888.2553/11–751: Telegram

No. 123
The Ambassador in Iran (Henderson) to the Secretary of State, at Paris1


24. (1) Fol tel is in response to suggestions from Dept we tel our views re polit repercussions in Iran if Mosadeq shld return without agrmt. Brit Emb has been informed its contents.

(2) If Mosadeq shld return from US without agrmt or making any progress which might promise agrmt, and if it wld be impression failure was due to Brit unwillingness negot except on terms which wld result in reestablishment Brit co in Iran, indignation and anger against Brit wld in our opinion reach new heights. Unfair as it might seem, Iranian public in gen wld interpret absence agrmt as additional evidence Brit trying to bring Iran to terms thru econ boycott or pressure. Unless US by word and deed wld indicate that despite lack agrmt it intended extend appreciable finan and econ aid to Iran, there wld be strengthening of already widely prevalent belief it was cooperating with UK in maintaining econ and tech blockade. Since UK wld not look kindly on extension any aid to Iran which wld assist latter in overcoming finan difficulties [Page 263] arising from absence oil revenues, US might find itself compelled to choose between deeply offending Brit or forfeiting such remnants of friendliness as still exist in Iran from great reservoir good will we possessed some five years ago. Such choice not easy since on one hand friendly Brit-US cooperation essential particularly in ME and on other deep-seated hostility towards US on part Iran wld promote success of those who want country to fall under Russian domination. It might take years patient effort to win back Iranian confidence in US and during those years much cld happen.

(3) If Mosadeq returns without agrmt or some kind of assurance Iran wld be able obtain funds from US to meet budgetary and foreign exchange needs, he will be subj considerable criticism for failure his policy. During his absence his opponents have gathered certain amount courage and have again become somewhat articulate. With his political skill and demagoguery, Mosadeq wld probably be able, however, to suppress such a position as might exist in Majlis unless (a) shld be deserted by some his nationalistic and leftist supporters or (b) US and UK Embs as well as Shah shld intervene by carrying on energetic campaign against him. He might, however, even in face foreign and royal intervention be able squelch opposition in Majlis by threats of violence or by actual violence. We doubt that he will resign voluntarily at time when resignation wld be construed as admission failure. More probably he will stay on unless Shah … decides to take difficult task of removing him and succeeds in doing so. Unless Mosadeq resigns or is removed immed after return, it may become almost impossible dislodge him. He will so rig elections which are taking place very soon (all elections are rigged to considerable extent in Iran) as to eliminate his most dangerous Majlis opponents and to form alliance with kindred nationalist elements and with Tudeh.

(4) Even replacement of Mosadeq by Prime Minister more friendly towards Brit at this time will not solve oil prob. New Prime Minister wld not dare take position which wld tend confirm charges certain to be made against him he merely another Brit stooge. He wld be compelled therefore lean over backward in dealing with oil prob. We do not see how any Prime Minister in near future cld conclude oil agrmt which wld enable Brit oil co to return to Iran. Even if such agrmt shld be concluded and forced through Majlis, activities of co wld be under such heavy polit attack that its activities wld be hampered. So long as it continued to operate, it wld be target for Commie and anti-West propaganda. We do not believe it cld last very long.

(5) We do not wish be alarmist in outlining what eventual consequences might be if no agrmt reached with Brit and no aid coming from US to replace absence oil revenues. Altho Iran as agric country [Page 264] has considerable econ resilience it has little finan flexibility. 80 percent its budget is composed of salaries, pensions, etc. When money runs out in four or five months govt will not be able pay armed forces, police, or civ personnel. In our opinion, Iran natl feelings being as they are, public more likely turn toward communism than to insist on what it wld consider as submission to western econ imperialism. It is quite possible Iran wld fall victim to internatl communism without any overt intervention on part Russia.

(6) Not believed nec here stress effect on free world loss of Iran. Internatl Communists with their experience and tactics shld find little difficulty in exterminating some 5 to 15 percent population which might oppose program and in organizing remainder as agric, industrial and mil serfs, process cld be much faster than in more advanced countries eastern Eur.

In comparatively short time strong and relatively eff Iran army cld be organized eager to engage in adventures in ME. Altho army wld not be first class it wld render def ME extremely difficult. Mere existence militarily strong Commie Iran wld have disruptive and demoralizing influence in this whole area.

(7) In our opinion stakes so high US and UK cannot afford to take chances by haggling too much over questions of profit making, 50–50 basis oil concessions, local prestige, etc. If new Brit Govt wld enter negots at once in spirit genuine goodwill prepared to make wide concessions and with full understanding no Brit firm at least in near future, again to operate in Iran oil industry, and if it should be able come to agrmt on generous basis, in our opinion Brit prestige in Iran wld soar rather than suffer; and friends of West wld again be able come to fore. US and Brit might then coop in relief prog and might even be able convert Iran with all its weaknesses into free world bastion of respectable strength. Altho latter goal might not be fully attained US and UK might at least be able to retain position in Iran which wld facilitate their def other countries ME.

(8) If in spite Brit willingness negot on generous basis including no return Brit companies to Iran soil and if Mosadeq shld still refuse come to agrmt, it is believed that it wld be much easier for patriots and friends of West in Iran to coalesce in bringing about his removal and installing a govt which wld be prepared to come to understanding with Brit.

(9) In case no agrmt reached between UK and Iran US might be able thru finan measures help keep Iran econ and pol alive for considerable period. Unless however Iran’s revenues from oil can be appreciably restored, country’s econ dependence on US will be so complete that morale will suffer and resentment against West incl US for keeping it in what it will consider as pauper status will be [Page 265] sure grow. In fact we believe Iran pride wld not permit it to continue to depend on US charity for its existence over protracted period.

  1. Transmitted in two sections and repeated to the Department and London; the source text is the copy transmitted to the Department as telegram 1710.