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788.13/6–1352: Telegram

No. 181
The Ambassador in Iran (Henderson) to the Department of State 1

top secret
priority

4837. 1. When I arrived palace morning June 12 to call on Shah I found Ala awaiting me (Embtel 4812 of June 12).2 He said he hoped I wld not hesitate impress on Shah necessity for urgent action. He feared that Shah who had seemed quite resolute two days ago was again weakening and becoming indecisive. He knew that I had been consistently refraining from doing anything which might be considered as interference in Iranian internal affairs. Nevertheless, he thought I wld be doing Iran service if I cld say anything which wld encourage Shah to assume more decisive attitude at this moment so critical for country.

2. At beginning my conversation with Shah I referred to msg which he had sent to me through Ala and said I failed understand how Shah cld have obtained impression that US Govt or I was supporting Mosadeq. Mosadeq had been named by Shah as Prime Minister and his nomination had been approved by Majlis. I had considered it my duty to endeavor to maintain as friendly working relations as conditions wld permit with Prime Minster of Iran. During my numerous conversations with Shah I thought that I had made it clear to him that in opinion US Govt and of myself Mosadeq’s policies were pushing Iran toward ruin. Furthermore, I had also not hesitated in my various talks with Mosadeq to let him also know that in opinion US Govt and myself he was fol policies which were not beneficial to Iran.

Shah said he had thoroughly understood my attitude and had never had any doubt that I was voicing views of State Dept. Nevertheless, numerous stories had come to him to effect that US press and many Americans including some US oil companies were supporting Mosadeq. He had also heard that various American nationals in private conversations had been saying that choice was between Mosadeq and communism. He therefore had asked Ala to obtain definite statement re our attitude towards Mosadeq.

3. I then referred to remarks made by him during previous conversations indicating disappointment at amount and type of military aid which US seemed to be prepared to extend to Iran. Endeavored [Page 397]to assure him US deeply interested in future Iran and anxious to strengthen Iran’s defensive capacity. During this portion our conversation I followed line contained in para 4A–B of Deptel 2742 of May 30. He seemed to take my remarks with good grace and to be anxious to enter into discussion of country’s immediate financial and political problems.

4. Shah said he deeply concerned at both financial and political situation. Apparently funds not available to pay portion of govt salaries due May 20 unless steps wld be taken which might undermine public confidence in Bank Melli. What wld happen on June 20, next pay day, no one knew. Although Mosadeq had been requested return immediately after presentation Iranian case at Hague Prime Minister seemed determined stay on for time in Europe. He might not get back until after June 20. Meantime, increasing pressure being brought on Shah to replace Mosadeq at once or encourage Senate and Majlis vote no confidence in govt. Shah did not see how he cld do anything while decision of Court still pending. If Court shld find itself competent, failure Mosadeq policy wld be clear. Mosadeq might resign or steps cld be taken get rid of him. If Court shld decide itself incompetent Mosadeq might again be hero. He likely to announce that he had won Iran’s freedom, that Iran cld now sell its oil, and that in short time financial difficulties wld be eliminated. This wld not be true; Iran wld still have difficulties in selling oil to buyers who had means to transport it. Nevertheless, Mosadeq wld probably be able with his false promises deceive public for some time and until his deceit shld become known it wld be dangerous remove him. Therefore, nothing cld be done until Court had made its decision and if decision favorable to Iran it might be impossible do anything for considerable time.

5. I stressed to Shah desperateness of present financial situation of country. I said responsible Iranian statesmen seemed now to be fully conscious of seriousness of crisis which Iran was facing. It seemed to me they were hesitating from acting because they did not know what Shah wanted them to do. I doubted that thinking Iranian leaders would believe that a favorable decision of Court would be of material assistance in helping Iranian financial difficulties. They would be quite aware that if Mosadeq stayed on and Iran should make no constructive move in direction oil settlement Iran would continue drift towards ruin. These people were looking towards Shah to show same decisiveness in this situation as he had shown in 1946 when he had ordered armed forces to clear usurpers out of Azerbaijan.3 Prestige of Throne was high this moment. If, [Page 398]however, Shah allowed Iran to continue drift towards ruin without taking some action himself or indicating to statesmen looking to him so anxiously for guidance that he would not object to their taking action, confidence in Throne might ebb to such extent it would be much more difficult to rally people round it later in last minute effort to save country.

I was expressing these thoughts without having Shah’s background knowledge. Shah might be aware of various factors unknown to me. Shah should therefore understand in giving voice to some of my thoughts I was not venturing to press advice on him.

6. Shah seemed troubled. He said it would not be fair for Iranian statesmen to blame him if he did not come out for removal Mosadeq at time Mosadeq might again be national hero. If he should do so Mosadeq could become formidable antagonist not only to government but to Throne. In any event Shah would be taking great risk to support replacement of Mosadeq unless he was in possession assurances that new government would receive almost immediate financial aid from UK or US. With best will in world it would take considerable time for new government negotiate and sign oil agreement with Brit. Oil problem complicated. It could not be solved over night.

Furthermore no new government could exist if it should capitulate entirely. He was convinced, for instance, that no government in Iran could live if it should try negotiate oil settlement outside framework of nationalization laws. Settlement of oil dispute might require weeks perhaps months. New government to continue to carry on might need foreign financial assistance in matter of days. Where could he obtain assurance of such assistance? If he should be instrumental in effecting removal Mosadeq, and successor government should be unable obtain foreign financial assistance, not only would that government fall, but Throne would be in jeopardy and influence those elements in Iran friendly to West would sharply diminish.

Could he also obtain assurance that British would not try drive impossible bargain with new government? What had taken place during recent months in Egypt not encouraging. Egypt in better financial position, however, than Iran; it could afford to wait. Delay in receiving financial aid and in effecting settlement oil problem acceptable to Iranian people would be fatal.

7. I told Shah he should not expect US Government to give him any fast assurances in advance of financial assistance. Attitude US people and members of Congress as events unfolded would contribute to making of US decision this respect. In my opinion this attitude would be determined by manner in which Iranian Government approached oil problem. I was convinced that if US public [Page 399]and Congress should obtain impression Government Iran trying energetically and sincerely find fair solution oil dispute they would not like to see that government fall merely because it could not obtain temporary financial aid. Another factor which would influence US decision of financial aid would be attitude UK Government and public. US would not of course like to take action which would further inflame UK opinion against Iran and at same time injure US–UK relations. Government of Iran by approaching UK Govt in genuinely conciliatory spirit and with obvious desire find fair solution could greatly improve atmosphere British-Iranian relations and prepare way for necessary financial aid as well as solution oil problem.

It might be helpful if Shah could get in touch at once with Middleton and talk to him with same frankness as to me. Shah said he would see Middleton before latter departed for UK next week for conference in London but he hesitated talk to him so openly, not because he did not trust Middleton but because he afraid of gossip in London with subsequent fatal leak to press. He had had unfortunate experience in this regard last autumn. He could have no objection, however, if I should outline to Middleton what he had told me about oil problem and financial aid.

8. I said British had made it clear they preferred settle oil problem by direct negotiations and did not relish dealing through third party. Although I would inform Middleton of some of Shah’s worries as expressed by him to me, I hoped he wld also talk with him frankly.

9. Shah said he had been giving considerable thought to problem of successor to Mosadeq. Seemed to be three approaches this problem:

(a)
New Prime Minister to be either member National Front or someone closely associated with it. Saleh outstanding candidate this category. Saleh seemed to have progressive ideas, integrity and common sense. Saleh had made mistakes in past including experiment of collaboration with Tudeh. He thought Saleh had become wiser. Saleh might be able mold national movement, strength of which could not be ignored, into constructive force. If Saleh should go off wrong direction it would not be difficult remove him. Busheri also possibility. Busheri, however, sometimes showed opportunistic characteristics and too much under influence Kashani.
(b)
New Prime Minister to be someone who could possibly work with National Front and at same time would have respect of country’s leading statesmen. He thought Mansour could play this role. Mansour experienced, resourceful, persuasive and progressive. He stood halfway between nationalists and so-called elder statesmen.
(c)
Cabinet headed by and composed of elder statesmen. Qavam, of course, ranked as most prominent of elder statesmen but Hakimi had almost as great prestige and had perhaps better reputation. [Page 400]Elder statesman like Qavam or Hakimi could form Cabinet outstanding men of country who might help tide country over present crisis. He was worried, however, lest such government might be entirely devoid progressive ideas. It might be charged such government was pushing Iran back to 1945 or 1946. On other hand situation during those years preferable to that at present. National Front and Tudeh should, of course, join in opposing such government which might be compelled take rather repressive measures during first days its existence to maintain law and order.4

. . . . . . .

Henderson
  1. Transmitted in five sections; also sent to London.
  2. In telegram 4812 Henderson also reported that he was to see the Shah on June 12, and that he was planning on disabusing once and for all the rumor that the United States had been and was still supporting Mosadeq. (788.13/6–1252)
  3. See Foreign Relations, 1946, vol. vii, pp. 289 ff.
  4. Ambassador Henderson informed the Department in telegram 4878, June 18, that he had spoken to Hosein Ala on June 17 and that Ala said the Shah believed that Mosadeq had to be relieved of his duties, but that the Shah was undecided upon a successor. Henderson also reported that Middleton had an audience with the Shah on June 16 and found the Shah to be as indecisive and vague as ever. (788.13/6–1852)