Foreign Relations of the United States, 1950, The Near East, South Asia, and Africa, Volume V

396.1–L0/5–1550: Telegram

The Acting Secretary of State to the Embassy in the United Kingdom ¹

secret

Washington, May 22, 1950—7 p. m.

2463. Secto 276 May 16. While Tehran’s views not yet reed, Dept has given careful consideration points raised by Brit Del re Iran situation. Fol for use further discussion UK Reps:

1. Contemplated US Mission will be far broader in scope than mere survey mission and it is our intention it remain in Iran for as long as may be necessary to relieve present critical situation. It will have responsibility for recommending projects to be financed by Eximbank, for observing expenditure of funds loaned and for recommending to IranGovt measures it cld take on its own to improve situation.

2. Dept’s proposed expanded informational program contemplates as one of its basic objectives giving to broad segments of Iran people confidence in their future and in ability their Govt to offer them life better than they cld enjoy under Communism. It is not intended as mere propaganda campaign and Dept confidently hopes it can have beneficial effect on Iran morale.

3. We feel any pressure by us on IranGovt to ratify AIOC agreement, or effort to bind aid program to AIOC agreement which we consider normal business arrangement, not “aid” to Iran, wld be most undesirable for polit if for no other reasons. US Govt has consistently taken position when pressed by Irans for intervention AIOC dispute was UK-Iran matter not subj to fon intervention. We have made our views known to Brit alone in complete frankness only as part of our gen analysis serious Iran situation and in spirit of closest US-UK cooperation. To reverse our position by interceding with IranGovt and putting pressure on Irans at this time to ratify agreement which we are not prepared to endorse eld, in Dept’s opinion, jeopardize chances success Iran program.

4. Dept further believes binding aid program to AIOC concession agreement wld in view latters admitted unpopularity in Iran start program off on wrong foot and reduce substantially any chance of inducing Irans to effect reforms both we and Brit desire. Also time factor seems to preclude such a step. Opinion both here and in UK is that something must be done now and from all info available to Dept it seems certain it will be at least several months before AIOC agreement ratified.

5. Dept intends using possible fin assistance as lever to obtain essential reforms and it will be made quite clear to Irans that in return for US assistance they will be expected take measures help themselves and that individual loans may possibly be held up if essential measures are not taken. Our feeling is it wld be best confine original public statement in this connection to gen pledge by Irans when they request mission that IranGovt will stand ready take action on Mission’s recommendations. Dept does not contemplate in original approach to Irans promising any sort of finan assistance; they will be told only that Mission will go to Iran, survey situation and make recommendations as to what, if any, action US Govt shld take to meet critical situation. Tying question of finan assistance to reform at outset wld for this reason seem unwise. We believe it better for such reforms as may be necessary to be result advice from competent outside experts rather than some quixotic Iran scheme which wld have little more chance success than Shah’s abortive “Holy War” against corruption.

Webb

1. Repeated to Tehran.