198. Telegram From the Embassy in Iran to the Department of State1

4252. 1. Regret delay reply Deptel 2549, April 2.2 Been hoping clarification Iranian internal situation would render possible give affirmative reply re both programs mentioned. Still difficult with future so murky make firm recommendations re advisability adoption village council program. Successful executive should contribute significantly future Iran. Spirit constructive cooperation necessary in rural communities if Iran have healthy economic life. Without special training type envisaged this program it would probably take generations before rural communities would acquire understanding necessary as basis for public spiritedness and free cooperation. Question is whether in present conditions which, in view economic situation, severity internal conflicts and stresses resulting from foreign pressures likely continue unsettled for some time, program this character closely identified as it is with Mosadeq’s political fortunes and requiring multiple contacts with explosive elements in town and village has sufficient chance success to warrant adoption. Recent trends cause me believe chances [Page 545] success not (repeat not) good and I see no (repeat no) immediate prospect just now (repeat now) reversal these trends.

2. I recommend adoption housing program which might with advantage be strengthened to absorb some of funds not (repeat not) used in village council program if decision made not (repeat not) adopt latter or reduce its scope.

3. Despatch going forward next pouch treating in more detail problems touched on herein and discussing in light recent developments certain other problems re aid. In this despatch conclusions drawn that (A) aside from difficulties of political and security character which any kind aid must encounter in deteriorating situation here, technical assistance not (repeat not) accompanied by economic assistance not (repeat not) likely achieve worthwhile results in country so economically arid as Iran; and (B) if Congress approves for Iran technical assistance programs say in neighborhood 10 million dollars for 1954 without adding at least twice as much for supporting economic aid, chances in Embassy’s opinion success such technical aid so slight consideration should be given withdrawal TCI entirely.3

4. I am showing this telegram Warne, Director TCI for whose judgment and courageous fighting spirit I have respect and have invited him comment on it either by telegram or despatch.4

  1. Source: National Archives, RG 59, Central Files 1950–1954, 788.00/4–3053. Secret. Received at 9:50 a.m.
  2. In telegram 2549 to Tehran, April 2, the Department asked the Embassy for “comments regarding probable political consequences of proceeding with implementation TCA support Mosadeq’s agrarian development and urban housing program.” (Ibid., 788.00/4–253)
  3. In despatch 895 from Tehran, May 1, Henderson wrote that the continuation of technical assistance was construed by Iranians as an indication of U.S. support in their oil dispute with the British. Hence, “the time may come in the not too distant future when conditions in Iran will have degenerated to such an extent that the continuance of the extension of limited amounts of technical and economic aid will no longer serve useful purposes; when the continuance of the extension of such aid might be more disadvantageous to the United States than its discontinuance. . . I do not believe that that time has as yet come. . . The Department should know however that the possibility exists that it may come.” (Ibid., 788.00/5–153)
  4. In telegram 4253 from Tehran, April 30, Warne defended the Village Council Project and advised against “any decision pull back piecemeal from our acknowledged objectives, as decision not (repeat not) go forward on Village Council Project this late date would seem start do.” (Ibid., 788.00/4–3053) The Department responded in telegram 2816, May 4, in which it instructed, “in view worldwide objectives TCA, Congressional interest land reform, and probable adverse reaction by Mosadeq should TCI withdraw this time from Project, go ahead with Village Council Project.” (Ibid.)