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Grady on Iran's Cabinet & Oil Committee Prospects

Arash Norouzi
The Mossadegh Project
| October 10, 2017                                                          


Henry Francis Grady, U.S. Ambassador to Iran Henry F. Grady, the United States Ambassador to Iran, cabled this assessment of Premier Mossadegh’s newly forming government.

Earlier the same day, Grady reported on his separate meetings with the Shah and a group of prominent Iranian politicians.




788.00/5–751: Telegram

No. 19

The Ambassador in Iran (Grady)
to the Department of State

Tehran, May 7, 1951—3 p.m.

SECRET

2694. Following is [the U.S.] Embassy’s appraisal [of the] strategy and prospects of [the] Mosadeq Cabinet in light [of] developments reported [in] Embassy telegrams 2661, May 3 and 2689, May 7 1

(1) Mosadeq will concentrate [the] attention [of] his government on [the] solution [of the] oil issue to [the] exclusion [of] almost every other consideration. Electoral reform, while apparently also being pushed, will be dropped if serious Majlis opposition develops. Similarly, [a] request that [the] Majlis approve [the] entire budget [for the] current fiscal year instead of [the] usual series of monthly authorizations may be brought forward, but will not be pushed.

(2) Selection [of] members [of] Joint Oil Committee will probably be made promptly. Although [a] National Front member has privately denied [that] efforts [are] being made to influence [the] selection, it appears highly probable [that] Mosadeq will largely control [the] choice. Intrigue of pro-British elements is, of course, [a] possibility, but given [the] present temper of [the] Parliament and public, successful packing of Committee or blocking of appointments [is] not believed probable.

(3) Once [the] Committee [is] formed, Mosadeq will move cautiously. He has already intimated to [the] British [a] desire to take over control with [a] minimum of dislocation and to avoid breakdown of production. Embassy [is] inclined to believe nominal taking-over by [the] Joint Committee (necessary for domestic publicity purposes) while [a] substantive settlement is discussed, might be acceptable to him. He will, however, press discussions to reach [a] definitive settlement within three months, if possible. Embassy has as yet no information concerning his reaction to Shepherd proposals to Ala, nor (except for vague ideas re evaluation [of] company claims reported [in] Embassy telegrams 2100 March 17 and 2113 March 192) concerning Mosadeq’s ideas on [a] fair settlement. [British Ambassador Francis Shepherd and former Premier Hossein Ala] Embassy shares Britain’s impression concerning his lack of concrete factual info on oil operations and doubts any concrete plan or change-over of management and settlement with AIOC has yet been formulated.

(4) Aside from [the] foregoing, Mosadeq’s present strategy [is] believed [to be] designed to avoid friction with [the] Majlis. His cabinet, composed largely of well-known political time-servers from previous administrations, [is] unlikely do anything [to] antagonize Deputies. Long-range projects likely [to] arouse opposition will be shelved. Administrative reforms begun by Ala will be held in abeyance. Loan agreement [is] unlikely [to] receive early consideration. Majlis will be left as much as possible to [its] own devices. Mosadeq’s method of working is to concentrate on one thing at [a] time.

(5) From [the] standpoint [of] Mosadeq tenure [in] office, [the] Embassy believes this strategy [is] likely to be successful at least for three months specified in Oil Committee resolution. Obviously [the] critical test will come when [the] Joint Oil Committee submits its settlement proposals to [the] Majlis. Mosadeq will have to assume responsibility [for] these proposals. In view [of] his leadership nationalization drive and his present popular following, he appears in [an] especially favorable position to secure [the] acceptance of [a] reasonable settlement if he can be persuaded to make one. Factors which might produce [an] earlier upset include:

(1) Mosadeq’s own health, which is precarious.

(2) Popular impatience, possibly Tudeh-stimulated, should present [an] expectation [that an] early oil settlement be disappointed (obviously the longer [a] settlement is delayed, the more difficult this position will become).

(3) Popular administration with do-nothing policy except on [the] oil issue. (In view [of the] comparatively satisfactory economic situation this spring [this] last possibility [is] considered improbable.)

(6) Despite [the] unfavorable implications of [the] foregoing analysis for early attainment our own programs in Iran, Embassy perceives no feasible alternative for the present but to continue to extend to Mosadeq [the] same measure of cooperation accorded Ala and Razmara. [late Premier Ali Razmara]. He has indicated [a] desire for such cooperation (Embassy telegram 2650 May 24) and unless instructed to [the] contrary, I intend to follow this policy. On the positive side, [the] continued demonstration of our goodwill may afford us the opportunity to influence [a] favorable settlement of [the] oil issue.

Grady


• Note: Bracketed text added and abbreviations removed from original for better readability.
[Annotations by Arash Norouzi]

• Source: Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X (1989)

1 “Telegram 2661 transmitted the text of Mosadeq’s statement to the Majlis at the time he presented his Cabinet. (788.00/5–351) Telegram 2689 reported that the Majlis had given Mosadeq a vote of confidence with 99 in favor and 3 abstaining. (788.00/5–751)” — U.S. State Department Office of the Historian

2 “Neither printed.” — U.S. State Department Office of the Historian


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Related links:

Grady: Shah “Quite Unhappy” About Mossadegh Win, Oil Nationalization (May 7, 1951)

Ambassador Henry F. Grady Meets New Premier Mohammad Mossadegh: May 2, 1951

A Lesson In Oil | Toledo Blade, May 4, 1951



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