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208. Despatch From the Embassy in Iran to the Department of State1

No. 982

SUBJECT

  • Informal Outline of General Zahedi’s Proposed Program for Iran

I have the honor to transmit a copy of a communication received May 19 from a responsible Iranian who had seen General Zahedi and who, after talking with him, outlined at the request of the General a tentative program which he would try to follow in the event he became Prime Minister.

It may be noted that General Zahedi proposes to take a strong stand toward the communists and to restore order in the country, after which he would turn to economic and social reforms that presumably would require substantial economic and financial aid from abroad.

The General has a tentative suggestion upon the oil problem. He also believes that it will be necessary for the United States Government to intervene in Iranian affairs, asserting that it is impossible for Iranians to remove the present Government by their own efforts. Lastly, the General expresses willingness to collaborate with any other Iranian who as Prime Minister can successfully implement the program he has described.

Loy W. Henderson

Ambassador

[Page 571]

Attachment

Excellency:

General Zahedi asked me to meet him yesterday evening in the Parliament Buildings.

He wanted me to deliver to Your Excellency a message stating what would be his policy if and when he comes to power.

1. His first and most immediate order will be to restore order, discipline and security. From the first day, he will crush the Tudeh and puppet communist organizations. He feels sure that after three months, there will be no Tudeh in the streets of cities in Iran and as there are no communists in the country (this means among the peasantry) the present confused position will come to an end. Most of it comes from Government presently encouraging and intriguing with the communists.

2. Once the order restored and the communists completely crushed, he will turn to economic and social reforms as follows:

a. Increase in agricultural production by small loans to peasants (up to 5,000 rials per head); increase in the purchase price of wheat and barley by bringing those in line with world prices (present internal prices are 1/3 of world prices) by Government purchases and sale of Iranian cereals to such countries as Pakistan, India, Japan, which are in need of same.

This would increase the purchasing power of the peasantry which represents 80% of the population of Iran.

b. Equalization of wealth, by imposing higher taxes on luxury goods and property.

c. Land reform and improvement of bad or waterless lands.

d. Quick and massive program of public works—this will need financial help from World Bank, Export-Import Bank or better U.S. Government.

3. The oil problem will be solved by an international committee of three Iranian members, three British, and two neutrals, one of which will be chairman of the committee. The decision of such committee will be approved by Parliament of Iran.

4. He will begin on the first day a ceaseless fight against bribery by appointing Cabinet members well known for their integrity and a thorough purge of bad public officers. Position of present Government—he says that deputies are prepared to sign a non-confidence motion bearing signatures of half plus one of the deputies; this may be done at any moment now. Deputies are afraid Shah will not act on this motion without strong pressure by U.S. and British. He feels that sooner or [Page 572]later America will have to take action with Shah because Iranians cannot save themselves. As the present position has arisen as a result of foreign interference, it is impossible for Iranians to oust the present Government by themselves.

The sooner this action is taken, the easier it will be to restore order and start re-establishing the economic and social position. General Zahedi adds that in case the U.S. Government does not trust him for carrying out this program, he is ready to support and collaborate with any other person who can carry out with success these reforms and abandon his efforts to become Prime Minister in favor of the former.

  1. Source: National Archives, RG 59, Central Files 1950–1954, 788.00/5–2053. Top Secret; Security Information. Received May 27. Drafted by Melbourne.