SOLUTION ON IRAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01041A000100020058-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 9, 2016
• Document Release Date: February 16, 1999
• Sequence Number: 58
• Publication Date: November 28, 1952
• Content Type: MF

Approved For Release 2000/09/12 :CIA-RDP79-01041A00010Q~~0~05~~~=II`
Security Inform=tion
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MET~OI~A,N)7UNI ~,Oh ~~~L SMITH
SUBJECT: Solution ~.n Iran
28 November 1952
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I. Facts - 4i1 must move and soon; oti7erwise Nlossadeg is
likely to ma~T, e decisions that wi11 place the situation beyond
recall.
25X6A
er oil or hard currency
25X6 Amount involved does not exceed. ~~OO,Q00,000.
Cost to U. S. if Iran falls to Commies is 3-6 billion
at a minimum 25X1 X
II. Solution - Create a U. 8. corporation to purchase oil
from NIOC and to run fields and refineries to extent Iran, re-
quests.
Corporation issues its common stock to selected parti-
cipating U. S. oil companies in exchange for their stock. Amount
of this to be equal to the value of an exclusive right for 5-10
years to deal in Iranian oil.
Corporation issues a special stock or a subordinated
note to the It, S. Government in return for cash equal to minimum
settlement Britain would accept for expropriated properties.
Corporation then turns over the participating ail com-
panies' stook and cash to the Anglo-Iranian company in payment
for an absolute assignment of all -the latters' right, title and
interest in Iran, including claims against the Government and the
NIO C.
25X6A
Security tnfornatian ills. It separated from fhe Si6e (t mast !Is
Approved For Release 2000/09/12 :CIA-RDP79g'~'1~~194t'I~d~'2tl"I~58~1w
 Approved For Release 2000/09/12 :CIA-RDP79-01041A000100020058-0
5ECRE '~-
Security Information
..III. results - Anglo-Iranian b ecames in effect a holding
company of American oil shares augmenting holdings by cash pur-
chases on open market if it so desires, Thus it would became a
solid asset and a good income producer for Britain.
An American organization handles the transport and
marketing of Iranian oil, driving the best bargain it can with
Niossadeq, but at 7_east starting the flow promptly. An American
private concern - backed as necessary by the State Department -
then proceeds to negotiate and/or artibrate the compensation for
the expropriated properties. This should be done without the
25X6A bitterness and suspicion that has primarily prevented any reason-
able agreement
American private initiative is enlisted to re-introduce
Iranian oil and products into world markets in the most orderly
fashion. They are asked to risk little and whatever risk they do
.take is pretty well minimized by tax deductions against excess
profits taxes.
jT. S. Government's initial cost might be several hun-
dred million but this would be reduced by whatever Iran agrees
to pay whether in oil or otherwise. Its ultimate net cost would
be ridiculously cheap compared to, the- cost to t}.ie national security Uy
loss of Iran.
Chief merit of the solution is its relative simplicity
and the speed with which the immediately important aspects of the
problem can be handled without being tied to the knotty problem of
calculating and ad~ust~.ng compensation.
ROR~?,T AM~JRY, JR.
Acting :Ceputy Director/Tntellzg
~~: ~..
Secari#y tr;,_
Approved For Release 2000/09/12 :CIA-RDP79-01041A000100020058-0