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OCR Page 1 of 3*NATIONAL
ARCHIVES AND
RECORDS
BERVICE*
AIDE-MKMOIRE
The American Government considers that the situation in
Iran has become most critical and that it is essential that
immediate steps be taken in an effort to prevent the loss of Iran
to the West.
There seems little likelihood that the Shah or conservative
elements will recapture political influence from the nationalist
government of Mosadeq. lieanwhile, the danger of communist capture
of power is increasing.
Unpalatable though it is, there seems no reasonable alter-
native to supporting the present government. Such support must
be in a manner which will not relinquish British claims to
compensati on for the nationalization of the Anglo-Iranian oil
Company in Iran. Furthermore, it must be done in such a way as to
be justifiable to both British and American public opinion. Also
there must be some prospect that Iran will benefit from the
resumption of oil revenues to the end that budgetary financial aid
will
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