250. Memorandum From the Department of State Representative on the National Security Council Planning Board (Smith) to the President’s Special Assistant for National Security Affairs (Gray)0

SUBJECT

  • The Internal Political Situation in Iran

The Under Secretary has asked that I reply to your memorandum of August 29, 1958.1 The Secretary has read this memorandum and approves of its contents.

We share Mr. Allen Dulles’ concern over the situation in Iran. Most of the ingredients which contribute to this concern have been with us for a long time. The one new element involves the inspiration the Iraqi coup may provide to certain elements within the Iranian military and others who believe that a forcible change of government in Iran will resolve the many problems which face the country. We are inclined to doubt that the deeply rooted social problems of Iran can be resolved in this fashion, and we continue to believe that the Shah of Iran represents the best hope for evolutionary and peaceful change.

Whether the Shah will be successful in bringing about needed reforms with sufficient speed to avert a coup or attempted coup is a moot [Page 588]point. We believe, however, that he has given us an opening through which we might be able to help him gauge better the cross currents within his country, and stimulate him to some constructive action. We have authorized our Ambassador in Tehran to raise the associated questions of growing dissatisfaction and desirable reforms at his next audience with the Shah.2 If the Shah is amenable to this type of approach, some good may come out of these efforts. There is, of course, no assurance that even if he is responsive to our suggestions, this will enable him to ride out the rising tide of discontent. Indeed, the same could be said of any other Iranian government called to grapple with inevitable economic, political, and social dislocations in an underdeveloped country whose peoples have such new and unsatisfied wants.

Gerard C. Smith
  1. Source: Eisenhower Library, White House Office Files, Project Clean Up, Iran. Top Secret; Limit Distribution. The Department of State copy of this memorandum indicates that Mouser was the drafter. (Department of State, Central Files, 788.00/8–2958)
  2. Gray’s memorandum recalled estimates at two recent NSC meetings by CIA Director Dulles of the political situation in Iran and expressed concern that the Department of State give “adequate and appropriate attention to the problem.” (Ibid., S/PNSC Files: Lot 62 D 1, Iran, US Policy Toward—NSC 5703/1)

    In an August 30 memorandum to Rountree, Herter explained Gray’s concern as resulting from a conversation Herter had with Gray regarding two briefings Allen Dulles gave to the NSCHerter asked Rountree to pass to Gray a copy of a State memorandum on this subject as soon as it was completed “so that if this matter is raised a third time by Allen Dulles, the question will not be raised as to ‘what the State Department is doing about this?’” (Ibid.)

  3. In telegram 667 to Tehran, September 2, the Department suggested that Wailes should discuss the questions of opposition to the Shah and the need for reform measures “in broad terms which would protect informants, while at the same time preserving Shah’s confidence in us.” The Department added that “it might be a mistake to mention too many reform measures at the outset.” (Ibid., Central Files, 788.00/9–158)

    In telegram 551 from Tehran, September 8, Wailes reported that he informed the Shah of the Embassy’s examination of and views on underground movements and unrest in Iran without mentioning sources. The Shah was impressed with U.S. intelligence work and receptive to suggestions for preventative measures, such as an anti-corruption campaign and “fireside chats” to his people. Wailes warned, however, that it would be difficult to predict if any concrete results would result from the discussion. (Ibid., 788.00/9–858)