Labour Government—British economic problems and announcement of general election— deterioration in Tehran.

2. British rejection of the Persian Piece of Paper, September 19-22 370 Differing reactions to Sir Francis Shepherd’s advice on the Piece of Paper—message regarding Shah’s conviction that Dr Musaddiq must be replaced—views of Mr Attlee and State Department on Piece of Paper— meeting held by Mr Stokes decides on British rejection— renewed Persian threat of expulsion. 3. Deterioration in Persia and the Persian announcement of expulsion of

British oil workers in South Persia, September 22-25 379 AIOC fears that His Majesty’s Government would make an unacceptable agreement with Persia—disagreement between Mr Stokes and Tehran Embassy on supporting M. Sayyid Zia—difficulty of guiding BBC—further deterioration at Abadan—withdrawal of M. Sayyid Zia—the Persian cat pounces.

Chapter XIV British Appeal to the United Nations and Relinquishment of Abadan, September 25-October 4, 1951 1. The Prime Minister’s exchange with President Truman and the decisions of the British Cabinet, September 25-27 Mr Attlee’s appeal for American association with British representations against Persian expulsion order—President Truman suggests a further British offer to Persia—conflicting advice and legal opinions on use of force—Cabinet decision against use of force and for appeal to Security Council—proposals by Sir Hartley Shawcross for pressure on Persia—decision on evacuating AIOC staff deferred. 2. British appeal to the Security Council and decision to withdraw from

Abadan, September 27-October 1 Abadan refinery passes under Persian control—the Shah’s role— arguments against economic sanctions against Persia—Aga Khan’s letter to Dr Musaddiq—modified view of Attorney-General on using force—revision of ministerial decision for interception of tankers— American objections to British appeal to Security council—President Truman proposes substitution of Anglo-Dutch interests in Persia— British staff critical of naval evacuation—decision to evacuate complicates British recourse to Security Council—Foreign Secretary’s appeal to America—British discouragement of proposed message from Mr Truman to Dr Musaddiq—question of a modus vivendi—The Times’ criticism of British diplomacy—deferment at Security Council. 384

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3. The British relinquishment of Abadan, October 1-4 Confusion regarding evacuation plans—friction with AIOC staff— exchanges between Mr Churchill and Mr Morrison—the scene of the British evacuation—contrasting American and French attitudes—Mr Attlee’s criticism of American policy—Persian expulsion of His Majesty’s Consul-General in Khuzistan.

Chapter XV Aftermath and Recommencement, October 5, 1951-August 5, 1954

1. Repercussions in Egypt British offer to revise Anglo-Egyptian Treaty of 1936 rejected by Egypt in April 1951—Egyptian abrogation of the treaty and rejection of proposed Middle East command, October 15—firm British reaction—clashes in Canal Zone and Black Saturday in Cairo. 2. British failure at the Security Council and Anglo-American

Conversations in Paris Criticism of AIOC—failure in Security Council of diluted British resolution—Sir William Strang’s criticism of United Nations and conclusions on the Persian crisis—Mr Eden resumes office and forms new committees on Persia—Mr Eden’s important meeting of November 1—Persian economic weakness—British disagreement with American fear of Communism in Persia—Mr Eden suggests to Mr Acheson a consortium for Persian oil and British participation in Saudi Arabia—Mr Eden’s principles for negotiating with Persia, November 8—Mr John Kennedy suggests possibility of American replacement of AIOC.

3. Stalemate in Persia Persian expulsion of British consuls and rejection of Mr Hankey as successor to Sir Francis Shepherd, January 1952—failure of M. Qavam’s coup—The Hague Court disclaims jurisdiction in AngloPersian case, July 1952—Persian rejection of Truman-Churchill proposals and severance of relations with Great Britain—Mr R.A. Butler irresponsive to Mr Humphrey’s proposal for American oil syndicate in Persia—withdrawal of American support from Dr Musaddiq—General Zahedi becomes Prime Minister, August 1953. 4. Settlement of the Anglo-Persian oil dispute by the constitution of an international consortium Opposition to State Department proposals for American replacement of AIOC—Mr Hoover communicates Persian proposals for oil settlement—Anglo-Persian relations resumed, December 1953— formation of Consortium, April 1954—Sir Roger Stevens’ advice on negotiations—contribution of Dr Amini—the settlement, August 1954. 5. The Final Reckoning American gains from Anglo-Persian dispute—Russian quiescence— repercussions in Egypt—parliamentary criticism and defence of British 407

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evacuation of Canal zone (July 1954)—analyses of Mr Julian Amery and Mr Eden—British reverses and opportunities in an era of transition.

Chapter XVI Conclusions 1. Political Conclusions

2. Personal Conclusions 436

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3. Administrative Conclusions 447

A. The function of the Foreign Office in Whitehall. 448 B. The internal functioning of the Foreign Office. 449 C. Suggested gaps and improvements. 450