Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

611.88/8–2753: Telegram

No. 357
The Ambassador in Iran (Henderson) to the Department of State¹

secret
priority

Tehran, August 27, 1953—10 a.m.

497. 1. I talked for hour with new Prime Minister Zahedi. His son interpreted. I again congratulated him and wished him success and he again expressed appreciation of US moral support. He said success in rescuing Iran on very brink Communist abyss would be only temporary unless Iranian people could be convinced that new government had something offer them. He must begin acting immediately. For instance he hoped within week put hundred thousand to work on roads which in deplorable condition. Also necessary begin construction immediately thousands houses Tehran and elsewhere for people now without shelter. People tired of promises. Action necessary. He needed US financial assistance since his government not only bankrupt but indebted. Mosadeq had been spending money people had entrusted to banks, insurance companies, et cetera. He could not understand what Mosadeq had had in mind. Latter must have realized he leading country down dead end financial alley. He hoped US aid would not be too late and too little. Iranian people willing work hard; after years frustration and economic chaos they needed stimulus in form action.

2. I told Prime Minister I sure US Government would extend aid but it must be in orderly fashion in accord US laws. US Government not in possession enormous amount funds which it could spend freely. US aid in quantity and form must therefore be in framework existing legislation. Prime Minister asked if I could give him idea of amount. I replied negative. I thought it would be sufficient see Iran through present crisis but doubted it would be enough defray costs grandiose projects for employment workers on mass scale. Prime Minister said government intended certain radical reforms re taxes et cetera, but it would take time realize benefits. He referred in passing to oil problem. Said he was thinking of explaining Iran’s bankrupt conditions to country and hoping reaction would be requests from people themselves to try settle this problem. Much of course would depend on attitude British. I did not consider occasion appropriate to endeavor press Prime Minister this regard.

3. Prime Minister touched on projected exchange of letters with President re additional US aid. Our conversation this regard already outlined in Embtel 487, August 26.²

4. During our talk we also touched on field foreign affairs. Prime Minister said Soviet Ambassador had protested anti-Soviet demonstrations on August 19 and attacks on Soviet information center. He making effort smooth matters over by sending assurances to Ambassador new government desired maintain friendly relations with its neighbors including USSR. Prime Minister said he would not slow up his campaign root out Communists mainly to appease Soviet Union. I remarked I glad he desired improve relations with Iran’s neighbors. I thought it particularly important Iran take energetic steps strengthen friendly relations with Pakistan, Iraq, Turkey and Afghanistan. I sure he would find reciprocal attitude friendliness on part these countries. He agreed. I said also it imperative that in due course diplomatic relations of friendly character be established with UK. He also agreed. I described my conversation re Iran’s positions re US desire Iran support UN on Korean question³ with Meftah on August 24 and with Shah August 25. I said I somewhat disappointed at Shah’s hesitation in matter. It seemed to me that time had come for Iran to play kind of role in international affairs which would be commensurate with Iran’s international importance. I said I did not infer that Iran should take provocative attitude re Soviet bloc. Nevertheless if Iran would come out unostentatiously but unequivocally and firmly in support of efforts promote collective security and discourage aggression, Iran’s international prestige would be greatly strengthened. Furthermore I thought Iranian people themselves would be stimulated and their self respect increased if they had government which did not hesitate take firm stand when accepted principles of international intercourse were at stake. Prime Minister said my views were in accord with his own and that he hoped to be able clarify Iran’s foreign policies. He had asked Entezam and Meftah to discuss with him during course of day foreign policy problems facing Iran Government at present time. He needed help of experienced diplomat like Entezam and therefore intended using him informally until Minister Foreign Affairs could be selected.

5. I found Prime Minister physically vigorous and mentally alert. He is clearly activist who if given wise guidance and not frustrated by Shah could do much to extricate Iran from its present political and economic morass. He exhibited a sensitivity to foreign and internal political matters rather surprising in a person with his limited background.

Henderson

1. Also sent to London.
2. Not printed. (788.5 MSP/8–2653) The text of the Eisenhower–Zahedi exchange, Aug. 26, is in Department of State Bulletin, Sept. 14, 1953, p. 349. Zahedi asked for assistance for Iran in its current economic and financial crises. Eisenhower replied that he would immediately send a representative to assist Ambassador Henderson in this matter.
3. Presumably a reference to the Political Conference on Korea in the wake of the Armistice signed in July 1953. For documentation, see volume xvi.