298. Memorandum From the Chief of the Iran Branch, Near East and Africa Division, Directorate of Plans (Waller) to the Deputy Director for Plans, Central Intelligence Agency (Wisner)1

1. Attached hereto is the draft of a cable prepared by Mr. Jernegan of State on the basis of suggestions made by you.

2. It has not been sent, however, since Messrs. Byroade, Matthews and Berry of State were in agreement that such an approach to Zahedi at this time would be unwise. Specifically, their reasoning was as follows:

A. State would possibly find itself in a difficult position if Zahedi actually concluded economic agreements with the USSR. Such agreements might, amongst other things, prejudice U.S. aid. If Zahedi were to construe U.S. remarks per attached cable draft as encouragement to continue negotiations, it would be difficult later to bring pressure to bear causing Zahedi to abandon undesirable economic ties with the USSR.

B. The Department of State would risk adverse U.S. criticism if the attached cable draft should leak from Persian government sources and be quoted out of context. Zahedi could, in fact, use it as an excuse for later démarches with the USSR which would be unacceptable to the U.S.

C. Inexperienced as he is, Zahedi may find himself out-manoeuvered and out-foxed by the Soviets in ensuing negotiations. This could be to the detriment of U.S. interests.

3. If you still feel that the attached cable draft or a communication similar to it should be sent, it is suggested that you discuss the matter with Mr. Matthews.2

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In your discretion, if it seems appropriate, you may indicate to Zahedi that it might be advisable for him to continue negotiations with Soviets or at least not make first move to break them off. Such an attitude would be in line nationalist policies expected of Zahedi and would, if Soviets refuse pay gold or make concessions, be another black mark against Russians in Iran. However, Zahedi should not obtain impression American public would be unconcerned if his Govt made any considerable concessions to Soviets.

  1. Source: Central Intelligence Agency, DDO Files, Job 79–01228A, Box 11, Folder 14, Iran 1951–1953. Secret.
  2. At the end of the memorandum is a handwritten note that reads: “While I originally shared reason #A, the possibilities of the Russians rising to the bait was remote; and even if they did we could avoid the fish (barracude, that is), swallowing angler Zahedi for the same reason we could avoid Z from falling in the river (see reason C). As to reason B, maybe we shouldn’t have started Ajax, and simply stayed in bed to avoid ‘risk adverse U.S. criticism.’ (Reason B)”