<--PREV Doc #280  |  Memorial Commission Home Page  |  First Term Table of Contents  |  Presidential Papers Home Page  |  Doc#  |  NEXT--> Doc #282 Document #281; June 30, 1953 To Mohammed Mossadeq Series: EM, AWF, International Series: Iran ; Category: Cable 3295. Secret The Papers of Dwight David Eisenhower, Volume XIV - The Presidency: The Middle Way Part II: Settling into "the long pull"; May 1953 to August 1953 Chapter 4: Striving for Unity   Dear Mr. Prime Minister:1 I have received your letter of May 28 in which you described the present difficult situation in Iran and expressed the hope that the United States might be able to assist Iran in overcoming some of its difficulties.2 In writing my reply which has been delayed until I could have an opportunity to consult with Mr. Dulles and Ambassador Henderson, I am motivated by the same spirit of friendly frankness as that which I find reflected in your letter.3 The Government and people of the United States historically have cherished and still have deep feelings of friendliness for Iran and the Iranian people. They sincerely hope that Iran will be able to maintain its independence and that the Iranian people will be successful in realizing their national aspirations and in developing a contented and free nation which will contribute to world prosperity and peace. It was primarily because of that hope that the United States Government during the last two years has made earnest efforts to assist in eliminating certain differences between Iran and the United Kingdom which have arisen as a result of the nationalization of the Iranian oil industry. It has been the belief of the United States that the reaching of an agreement in the matter of compensation would strengthen confidence throughout the world in the determination of Iran fully to adhere to the principles which render possible a harmonious community of free nations; that it would contribute to the strengthening of the international credit standing of Iran; and that it would lead to the solution of some of the financial and economic problems at present facing Iran.4 The failure of Iran and of the United Kingdom to reach an agreement with regard to compensation has handicapped the Government of the United States in its efforts to help Iran. There is a strong feeling in the United States, even among American citizens most sympathetic to Iran and friendly to the Iranian people, that it would not be fair to the American taxpayers for the United States Government to extend any considerable amount of economic aid to Iran so long as Iran could have access to funds derived from the sale of its oil and oil products if a reasonable agreement were reached with regard to compensation whereby the large-scale marketing of Iranian oil would be resumed. Similarly, many American citizens would be deeply opposed to the purchase by the United States Government of Iranian oil in the absence of an oil settlement.5 There is also considerable sentiment in the United States to the effect that a settlement based on the payment of compensation merely for losses of the physical assets of a firm which has been nationalized would not be what might be called a reasonable settlement and that an agreement to such a settlement might tend to weaken mutual trust between free nations engaged in friendly economic intercourse. Furthermore, many of my countrymen who have kept themselves informed regarding developments in this unfortunate dispute believe that, in view of the emotions which have been aroused both in Iran and the United Kingdom, efforts to determine by direct negotiation the amount of compensation due are more likely to increase friction than to promote understanding. They continue to adhere to the opinion that the most practicable and the fairest means of settling the question of compensation would be for that question to be referred to some neutral international body which could consider on the basis of merit all claims and counter-claims.6 I fully understand that the Government of Iran must determine for itself which foreign and domestic policies are likely to be most advantageous to Iran and to the Iranian people. In what I have written, I am not trying to advise the Iranian Government on its best interests. I am merely trying to explain why, in the circumstances, the Government of the United States is not presently in a position to extend more aid to Iran or to purchase Iranian oil. In case Iran should so desire, the United States Government hopes to be able to continue to extend technical assistance and military aid on a basis comparable to that given during the past year.7 I note the concern reflected in your letter at the present dangerous situation in Iran and sincerely hope that before it is too late, the Government of Iran will take such steps as are in its power to prevent a further deterioration of that situation. Please accept, Mr. Prime Minister, the renewed assurances of my highest consideration. 1 Mohammed Mossadeq, an ardent nationalist who had long opposed British influence in Iran, had become Prime Minister in April 1951. As a leader of the National Front party, he had been instrumental in the unanimous passage of the bill that had nationalized the Anglo-Iranian Oil Company (AIOC) and led to the closing of the world's largest oil refinery at Abadan (for background see Galambos, NATO and the Campaign of 1952, no. 233; no. 181 in this volume, and U.S., Congress, House Committee on Foreign Affairs, Selected Executive Session Hearings of the Committee, 1951-56, vol. 16, The Middle East, Africa, and Inter-American Affairs [Washington, D.C., 1980], p. 27). The lack of skilled technicians made it difficult for Iran to maintain production of oil, and besides, the British and other Western governments boycotted the oil that was produced. Production in other Middle Eastern countries had helped to make up for the loss of Iranian supplies, and the economic situation in Iran had rapidly deteriorated (U.S., Congress, House Committee on Foreign Affairs, Selected Executive Session Hearings of the Committee, 1951-56, vol. 16, The Middle East, Africa, and Inter-American Affairs, p. 147; Eisenhower, Mandate for Change, pp. 159-60). 2 Mossadeq's letter (AWF/I: Iran) first referred to messages exchanged between himself and Eisenhower in January, when the President-elect had urged the Prime Minister to send "either personally and directly, or through established diplomatic channels at any time a communication regarding your views on any subject in which we may have a common interest" (U.S. Department of State Bulletin 29, no. 734 [July 20, 1953], 76-77). In January and in March Mossadeq had cited the economic and political difficulties faced by the Iranian people because of the "illegal obstacles" placed by the British on the sale of Iranian oil; he had requested U.S. aid in ending the boycott. Were this not possible, "effective economic assistance to enable Iran to utilize her other resources" would be imperative. Although grateful for previous U.S. aid, Mossadeq implied in his request that unless he received more, his country might approach the Soviet Union (Yonah Alexander and Allan Names, eds., The United States and Iran: A Documentary History [Frederick, Md., 1980], p. 214). 3 Career diplomat Loy Wesley Henderson (A.B. Northwestern University 1915) had been American Ambassador to Iran since November 1951. According to a June 26 memorandum from Secretary Dulles to the President (AWF/I: Iran), Henderson had drafted this reply. 4 The United States had found itself in a difficult position after the takeover, trying on the one hand to support the nationalistic aspirations of Iran, while on the other hand continuing to support the United Kingdom. In the two years following nationalization, American policy had been to urge negotiations between the two countries, particularly with regard to compensation for losses suffered by the British. For a discussion of these negotiations see Galambos, NATO and the Campaign of 1952, nos. 259 and 362; James A. Bill and William Roger Louis, Musaddiq, Iranian Nationalism, and Oil (Austin, 1988), pp. 185-87; and Dean Acheson, Present at the Creation: My Years in the State Department (New York, 1969), pp. 507-11, 679-85. Earlier this same year, Ambassador Henderson had presented the British and Iranian governments with a plan to replace the AIOC with a consortium of oil companies to purchase Iranian oil. Mossadeq had rejected this proposal as a "form of plunder" (Eisenhower, Mandate for Change, p. 161). 5 Eisenhower had expressed his reluctance to "pour more American money into a country in turmoil in order to bail Mossadegh out of troubles rooted in his refusal to work out an agreement with the British" (ibid., p. 162). 6 The International Court of Justice, the World Bank, and the U.N. Security Council had each debated the controversy and been unable to bring both sides to agreement (see Galambos, NATO and the Campaign of 1952; Bill and Louis, Musaddiq, p. 182). 7 Under the Mutual Defense Assistance Program, Iran had received $23 million in U.S. aid during the 1951 fiscal year and $38 million in 1952 (U.S., Congress, House, Committee on Foreign Affairs, Selected Executive Session Hearings of the Committee, 1951-56, vol. 16, The Middle East, Africa, and Inter-American Affairs, p. 56). After the overthrow of the Mossadeq government in August, Eisenhower would offer Iran an additional $45 million in emergency, economic assistance (see no. 457; Eisenhower to Zahedi, Aug. 26, 1953, AWF/I: Iran; NSC meeting minutes, Sept. 17, 1953, AWF/NSC; and Eisenhower, Mandate for Change, p. 165). Bibliographic reference to this document: Eisenhower, Dwight D. Cable 3295. Secret To Mohammed Mossadeq, 30 June 1953. In The Papers of Dwight David Eisenhower, ed. L. Galambos and D. van Ee, doc. 281. World Wide Web facsimile by The Dwight D. Eisenhower Memorial Commission of the print edition; Baltimore, MD: The Johns Hopkins University Press, 1996, http://www.eisenhowermemorial.org/presidential-papers/first-term/documents/281.cfm <--PREV Doc #280  |  Memorial Commission Home Page  |  First Term Table of Contents  |  Presidential Papers Home Page  |  Doc#  |  NEXT--> Doc #282

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