888.2553/9–2052: Telegram

No. 215
The Ambassador in Iran (Henderson) to the Department of State1

top secret

1220. 1. Embassy understands that Mosadeq has been preparing formal reply to joint US–UK message regarding oil. Although certain sections Iran press hint reply will be delivered only to British I believe he will send reply also to US. It is not yet clear, however, whether US reply will be delivered through US Embassy Tehran or through Iranian Embassy Washington now that Mosadeq has trusted agent as Amb to US.

2. Ala told me September 18 he thought Mosadeq had finally been persuaded that it would be inadvisable to incorporate in reply mention of possible severance diplomatic relations. Mosadeq was insisting, however, that reply shld contain statement that Iran desired British answer to it within five days. Ala still hoped, however, that Mosadeq wld finally agree exclude all passages which might smack of ultimatum.

3. Bayat, Vice President Senate and member Mixed Oil Commission, called afternoon Sept 19. He told me reply to joint proposals wld contain no reference to severance diplomatic relations and no suggestion that British reply should be made within any set period. He said he hoped that British wld consider offer as counterproposal conciliatory character which if not fully acceptable shld be met by another counterproposal on part UK. During our talk Bayat said that in his opinion Mosadeq might be willing negotiate regarding 50 million pounds but cld not possibly accept formula which wld give AIOC right to present to ICJ huge claims based on losses of future profits. Bayat may be right. I believe, however, that Mosadeq earnestly desires from British large sum in order enable Iranian [Page 475] Govt continue function and to permit it to introduce certain internal reforms. Also he wld like convince Iranian people he has made good bargain with British. It possible however, he might be willing make certain concessions in this matter. I agree with Bayat that Mosadeq not likely in face aroused Iranian public opinion make concessions which wld give AIOC right to present to ICJ large claims for losses of future profits.

4. More temperate Iranians are for most part distressed and alarmed at direction which Mosadeq and certain his advisers, particularly those of Iranian party, are leading country. Belief is becoming rather widespread that diplomatic break with UK is now inevitable and that this break will be followed by intensification anti-West propaganda and sentiment. Rumors are current that shortly after severance diplomatic relations with British or simultaneously therewith US military advisers will be invited to leave country and US Consulates will be closed. Various Iranians who are in full sympathy with Mosadeq but who wld not like Iran go so far as diplomatic break with British are expressing hope that Mosadeq’s strong word “will bring US and UK to realization of seriousness of game which they are playing re Iran and will cause these two countries to revise their policies re Iran”. An Iranian official, particularly close to Mosadeq, in discussing latter’s threat to break diplomatic relations with UK, in typical Iranian fashion, said to me “Can’t you understand, we do not expect relations to be broken; we expect US to prevent us from breaking relations by persuading British to understand our position and yield to our demands.”

5. Hints of coup d’état or resort to tactics of violence are becoming more open.…

6. Iranian political leader who has been member of one of Mosadeq’s previous Cabinets, also called on me yesterday. This leader who has in past had close relations with Kashani expressed opinion Iran cld now be saved only by some form coup. When I expressed doubt at permanent success venture this kind, he agreed. He then began in rather hopeless way to urge that no time be lost in giving consideration to possibility of “Iranian Govt in exile” in event Iran or most of Iran is taken over by Communists. He said that Kashani had assumed even stronger position against British than Mosadeq and he no longer believed that Kashani cld save country from drifting toward communism. This particular political leader maintained Mosadeq cld not retreat from his present position re oil disputes; he was certain British wld not yield; therefore Iran was faced with catastrophe.

  1. Repeated to London.