466. At [the] Shah’s request that I visit him privately without publicity, I saw him [at] six o’clock this evening. Pirnia, master of ceremonies, who met me [at the] rear entrance [of the] Palace, said I would find [the] Shah [a] changed man. He was right. [Dr. Hossein Pirnia] [The] Shah showed vigor, decisiveness and [a] certain amount [of] clear thinking which I had not found in him before. Only time will determine whether this change [is] merely [a] temporary result [of his] discovery that people of [the] country had [a] deeper sense of loyalty [to] him than he had realized. In any event, I did not find [the] hesitation, brooding, discouragement and air [of] “what can I do” which I had noticed [during] practically all previous conversations.

2. He greeted me warmly and expressed deep appreciation of [the] friendship which [the] US had shown him and Iran during [this] period. I read [an] oral message from [the] President to which I had taken [the] liberty of adding [an] introductory paragraph as follows: “I congratulate you for the great moral courage which you displayed at a critical time in your country’s history. I am convinced that by your action you contributed much to the preservation of the independence and to the future prosperity of Iran.”² The Shah wept as I read this message and asked me in reply to tell the President how grateful he was for [the] interest which [the] President and Government of US had shown in Iran. He would always feel deeply indebted for this proof of genuine friendship. [The] Miracle of saving Iran which had just been wrought was due to [the] friendship [of the] West, to [the] patriotism [of the] Iranian people and to [the] intermediation [of] God. It [was] impossible for him [to] believe so many factors could have contributed simultaneously to this salvation [of] his country unless Providence had so willed [it].

3. [The] Shah dwelt for some time on [the] part which “common people of Iran” had played. People of [the] poorest classes who were ill-clad and hungry had been willing [to] sacrifice their lives on his behalf. He could never forget this and he would never be satisfied until hunger had been eliminated from his country. Iran had been saved but victory would be short-lived unless substantial aid came from [the] US immediately. No time could be lost. This was Iran’s last chance to survive as an independent country. I said I agreed that if [the] present government should fail, Communism seemed to be [the] only alternative. He said “If I fail, [there is] no alternative but Communism. People have shown their trust in me and it rests upon me [to] prove their trust [is] merited. I must help [the] new government live up to expectations and I cannot do that without quick aid from the US. How soon can this aid come and in what quantities and form?”

4. I replied [that the] US [is] prepared [to] extend aid but it must be given in [an] orderly way and in circumstances which would be acceptable [to the] US public as well as Iranian public. I had been endeavoring all day to get in touch with financial and economic experts [of the] new government in order [to] begin conversations. If he wished [to receive] quick aid, he should take steps [to] see that conversations begin immediately. He promised [to] talk to Zahedi this evening in [an] effort [to] accelerate [talks]. [The new Prime Minister, Fazlollah Zahedi]

5. [The] Shah said he [is] not completely happy re [the] Cabinet which Zahedi had presented him on his arrival. Same old faces which had been rotating in office for years. He had hoped for [a] Cabinet which would stimulate [the] country particularly [the] youth. He had been told [the] Americans had insisted Amini be included as Minister [of] Finance and that [a] Cabinet be selected before his arrival and presented to him as [a] fait accompli. [Ali Amini] I told him [this] information [was] incorrect.

I do not know who had selected Amini. Certainly not Americans. There had been [a] feeling in [the] Embassy that [a] Cabinet should be formed quickly so [that the] Government could begin to function [at the] earliest possible moment, [I had] no idea [who is] endeavoring [to] have members selected without consultation with him. He said he [was] relieved [to] hear me say this. He [was] sure Americans would not begin trying [to] interfere in [the] personnel matters of [the] Government. They should know from experience this would be [the] surest way [to] change friendship into suspicion. [It is] Particularly important [there be] no interference in [the] future in his control [of the] armed forces. Neither foreigners nor Iranians should come between him and [the] army. Razmara had been unsuccessful in trying to separate [the] army from [the] Shah. [Gen. Ali Razamara, former Premier] Mosadeq had been able to break down army unity. [Dr. Mohammad Mossadegh] It was his task and it would be [a] difficult and delicate one to rebuild [the] army as [a] solid block loyal to him. Otherwise there would be no stability in [the] country.

6. I asked if I [was] to infer he [was] dissatisfied with [the] way Zahedi had been conducting affairs or if he [were] under [the] impression [that] Zahedi [was] attempting [to] exert authority which should be vested in him. He replied negative insisting he had complete confidence in Zahedi. He did not believe Zahedi had ambitions other than [to] serve Iran and its Shah, nevertheless he thought that certain advisers around Zahedi were pressing [the] latter to take actions without proper consultation with him. He had had several discussions with Zahedi and was sure that he had achieved [an] understanding with him re [the] extent [of] consultation in [the] future.

I said Zahedi and many other army officers had risked their lives for [the] Shah and country. I hoped [the] Shah would show in some way his appreciation. He said he intended to do so but he must disappoint many retired army officers expecting [to] resume active service. Most of them [are] outmoded, some corrupt. He could give them decorations and other awards but not jobs.

7. In discussing [the] failure of [the] plans on [the] night of August 15th he said someone must have betrayed them. Could it have been British agents? [The CIA-hatched coup plot was foiled when Mossadegh had the officer who delivered the Shah’s dismissal decree, Nematollah Nassiri, arrested]

I expressed surprise. I pointed out [that] on various previous conversations he had said [that] if Iran [were] to be saved [it was] necessary for [the] British and Americans to have [a] common policy re Iran and work with mutual confidence. This situation had been achieved and I hoped he would never again make either to [the] British or Americans remarks which might tend [to] undermine that mutual confidence. I knew for [a] fact that [the] British were dealing honestly with him and he should get out of his head once [and] for all [the] idea [that] they [are] engaging in double dealing. He said he [was] relieved [to] hear this and believed me. I told him [that] Communists espionage facilities [are] well developed. They had many dangerous hearing devices. He said perhaps they had broken down [the] code [of the] telegrams exchanged between Tehran and Ramsar. I agreed this [was] quite possible.

8. I said if Iran wanted [the] British and US [to] pursue [a] common policy re [the] Iran Government [it] should not expect [to] receive substantial aid from [the] US while it was making [the] British [a] whipping boy. I worried lest when [the] Majlis reassembled there would again take place long tirades against [the] British. I [am] also concerned re [the] Tudeh press in this respect. He said he would endeavor [to] arrange for those members [of the] Majlis who had not resigned to meet and vote [for the] dissolution [of the] Majlis. Elections would then be held in [the] spring so [the] Government could accomplish much without interference [of the] Majlis. It was his intention also not to convene [the] Senate until [a] new Majlis [was] elected. He intended [on] taking steps also to reward in some way although not with Cabinet positions [a] small band [of] Majlis members who had at [the] risk [of their] lives refused [to] resign. It [was] also his intention [to] completely root out [the] subversive press. He [is] determined [to] completely wreck [the] Tudeh organization while at [the] same time maintaining as correct relations as possible with [the] USSR.³

9. In terminating [our] conversation he again urged me [to] impress on [the] US Government [the] importance [of] receiving substantial and immediate financial and economic aid. In [the] absence [of the] Majlis it would be difficult [to] arrange for [a] loan. Therefore most of this aid must be in [the] form [of a] grant. I said if this [is] true we might be severely hampered in our efforts. For instance it might be easier quickly to obtain funds for road building and similar programs through loans rather than grants. He promised [to] look into [the] legal aspects [of] this problem but said he feared it might be impossible for [the] Iranian Government to accept loans without [the] consent [of the] Majlis.

HENDERSON