788.13/5–1051: Telegram

No. 20
The Secretary of State to the Embassy in Iran1

top secret

2067. Eyes only Amb. Dept perceives most serious danger in possibility that Mosadeq, in carrying out his “neutral” policy and in line his gen attitude re presence fon missions in Iran, may take action which wld seriously threaten Iran security and render attainment objectives US program in Iran difficult or impossible. Most recent developments this connection are: (a) Tudeh demands upon Mosadeq including expulsion US mil mission and termination mil aid, (b) unconfirmed report contained Embtel 27142 regarding possible drastic cut Army budget, and (c) press reports he may legalize Tudeh party.

Shld these contingencies materialize, situation wld be created under which Iran forces wld be rendered incapable of maintaining order fol precipitation wide-spread internal disorders (which undoubtedly wld be fomented by Tudeh), and stage might be set for successful coup d’état. Moreover, expulsion US mil missions and rejection mil aid wld have serious repercussions here and might make it virtually impossible for US to extend further aid to Iran since public and probably Congress wld interpret such move, particularly expulsion US missions, as not only anti-Amer but definitely pro–Sov.

Foregoing is, from point of view of US natl interest, most important element in complex problem of relationship with Mosadeq. Dept hopeful that, notwithstanding Mosadeq’s record re AIOC, responsibility imposed upon him as PriMin will render it possible to work out some arrangement to prevent interruption in flow of oil to West. If, however, in pursuing policy of ultra-nationalism Iran security itself is thrown into considerable doubt, Dept perceives possibility that extraordinary political measures might be required in effort prevent loss of Iran to the free world.

Dept believes Shah must be fully aware grave dangers inherent this aspect of situation, but recognizes uncertainty and confusion might lead him to fail to take effective measures to forestall in [Page 51] time precipitous and unwise action by Mosadeq on security matters. It is possible, however, that such proposed action by Mosadeq might be seized upon by Shah as opportunity for dismissing him on grounds other than oil nationalization and install a PriMin in whom he has greater confidence.

In view extreme importance this matter, wld appear desirable that you discuss it frankly with Shah, pointing out ur approach is motivated by sincere interest US Govt in welfare Iran people and continued Iran independence under Shah’s leadership which we fear might be seriously jeopardized if rash antiforeign action is taken solely to exploit present emotional nationalism. Whether or not approach shld be made at this time and precise nature of approach, of course, wld depend in large measure upon ur estimate of likelihood that any or all contingencies feared might in fact materialize.

Dept wld appreciate ur urgent comments.3

  1. Drafted by Rountree and cleared by the Office of the Deputy Under Secretary (G), International Security Affairs (S/ISA), and the Department of Defense. The source text bears the following typewritten notation: “Note: no Distribution, except to S/S and NEA.”
  2. In telegram 2714 Grady reported that a “generally reliable source” had told him that Mosadeq had announced in a recent National Front conference his intention of reducing the army budget by two-thirds. (888.10/5–851)
  3. On May 12 Ambassador Grady replied as follows to this telegram: “Dept needlessly disturbed. Shld developments indicate the Dept’s fears are well-founded, I will report in full. As Mr. Hull used to say ‘we are giving earnest attention to all phases of the situation.’” (Telegram 2765 from Tehran; 788.13/5–1251)