888.2553/10–2251: Telegram

No. 116
The Ambassador in Iran (Henderson) to the Department of State1


1478. Altho recent rapid and serious developments in oil dispute have prevented my consultation with Brits at length on subj raised Deptels 642 and 645 September 25,2 I consider it pertinent and important give Dept at this time current Emb appraisal Iran sitn.

Fol not discussed with Brit but will be soon. Doubtful if Brit appraisal will coincide with that of Emb.

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US policy.

Emb believes basic postulates US policy are determination Iran shall not fall into Commie hands and that it shall become willing partner of free world.

Principal factors in Iran today.

Strong popular current of anti-fon nationalism, personified and led by PriMinMosadeq and Natl Front supporters.
Constitutional monarchy, headed by indecisive and weak though well-intentioned Shah.
Small oligarchy of landowners and merchants, motivated by complete self-interest, and currently supporting Shah.
Running sore of oil dispute with Brit, with attendant dislocation of Iran’s economy.
Security forces in gen still loyal to Shah.
Influence of … Mullahs affecting all phases Iran life.…
Depressed econ and social conditions of majority of population, with resultant discontent (see Embtel 1479, October 223).
Commie exploitation of sitn.
Decline in western influence.

Emb appraisal character and influence these elements.

a. Emb considers rising Iran nationalism present venting itself through oil dispute is real and potent force. Irans, in gen, resent and suspect all foreigners, and Emb believes Iran nationalism at this time directed particularly at Brit not likely wane in near future.

Mosadeq and Natl Front politicians have encouraged and used nationalist sentiments to come to power. However, their removal or defeat will not eliminate Iran nationalism. Public opinion almost certain to support any other leader or movement in future which panders to this nationalism and to oppose what might be considered as appeasement of foreigner at expense Iran. Econ considerations are secondary to these vague but fierce and pervasive emotions.

Inability of Brit-encouraged Majlis opposition to oust Mosadeq govt and unanimous pol support of PriMin’s mission to UN serve to emphasize futility of hopes that nationalist movement only superficial or that “strong man” govt cld succeed in restoring Brit-managed concession on basis similar to that of past.

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Demonstrated pol ability of Mosadeq as shrewd leader national front minority and demagogue who well understands Iran emotions and character, his personal prejudices against Brit, his undoubted understanding of Russian intentions in Iran, and his almost megalomaniac desire to act as champion of people in struggle for “independence” are important factors to be considered in present sitn.

b. The Shah might be factor for stability, continuity of leadership, and resistance to communism in Iran. He appears however to have no confidence in his own influence; at least he apparently does not regard it as opportune to endeavor to exert it against present govt.

He has thus far been unable to use nationalist elements to strengthen crown or to effect much needed reforms in face land-owning-merchant oligarchy. He is probably correct in his belief if he shld try just now remove Mosadeq from Premiership, or if he shld take any other measure which might seem to run counter to nationalist aspirations, prestige and influence of crown wld suffer severely and he might even be overthrown.

Disappearance of Shah wld mean loss to western world of potentially powerful anti-Commie element and ensuing struggle for power might lead to chaos which organized Tudeh Party wld exploit.

c. The landowner-merchant oligarchy has been one of main obstacles to progress of Iranian people and to development of country’s resources. It has tenaciously fought for maintenance of status quo. While supporting Shah as stabilizing factor in country, it has obstructed his inclinations toward reforms. This feudal group is anxious to perpetuate itself and is governed by complete self-interest.

d. Oil dispute with British, with attendant dislocation of Iran’s economy as result cessation oil industry, is greatest factor for instability in Iran today. Political and popular emotions have been increasingly exacerbated by this issue during past year. Even “opposition” has recently declared it will support govt until oil question settled. Failure to obtain usual oil revenues will affect govt bureaucracy and mil forces seriously as salaries and supplies lag behind. Trade standstill and gen econ consequences discussed (Embtel 1479, Oct 22). Finally, until revenues again begin flow from oil industry, govt, even if so inclined, can [not?] turn to public works or improvement miserable social and econ conditions majority population.

Decline of British influence in Iran weakens Iranian resistance to communism and Soviet pressure. Iranians long accustomed playing foreign powers against each other, may dangerously allow selves be vulnerable Soviet penetration to such extent that if or [Page 239] when they turn later to western world to save them from Soviet domination their position will already have become irretrievable. British influence has been extensive, sometimes from our point of view shortsighted, but nonetheless effective in past in keeping Russians from gaining control all of Iran.

e. There is still great loyalty to Shah among security forces. US advisory missions to these forces assist in maintaining their effectiveness for internal security.

Nevertheless mil units in Iran are weak reeds for Shah, govt or free world to rely upon. Lower ranks are discontented and ill paid, junior officers reportedly are receptive to Commie propaganda, and senior officers often are incompetent and corrupt. In view of anti-mil sentiments of Mosadeq it is not unlikely US mil missions will be hampered in their operations and may even be forced eventually to leave. This last development wld be most serious blow to US policy.

f. … religious leaders, such as Mullah Kashani, have been gaining increasing prominence and influence under Mosadeq govt. Anti-British slogans, particularly those connected with oil dispute,.… Movement to drive out British has gained almost significance of religious crusade in some quarters. Shld any Iranian Govt agree to restoration British control Iranian oil industry, there wld be religious fanatics ready to stir up popular emotions and to assassinate responsible officials. Religious fanaticism can be used to combat communism, but it cannot be employed as constructive forger for country’s progress.

g. For appraisal econ factors see Embtel 1479, Oct 22.

h. Strength of Tudeh Parties in key areas as fols: (1) Tehran 4,000 to 8,000 hardcore with party members and sponsored groups totalling 35,000 maximum; (2) Khuzistan approx 5,000 party members among oil workers; (3) Azerbaijan and Gilan strong though unestimated membership.

Potential for rapid party increase based on fact its platform parallels that of Natl Front and its activities known to public only as stooge organs (peace fronts). Any deviation of Natl Front leaders from present extremist course wld probably result in rapid increase Tudeh following and consequent upsurge in power. In this event party cld become prime threat to present polit order.

Above possibility cld arise through Iranian popular misconception of nature of Tudeh, which is widely viewed as indigenous political movement advocating reforms close to heart of populace. Sitn is further complicated by confidence Natl Front leaders in their own superior astuteness and in their ability at proper time to handle Tudeh and Communists.

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With regard to USSR, average Iranian fails see any present tangible evidence of Sov imperialism whereas he imagines he sees numerous signs of endeavors Brits and Americans maintain old controls and even obtain new holds in country. His imagination in this regard is continually sharpened by steady barrage clever Sov propaganda. USSR is queen of airwaves in this area. At any time one can hear Sov propaganda on various short and long wave lengths in several languages.

At present Communists are spurring nationalist drive to oust Brits from Iran and follow tactics prevent as much as possible any deviation from anti-Brit line. When western powers driven from Iran and influence destroyed, Communists may be expected implement second stage their long range objectives—destruction of all remaining rivals for power in Iran.

US recent position in SC oil dispute has been construed here as substantive support of UK and may be expected increase Tudeh potential directly and indirectly thru resultant tendency of Natl Front and its popular supporters turn toward USSR. Granted time and over longer range this may create environment favorable to Tudeh power seizure attempt. Several recent estimates assert Tudeh in any early national election cld obtain 20 Majlis seats, wld be in position to exert influence far out of proportion to numbers, and wld be able demand Cabinet participation.

i. Present direction taken by Iranian nationalism as exemplified by its attitude towards Brit oil interests has served to decrease western influence particularly Brit. Relative responsibility US on behalf free world in prevention Iran from passing into Sov sphere has increased as result. It shld be realized that despite gen condemnation thruout country Brits still have most powerful unseen support which might be effectively mobilized in certain circumstances. For instance if as result understanding attitude on part Brit oil dispute cld be settled in manner inoffensive to reasonable Iran nationalist elements or if Russians or Communists shld make misstep in their program, Brits might still stage comeback. Their former position, however, as far as oil is concerned, can never be restored. We hope to present specific recommendations shortly.

  1. Transmitted in three sections and repeated to London.
  2. Telegram 642 reported that no limit should be placed on the topics or categories which the British and U.S. Ambassadors should examine to prepare a joint estimate of the Iranian situation. Telegram 645 repeated the text of a cable from London that suggested six broad fields for joint examination. (888.2553/9–2051 and 9–2551)
  3. Telegram 1479 presented a detailed financial and economic picture which concluded that economic conditions in Iran were worse, but not much worse than in normal years, while the financial situation was bad and deteriorating rapidly. (888.2553/10–2251)