THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTVS GOVERNMENT Printed for the Cabinet.. July 1951 SECRET Copy No. ^ CM. (51) 51st Conclusions CABINET 51 (51) CONCLUSIONS of a Meeting of the Cabinet held at 10. Downing Street, S.W. 1, on Thursday, 12th July, 1951, at 11 a.m. Present: The Right Hon. C. R. ATTLEE, M.P., Prime Minister (in the Chair). The Right Hon. HERBERT MORRISON, The Right Hon. HUGH DALTON, M.P., M.P., Secretary of State for Foreign Minister of Local Government and Affairs. Planning. The Right Hon. VISCOUNT ALEXANDER The Right Hon. VISCOUNT JOWITT, OF HILLSBOROUGH, Chancellor of the Lord Chancellor. Duchy of Lancaster. The Right Hon. J. CHUTER EDE, M.P., The Right Hon. E. SHINWELL, M.P., Secretary of State for the Home Minister of Defence. Department. The Right Hon. T. WILLIAMS, M.P., The Right Hon. GEORGE TOMLINSON, Minister of Agriculture and Fisheries. M.P., Minister of Education. The Right Hon. JAMES GRIFFITHS, M.P., The Right Hon. P. C. GORDON WALKER, Secretary of State for the Colonies. M.P., Secretary of State for Common­ wealth Relations. The Right Hon. Sir HARTLEY SHAW- The Right Hon. ALFRED ROBENS, M.P., CROSS, K.C., M.P., President of the Minister of Labour and National Board of Trade. Service. The Right Hon. RICHARD STOKES, M.P., Lord Privy Seal. The following were also present: The Right Hon. P. J. NOEL-BAKER, M.P., The Right Hon. Sir FRANK SOSKICE, Minister of Fuel and Power (Item 2). K.C., M.P., Attorney-General (Items 2-4). The Right Hon. JOHN WHEATLEY, K.C., Mr. THOMAS FRASER, M.P., Parlia- M.P., Lord Advocate (Item 4). mentary Under-Secretary of State for Scotland (Item 4). The Right Hon. WILLIAM WHTTELEY, Sir EDWARD BRIDGES, Treasury (Item 2). M.P., Parliamentary Secretary, Treasury (Items 1 and 3). Secretariat : Sir NORMAN BROOK. Lieut.-General Sir KENNETH MCLEAN. Mr. A. JOHNSTON. Mr. O. C. MORLAND. CABINET 51 (51) CONTENTS Minute No. Subject Page 1 Parliament 145 Business in the House of Commons. Persia. 2 Persia 145 Evacuation of A.I.O.C. Staff. Military Action. Negotiations with the Persian Government. Statement by the Foreign Secretary. Economic Measures. 3 Bechuanaland Protectorate ... - 148 Tshekedi Khama. 4 Tied Cottages ... ... 148 Parliament. 1. The Cabinet were informed of the business to be taken in Business in the House of Commons in the following week, the House of Commons. Persia. It was agreed that, if a debate on the Persian situation were held on 17th July, the Government spokesmen should be the Prime Minister and the Foreign Secretary. If, however, the circumstances were then such that a full Parliamentary discussion might prejudice the situation, the Opposition might be persuaded to agree that the debate should be postponed. The Cabinet also considered what arrangements should be made to enable the House of Commons to discuss foreign affairs and economic questions during the week beginning 23rd July. They agreed that it would be preferable if a three-day debate could be held from 23rd-25th July, in which the House would be free to hold a wide­ ranging discussion on the international situation, the need for rearmament and the impact of rearmament on the national economy. In that event the Foreign Secretary might speak on the first day, the Chancellor of the Exchequer on the second and the Prime Minister on the third. The Cabinet invited the Home Secretary and the Chief Whip to seek to persuade the leaders of the Opposition to accept such an arrangement. Persia. 2. The Cabinet had before them a memorandum by the Foreign (Previous Secretary (CP. (51) 200) on the situation in Persia. This discussed Reference: the question of military intervention in Persia for the purpose of CM . (51) 50th protecting British property, as distinct from British lives, and reached Conclusions, the conclusion that military intervention for the former purpose would Minute 2.) be undesirable. It also recommended (i) that we should announce a phased withdrawal of the staff of the Anglo-Iranian Oil Company (A.I.O.C.) from the oil-fields and from Abadan, (ii) that the International Court should be informed of this decision, (iii) that the dispute should be referred to the Security Council, and (iv) that we should inform the United States Government of the steps we were taking and seek their support in the Security Council. The Foreign Secretary said that, since this memorandum was prepared, the situation had again been changed by the Persian Prime Ministers acceptance of President ,Truman's offer to send Mr. Harriman to Tehran for discussions. The United States Government, who had been informed of the. general lines of the proposals in the memorandum, had suggested that in these circum­ stances reference to the Security Council would be premature. The Foreign Secretary said that he accepted that view: action on the recommendations made in his memorandum must at least be post­ poned until the effects of Mr. Harriman's mission could be judged. He hoped that Mr. Harriman would not seek to act as a mediator between the two parties to the dispute; and he intended to urge Mr. Harriman to impress upon the Persian Government their duty to conform with the interim ruling of the International Court as an essential basis for a settlement of the dispute. Evacuation The Foreign Secretary said that he had not yet received the views of A.I.O.C. of the United States Government on the proposal to announce a Staff. phased withdrawal of A.I.O.C. staff. Both the Company and His Majesty's Ambassador in Tehran were strongly in favour of adopting this course as the best method of demonstrating to the Persians our determination not to yield to their demands. Moreover, some with­ drawals were already taking place, and an early statement was needed to prevent these from being regarded as a sign of weakness. He had now been convinced that this was the right course; but, in view of Mr. Harriman's mission, he suggested that any announcement should now be delayed for a few days. ' In discussion some Ministers expressed the view that evacuation was bound to be interpreted as a sign of weakness, and that the Company ought to hold on, at least at Abadan, as long as possible. Evacuation would be regarded throughout the Middle East, as well as in the United States and in this country, as a capitulation to Persian pressure, and it was unlikely that the Company would be able to return once they had left. The Australian Government had for these reasons urged great caution in reaching a decision to withdraw. On the other hand, it was pointed out that withdrawal, from the oilfields at least, could not be deferred much longer, and that it must be represented as an act of deliberate policy when it took place. The Cabinet— (1) Agreed that, in view of Mr. Harriman's forthcoming discussions with the Persian Government, no announce­ ment should be made for the time being regarding a phased withdrawal of A.I.O.C. staff from Persia. Military In discussing the possibility of military intervention in Persia, Action. the Cabinet were reminded that they had at one stage asked the Chiefs of Staff to consider the military implications of seizing Abadan and holding it, if necessary against Persian opposition, for the purpose of refining there crude oil brought from Kuwait. The Cabinet were, however, impressed by the arguments developed in paragraphs 2-3 of. CP. (51) 200 against the use of force for the protection of British property, as distinct from British lives. They agreed that military action in excess of that required for the protection of British lives should not be contemplated unless there were some far-reaching change in the" general situation, such as the fall of the present Government and the establishment of a-Communist regime in Persia. The Cabinet— (2) Agreed that military action in Persia, on a larger scale than that necessary for the protection of British lives, should not be contemplated unless there were some fundamental change in the general situation there. Negotiations The Prime Minister said that Dr. Mussadiq had been able to with the form his Government owing to the support of Persians who were Persian dissatisfied with former rule by a corrupt clique. We could not Government. safely assume that if we succeeded in upsetting the present Govern­ ment their successors would be less unsatisfactory, and we should risk identifying ourselves with support of an equally undemocratic regime. If negotiations could be resumed it would be wise to stress, not only our acceptance of the principle of nationalisation, but also our willingness to operate the oil industry, on behalf of the Persian Government, on a basis of friendly partnership: we must not alienate genuine nationalist feeling in Persia by clinging to the old technique of obtaining concessions and insisting upon exact compliance with their terms. In discussion attention was drawn to the need for considering how far we should be willing to go to enable the Persian Government to avoid making concessions which they regarded as humiliating. We had no legal right to interfere with Persian expropriation and operation of their oil industry but we had the right to require com­ pensation for the A.I.O.C., and the Persian Government could only pay this if the industry was profitably operated. Mr. Harriman might be able to impress this point upon the Persian Prime Minister, and it might also be desirable to make it clear to the United States Government that we should not insist on the withdrawal of the nationalisation law if amendment could make it workable.