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80. Memorandum on the Substance of Discussion at a Department of State-Joint Chiefs of Staff Meeting/1/ Washington, April 23, 1965, 3:30 p.m. /1/Source: Department of State, NEA/IRN Files: Lot 69 D 490, Iran 1965, POL 1 Gen. Policy, Background. Secret. The meeting took place at the Pentagon. Chairman of the Joint Chiefs of Staff General Earle G. Wheeler headed a 15-man delegation from the Department of Defense; Captain Zimmerman, Rivinius, and Lieutenant General Spivy represented J-5; and Brigadier General Strickland and Deputy Assistant Secretary of Defense for International Security Affairs William Lang represented OSD/ISA. The Department of State was represented by Ambassador Llewellyn E. Thompson, Ambassador Holmes, Kitchen, and Colonel Evans. Bromley Smith represented the National Security Council and Jack Smith represented the CIA. The source text indicates that it is a State draft that has not been cleared with the Department of Defense. There was one item on the agenda--a discussion of the Iranian situation by Ambassador Holmes. The substance of his remarks was as follows: As an introduction, Ambassador Holmes stated that Iran has a 1200-mile border with the Soviet Union and has a long border with a stirred-up Arab World. If the Soviets again try to take over Iran, they would get Iranian oil and outflank all other sources of Middle East oil--a heavy blow to Western Europe. By taking over Iran, the Soviets would also have an open shot to East Africa. We, therefore, have to retain our influence over Iran, and it should not be too costly for us to do so. In September 1959 Iran agreed not to permit any Thor missile bases on its soil. From the Cuban crisis to date the Soviets have followed a change of tactics. Radio Moscow has been relatively mild in its propaganda attacks on the Shah's regime (although clandestine radio attacks continue). Natural trading patterns continue and the Soviets have increased slightly the numbers of their people in Iran--e.g., more cultural missions. Joint enterprises on border area irrigation and Caspian Sea fishing also have been developed. The Iranians, however, are very sensible and very suspicious of the Soviets. The Shah is worried about his people's becoming too complacent about the Soviets. He has asked the U.S. and the U.K. for recommendations to improve his security police. He has never made a move on a problem dealing with the Soviets without consulting the U.S. The Shah is also very concerned about the Persian Gulf and the Arab minorities in the oil lands of southern Iran. There is considerable agitation of Arab minorities by the UAR-subsidized newspapers in Kuwait. But the Shah is a Commander-in-Chief in fact, and he worries about various things a great deal, especially Arab unity. He uses his concerns to push us for more aid. He has stated he is concerned about CENTO. He is disillusioned, but in his own mind he has stopped worrying about military problems because he knows he can be assured of U.S. support. The modernization of the armed forces, a program agreed to in July 1964, is progressing well. He is happy that the U.K. presence in the Persian Gulf continues, but the Shah worries about the day when the U.K. pulls out of the Gulf and he will have to fill the vacuum. The Shah's government reform program is going ahead--in a Persian way. The human materials in Iran are good. The literacy rate is still low but growing. Ambassador Holmes was impressed with the basic intelligence of the Iranian people and stated that the Shah now has a government he never had before. The one great danger to continuing progress and stability is that some one will kill the Shah. Each year that passes, however, will decrease the chaos following the demise of the Shah. The main factor contributing to this improved situation is the improvements being made in the Iranian armed forces. The present Chief, MAAG (Major General Eckhardt, U.S.A.) has done a superb job. Ambassador Holmes hoped that his successor (Major General Jablonsky, U.S.A.) would have similarly high qualifications to permit continued effective influence. Chief, MAAG serves as a military adviser to the Shah; he goes to the Shah and sees him alone; but he still has managed to maintain excellent relations with the Iranian General Staff. On the latest military shopping list of the Shah, Ambassador Holmes has talked to the Finance Minister to give the Shah the facts; it is a constant struggle to keep the Shah's appetite within bounds--e.g., he is talking about getting one squadron of F-111's by 1970. Nevertheless, so long as we recognize that the Shah is moody and he stays alive, the U.S. will be able to handle him. General Wheeler commented that, when General Abdul Hassain Hejazi, Chief of the Iranian Supreme Commander's Staff, visited the U.S., the Iraqis were getting more support from the UAR than we had estimated at the time. Nevertheless, General Wheeler argued that Arab unity was a long time in the future, and noted that General Hejazi was a mirror of the Shah and probably never has an original idea of his own. General Wheeler also noted that improved Iranian relations with the Soviets are all to the good. Ambassador Holmes replied that most officials in the Iranian Government are realistic. Only some of them appear to be complacent about the Soviets and they are really preoccupied with their own problems. General McConnell/2/ stated that a USAF Brigadier General will be assigned as Deputy Chief, MAAG this coming summer. He then asked if the Kurds are currently a problem to the Iranian Government. Ambassador Holmes stated that the Iranian Army still occupies Kurdish areas, but that the government is now beginning to treat the Kurds as Persians and is instituting an aid program for them. /2/General John P. McConnell, Chief of Staff, U.S. Air Force. Ambassador Holmes noted that the Shah was very interested in the Concord Squadron, and was impressed with his visit to the Bon Homme Richard. He has talked with General Adams, CINCSTRIKE, and would be willing to have a floating U.S. reserve to be located in his ports. Mr. Kitchen asked about Iran's relations with Israel. Ambassador Holmes stated that the Israelis frequently force feed the Shah with raw information on the Arab threat. Israeli technical assistance men also aid and abet this in the oil areas of southern Iran. Ambassador Holmes stated that in 1958 we did not live up to our MAP commitments. Ambassador Holmes urged that, in the current five-year modernization program for the armed forces, we do not arouse the Shah's suspicions by permitting MAP slippages to develop. General Wheeler stated that there has been a great effort by all services to overcome MAP slippages--a problem not unique to Iran. General Wheeler stated that the JCS were delighted to get such a favorable and encouraging report on Iran--such was not the case several years ago. Mr. Kitchen observed that a lot of the credit for the improved situation in Iran belongs to the Mobile Training Teams who served with the Iranian armed forces. Ambassador Holmes added that the training of Iranian officers in the U.S. also must be recognized as a reason for the improved situation, although it was agreed that a "Nasser" might well have been trained in the process.
81. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, April 27, 1965, 1700Z. /1/Source: Department of State, Central Files, DEF 19-3 U.S.-IRAN. Confidential. Repeated to CINCSTRIKE and DOD. 1205. Shah's Interest in Arms. After giving me build-up re economic and social progress Iran is making and his philosophy how Iran must be capable of coping with war by proxy,/2/ Shah twenty-seventh stressed importance of prompt and favorable U.S. response to his recent requests for more modern military equipment. /2/In telegram 1204, April 27, Meyer reported that during a private talk following presentation of his credentials the Shah had discussed his "White Revolution" at length, and had made the point that the more successful his revolution became, the more desperate were his enemies. (Ibid., POL 15-1 IRAN) I pointed out U.S. disposition toward Iran has been uniquely friendly, there being no other country where U.S. has involved itself in 5-year arms program. More than that equipment in that program is well advanced over equipment which we providing most other countries in this part of world. Referring to economic review currently under study, I said Shah was on right track in seeking "balanced program" of economic and military progress. Shah said that he hoped following his return from forthcoming month-long journey, economic review and subject of his arms needs can be brought to successful conclusion, e.g., end of May. Shah said main point is that it takes such long time from date of order to date of delivery. Meanwhile, area threat (Nasser) is increasingly imminent. He, therefore, must have early decision as to whether he can have advanced equipment, so adequate training and planning can be undertaken in years intervening before equipment is actually delivered. Having made his major pitch to General Eckhardt (being reported separately) re his desire for F-111, Sheridans and more Hawks, Shah said he wanted to mention to me one further "detail." Originally he had asked for destroyers for defense of Persian Gulf. USG had demurred, on basis destroyers beyond Iran's capabilities. His request for motor torpedo boats had also been turned down. Mention had been made, however, of "bull-pup" air to surface missiles. It obvious, he said, that if Iran had capability deliver its own weaponry, it much preferable to time-consuming maritime vehicles. I told Shah this was new subject as far as I was concerned and I would have to look into it. Shah made clear his greatest defense concern is Persian Gulf area. He said he had to have suitable weaponry and would like to get it from the U.S. if possible. Meyer
82. Memorandum From Secretary of State Rusk to President Johnson/1/ Washington, May 10, 1965. /1/Source: Johnson Library, National Security File, Special Head of State Correspondence File, Iran, Presidential Correspondence. Confidential. SUBJECT Recommendation: I suggest that you telephone the Shah of Iran during his one-day stopover in New York on Tuesday, May 18. The Shah and the Empress left Tehran on May 2 for state visits to Brazil, Argentina, and Canada. On the New York stopover they will be en route from Buenos Aires to Ottawa. The Shah will be residing at the Waldorf Towers, and according to his present schedule he could be reached there by telephone at 11:00 a.m. on May 18. Background: The Shah is important to the United States as the reform-minded ruler of one of the most stable countries in the Middle East. He considers, not without justification, that Iran has been our most dependable ally on the southern periphery of the Soviet Bloc. In spite of some issues that have arisen recently (most notably our differing assessment of the Nasser threat to Iran and the Shah's irritation at our inability to bring rapidly to justice an Iranian who has been abusing our Congress and Courts with false charges of corruption against the royal family), there remains a broad consensus between us and the Shah on the really fundamental issues of foreign and domestic policy. As our posture toward Iran changes gradually in keeping with the country's increasing financial strength, administrative capabilities, and broadening foreign ties, the Shah is watchful for signs of our continuing sponsorship of Iran's welfare and security and, most particularly, our regard for his counsel on key world issues. I believe that the proposed telephone call from you on May 18 would be an important step in maintaining our fruitful relations with Iran./2/ /2/A typewritten notation on the source text reads: "He made the call." Dean Rusk
83. Memorandum From Robert W. Komer of the National Security Council Staff to President Johnson/1/ Washington, May 17, 1965. /1/Source: Johnson Library, National Security File, Special Head of State Correspondence File, Iran, Shah Correspondence, Vol. I. Secret. This memorandum was attached to a May 18 transmittal note from Jack Valenti to the President that reads: "Mr. President, I thought you'd want to see this." We have a massage problem with the Shah of Iran, who has a 24-hour stopover in New York Tuesday, 18 May, en route from Brazil and Argentina to Ottawa and Paris. We naturally evaded feelers that he come down here, so Rusk urges five minute phone call from you. It would be worth weeks of lower level diplomacy. The Shah has been very good on Vietnam and the Dominican Republic, and we don't want De Gaulle to talk him out of those positions. Harriman will be talking to the Shah in the Waldorf Towers from 10:30 to 11:30, so you'd have no problem getting through to him then. Here are a few suggested talking points: 1. Happy to have Shah and Empress on American soil again, even if only briefly. You are especially relieved that the Shah escaped the recent attempt on his life (you wired him). You know from your own role at the time of President Kennedy's assassination what a shock such an experience is. 2. You are glad he was so well received in Brazil and Argentina. Did he pick up any interesting reaction to our handling of the Dominican crisis? Vietnam? 3. You appreciate the Shah's support for our Dominican and Vietnamese positions. You are especially concerned that the Afro-Asian Conference in Algiers next month will degenerate into an anti-US orgy unless responsible delegations like Iran's stand up against the Communist steam-roller. Could the Shah help? 4. You'll be anxious to hear Gov. Harriman's report of his talk with the Shah (we hope the Shah doesn't bring up the Gudarzian case, of an obvious swindler who's sought to implicate the Royal Family)./2/ /2/See Document 84 for a record of Harriman's meeting with the Shah. If you can't call, telegram at Tab/3/ would be useful (but not half as good). /3/Not printed. R.W. Komer
84. Memorandum of Conversation/1/ New York, May 18, 1965. /1/Source: Department of State, Central Files, POL 15-1 IRAN. Confidential. Drafted by Talbot on May 21. Approved in S/AH on May 26. SUBJECT PARTICIPANTS Governor Harriman and Mr. Talbot met with the Shah for one and a quarter hours at the Waldorf Towers. Mr. Chester Carter of Protocol was also present. The Shah in discussing his recent visits to Brazil and Argentina said that it had seemed quite useful to tell them of Iran's experiences in facing land reform problems frankly and in undertaking rigorous battles against corruption. He also had had opportunities to state publicly his strong endorsement of United States positions on Vietnam and the Dominican Republic. This seemed to him important, because the President is taking just the right line in a very difficult period and deserved the public support of those who agreed with him. The pity was that many others agreed but were unwilling to say so except privately. Governor Harriman congratulated the Shah on the position he had taken and expressed our appreciation for his firm and forthright backing of our efforts to meet difficult situations. The Governor then explained in considerable detail the course of developments in Vietnam and the Dominican Republic, and the specific aspects of our policy in each situation. The Shah reiterated his support of United States firmness in dealing with Communist-directed challenges of these sorts. He inquired whether any results had been achieved by five day stop in bombing and expressed approval of decision to renew operations. Talk turned to the forthcoming Afro-Asian Conference in Algiers. The Governor expressed the hope that the Shah's representatives could play a useful role in preventing the conference from being captured by extremist delegations. The Shah stated this to be his intention, and recalled he had discussed the matter with the Secretary of State during the latter's visit to Tehran in April. The Shah said he had not decided who would lead the Iranian delegation but it might be the Prime Minister. The Governor encouraged the Shah to send the Prime Minister, whose official position and personal qualities would enable him to deal effectively with the heads of government present at the conference. The Shah said he would welcome continuing discussion with the United States and exchange of information on preparations for the conference. He suggested that the American Ambassador in Tehran might be armed with reference material. Governor Harriman and Mr. Talbot assured the Shah that our Ambassador in Tehran would be equipped to discuss all aspects of preparations for effective participation in the Afro-Asian Conference. Turning to his own region, the Shah referred to Iran's complete alliance with the United States against the "ultimate Communist danger." At the same time, he said, it would be regrettable if the major powers entered into limited area disputes. Therefore, he felt it important that Iran should strengthen itself to deal with any problems that might arise in, for example, the Persian Gulf. He expressed confidence that the situation could be kept manageable with the military strength Iran was building. He was concerned about the situation in Iraq. Iran had substantial assets there, with the Kurds, Shiahs, etc., but he was not using them at this time. Governor Harriman and Mr. Talbot encouraged the Shah in a policy of restraint toward the Arab nations. The Governor added that strength for Iran obviously needs to be based first on social and economic modernization. He hoped the Shah would always keep his military outlay in balance with these other objectives. The Shah said this was his intention. A brief discussion of the situations in various Arab countries developed no new points. The Shah spoke of relations with his close neighbors along the Soviet periphery. The Governor noted that the King of Afghanistan had been warm in his comments about the Shah. The Shah recalled the assistance Iran had given to Afghanistan and suggested he would like to strengthen their relationship, "even though I don't understand how a country can call itself neutral," he said "we must protect Afghanistan's neutrality against Soviet pressures." The Shah expressed his desire to help persuade Ayub of Pakistan to be careful in his dealings with Communist China. He said that he was broadening Iran's relations with India, now through cooperation in oil extraction and in the future perhaps in such things as aluminum. Looking westward, the Shah expressed concern about the mood in Turkey, which he found badly shaken by the Turkish inability to get a favorable solution to the Cyprus issue. The Governor and Mr. Talbot congratulated the Shah on escaping harm when the attempted assassination occurred on the night after the CENTO delegates had dined with the Shah. The Shah described the incident as a near thing and expressed his concern at the Communist encouragement of Iranian students in Western countries, particularly in Germany, Austria and Great Britain. He identified the assassination ring as developed and directed by students in Britain. In the middle of the conversation, the President telephoned the Shah from Washington./2/ It was clear that the Shah greatly appreciated this gesture of friendship and interest. The President asked the Shah to take an active interest in the Afro-Asian Conference. /2/See Document 85.
85. Telephone Conversation Between President Johnson and the Shah of Iran/1/ May 18, 1965, 11:01 a.m. /1/Source: Johnson Library, Recordings and Transcripts, Recording of Telephone Conversation between President Johnson and Mohammed Reza Pahlevi, May 18, 1965, 11:01 a.m., Tape 6505.17, PNO 4. No classification marking. The Shah was in New York; the President was in Washington. This transcript was prepared by the Office of the Historian specifically for this volume. LBJ: Hello? MRP: Hello LBJ: Your Majesty, how are you? MRP: Mr. President, I'm so glad to hear you. LBJ: Well, it's wonderful to hear your voice, and we're so happy to have you and the Empress back in our country again, even if it's very brief. MRP: Yes. Unfortunately, we could not pay you our respects. LBJ: Oh, I would like so much to see you. I was, oh, so relieved, though, that you escaped the recent attempt. You know from your own role at the time of President Kennedy's, what a shock such an experience is. MRP: Yes, it was rather close this time. LBJ: Well, we were so pleased that you were so well received in Brazil and Argentina. MRP: Yes, they have been very nice to us. And I hope that this is a new era between our part of the world and this continent of South America. LBJ: I sure hope so. Did you pick up any interesting reactions to our handling of the Dominican crisis or Vietnam? MRP: Oh, well, I think that all of them in their inner heart were in favor of it. Some of them dared to say so openly and some others refrained to. But I suppose they all agree in their inner hearts. LBJ: Well, we certainly are grateful to you for your Dominican and Vietnamese position, and I'm very concerned that the Afro-Asian Conference in Algiers next month will degenerate. I'm afraid it will be an anti-US operation unless some responsible delegation like Iran stands up against these steamrollers. MRP: Yes. We shall do our duty, and we are grateful to you to have taken this attitude, Mr. President. LBJ: Well, we have to take this when our liberty is at stake-- MRP: Oh, yes. LBJ:--and I'm going to be anxious to have Governor Harriman report his talk with you, and if you have any suggestions for me, let me know, and please give Mrs. Johnson's high regards to the Empress and yourself. We look forward to seeing you before too long. MRP: Thank you very much. Would you please be kind enough as to give Mrs. Johnson our best regards? LBJ: We enjoyed our visit in your home so much. You don't know how much it meant to both of us and how close we feel to both of you. MRP: Well, we have the best of recollections, really, of your visit. LBJ: Everyone tells me you have just made phenomenal progress. MRP: Yes. We have been very lucky. LBJ: Well, no. You've been very courageous, that's what. And the very best of everything to you. MRP: Thank you, Mr. President, I wish you all the success. LBJ: You tell Governor Harriman I want him to report to me. Y'all talk confidentially [about] every problem you have so I can get a full report. MRP: All right, thank you very much. LBJ: And I look forward to--you help us out in Algiers now and you get on top of that. MRP: All right. Thank you very much.
86. Excerpt From Memorandum for the Record/1/ Washington, May 20, 1965, 2 p.m. /1/Source: Department of State, NEA/IRN Files: Lot 69 D 489, Iran 1965, POL 23-1 Plans, Programs--POL 23-1-a, Internal Defense Plan. Secret. No drafting information appears on the source text. The excerpt was prepared as an enclosure to an airgram to Tehran, but a handwritten notation on the source text reads: "Note: this not included in airgram as Maechling says sending minutes of CI outside of country prohibited. dg 6/1/65." SUBJECT PRESENT Governor Harriman, Admiral Raborn, Mr. Bell, Mr. Anderson vice Mr. Rowan, General Anthis vice General Wheeler, Mr. Friedman vice Mr. Vance Ambassador Holmes and Messrs. Jernegan and Maechling were present for the meeting 2. Progress Report on Internal Defense Plan for Iran Mr. Jernegan briefly reviewed the Progress Report on the Internal Defense Plan for Iran/2/ saying that there is essentially no great change and that the situation has vastly improved despite recent assassination attempts on the Shah. He said that there is always danger of assassination of high level officials in Iran but that there are no indications of major plots to threaten the regime. He informed the Group that local internal security forces have improved their ability to handle internal security situations and that the Army has enough personnel trained in counter-insurgency to begin training themselves. /2/Governor Harriman's April 28 memorandum for the Special Group (CI) summarizing the Country Team's fifth and sixth progress reports on the Internal Defense Plan for Iran is ibid. Airgram A-81 from Tehran, August 22, 1964, containing the Embassy's fifth progress report and airgram A-501 from Tehran, March 29, 1965, containing its sixth report are ibid., Central Files, POL 23-1 IRAN. He briefly reviewed some of the reform programs such as the Literacy Corps, female emancipation and administrative and fiscal reforms. He said that the Youth Program is progressing well but that there is a shortage of operating funds for the Student Center. Messrs. Bell and Anderson said that USIA has agreed to provide the funds that the Country Team has requested; if there is a problem in providing more funds, AID is prepared to take another look. Mr. Jernegan concluded by saying that no new actions by the Special Group are called for and suggested that in light of the current stability of Iran the requirement for semi-annual progress reports on the IDP be suspended and reports be submitted on an ad hoc basis. The JCS and DOD representatives did not concur, stating that the police have probably improved but are not yet capable of handling a situation such as that of June 1963; also there is unrest among the ethnic minorities. The Group agreed with the Chairman's recommendation that, since there is a new Ambassador in Iran, he be asked to submit one more report by October 1, together with his recommendation on further reporting. The Chairman reported that in his discussions with the Shah on Tuesday, the Shah had expressed concern over student activities. The Shah said that he had evidence that the recent attempt on his life was planned by students recently returned from England. Mr. Jernegan informed the Group that the Shah's information is from an Iranian source, but we do agree that students are involved. Ambassador Holmes pointed out that there are indications of Chinese Communist influence among the students in Iran. Mr. Bell brought the attention of the Group to the recent report of a Youth Committee Survey Team asking if not more could be done in this field. The Chairman suggested that the Interdepartmental Youth Committee take a look at our programs in Iran to see what useful things we might do to assist. In reply to a question by the Chairman, Mr. Bell explained that the phase-out of AID in Iran, tentatively scheduled for FY-68, will be reviewed annually, and if there is need for continued CI programs they will not be phased out. The Director of Central Intelligence asked if there is a contingency plan on what should be done in case the Shah is removed from the scene, and if there is one, is it adequate? Ambassador Holmes replied that there has been a contingency study. He said there are constitutional provisions for a regent, but not for a regency council, and that it has been suggested that perhaps there could be a council of advisers for the Prince, acting as regent, until such time as he reached his majority. He reported that he had discussed this subject with the Shah but nothing specific has been done. It was agreed that the Ambassador should be requested to bring this contingency study up-to-date. The Director of Central Intelligence asked if there is any new action that we should take to expedite and support such programs as Youth, Literacy Corps, and land reform, etc. The Group agreed with the Chairman's recommendation that the Ambassador be asked to observe these programs closely to insure that all steps are being taken to improve their effectiveness. The Director of Central Intelligence asked if the USIA is initiating or assisting in any psychological operations in support of western-oriented youth and labor groups. Mr. Anderson answered by saying that USIA will prepare a report on this subject for the Group. The Director of Central Intelligence stated that he would like to have the Country Team's views on the adequacy of Iranian security measures to protect the Shah. The Group agreed with the Chairman's recommendation that we request the Country Team's views on this subject.
87. Memorandum From Harold H. Saunders of the National Security Council Staff to Robert W. Komer of the National Security Council Staff/1/ Washington, June 8, 1965. /1/Source: Johnson Library, National Security File, Robert W. Komer Files, Iran, 1965-March 1966. Confidential. RWK: FYI. Here's a cable/2/ approving the second tranche of Iran's five-year military purchase. Chief issues decided this way: /2/Not found attached; see Document 88. 1. Shah asked us to lift the $200 million ceiling to $230m. to raise war reserve ammo from 30 to 60 days. Our military go along with this (Greece, Turkey, 90 days; Korea, Thailand, China, small arms 90, other 60; Pakistan, India 60). However, decision recommended in this cable is to go ahead with the ammo but not raise the ceiling yet. Since this $90 million brings two-year total to about $140 million, we'll be pressing the ceiling well before five years. Embassy says greatly improved revenue prospects warrant slight increase in ceiling. But leaving it intact now maximizes our leverage later. 2. Iranians want to go back up to 172,000 man force level. DOD goes along, and even AID isn't ready to fight over this. 3. Stall on advanced aircraft, Hawk and Sheridan (which is still in R & D anyway). The planes will be the toughest to handle, and there's some thought of putting the Bullpup missile and F-5 together but not this year. AID feels the economic review this spring was a major step forward. Iranians worked from sound economic projections for the first time. The Shah is still working on the principle of putting hardware above everything else, but AID feels this is the resurrection of a useful economic dialogue. So while the Shah is probably pushing reasonable economic ceilings, we may make progress by going along on the war reserve and force level in order to drag our feet on less reasonable requests. Any objection to the attached? HHS/3/ /3/Printed from a copy that bears these typed initials.
88. Telegram From the Department of State to the Embassy in Iran/1/ Washington, June 12, 1965, 11:03 a.m. /1/Source: Department of State, Central Files, DEF 19-3 US-IRAN. Confidential; Priority. Drafted by Tiger, Mulligan, R. Murray (DOD/ISA), and Henrietta Towsley (AID/NESA); cleared in substance by Solbert and Captain Cain of SAMAA, and in draft by Komer, Arrill, Bunte, and Chief of AID's Military Assistance Division Robert B. Black; Charles Mann of the Bureau of the Budget was informed; and approved by Jernegan. Repeated to CINCMEAFSA. 1124. Joint State/Defense/AID message. Embassy A-590;/2/ Embtels 1311,/3/ 1346,/4/ 1359,/5/ 1402/6/ and DEF 2212./7/ Concur your analysis US policy objectives and evaluation Shah's position outlined A-590. While we share CT's concern about Shah's long-term military spending plans, we agree that so long as he convinced Iran's economic prospects will allow both meeting these plans and financing ambitious development program, there is probably little we can do directly at this time to curtail his military spending without risking impression we reacting completely negatively his desires purchase additional US military equipment and thereby jeopardize what influence we have. We have therefore worked out approach outlined below, which we believe sufficiently responsive to Shah without posing present threat Iran's economic welfare. We trust that you will find further opportunity to impress on Shah that factors affecting control and growth of the economy demand action as urgently as do military requirements. Believe presentation to Shah should be designed: (1) avoid any suggestion advance commitment specific military equipment; (2) exploit opportunity offered by annual review procedure to interest Shah further in administrative improvements required minimize inflationary dangers and threat to development effort inherent proposed military expenditure increases. /2/Airgram A-590 from Tehran, May 15, transmitted the Embassy's first annual review of the July 4, 1964, Memorandum of Understanding. (Ibid.) /3/Dated May 24. (Ibid.) /4/Dated June 1. (Ibid., E 2-2 IRAN) /5/Dated June 3. (Ibid., E 8 IRAN) /6/Dated June 10. (Ibid., DEF 19-3 U.S.-IRAN) /7/Not found. Specific points for discussion with Shah follow: 1. Second Tranche. Approve second tranche in range $85-$90 million covering items as proposed Enclosure 2, A-590. This decision may be communicated to Shah in general terms, including our willingness help Iran secure 60-day war reserve ammunition by combination various means now being explored (including credit), as proposed Embtel 1402. Re other items in tranche, they may be catalogued, but details implementation must await clarifications discussed paras 7 and 8 below. Details second tranche items should be developed by MAAG with GOI and submitted Military Departments info OSD for preparation Letters of Offer and disbursement schedule. Based on disbursement schedule, instructions for negotiation second tranche credit will be provided by DOD. 2. Five-Year Credit Ceiling. Do not perceive any utility broaching at this time change in over-all credit ceiling ($200 million for five-year period) as specified July 4, 1964 Memo of Understanding. Since approved new items second tranche consistent 1964 illustrative list and since sum first and second tranches does not approach over-all five-year figure, we believe it premature raise issue now. Consideration ceiling change would also cause time-consuming procedural hurdles (new 1550 determination, etc.) which unnecessary face at this time. We would hope Shah would be satisfied this year with second tranche as proposed and our undertakings re other problems as outlined below and would not question five-year total. If he should question, you may refer at your discretion to above points. FYI. Believe we will be in better position to address problem at later date, giving us more time to urge Shah in direction higher priority for economic development and take advantage later reading Iran's economic situation. In any event, you should be aware that, owing present and prospective tightness MAP funds and especially in view Iran's improved financial condition, it unlikely we could modify agreement in any way requiring more MAP resources for Iran than originally foreseen. Sales additional to $200 million in five-year period could, of course, be accommodated without more MAP resources if they were for cash or if unguaranteed commercial credit could be provided. End FYI. 3. Aircraft. Argumentation against F-111 as previously provided: no present or future military requirement for Iran to have an aircraft of this capability, too sophisticated, costly, still in R&D stage. In your discussions with Shah you may note that we recognize that Iran may need at some point aircraft of greater capabilities than F-5. We would be prepared discuss GOI aircraft requirements at greater length with IIAF during course of year if Shah so desires. FYI. DOD plans undertake unilateral study of Iran's aircraft requirements and U.S. aircraft availabilities. End FYI. 4. Second Hawk Battalion. On both Hawk and Sheridan we believe offer "sympathetic consideration" at time next annual review is too strong. On Hawk, we do not wish to convey to Shah idea that we will say "yes" next year only to find that none are available. (See DEF 2212 re problem availability.) Conversely, we do not wish to tell Shah outright that we will not have any available and risk his turning elsewhere at this early stage. Recommend you place chief stress on absorption difficulties, but also refer possible improvements we contemplating to Hawk, and suggest further discussions during coming year. 5. Sheridan Tanks. Principal arguments already known to you: Sheridan still in R&D, none are available, problem of absorption, and--as in case of all other items--problem of cost. We suggest GOI be informed of problems, that it is premature for commitments, that we recognize their requirement for improved armor capabilities and that we should also watch this over course of year and see where we stand at time next annual review. 6. Bullpup. FYI. While agree your position, we willing consider sale Bullpups at some future time provided they are available and releasable to Iran from security standpoint; and if in your judgment this will help dampen Shah's desires for more sophisticated aircraft. At present time there are none available from U.S. production, although may be available from European consortium. We have not looked into this in great depth, and will not do so unless you so recommend after your discussions with GOI. End FYI. 7. Other Items. Other items recommended for financing under 2nd tranche approved, subject to availability. ARMISH/MAAG should define requirements for Military Depts. so that Letters of Offer can be prepared. DOD now taking steps authorize Military Depts. proceed in advance of funding with supply actions for second 4 C-130s, radio test equipment, 163 APCs and 1610 LMGs. 8. Price and Availability. Prices and delivery schedules cannot be determined in detail at this time. MAAG must first define requirements more precisely for Military Depts. before deliveries can be projected and prices as stated A-590 confirmed. In any case, there would appear to be no obligation determine this type detail in connection with annual review. 9. Force Level. We recognize additional units called for in 1964 Memorandum of Understanding will require some additional personnel; nevertheless, principle that economic development Iran's first need and that military establishment must be forced sort out priorities within reasonably economic ceiling remains key consideration. Ceiling 160 thousand was accepted by Shah only after President Kennedy personally pressed principle during Shah's 1962 visit and ceiling was finally reached only recently. Accordingly, prior to any decision re breaching personnel ceiling which subject high level decision, wish your views on how Iranians might meet modernization needs through reshuffling within 160 thousand ceiling perhaps through cutback non-essential units. We are prepared if GOI considers desirable to assist in personnel survey, to include availability of personnel with requisite skills. In any case, we doubt it necessary broach this subject in connection annual review 1964 Memo of Understanding (which limited by terms of agreement essentially to questions financing and training readiness for equipment purchases) and we gather from Embtel 1402 that you do not expect Shah raise issue June 19 audience. If he should inquire, you may refer in general terms to our concerns as expressed above. 10. Allocation of Economic Resources. We wish stress importance your continued emphasis on value careful economic projections and allocation resources as set forth Embtels 1346 and 1359. Appreciate we must take care not to nip in bud dialogue begun between Shah and economic planners this subject or create suspicion in his mind that economists are "sabotaging" military program, but we will need to reiterate at appropriate opportunities necessity facing hard questions if Iran is to carry out effective development program and attain satisfactory growth rate. Certainly US will have gained important advantage from annual review procedure if continuing dialogue can be established with Shah concerning application competent economic analysis to problem military purchases. You might consider introducing your top economic advisers into high-level discussions military/economic problem, as supplement to ongoing discussions technical military matters between Shah and MAAG chief. We realize discussion this subject with Shah must proceed slowly and carefully. Although projections on which Shah bases optimistic plans for development and military programs probably unrealistic many critical respects, we recognize little advantage debating merits these projections with Shah. Trouble could well ensue if Iran accelerates volume public expenditures at rates foreseen without commensurate increases public savings, but fact remains development program not now competing against military for resources due slowness preparation sound development projects. Since qualitative discussions economic projections apt appear academic to Shah, suggest you strive focus his attention for time being on fact that projections appear indicate that a bright future attainable, but this will not come about automatically merely because resources available, but will require continued and accelerated actions to upgrade economic administration (along lines represented by initial steps toward modern budgeting system) in order to achieve maximum growth rate under conditions minimal inflation. Rusk
89. Telegram From the Department of State to the Embassy in Iran/1/ Washington, June 17, 1965, 2:12 p.m. /1/Source: Department of State, Central Files, POL 15-1 IRAN. Confidential; Immediate; Limdis. Drafted by Newberry and Tiger; cleared by Special Assistant to the Ambassador at Large Rollie H. White, Handley, and Komer; and approved by Rusk. 1144. Deliver the following orally and confidentially to the Shah on the President's behalf. Or if this not practical in view of his imminent departure you may deliver orally to FonMin. Report Shah's response and comments. The President was delighted with the Shah's understanding interest in the Algiers conference when they discussed it in the brief but gratifying telephone chat at the time of the Shah's stop in New York./2/ /2/See Document 85. The President notes that the prospects of the forthcoming conference of Asian and African leaders in Algiers have struck some of our friends with dismay, but he is encouraged by the constructive efforts which Iran is making to the end that the responsible voices of Asia and Africa may have a full and effective hearing at Algiers. The President is impressed to learn from Ambassador Meyer that Iran will seek to focus the main attention of the Asian-African conference on a consideration of ways and means of improving the social and economic conditions of the peoples of Asia and Africa. The President hopes that other responsible delegations will recognize the wisdom of this conception of the "Afro-Asian movement" and not fall prey to those forces of confusion and subversion which cynically seek to betray the deeply felt longings of Asians and Africans to enjoy the fruits of independence and human dignity. The President sees hopeful signs that more and more leaders of Africa and Asia are learning to distinguish their real interests from the lure of slogans and the transitory satisfactions of belaboring the phantoms of ancient animosities. The kind of leadership and example Your Majesty is giving has already done a great deal to bring awareness of these lessons to other governments. If other responsible delegations at Algiers recognize how much may be gained from coordination of their efforts with their real friends, the conference will have a more constructive atmos-phere than some of our friends have feared. So the President hopes that the Iranian Delegation will provide leadership to this end. The President expresses again how much it meant to him to be able to have that all so brief chat with the Shah. The Shah's friendship, understanding, and support are of the greatest importance to President Johnson personally and to the American nation in these difficult days. The President sends the warmest good wishes to the Shah and the Imperial family. Rusk [Continue with the next documents] |
