788.5 MSP/12–1451: Telegram

No. 137
The Secretary of State to the Embassy in Iran1

top secret

1274. Departmental consideration problems raised in connection Section 511 and Battle Act assurances2 has been in light fundamental issues raised. On one hand it is recognized that failure IranGov comply legis requirements will render it impossible for US to extend assistance to Iran. Refusal of IranGov to comply and consequent termination aid wld, moreover, in all probability result strong criticism of US with inevitable claim action was part pressure to bring about capitulation of Iran to Brit in oil controversy. On other hand, obvious weakness on part of US in relation to Mosadeq’s intransigence wld probably serve to increase his obstinacy and weaken US position. Any substantial departure from specific undertakings contained in legislation wld at minimum require prior consultation Congressional leaders (now out of Washington) and give rise to similar demands by other countries receiving US assistance, thus weakening purposes of Mutual Security legislation.

It is realized that if Mosadeq’s resignation materializes, situation might be somewhat altered. Dept assumes, however, that any success [Page 296] or Govt, particularly with Mosadeq in opposition, wld encounter real polit problem in giving Section 511(a) assurances since this might be interpreted as clearly aligning Iran with US in opposition to Sov Union and thus placing Iran in more exposed position, which its policies have attempted to avoid. For this reason, believe we shld pursue substantially same line of action in light present possibility that Mosadeq may withdraw than if no such imminent possibility existed.

[Here follow comments on the suggested texts for the exchange of letters with Mosadeq.]

Suggest fol gen approach to problem which you may in ur discretion pursue:

Believe it advisable that Mosadeq not get impression we are alarmed over his possible refusal make it possible continue Amer aid. On other hand he shld understand clearly that legislative requirement imposes real problem which must be met if our programs are to continue. In addition to ur discussions with Mosadeq, you shld talk with Shah and Ala and urge them to prevail upon Mosadeq to find some satisfactory means of meeting requirement. They shld understand that Iran stands to lose great deal if Mosadeq remains intransigent or if he shld not be replaced by someone more aware of realities of situation. Suggestions contained Deptel 1173 Dec 63 wld be pertinent ur discussions with Shah.
Suggest you endeavor obtain Mosadeq’s agreement exchange of notes with modifications authorized above. As indicated, Dept wld consider other slight modifications considered essential obtain his agreement.
Without giving Mosadeq impression undue concern, every effort shld be made effect exchange on basis agreed drafts in line foregoing. If Mosadeq remains absolutely intransigent, however, it might be possible to have him write ltr to you, perhaps in conversational tone, discussing Amer aid to Iran and including statement that he has read Mutual Defense legis and finds that principles stated in Section 511(a), with exception of No. 3 which does not apply to Iran, conform to policies of IranGov. He might say in connection with fourth principle that it is, of course, policy of IranGov to make, consistent with its policies of econ stability, full contribution permitted by its manpower, resources, facilities, and gen econ condition to the support of purposes of UN. He might state that as you know, however, Iran econ in difficult situation and Iran cannot afford do more than maintain limited mil strength. You might tell Mosadeq that if he were willing to write such ltr you wld be prepared to see if it wld meet legis requirements even though it did not spell out assurances in detail and believe this might be case. FYI, it is emphasized that while Dept wld be disposed accept such [Page 297] ltr if it contains substance of foregoing, assuming approval Congressional committees, it is earnestly hoped that this will not be necessary in view obvious disadvantages of such substantial departure from procedure re other participating countries. Apart from difficulty negotiating on basis Mosadeq’s draft, result even if substance substantially same as US draft wld appear quite different to Cong, thereby spotlighting divergencies between assurances from Iran and other countries.
In event Mosadeq refuses even this suggestion and if approach to Shah unsuccessful Dept wld consider seeking Section 511(b) assurances from IranGov entirely within context of econ and technical assistance programs. This wld require termination of mil aid shipments after Jan 8 which wld remain in suspense until IranGov, either under Mosadeq or his successor, prepared give assurances required by law. It wld be hoped, however, that such termination cld be handled as quietly as possible and that it will be possible for mil and Gendarmérie missions to remain. It wld appear impossible, however, continue paying expenses substantial number Iran mil students now in US, and termination such payments and their subsequent return to Iran undoubtedly will attract public notice, particularly in Iran. If you shld recommend it and IranGov shld agree, it might be possible after Jan 8 without Section 511(a) assurances for Iran students continue receive training and some mil shipments to be continued, both on cash reimbursable basis under Section 408(e) of Mutual Defense Assistance Act of 1949.

Fourth alternative above is, of course, undesirable in many respects, although preferable to complete cessation Amer aid. Dept and Defense wld be greatly concerned over possible effects upon status mil missions including chance that Mosadeq might now or later request their withdrawal or refuse extend agreements.

Dept fully recognizes extreme difficulty position in which you have been placed as result several factors converging at once, i.e., (a) 511 assurances, (b) Battle Act, (c) ARMISH agreement, (d) decision which must be taken in relation Iran’s request for second withdrawal from IMF, (e) econ aid agreement, in addition continuing problem of oil controversy including IBRD activities. Recognize that Mosadeq undoubtedly will interpret many of our efforts in connection with these matters as application of pressure upon him in favor Brit interests. For this reason it is hoped that Section 511 assurances can, to extent possible, be negot in advance of other matters. This is particularly desirable since this matter is in Dept’s judgment most urgent in our relations with Iran.

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Pls tele ur comments soonest. Before discussing with Mosadeq fourth alternative above (cessation of mil aid) Dept shld be consulted.4

  1. Drafted by Ferguson (GTI) and Rountree on Dec. 18; cleared by Nitze, Linder, Bonbright, Matthews, Bohlen, Tate, Ohly, Merchant, Brown, TCA, and the Department of Defense; and signed by Secretary Acheson.
  2. Reference is to the Mutual Defense Assistance Control Act, signed into law Oct. 26, 1951, as P.L. 82–213. For text, see 65 Stat. 644. Under the terms of this legislation, the United States was obliged to discontinue economic and military assistance to countries which shipped strategic goods and raw materials to the Soviet Union or its satellites.
  3. Telegram 1173 pointed out the urgency of securing Iran’s assurances under Section 511 of the Battle Act before Jan. 8, lest the United States be forced to terminate assistance. It was suggested that Henderson might prefer to go directly to the Shah on the matter rather than engage in prolonged talks with Mosadeq. (788.5 MSP/12–651)
  4. On Dec. 26, Henderson reported that he discussed the exchange of letters with Mosadeq two days earlier and the Prime Minister seemed to be even more unreasonable and inflexible than he had been in their previous conversation. No agreement was reached on the texts of the letters and Mosadeq stated that he could not enter into any exchange of letters without prior approval of the Majlis. (788.5 MSP/12–2651)