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

489. 1. I saw Shah again last evening at my request in order discuss various matters, particularly exchange of letters re financial, economic aid and Qashqai problem. Both these matters being discussed in separate telegrams.2 This telegram limited to exchanges which might be of interest to Department between Shah and myself on other subjects.

2. Shah again said he not happy re Cabinet. He thought it had not made very good impression. Changes might be necessary very soon. I said Cabinet not yet completed, if selections to fill vacancies should be wise it could be materially strengthened. Shah would be deluged with [Page 716]visits disgruntled politicians who will criticize new government’s policies. I hoped he would neither by word or gesture indicate to any of them lack of full confidence in his Prime Minister. All country, including Zahedi, must be given to feel latter has Shah’s complete support. Zahedi might be kind of man who could move with decision if he sure Shah back of him but who would become ineffectual if he not sure Shah’s support. Even if Zahedi should do certain things which Shah considered to be unwise, Shah should not be unduly critical. No two persons do things in exactly same way. Zahedi must not feel he must consult Shah re every detail. Shah agreed, said he would try to build up Zahedi. During course of day he had given him active army status, promoted him to Lt. Gen. and given him highest Iranian decoration. Zahedi had conducted himself during this crisis with courage and wisdom. As result his estimate Zahedi had risen. Nevertheless it must be clear to Zahedi and every one that no person or organization can come between Shah and Army. Energetic steps must be taken to strengthen solidarity Army and to display favoritism at this time would give rise to rifts. Only officers of highest character and proven loyalty and ability should hold high positions. Certain additional US military aid essential. He would discuss this another occasion.

3. Shah continued by stating internal programs should be formulated rapidly which would appeal to youth of country. Communism must be combatted (A) by mercilessly weeding out Communist leaders who had buried themselves in number of united front organizations (B) by instituting programs which would undercut Communist propaganda. Iran must move in direction socialism; more equitable distribution of wealth of country. I said it seemed to me slogan should be “Greater production accompanied by more equitable distribution.” Emphasis should be on greater production and equitable distribution should take second place. If slogan “More equitable distribution” given too much emphasis, certain groups might obtain impression quickest and easiest way improve their lots would be to take property from other persons rather than to work hard in order increase wealth. Emphasis on more equitable distribution rather than greater production would give rise to class warfare which could paralyze country and play into hands Communists. Shah again agreed but said effective measures must be taken without loss of time convince poor and needy Government looking after their interests. He hoped re-launch his campaign for distribution of crownlands on wide scale. He was wondering if Bank for Reconstruction which he had organized might not have been attempting to obtain loan immediately from EXIM Bank in order start building workers houses in Tehran and other large urban centers. If they could begin at once building cheap but healthy living quarters—say for 10,000 homeless families in Tehran, and a thousand or more in each of the other large Iranian cities—effect would be most salutary. [Page 717]Perhaps EXIM Bank could make loan to Reconstruction Bank without necessity approval Majlis. I said I not qualified discuss this problem. It might be Majlis would require some kind of government guarantee. Shah said such guarantee would probably require Majlis approval. He still thought Majlis should dissolve itself although Zahedi was of opinion it would be politically wise permit rump Majlis to function while he held elections to fill vacancies. He afraid any kind Majlis would be great handicap to Zahedi. I said it seemed to me some kind loans for Iran would be necessary if it was to receive substantial aid from US particularly in direction road building, etc. Shah said he hoped I would discuss this matter in some detail with Zahedi.

4. Said he understood I had seen Meftah acting Minister of Foreign Affairs during course of day. I replied in affirmative stating I had discussed with Meftah US position in UN re problem and under instructions from Washington had expressed hope US could have Iranian support. At Shah’s request I outlined US position (Depcirctel 102, August 20).3 Shah asked if US could not get enough votes to support its position without Iran taking sides. He did not wish do anything which might offend Nehru. I said US would particularly like support Asian power like Iran. Shah asked if any other Asian countries would take sides against India. I said I certain number would.

Shah said he anxious have friendship Nehru. He therefore contemplated calling in Indian Ambassador and suggesting latter send message to Nehru to effect that Shah was not espousing socialism against capitalism or capitalism against socialism. Shah favored mixed economy in Iran. I asked Shah if it his intention give Nehru impression Iran would support “third force.” I thought it would be unfortunate for Iran to encourage Nehru’s ambitions in this direction. So-called “third force” not force at all. Conception based on false premises that both free world and Communist world equally guilty and “third force” was not taking sides but was merely supporting whichever world happened to be right re some particular point. Shah said he considered “third force” idea as unsound and did not intend giving support to it. His purpose in message to Nehru would relate merely to Iranian internal problems. Iran would like an economy similar to that of Scandinavian countries. I told Shah I hoped Iran would play more clear cut role on side free world in UN. No desire that Iran should necessarily provoke Soviet Union. Nevertheless it unbecoming sovereign country like Iran not to support movement on success of which Iran’s future independence might hang merely because of desire not displease Soviet Union. Free world struggle to prevent Korea from becoming victim of aggression really struggle to prevent all countries contiguous of Soviet interna[Page 718]tional communism from becoming such victim. If as result vacillation and hesitation Korea should be lost to free world international communism would be encouraged to strike elsewhere. Shah did not reply.

5. Shah said he had difficulty knowing what be done with Mosadeq. Latter should really be tried for treason. Yet he feared trial might merely result in making former Prime Minister martyr. How could Government justify trial Army officers acting under Mosadeq’s orders without trying Mosadeq himself? Impression might be created Government afraid to try Mosadeq. He had been toying with idea permit Mosadeq go abroad for medical treatment. Europe however too close to Iran. Might be preferable let Mosadeq go to US if he would give undertaking to refrain in future from engaging in Iranian political activities. He asked my opinion. I said matter too complicated for me to venture off-hand advice. I thought however, that if Mosadeq should be brought to public trial he might be able with his histrionic ability to make it appear that his accusers rather than he were being tried.

6. Shah said he had received letter from Qavam asking that latter be permitted leave country for medical treatment. He in quandary because Parliament had passed bill of attainder against Qavam and he might be condemned for permitting Qavam leave country in such circumstances. I asked whether it might not be possible to permit Qavam go to Europe for medical treatment provided latter would give signed statement he would return to Iran on Shah’s request if he should subsequently be needed in connection with legal proceedings. Shah said he would look into this possibility.

  1. Source: National Archives, RG 59, Central Files 1950–1954, 788.00/8–2653. Top Secret; Security Information. Received at 11:22 a.m.
  2. Not found.
  3. Not found.