788.00/3–753: Telegram

No. 314
The Secretary of State to the Embassy in the United Kingdom 1

top secret

5959. Secy in Mar 6 mtg with Eden 2 gave following evaluation present Iranian political situation. While picture still obscure authority Shah has probably largely and permanently disappeared. Mosadeq will probably come through present situation remaining in power. As a result, however, loss authority and prestige by Shah and Army risk of Iran going Communist greater and possibility of transition to an orderly govt when Mosadeq does fall diminished. End evaluation.

Secy indicated if Mosadeq rejects present oil proposal we do not intend to make another believing under this contingency oil question shld be held in suspense. Under such situation large scale US financing Mosadeq Govt not contemplated. Mosadeq shld not receive a premium for acting as he has. There shld be no large US purchases oil. However, we shld be tolerant of minor measures sufficient to keep Mosadeq barely afloat and thus attempt avoid disastrous possibility of Communists replacing him. Illustrative minor steps might include such items as arranging small sales of oil or letting Jones technicians go to Iran.3

Eden made strongest kind of plea that we not permit Jones technicians go stating effect thereof in UK would be very serious. He made plea that we render assistance in ways not directly related to oil. Secy felt certain aspects problem wld have to be played by ear [Page 703] as situation develops but stressed importance attempting prevent a complete collapse and Communist takeover Iran.

In second mtg at White House Secy expressed view situation so dangerous and unpredictable might be necessary act promptly and US wld have to have considerable measure discretion as to what it did. Eden repeated plea that US measures adopted to “maintain a state of friendly stability in Iran” should be unrelated any purchases of oil or activation of the refinery. Eden reemphasized that bitter resentment wld be aroused in UK by presence American technicians in Abadan. This matter left unsettled but with US freedom of action reserved.4

  1. Also sent to Tehran. Drafted by Raynor, approved by Jernegan, and cleared with Bonbright.
  2. See footnote 4, Document 312.
  3. According to a memorandum to the Secretary of State from Byroade, Mar. 4, Alton Jones, President of Cities Service, when leaving Iran in late summer of 1952, indicated that his company might supply technicians to the Iranian oil industry if requested. Since that time the Iranians pressed him to furnish these technicians, but Jones refused because he thought it would cause the administration embarrassment. The British also felt that the dispatch of these people would have adverse effects on British public opinion. Despite this fact, however, Byroade recommended that Secretary of State Dulles inform Foreign Secretary Eden that the U.S. Government could no longer discourage Jones from sending technicians to Iran. (888.2553/3–453)
  4. Ambassador Henderson generally agreed with the Secretary’s evaluation of the Iranian political situation and the Secretary’s outline of future American policy as he expressed it to Foreign Secretary Eden. Henderson believed, however, that the Shah had not completely disappeared, that he was still struggling for survival, and that he might emerge from the present crisis with a certain vestige of influence. (Telegram 3597, Mar. 8; 788.00/3–853)