[Released July 9, 1953. Dated June 29, 1953]

- Dear Mr. Prime Minister:

            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. 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.

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.

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.

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.

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.

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.

            DWIGHT D. EISENHOWER

NOTE: The Prime Minister's message follows:

- Dear Mr. President:

            In the kind reply which you sent to my message of last January you suggested that I might inform you direct or through diplomatic channels of any views that may be of mutual interest.

In that message I had briefly referred to the hardships and privations which the Iranian people had undergone during the last two years in their efforts to attain their aspirations and also to the difficulties which the British Government has created for Iran in its support of the illogical claims of an imperialistic company.

During the few months that have elapsed since the date of that message the Iranian people have been suffering financial hardships and struggling with political intrigues carried on by the former Oil Company and the British Government. For instance, the purchasers of Iranian oil have been dragged from one court to another, and all means of propaganda and diplomacy have been employed in order to place illegal obstacles in the way of the sale of Iranian oil. Although the Italian and Japanese courts have declared Iranian oil to be free and unencumbered, the British have not as yet abandoned their unjust and unprincipled activities.

Although it was hoped that during Your Excellency's administration attention of a more sympathetic character would be devoted to the Iranian situation, unfortunately no change seems thus far to have taken place in the position of the American Government.

In the message which the Secretary of State sent me from Karachi, he expressed regret that the efforts of the United States to contribute to the solution of the problem of compensation had thus far been unsuccessful. It should be recalled that the Iranian Government was prepared to pay the value of the former Company's properties in Iran in such amount as might be determined by the International Court of Justice. It was also prepared to accept the jurisdiction of the said court with regard to the amount of compensation provided the British Government would state the amount of its claim in advance and that claim would be within the bounds of reason. Obviously the Iranian Government also had certain claims against the former Oil Company and the British Government which would have been presented at the time of the hearing of the case.

The British Government, hoping to regain its old position, has in effect ignored all of these proposals.

As a result of actions taken by the former Company and the British Government, the Iranian nation is now facing great economic and political difficulties. There can be serious consequences, from an international viewpoint as well, if this situation is permitted to continue. If prompt and effective aid is not given this country now, any steps that might be taken tomorrow to compensate for the negligence of today might well be too late.

We are of course grateful for the aid heretofore granted Iran by the Government of the United States. This aid has not, however, been sufficient to solve the problems of Iran and to ensure world peace which is the aim and ideal of the noble people and of the Government of the United States.

The standard of living of the Iranian people has been very, low as a result of century-old imperialistic policies, and it will be impossible to raise it without extensive programs of development and rehabilitation. Unfortunately the aid heretofore granted has been in principle primarily of a technical nature, and even in this respect the assistance needed has not at times been accorded. For example, the Export-Import Bank which was to have advanced Iran twenty-five million dollars for use in the sphere of agriculture did not do so because of unwarranted outside interference.

The Iranian nation hopes that with the help and assistance of the American Government the obstacles placed in the way of sale of Iranian oil can be removed, and that if the American Government is not able to effect a removal of such obstacles, it can render effective economic assistance of the Presidents to enable Iran to utilize her other resources. This country has natural resources other than oil. The exploitation of these resources would solve the present difficulties of the country. This, however, is impossible without economic aid.

In conclusion, I invite Your Excellency's sympathetic and responsive attention to the present dangerous situation of Iran, and I trust that you will ascribe to all the points contained in this message the importance due them.

Please accept, Mr. President, the assurance of my highest consideration.

DR. M. MOSSADEGH

The earlier correspondence referred to by the Prime Minister Was dated prior to the inauguration. This exchange of messages was released on July 11 and is published in the Department of State Bulletin (vol. 29, p. 76).

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