788.00/1–2351: Telegram

No. 2
The Ambassador in Iran (Grady) to the Department of State

secret
priority

1631. Deptel 1209 January 19.1 Political situation at moment characterized by:

(a)
Weakness of Razmara Government vis-à-vis Majlis and entrenched interests, also general lack of popular faith in government,
(b)
Critical financial situation Razmara Government,
(c)
Confusion and frustration resulting from unsettled oil question,
(d)
Gradual but steady swing of Iran toward neutral position which trend in part reflects course of events in Asia.

A good portion of blame for present situation can be placed upon Shah. It seems apparent Shah, undoubtedly recalling manner of establishment of dynasty, will never support strong Prime Minister. Razmara showed considerable promise six months ago and so Shah began undercutting him. Recently Shah’s attitude has changed somewhat and he is now apparently making effort support Razmara or at least assure more stability in government. In this connection, Razmara informed local AP Correspondent Friday he is now enjoying Shah’s support because he (Prime Minister) is now weak.

Prime Minister’s position with Majlis is one of open conflict and situation was brought to head by abrupt withdrawal oil bill. According to one Majlis Deputy, this act inspired Majlis to “recover its rights” which in turn led to (1) its hasty rescission press laws and (2) action restoring oil question to Majlis Oil Commission thus taking determination oil policy out of Prime Minister’s hands. Shah’s efforts to bring about harmony and stability in Majlis may be successful to degree but more than this now needed restore prestige Razmara Government.

On aid question, Razmara believed honest when he says real difficulty must be expected if Export-Import loan agreement comes before Majlis. On other hand, according one source, he has informed Soviets he is blocking US aid to avoid increased US prestige. [Page 5] Regardless of Razmara’s attitude re loan, it seems clear debates in Majlis will be critical and prolonged unless large loan on simplified terms offered and unless Shah and Razmara show positive leadership in attempt obtain Majlis approval.

Undoubtedly both Shah and Razmara have given serious consideration dissolution of Majlis. Dissolution might seem to offer attractive prospect of government by decree. On other hand, dissolution might very easily lead to civil disturbances and thus play directly into hands of Soviets. National Front leaders and Tudeh would undoubtedly encourage unrest. Further, dissolution of Majlis would require new elections which could probably not be completed in less than five months, certainly in not less than three months. Meanwhile, all legislation would be blocked and interim government decrees would be subject to eventual Majlis approval. This would include action on any loan or oil agreement. Furthermore, it seems doubtful whether new Majlis would prove more effective in constructive legislation than present Majlis. Although government can and does rig elections in provinces, it cannot do so in Tehran. Number of National Front and opposition members would probably be increased rather than decreased by new elections. Although National Front is in general an unstable and unconstructive coalition, it enjoys considerable popularity among the masses.

We believe that present political situation will be resolved in one of two ways: (1) Out of frustration, Razmara may make bid for dictatorial powers or (2) Razmara government will continue for several months and then collapse to be succeeded by familiar old-line government.

In view of Razmara’s lowered prestige, with doubtful support and possible open opposition from Shah, and with his control over the army very doubtful at best, it now seems most unlikely that Razmara would be so rash as to bid for dictatorial powers.

We conclude, therefore, that slow but steady disintegration of Razmara Government may be expected to continue and that within the next few months Razmara will go the way of his predecessors only to be succeeded by another politician, probably with an old-guard line-up in the cabinet.

I realize that the foregoing is not a cheerful or encouraging picture. Nevertheless we are determined to continue to exert dynamic efforts to build up this country both politically and economically thereby to strengthen it as a barrier against the flood of Russian aggression. In this, we must have full and effective support from both Washington and London. To accomplish our purpose the following is necessary: [Page 6]

1.
Come to an agreement with the British without delay on the highest level as to parallel policies in Iran,
2.
Continue our efforts here through close personal relations with the Shah and the Prime Minister, and in collaboration with the British (if they can be persuaded to really cooperate with us) to bolster their morale and guide their footsteps along the road of progressive development of the country,
3.
Encourage the earliest possible solution to the oil question,
4.
Extend immediate economic and military aid to Iran on simple terms and in amounts justified by the vital strategic location of this country.

The alternative to the foregoing is through default to allow Iran to fall into the Soviet orbit.

Grady
  1. Telegram 1209 reads as follows:

    “In discussions here re impasse over US aid policies in Iran, it wld be helpful have tel analysis polit situation as it exists at moment. Dept unclear position of Shah in Razmara’s difficulties with Majlis and why consideration has not been given by Shah and Razmara to dissolution Majlis if it continues balk every attempt by Govt introduce legis of any sort.” (788.00/1–1951)