360. Letter From the Ambassador to Iran (Henderson) to the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Byroade)1

Dear Hank:

Yesterday morning I dictated a telegram summarizing some of the comments made to me by the Shah during our conversation of January 14 with regard to Iran’s need for additional American aid. When I saw the rough draft of this telegram I decided not to send it as a telegram but rather to forward it as an enclosure to this personal letter to you.

I am sending this summary of conversation in this informal fashion because I was afraid that if I sent it as a telegram it might make too great an impression upon the Department of State and other interested Departments. Although the Shah plays a great role in Iran it did not seem to me quite fair to Iran to disseminate throughout the Department and other agencies of the Government statements disadvantageous to Iran made by the Shah in one of his petulant moods.

During our conversation the Shah displayed considerable venom as far as Zahedi was concerned. He accused the ailing Prime Minister not only of bungling the elections but of taking a complacent attitude with respect to corruption. He said that up to this time Amini, the Minister of Finance, had not been guilty of corrupt practices but that he was now convinced that Amini, as well as Panahy, who is at present in charge of the Plan Organization, and Radji, Panahy’s Deputy, were out to make as much money for themselves as possible.

He then launched a vigorous attack upon Wright, the British Chargé d’Affaires. He said, “I do not know why the British should have sent as Chargé d’Affaires a person who is no diplomat. Wright has had no political experience. He seems to have been some kind of an economist.” The Shah further indicated that he expected to have nothing whatsoever to do with Wright. When I defended Wright His Majesty showed signs of temper and said it was not necessary for him to have relations with a mere Chargé d’Affaires. He is of course annoyed with Wright because he sent Perron, behind the back of the Prime Minister and the Foreign Minister, to Wright for purposes of intrigue. Wright discussed the matter with the Foreign Minister who took it up with the Prime Minister, who, in turn, took it up with the Shah. I personally think Wright has done a noble job in this respect, but it would seem that for a time at least he has incurred the vindictive hostility of the Shah.

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Since the pouch is going out in a few moments I will not have time to elaborate in more detail in this letter regarding my conversation with His Majesty. I believe I have written enough, however, to let you know that His Majesty is not easy to deal with these days. On the other hand this bad humor might be merely a reflection of internal troubles. [Page 903] During our conversation reference was made to domestic troubles of Amini whose wife the Shah told me with relish had been behaving badly in Europe. When I remarked that I thought Amini had been doing extremely well in the circumstances the Shah stated with emphasis that “no one could be having more family trouble than I encounter constantly”. I understand that among the members of his family who are causing the Shah worry are not only his Mother but the Empress herself.

I hope that the Shah’s outburst, as set forth in the enclosure, will not cause anyone in the Department who sees it from considering Iran’s need for further aid on any other than an unprejudiced sympathetic basis.

With warmest regards, I am
Loy W. Henderson 2

P.S. I am sending a copy of this to Evan Wilson in London. It is extremely important that the contents of this letter, particularly those portions relating to Wright, not be brought to the attention of the British Government.


Memorandum of Conversation


  • His Majesty the Shah of Iran
  • Loy W. Henderson, American Ambassador

At my request the Shah granted me an audience yesterday at the beginning of which I presented him with a copy of Persepolis, as a gift of the Oriental Institute of Chicago University.

During our conversation subsequent to the presentation the Shah asked me again what the U.S. was planning to do for Iran, what kind of report re economic and military aid had Vice President Nixon made to the National Security Council, etc.3 The Shah, who appeared to be in a petulant humor, commenced to complain re the state of the Iranian budget. The available funds even with American emergency aid were not sufficient to meet the urgent economic and security needs of the country. What would happen after several months when emergency aid was exhausted he did not know unless the U.S. could find some way to supplement emergency aid at least until conclusion of the oil agreement. Eden had expressed in a recent speech the hope that the oil agreement would be achieved during the year 1954. That did not indicate expectation on the part of the British for an early agreement. Even if an early agreement could be obtained he could not believe that the agreement or the oil flowing from it would provide Iran with adequate budgetary funds for some time to come. Iran furthermore needed more than budgetary funds. It must after the empty promises of many years begin to do something concrete in the direction of economic development. If not, a disillusioned population might be easy prey for communism.

Stressing the needs of the Army the Shah said the Army budget was so limited that it was not even able to transfer military stores from one place to another. The funds available are barely sufficient to pay salary, allowances, quarters, etc. There was nothing left for operations. I remarked that perhaps with more expert management the Army could within the framework of the present budget take care of elementary operational needs. General McClure in describing to me earlier in the day a recent conversation which he had had with General Batmanqilich, said Batmanqilich had declared solemnly to him that the Army did not even possess personnel to distribute clothing and blankets which the U.S. Government was giving to it. I said that a statement of this kind on the part of the Chief of Staff was shocking to both General McClure and myself. It seemed to us to denote lack of resourcefulness and organizational ability. Shah said somewhat apologetically that he was sure General Batmanqilich had made this statement merely in order to impress General McClure with their military needs. Batmanqilich would, of course, find means of distributing this material. He had [Page 904] been talking with General Batmanqilich a few moments before he received me. General Batmanqilich, known for his administrative and organizational ability, was a loyal, honest, and capable military leader. If he was experiencing difficulties under the present budget, no successor was likely to be found who would not. Even without re-organization the Army should have 10,000 more men, particularly non-commissioned and junior officers to make it efficient. Re-organization which would give the Army defensive capabilities would require 15,000 more men. Needs therefore for a re-organized Army were for 25,000 men in addition to the 125,000 already in uniform. This required budgetary funds and no such funds were as yet in sight.

Turning to civilian needs the Shah asked if there was not something I could tell him re U.S. plans. Did Secretary Dulles’ speech on December 12 indicate a radical change in U.S. policy?4 Was the U.S. planning to call home its troops and turn the defense of the world against aggression over to the United Nations? Had the U.S. Government decided to refrain from giving further economic aid to Iran at this time when Iran was in such need? The U.S. had helped Turkey and Greece to get started in their economic development; was he to understand that at the moment when Iran was in a position to use such aid, and was urgently in need of it, the U.S. had decided to extend no more aid of a financial and economic development character? If Iran was not to receive any additional aid, the Government should know at once so decisions could be made as to what, if anything, could be done.

I told the Shah that we had endeavored to make it clear when the $45 million aid was granted that the grant was on the basis of emergency; that it would be difficult to find additional funds for Iran’s budgetary use; that it had not been easy to obtain funds wherewith to give this emergency aid and that no additional funds were in sight. The U.S. Government had, of course, hoped that by the time the emergency funds had been exhausted there would be an oil agreement which together with fresh funds obtained by Iran locally would take care of Iran’s most urgent needs. Shah interrupted to say that Iran was not entirely to blame for delay in achievement of an oil agreement. I replied that it was true that the present Iranian Government could not be entirely to blame for this delay but that I was sure His Majesty would agree with me that Iran as a country had primarily itself to blame for a situation in which it now found itself. In fact, the U.S. Government had spent many millions of dollars in order to help Iran out of a predicament in which it had put itself. The Shah asked if he was to understand that the U.S. did not intend to give Iran any additional financial aid re [Page 905] gardless of delays in achieving an oil agreement. I told him that I was not in a position at this time to state what the U.S. might or might not do. The Shah asked if he was to understand also that in the event an oil agreement would be achieved the U.S. would consider it unnecessary to give Iran financial or economic aid? I told the Shah that I was not in a position to state at this time what the U.S. Government might or might not do in circumstances which could not be foreseen. I knew the U.S. Government hoped that Iran with funds obtained as the result of an oil agreement could meet its budgetary needs and have a surplus for use in economic development. The U.S. Government had in the past come to Iran’s aid in time of great stress and I was sure that the U.S. Government would not permit Iran to collapse financially or economically if it should be convinced that Iran, although doing its utmost to make the best use of its own human and natural resources, needed U.S. aid for its survival. I was not, however, making any promises and I did not believe the U.S. Government was in a position to make any promises at this time.

Reverting to Secretary Dulles’ speech I said that if the Shah had read it carefully it should have given him encouragement. It indicated that the U.S. was determined to hold the initiative in its struggle to avert international communist aggression. It further indicated that although the U.S. was willing to come to an understanding with the Soviet Union it was not prepared to do so on the basis of division of the world into spheres of influence or of sacrifice of interests of other countries. In my opinion, the speech showed more rather than less determination to oppose international communist aggression. I then discussed certain aspects of the speech in some detail.

The Shah then reverted to a discussion of certain Iranian domestic problems which were treated in a telegram.

  1. Source: National Archives, RG 59, Central Files 1950–1954, 888.00–TA/1–1654. Secret.
  2. Henderson signed “Loy” above his typed signature, and initialed below the postscript.
  3. Vice President Nixon met with the Shah on December 11, 1953, in Tehran. Telegram 1341 from Tehran, December 17, reported that the Shah had reiterated to the Vice President his desire that a decision soon be made regarding “whether Iranian Army was to be organized, equipped and trained to defend Iran in case of external attack from any direction, or army was to be used merely for maintaining internal security.” For telegram 1341, see Foreign Relations, 1952–1954, vol. X, Iran, 1951–1954, pp. 850–852 (Document 396). The Vice President reported to the NSC on his trip to the Far East, South Asia, and Iran on December 23, 1953; see ibid., pp. 854–855 (Document 398).
  4. Assistant Secretary Byroade, not Secretary Dulles, delivered a speech on Iran on December 12; see Department of State Bulletin, December 28, 1953, pp. 894–896.