The Department of State Bulletin
Vol. XXX, No. 763 • Publication 5369
February 8, 1954

Iran. Whereas there is still a long road ahead before a settlement is likely to be reached to the Arab-Israeli problem, there is a general feeling of optimism in Washington about the Anglo-Iranian difficulties and about the future of Iran itself. Recent developments there have led most observers to believe that the new government, under the leadership of the forward-looking Shah and his aggressive Prime Minister Zahedi, [Fazlollah Zahedi] is dedicated to the task of building Iran into a strong and stable country, one that will be able to resist Communist aggression and assist in maintaining world peace. In their accomplishments to date, in the progress they have made in establishing order and security in Iran, in their constructive efforts toward building a sound economy, and in their resumption of diplomatic relations with the British, Iran’s present leaders have shown both courage and decisiveness. As a result of the events of the past few months, the prospects have brightened for an oil settlement, unquestionably Iran’s No. 1 problem.

There is every indication that the Zahedi government and the Shah recognize that a solution must be in keeping with the national aspirations of the Iranian people and at the same time be commercially sound enough to permit the resumption of Iran’s oil flow to world markets. On the other side, the British thinking on Iran now gives evidence of greater understanding of the Iranian point of view. The United States, which has not taken sides in the controversy, has made repeated attempts to assist the parties concerned to find a solution fair to both sides. These efforts are still continuing. Many of you may know Herbert Hoover, Jr., Special Consultant to the Secretary of State on international oil matters, who is currently using his vast experience and technical knowledge in advising the Secretary [Sec. of State John Foster Dulles] on this difficult problem.