888.2553/12–2651: Telegram

No. 138
The Ambassador in Iran (Henderson) to the Department of State1



In late afternoon Dec 22 I had hour’s conversation with Shah. He seemed frustrated, discouraged, fatalistically inclined. We discussed (a) progress exchange of notes re econ aid; (b) provisions Battle Act; (c) more gen aspects US aid policies to Iran; (d) Mosadeq’s policies and possibility that Mosadeq might become more reasonable or might be replaced by another PriMin.
I discussed with Shah difficulties encountered in attempt to effect exchanges notes re econ and milit aid and milit mission, keeping in mind various Dept instrs. I also told him our perplexities arising from combination provisions Battle Act and Mosadeq’s expressed intention sell petroleum to Sov bloc if latter shld desire to buy.
Shah said if events shld so conspire as to render it impossible for US to continue to extend fin, econ or milit aid to Iran, he hoped some way cld be found of explaining matter to Iran public so that reaction wld not be too violent. He was afraid when Iran public recd info US had stopped aid, it wld believe that it had joined Great Britain in abandoning Iran to Communists and all friends of Western world wld lose hope as well as courage to continue resist Commie pressure.
I told Shah it seemed to me we shld not be thinking about what to do in case US aid shld cease, but what to do to prevent it from terminating. Shah replied combination US laws and apparent determination Mosadeq to take no steps which wld render Iran eligible [Page 299] for Amer aid might result in cessation of aid. He did not know what he cld do. He was particularly worried about Iran milit students who were preparing to go to US and about those already in US. He did not believe however that Mosadeq cared much about what happened to milit students or for that matter what happened to Iran def forces.
I said I was deeply concerned at course which Iran was following at present; I had highest respect for Dr. Mosadeq as Iran patriot and leader. It seemed to me however that for last few months such things as Iran had been able to accomplish were of destructive instead of constructive nature. AIOC had been driven out and Brit influence in Iran had been greatly reduced. Practically nothing had been done, however, to heal gaping polit and econ wounds which Iran had suffered in gaining control of its own oil. Sources of revenue vital to Iran’s econ and fin life had been cut off and there seemed to be no practical plans for replacing them. Mosadeq seemed to be hoping to obtain certain amt funds by selling oil to countries of Sov bloc or by borrowing from US. Any funds which might be obtained from these sources cld only be sTop gaps and wld not solve Iran’s problems. I said I had yet to hear of any constructive plan which might promise restore econ and polit stability of country.
Shah said he had given some thought to replacement of Mosadeq by another PriMin. He cld not however, find suitable person to take over. Furthermore, since there was no organized effective opposition to Mosadeq in country, he did not see how any change cld be effected except by coup. Successful coup must be followed, at least temporarily, by dictatorial regime and he did not know who cld be trusted to head such regime. I admitted matter was difficult. I said in my opinion any PriMin replacing Mosadeq must be man of decision, courage, organizational ability, loyalty to Shah and also with genuine interest in welfare Iran and its people. Shah wld be in better position than I to know where such person cld be found. I did not wish Shah to misunderstand me, I was not suggesting coup or any kind of extra-legal action on part Shah or anyone else. I was merely trying to point out it seemed to me Iran at present was headed towards destruction, that it cld be saved only by action Irans themselves, not by that US or any other fon country. Iran wld certainly be lost if Irans took merely fatalistic, frustrating view towards what was going on.
Shah thanked me for my remarks and said his only suggestion at moment was that I again talk with Mosadeq. He wld appreciate it if I wld report result my conversation to Ala. He wanted to do what he cld in matter but was not sure how effective his aid wld be. He again remarked that he was afraid US aid was being offered [Page 300] four years too late. During these four years many Irans who in 1945, 1946 and in 1947 had pinned great hopes on West had become discouraged and lost influence. Iran feeling itself terribly isolated had gradually become mentally ill. He hoped US wld remember in dealing with it that Iran was sick nation and cld not be expected to behave normally. Therefore, US shld have patience and make all necessary allowances. There was tendency part Western world ridicule Iran when it assumed what seemed to be irrational and unreasonable attitude. He hoped US wld show understanding and sympathy and go as far as possible in making exceptions and rendering it easy for country to obtain assistance it needs so badly.
  1. Transmitted in two sections and repeated to London.