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[Page 51]

12. Memorandum From the Deputy Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Berry) to Secretary of State Acheson 1

SUBJECT

  • The Iranian Situation

With reference to my memorandum of March 142 outlining the Iranian situation, there follows a summary of more recent developments:

The high state of tension that developed as a result of Razmara’s assassination has continued. A few days after this murder, the former Minister of Education in Razmara’s Government was shot and later died, and rumors spread regarding further assassinations. Martial law in Tehran was declared by the Shah on March 20 for a period of two months and Parliament adjourned for the Iranian New Year holidays. More recently, plots were reportedly uncovered involving planned attempts on the lives of the Shah, Prime Minister Ala and other offi-cials who were suspected of having moderate views regarding nationalization.

A succession of strikes broke out last week in Abadan and nearby oilfields, the original cause being a reduction by AIOC of living allowances for its workers. These strikes, which initially involved only a few employees, quickly expanded as a result of agitation by members of the illegal Communist Tudeh Party, posing as members of the National Front group which spearheaded the popular move for nationalization. (The National Front has not yet publicly disassociated itself from the fanatical religious brotherhood, Fedayan Islam, members of which assassinated Razmara and his Minister of Education.) The strike now involves between twelve and fifteen thousand employees, whose demands upon the company have reportedly increased to substantial proportions. The Shah has declared martial law in the military district which includes Abadan and the southern oilfields. We have learned of no immediate prospects of settlement.

Prime Minister Ala, in view of the seriousness of the situation, convened an emergency session of Parliament on April 2 but, in the absence of a quorum, the Parliament was compelled to adjourn. Mean[Page 52]while, Ala’s position is somewhat tenuous, as he has not yet received the customary vote of confidence and there is some question as to the legality of the declaration of martial law in the absence of a properly installed Government. There has, however, been no suggestion that martial law will not be continued.

Although the situation is potentially dangerous, disorders have not yet developed in the AIOC strike areas and the situation elsewhere is outwardly calm. (In Isfahan there were minor disturbances involved in a small-scale strike of textile workers.) Iranian security forces are considered presently able to maintain order. In view of the currently critical internal financial position of the Government, however, Army personnel (as well as civil servants) have in some cases gone for many months without payment and the possible consequences of a continuation of this situation cannot be overlooked.

In this tense atmosphere, and in light of the Iranian clamor for nationalization, it is felt that any precipitous action on the part of the British would bring about a very dangerous situation. We therefore requested the British to take no important steps without consulting us, and the Foreign Office agreed. In light, however, of the AIOC decision to reduce allowances at this critical juncture and the subsequent report that elements of the British fleet had been sent to Abadan, the matter was again pursued with the Foreign Office in London. We were told that the Foreign Office did not know in advance of the reduction in allowances, which was pursuant to an administrative arrangement made much earlier between the oil company and its workers, and that the press reports concerning naval movements were grossly exaggerated. Elements of the fleet are in fact in the Persian Gulf area “on normal duty” but have not been dispatched to Abadan. Two sloops, regularly assigned to the Persian Gulf, are understood to be at Bahrein. A cruiser is at Aden. In this connection, the British have again assured us that they will inform us before taking any important steps, but they reserve the right in an emergency to take appropriate measures to protect the lives and property of British citizens.3

Of great concern to us is the position of the British Government. There have been indications that it is considering a “strong” course in Iran which, in our view, would be extremely dangerous. Mr. McGhee is [Page 53]now consulting with British officials in London, and it is hoped that they will divulge their plan to him. Also, it is expected that conversations with a British delegation headed by Ambassador Franks will begin in Washington on April 9. It is hoped that these discussions will provide the basis for agreement between the United States and the United Kingdom as to an appropriate course in Iran, including plans for a possible settlement of the AIOC dispute on a basis which would take into account the Iranian demand for nationalization and would protect the legitimate interests of both parties.4

Regarding special United States measures in the present crisis, we are endeavoring to implement as rapidly as possible the various segments of existing aid programs, although it is generally felt that these cannot to a great extent be successful in quickly providing a significant impact upon Iranian public opinion. We are, therefore, considering extraordinary measures and have also asked for Ambassador Grady’s urgent views concerning the most effective utilization of special funds which might be obtained for this purpose.5

The Department and CIA are formulating for immediate execution a special program involving covert action in several fields, and experienced officers from both agencies are shortly departing for Tehran to help carry out this phase.

  1. Source: National Archives, RG 59, Central Files 1950–1954, 788.00/4–351. Top Secret. Drafted by Gray and Rountree.
  2. For the text of this memorandum, explaining the implications of Razmara’s assassination for the escalating Anglo-Iranian oil dispute, see Foreign Relations, 1952–1954, vol. X, Iran, 1951–1954, pp. 9–11 (Document 5).
  3. Telegram 5006 from London, March 20, reported that the Foreign Office assured Ambassador Gifford of its willingness to consult with the U.S. “prior substantive action.” In telegram 5142 from Tehran, March 30, however, Gifford reported that “ultimate action, if Brit lives endangered by threatened seizure oil properties wld probably be to move Brit troops to Basra and take other mil precautions. FonOff recognizes risk in any display of force and wld probably sanction it only as last resort. It is significant however that FonOff does not discount possibility force may be necessary.” Both telegrams are in National Archives, RG 59, Central Files 1950–1954, 888.2553/3–2051.
  4. For documentation on discussions with British Ambassador Franks on the issue of Iran, which took place on April 17 and 18, see Foreign Relations, 1952–1954, vol. X, Iran, 1951–1954, pp. 30–42 (Documents 12 and 13).
  5. Telegram 1698 to Tehran, March 28; ibid., pp. 28–30 (Document 11). Grady’s reply is in telegram 2302 from Tehran, April 6; see ibid., footnote 6, p. 30 (Document 11).