788.11/5–2452: Telegram

No. 175
The Ambassador in Iran (Henderson) to the Department of State1

secret
priority

4540. 1. Ala, Min Court, asked to see me yesterday afternoon. He told me he wanted to talk in utmost confidence re problem facing Shah. Until several weeks ago Shah’s policy of not intervening in political situation seemed to have widespread support although certain opposition circles were inclined be critical at his passivity. As situation has continued decline increasing number Iranian polit leaders have been insisting that Shah take some action to prevent complete ruin of country. He was afraid that Shah’s policy of nonintervention was now commencing seriously to affect his prestige. Country was looking to Shah to take some kind of action. Question was what kind of action shld he take and at what point.

Shld Shah take steps to effect removal Mosadeq before May 27 tentative date departure for Hague? If he did and Internatl Court shld decide against Iran Shah and new govt wld certainly be blamed. Shld Shah try bring about fall of Mosadeq after latter had concluded his arguments at Hague and before he had returned to Iran? Such course might be construed as cowardly. It might be said Shah had not dared remove Mosadeq while latter was on Iranian soil. Suppose Shah shld decide await Mosadeq’s return before effecting his removal. Mosadeq might dawdle on his way back. He might stop over in Switzerland or elsewhere in meantime financial situation of country might have resulted in internal disorders. Furthermore if Shah shld bring about removal Mosadeq now, in Hague, or after his return what cld his successor do to relieve financial situation? If Bank Melli shld be unable furnish more [Page 382]money new govt wld probably not be able pay govt salaries and other current expenses.

It seemed now quite clear US cld not help Iran overcome its financial difficulties except with advance approval of Brit Govt.

That approval not likely be given until Iran had met such condition as UK may prescribe for oil settlement. It wld take considerable amount of time for agreement to be concluded even if both govts take conciliatory attitude. But Iran had no knowledge which wld cause it to believe Brit wld take conciliatory attitude. It not impossible UK seeing that Iran’s situation was desperate might stiffen its demands to such extent that new govt finding itself unable meet them wld collapse. Even if US Govt wld be willing come to rescue new Iranian Govt financially without awaiting settlement oil question there no reason believe it had funds readily available for such purpose. Perhaps Congressional action wld be required. Ala said he wld be grateful for such advice and suggestion as I might be able give him on confidential personal basis.

2. We are convinced in view unyielding attitude assumed by Mosadeq and by Brit Govt no settlement oil problem possible so long as Mosadeq remains as PriMin. Mosadeq’s retirement therefore seems condition precedent to reaching oil settlement. Nevertheless hesitate in view lack of knowledge of Brit intentions give Ala advice. I assume Brit prefer that we do not know their intentions and that we give no advice. It seems to me that some of Ala’s worries are justified. I cld not therefore brush them lightly aside and suggest he tell Shah he shld get rid of Mosadeq now. I therefore told Ala I could appreciate his perplexities and was sorry I had no ready answer for all of them. Before venturing offer any advice I wld like give whole matter careful thought. Ala said he wld talk to me again in day or two. He afraid however it already too late for Shah take any decisive action before date set for Mosadeq’s departure.

3. I asked Ala who in his opinion seemed likely at this juncture to succeed Mosadeq. He said number of candidates. Among old line politicians there were Qavam, Mansour and Hakimi. He did not seem enthusiastic about these three. He said Entezam’s name was also cropping up again. He spoke of Entezam in somewhat warmer tones. Busheri was anxious for job. Maki also had been talking like a candidate to Shah. Ala seemed doubtful that either of these men had necessary prestige. He said among Natl Front group Shah was particularly impressed with Saleh. Shah liked Saleh’s courage and determination in dealing with Kashani. Saleh seemed to have integrity as well as strength.…

4. Ala asked me if I had any idea as to kind of agreement re oil which wld be acceptable to Brit. I replied in negative, pointing out [Page 383]I was, however, aware of several kinds which wld not be acceptable. I added I thought Brit might still be willing accept proposals similar to those made by Internatl Bank. I was not in position, however, speak for Brit. I asked Ala why he did not discuss problem oil with Brit. He said he did not like to do this without knowledge Mosadeq and Mosadeq wld, of course, object to informal conversations. Ala expressed concern re matter Brit oil technicians. He afraid Brit had in mind entry several hundred. He thought perhaps country might be able tolerate arrangements under which say 20 percent of foreign technicians wld be Brit. He not sure. Situation in south explosive and appearance in oil areas of even relatively small number Brit technicians might result in violence and sabotage on wide scale. Eventually number Brit technicians might be increased but at beginning number shld be extremely limited. I said one aspect of problem seemed be that fairly large number Brit technicians needed to reopen refinery. Ala said many Iranians still cld not understood why technicians other than Brit cld not be found for most of jobs in which foreign experts needed. There was tendency among Iranians believe polit rather than technical reasons responsible for insistence that Brit experts necessary for operation Iranian oil industry.2

5. Dept might care reread Embtel 3999, Apr 183 in connection with above.

Henderson
  1. Transmitted in two sections; also sent to London.
  2. The Department responded that same day that it had given serious consideration to the many difficult aspects of the problem which the possible fall of Mosadeq would create, and that it hoped to provide the Embassy with a definite statement of policy in the near future. Moreover, the Department agreed with Henderson’s position that the United States could not advise the Shah to remove Mosadeq prior to his departure for The Hague. (Telegram 2682; 788.13/5–2452)
  3. In this telegram Ambassador Henderson reported that there might be a sudden change of government in Iran. Therefore, he suggested that the Department urgently consider what measures the United States could initiate, particularly in the area of economic aid, to encourage a new regime to settle the oil controversy and to pursue policies generally oriented in a pro-Western direction. (888.10/4–1852)