Foreign Relations of the United States, 1952-1954, Iran, 1951–1954, Second Edition

144. Draft Paper Prepared in the Central Intelligence Agency¹

Washington, November 14, 1952.

CIA Proposed Re-wording, Paragraphs 2–3 of NSC 136 Draft
of 6 November 1952

2. Present trends in Iran are unfavorable to the maintenance of control by a non-communist regime for an extended period of time. In wresting the political initiative from the Shah, the landlords, and other traditional holders of power, the National Front politicians now in power have at least temporarily eliminated every alternative to their own rule except the Communist Tudeh Party. However, the ability of the National Front to maintain control of the situation indefinitely is uncertain. The political upheaval which brought the nationalists to power has heightened popular desire for promised economic and social betterment and has increased social unrest. At the same time, nationalist failure to restore the oil industry to operation has led to near-exhaustion of the government’s financial reserves and to deficit financing to meet current expenses, and is likely to produce a progressive deterioration of the economy at large.²

3. It is now estimated that communist forces will probably not gain control of the Iranian government during 1953.³ Nevertheless, the Iranian situation contains very great elements of instability. Any US policy regarding Iran must accordingly take into account the danger that the communists might be enabled to gain the ascendency as a result of such possible developments as a struggle for power within the National Front, more effective communist infiltration of the government than now appears probable, government failure to maintain the security forces and to take effective action against communist activity, or a major crop failure. It is clear that the United Kingdom no longer possesses the capability unilaterally to assure stability in the area. If present trends continue unchecked, Iran could be effectively lost to the free world before an actual Communist take-over of the Iranian Government. Failure to arrest present trends in Iran involves a serious risk to the national security of the United States.⁴

1. Source: Central Intelligence Agency, DDI Files, Job 33R00601A, Box 24, Folder 2, National Security Council 136 Series. Top Secret; Security Information; For NSC Staff Consideration Only. The paper is attached to a transmittal memorandum from Lay to the Senior NSC Staff, November 14, that reads: “The enclosed changes to paragraphs 2 and 3 of NSC 136, including omission of bracketed footnote, proposed by the Senior CIA Member, are transmitted herewith for consideration by the Senior Staff at its meeting on Tuesday, November 18, 1952, at 2:30 p.m.”
2. Paragraph 2 of the November 6 draft of NSC 136 reads: “The situation in Iran presents widening opportunities to the communist organization there. Social unrest is spreading in the wake of nationalist agitation and of disruption of the traditional structure of Iranian leadership and institutions. Government promises of early prosperity following eviction of the British Oil Company have not been fulfilled. On the contrary, the inability of the interested parties to reach an oil settlement and the inability of Iran to dispose of its oil have contributed to a worsening of economic conditions. The resulting popular bewilderment and frustration have increased receptivity to communist propaganda and agitation. The Government’s budgetary difficulties as a result of the loss of oil revenue have led to currency inflation, almost complete curtailment of public works, and fears that Iran’s military forces and civil administration may soon face demoralizing reductions in size and pay. Meanwhile, nationalist politicians, in their vanity and selfishness, show little understanding of the true nature of the communist threat and are vulnerable to communist efforts to infiltrate the nationalist movement.” (National Archives, RG 273, Records of the National Security Council, Official Minutes 1947–1961, Box 22, 125th Meeting)
3. Paragraph 3 of the November 6 draft of NSC 136 reads: “It is now estimated that communist forces will probably not gain control of the Iranian Government during 1953. Nevertheless the Iranian situation contains very great elements of instability and there is a continuing danger of serious communist infiltration of the National Front and the Government bureaucracy. It is clear that the United Kingdom no longer possesses the capability unilaterally to assure stability in the area. Therefore if present trends continue unchecked, Iran could be effectively lost to the free world before an actual communist take-over of the Iranian Government. Failure to arrest present trends in Iran involves a serious risk to the national security of the United States.” (Ibid.)
4. See also NIE–75, “Probable Developments in Iran during 1953,” approved 6 November 1952. [Footnote is in the original. NIE–75 is Document 143.]