Mr. Churchill and I and our colleagues in Her Majesty’s Government are disappointed to see from your message that our latest proposals for a settlement of the oil dispute should have been misunderstood in so many ways. The fears which you express are without foundation. The proposals in no way fail to recognise the fact of Iran’s nationalisation of her oil industry or seek to revive the 1933 Concession. There was no suggestion that there should be foreign management of the oil industry, still less was this put forward as a condition. We did not contemplate a monopoly of purchase of oil.

The proposals suggested an equitable method, not necessarily the only method, of settling all claims and counter-claims of both sides by impartial adjudication. We said nothing about the price of oil because that falls to be discussed between seller and purchaser and not between governments.

I am sending you this message in order that whether or not you accept the proposals you and your countrymen may know exactly what we had in mind.