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150. Letter From the Deputy Under Secretary of State for Political Affairs (Johnson) to the Deputy Secretary of Defense (Vance)/1/ Washington, July 6, 1966. /1/Source: Department of State, Central Files, DEF 19-8 US-IRAN. Secret. Dear Cy: Ambassador Meyer informed the Shah of Iran in late May of the U.S. proposal for an additional military credit sales program to Iran of up to $200 million. The Shah left almost immediately for state visits in Romania, Yugoslavia and Morocco. Since his return to Tehran the Shah has conveyed to the Ambassador directly, and through his aides, some serious misgivings about our offer. His dissatisfaction stems from his almost obsessive concern for the security of Iran's oil-rich province of Khuzistan and his conviction that equipment for the defense of this vital area must be obtained in the shortest possible time. The Shah has mounted major pressure campaign to bring us around to his point of view, using a number of high-level Iranians and the British Ambassador in Tehran as channels of information as to what he might do if the United States is not more responsive to his needs. This has been in addition to his own personal contact with Ambassador Meyer. The principal spectre raised in this war of nerves has been the possibility that Iran would buy arms from the Soviet Union, if the United States could not offer Iran what it feels it needs at this time. Obviously, the bargaining element is very strong in this dialogue, which is reminiscent of many exchanges with the Shah in the past. Times have changed, however, and Iran is receiving large oil revenues and is experiencing steady economic growth. The Shah, who more than any single individual is responsible for this progress, is riding high. Al Friendly's article in the Washington Post gives a balanced picture of the Shah's present strengths and weaknesses. With this as background the question arises, if we are to preserve our special relationship with Iran, how far we need to go to meet the Shah's demands. To accede completely is probably unnecessary, even if it were possible from the point of view of the resources available to support a military program in Iran. Nevertheless, the Shah has got himself committed publicly to an independent arms procurement policy. It will be impossible for him to retreat without some face-saving device. Should this be lacking, I fear the Shah could easily take steps which would jeopardize our position in Iran and which would be contrary to our national interest. In the light of all this, we have concluded that present political hazards are great enough to call for a little "give" in our military proposal. The Embassy in Tehran has suggested a number of possibilities, including the sale of rehabilitated F4C's at a cost substantially lower than the F4D's now being offered the Iranians and the waiver of R & D costs in connection with the new credit program. A third possibility, in line with the Peterson Report proposal, might be increasing the size from 12 to 16 of the F4D squadron now being offered. I would very much appreciate your reaction to these suggestions and your own judgment as to how we might best seek to keep our relationship with Iran on an even keel. Sincerely, Alex
151. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, July 7, 1966, 1350Z. /1/Source: Department of State, Central Files, DEF 12-5 IRAN. Secret; Priority. Repeated to CINCSTRIKE/USCINCMEAFSA. 80. Military Sales to Iran. 1. In hour-long talk morning 7th, I told Shah that time had come for frank conversation on arms procurement problem. Shah said he welcomed opportunity and wanted make clear that steps he taking in no way intended as "threats." I said what I had to say should also be considered in framework not of threats but facts. 2. I opened by expressing full USG support for Iran's "independent" policy, emphasizing we delighted Iran able stand on its own feet. Similarly, we can understand Iranian desire in military field to get best buys and to diversify sources of supply. We had been aware of Toufanian's shopping tours to Western Europe and this gave us no serious concern. What was cause for concern, however, would be turning to Soviets for arms. At least three times during conversation I stated categorically that move to Soviets will inevitably have serious "impact" as far as U.S. concerned, but added that precise nature that impact uncertain. 3. Shah professed failure to comprehend why there should be any US reaction. Contact has been made with Soviets, he affirmed, but acquisitions would be limited in quantity and quality. I pointed out Americans are human and there not slightest doubt they would be deeply hurt that valued and admired friend like Shah has decided to trade in arms with our adversaries. This particularly true, I added, at this time when whole American nation is gripped by anxiety over Vietnam. 4. Shah said problem is one of basic economics. As he had publicly stated in convocation of Deputies March 1, if oil income not stepped up to meet Iran's requirements Iran would have no choice but to look to sources of supply other than traditional suppliers. Problem was purely and simply one of foreign exchange. 5. On same occasion, Shah said, he had publicly stated his desire maintain traditional sources of arms supplies if those sources would offer acceptable terms. He had made same point in his personal appeals to President Johnson. Meanwhile, he had "waited seven months" for US to understand and respond sympathetically. R and D costs were being assessed and in case of Hawk Missiles this alone represented $2,000,000. I tried to explain that "accessorial charges" included number of elements. Crowning blow, Shah said, was limiting Iran to one squadron of 12 F-4 aircraft. Clearly, Shah said, USG not interested in according Iran favorable treatment compatible with investment US has put into this country or with traditional friendship between our two countries. 6. [garble--USG?] deeply devoted to Iran's higher interest, I said, USG, unlike certain other countries, not sending arms peddlers around even though we have serious balance of payments problem. We abhor arms races and overriding desire of President and others has been keep military expenditures to minimum adequate level so that economic progress can go forward. I went on to describe his assessment of our hardware response as grossly unfair. Stressing framework of our 1962 and 1964 agreements, I pointed out generous USG cooperation over years which continues to this very moment. Despite surprise nature of additional $200,000,000 authorization which Shah requested and received from parliament, USG had come forward with offer of additional $200,000,000 credit. Military costs are high these days, I said, and US equipment is best available. Prices had been shaved as best we could. Noted in this connection Hawk Missile battalion was offered at $28.8 million when earlier it had been $30, yet Shah in our conversation week ago scarcely noticed Hawk item. Shah said originally we had talked of $22 million price. I noted that was "naked" Hawk battalion. 7. Shah said total cost of items Iran required was over $400 million according prices USG offered. I said on contrary I continue to have conviction we could work out acceptable procurement program of USG purchased items, providing efficient and adequate military security. I went on to say that indicative of USG's general forthcomingness, there is today over $200,000,000 worth grant assistance either undelivered or contemplated over next three year period. It difficult to understand, I said, how our Iranian friends overlook something of such importance and appear ready to jeopardize it. Noted in this connection difficulties in obtaining grant funds to support such assistance from Congress. 8. Referring to inevitability of impact as far as USG is concerned, Shah said if USG held up on planned military supplies it would naturally produce a chain reaction. Among other repercussions, Iran would procure equipment elsewhere. Because of sensitivity of aircraft, he would not consider MIGs. Shah said if F-4 aircraft unavailable he would buy Mirages, adding that French are ready at any time to conclude transaction including credit. When I recalled his aversion to single engine aircraft Shah noted again that Israeli Air Force Chief of Staff had been here and had recommended Mirages enthusiastically. 9. Agreeing with Shah that chain reaction unfortunate, I asked why in order to save a few dollars by purchases from East Bloc he so ready to risk so much. Noted in this connection how Russians are duping so many Mideast countries by handing out MIG-21s "like lollipops" and mesmerizing Iranians and others with 2-1/2 percent interest rate. Shah said problem was not so much savings as it was Iran's shortage of foreign exchange, caused by lack of responsiveness of oil consortium. It was because of this that Iran must turn to barter arrangements with Soviets. 10. Shah said he knew we would lecture him re iniquities of dealing with Soviets. No one knew them better than he, he said. He fully aware their aims, including his own overthrow. I assured him we fully realize Iranians have had more firsthand experience this subject than even we. Shah said we should realize that by getting Soviets to contribute to Iran's strength, he was in fact improving Iran's capability of resisting Commie penetration. 11. This prompted discussion of implications of Commie involvement in Iranian military establishment as far as US security considerations concerned, vis-à-vis Hawk, Sidewinders and F-4's. Shah tried argue security penetration capability of Soviets would not be significantly increased, but this point seemed at least make slight dent. When he emphasized Soviet involvement would be carefully circumscribed, I told him it is difficult "to be little bit pregnant." 12. Shah returned to old argument how Paks had been hurt by cut-off in US supplies last fall. I reiterated previous arguments. Shah agreed Paks had fomented conflict. He also reluctantly agreed that USG policy of stopping hostilities was wiser than fueling them with more arms. Noting that Arabs were his rivals, I questioned his depending on Soviets if Iran-Arab conflict were to arise. Shah said he aware this point and would lay in adequate spare parts, etc. in advance. 13. Shah obviously actively interested in Soviet SAMs. When I suggested their inferiority to Hawks, noting morning's news that US planes in Vietnam undertook all missions successfully yesterday despite SAMs, Shah insisted effective altitude of Soviet SAMs to possibility of Soviet tanks if Sheridans not available. He was very critical of what he contended is $500,000 per copy price for Sheridans, noting again he being assessed R and D costs. Shah did not contest strongly when I pointed out M-47's still useful and question of Sheridans deferrable at least until 1970. 14. Even more disturbing than "impact" on U.S.-Iran military relationship, I said, is general effect turning to Russians will have on Shah's image and confidence in Iran. I pointed our Western world considers him enlightened, progressive and responsible leader. Some people would inevitably feel he now becoming another De Gaulle or even Nasser. Noted sad shape of other countries who started down arms procurement path with Soviets, i.e. Egypt (whose move to buy Soviet arms came under circumstances not entirely dissimilar from Shah's complaints), Ghana, Indonesia, and even Afghanistan. Shah promptly cited India. When asked whether he envied India's plight, Shah said no, but contended that Iran is much more responsibly and intelligently led than all those countries. I emphasized Iran is doing very well indeed and that is precisely reason we hate see policies which have produced its prosperity put in jeopardy. Shah insisted policy of procuring arms even from Soviets would be fully supported throughout Iran. I said undoubtedly it would be popular with street elements but I would have thought he might have learned from Ayub's present troubles difficulty of putting lid back on Pandora's Box. Shah said all Iranians, not just street, would be content. 15. At one point, Shah warned that when he turns to Soviets USG should not set in motion political movement in Iran. Very thought, I said, is ridiculous. Nevertheless, Shah went on to point out what we would lose if he were to lose his throne. Comment. Obsession of this type is incomprehensible to us, but it is in Shah's full character. 16. At one point Shah plaintively expressed wish for opportunity to have two or three days to talk out his problems with President Johnson. He said he very much shares President Johnson's concern for preserving Iran's economic progress. He reemphasized problem is primarily one of foreign exchange. It was because of this serious problem that he had hoped USG could find it possible to accord Iran reasonable prices and terms as it had with M-60 tanks. Pointing out President recalled favorably his personal visits with Shah and to Iran and has high regard for Iran's progress and Shah's leadership, I noted that during my half hour talk with President this came through as did President's personal concern that military expenditures be minimal within framework of adequate security. 17. Each time question Soviet procurement came up, Shah made clear contact been made and transaction with Soviets will fail materialize only if Soviets themselves refuse be responsive. Like Aram (Embtel 61),/2/ he recalled trouble he got into with Soviets in 1959 when he retreated from negotiations which had already begun. /2/Not printed. (Ibid., DEF 19-8 U.S.-IRAN) 18. Shah said he is convoking Senators and Deputies next week to "report" to them on state of affairs as he did on March 1. He said he planned not to go into "details." Before departure, I referred to this and urged that such public pronouncement refrain from making situation any worse. Public blow-up of this issue, I said, would make useless our continuing diplomatic dialogue on a subject with such vital consequences for Iran. Shah indicated concurrence. 19. Comment. Give and take was frank and friendly, as Shah had promised Alam it would be. I wish I could say I am encouraged that Shah will not turn to Soviets but I cannot do so. At same time, fact that USG reaction is inevitable is now clearly on record, and room is left for maneuverability as to what our reaction will actually be. Meyer
152. Telegram From the Department of State to the Embassy in Iran/1/ Washington, July 8, 1966, 8:41 p.m. /1/Source: Department of State, Central Files, DEF 19-8 US-IRAN. Secret; Priority; Limdis. Drafted by Crawford, Eliot, and Reed (DOD/ISA); cleared in draft by Warren, Colonel Haynes (DOD/ISA), Macomber, Wriggins, John G. MacCracken (EUR/SOV), and Hare; and approved by Acting Secretary Ball. Repeated to CINCSTRIKE and Moscow. 4417. Joint State/Defense. 1. Your statements to Shah, Aram and Alam (Embtels 1762, 31, 80)/2/ have covered essential points on US-Iranian political and military relationship, our desire continue that relationship to our mutual benefit (provided GOI action does not make it impossible for us to do so), and political and security problems inherent in any Iranian decision to buy arms from Soviets especially if introduction of Soviet military advisors or technical personnel involved. We were particularly refreshed by your blunt conversation with Shah on seventh and Aram earlier. Trust you will feel free to use with Shah points in paras 5, 6 and 9 in Embtel 31 if you deem them useful. /2/Documents 148, 149, and 151. 2. You should seek audience with Shah and make following points: A. You have reported conversation of July 7 in detail to USG which confirms views you expressed to Shah. B. In light of Shah's sense of urgency regarding defense of vulnerable industrial and military installations, US actively considering sale of 2 F4 squadrons for delivery commencing in FY'69, sale to be within available $200 million proposed credit and remaining credit under 1964 Understanding. FYI. We are looking at squadrons of 12 to 16 each in C, D, and E series from point of view of pricing, availability and impact on U.S. inventory. Prices and availabilities will follow shortly by septel. End FYI. C. We believe it would be mistake for Iranians cancel plans purchase Hawk missile units. Hawk would play important part in any credible Iranian air defense capability and could not effectively be replaced by other types of surface-to-air missiles. D. U.S. willing move ahead on sale of PGM's with first delivery about December 1968 if at least partially funded in third tranche. E. USG recognizes final decision on arms procurement is matter of Iran's sovereign choice just as furnishing of military assistance is US sovereign choice. We earnestly hope that it will remain in our mutual interest to continue the intimate military relationship we have had in the past. F. USG urges that Iran not take steps which could damage this relationship. Shah well aware need for public and Congressional support for foreign assistance programs; there is no doubt that Iran's entering into a military relationship with the USSR would produce a negative reaction in the US which would adversely affect this support. It is impossible to predict the future but the Shah can surely understand inevitability of such reaction to attempts to justify a concessionary military program (grant or sales) for Iran if Iran obtains arms from USSR, given the facts that the USSR is the only major long-term threat to Iran's security, that our military assistance to Iran has been predicated primarily on that threat and that Soviets are opposing us and our Free World friends including Iran on Viet Nam. Additionally, there are security considerations affecting sensitive US equipment (FYI, such as F4's end FYI) which would have to be weighed in the light of any Soviet or Eastern European arms program with Iran. FYI. If Shah again raises US-Soviet arms co-existence in India, Iraq, you should note that no sophisticated US equipment involved in either case. End FYI. G. We note that Ambassador Khosrovani has asked to see Secretary this coming week which will provide further opportunity for discussion these matters. 3. FYI. We are looking into matter of all administrative costs, including R & D. End FYI. Ball
153. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, July 11, 1966, 1400Z. /1/Source: Department of State, Central Files, DEF 19-8 US-IRAN. Secret; Limdis. Repeated to CINCSTRIKE/USCINCMEAFSA. 145. Military Sales to Iran. Ref: State 4417./2/ /2/Document 152. 1. Pursuant to reftel, I discussed with Shah eleventh each of points set forth in para 2. Left with him written paraphrased version. 2. Re point A, Shah now knows USG endorses fully views which I have previously expressed to him. 3. Re point B, Shah obviously gratified by prospect of two F-4 squadrons being considered for Iran, as well as earlier delivery date. I noted phrase "within available credit" signifies Washington's uninterrupted desire that military expenditures be kept in perspective. 4. Point C opened up whole subject of proposed dealing with Soviets. Disinterest in Hawks, Shah said, is due to fact Iran has approached Soviets for anti-aircraft guns and SAMs. I showed him clipping from July 8 NYHT describing ineffectuality of Soviet SAMs in Viet-Nam. Having had considerable background in capability of Hawks (during days when Israelis first sought them from us), I pointed out superiority this weapon: a) entirely different from Nike-Bloodhound-SAM flashlight ray types; b) radar much more sophisticated; c) catches aircraft at low altitudes, which is what Shah has to fear, as over against SAMs which are not good at low levels; and d) enemy aircraft have more difficulty dodging Hawks than SAMs. 5. Shah showed lively interest in these arguments but countered; a) it's too late; Iran has already approached Soviets and to reject Soviets without hearing them out would be impossible demonstration of his being "U.S. puppet"; and b) it is all question of money; Hawks are too expensive to shoe-horn into available U.S. credit. Re latter point, I said it remains to be seen what we can finally shoe-horn into joint program we had envisaged. Re Soviets, I expressed assumption Iranians would do better staff work than obviously been done to date and decisions re military equipment would be influenced by quality of product as well as low pricing and political considerations. I suggested that inferiority of SAMs might well prove to be loophole from which to get out of transaction with Soviets. While Shah gave no indication, my impression is that this thought was tucked away in his mind for potential but not probable use. 6. Re point D, Shah still attracted to four British Vospers, hover-craft and battle-class destroyer (which while not new will be adequate for time being, he said, particularly as trainer. He likes idea of 1,100 ton Vosper "pocket destroyers" with their 40 knot speed and electronic guns. (He confided in strict confidence Vospers would be equipped with surface to surface missiles to be acquired from a small non-Commie country.) Shah said PGM's are lighter craft, but I stressed earlier delivery date possible than for British vessels which still largely gleam in designer's eye. Shah said destroyer is not essential to British sales package; any or all items available in accordance Shah's wishes. Cost of Vosper is 4,000,000 pounds per copy. Once again I urged Shah to assure complete staff work had been accomplished before rushing headlong into a transaction. Throughout discussion I [garble] clear that some well-conceived diversification of his supply sources provided they not Communist is not objectionable. 7. Shah smarted somewhat over assertion in point E that furnishing of military assistance is a choice just as sovereign for US as is procurement for Iran. He himself began adding up figures and found something like $460,000,000 in USG grant and credit is at stake. He suggested this is something we should think about (meaning gravity of chain reaction), but quickly drew obvious point it is even more important for Iranians to think about. I of course, once again emphasized how incredible it is that Shah would jeopardize so much for so little gain. Changing supply pattern in itself would be costly business. Nonetheless, Shah undauntedly professed confidence Iran would one way or another be able fulfill its military needs if complete break in US-Iran military relationship occurs. 8. Re point F, Shah with considerable conviction expressed view Congress could be persuaded to see wisdom of his purchasing some arms from Soviets. He argued: a) by contributing to Iran's security strength, Soviets will in fact be contributing to Iran's ability to resist Communist endeavors against Iran. I said obviously Soviets have other purposes of which we only too well aware. His second argument: b) Soviets are building up image as being [garble] and peaceful nation whose only interest is to build up Iran's economic strength as by steel mill. Last evening he had heard clandestine broadcast emphasizing this theme. Wouldn't it be more intelligent, he asked, to tarnish Soviet image by diverting to them allegations presently being made against Americans to effect our only interest is monetary profits via peddling of arms? I said latter thought had occurred to us. "Intellectual critics" of Shah's regime (whom Shah loathes) have for long time condemned USG's over-identification with Shah in military field. I said I did not believe day would come when Shah would concur with those critics. He quickly added that such criticism exists in Washington as well as Iran. 9. I went on to say that popular opinion does not usually charge Soviets with same criticism it employs against U.S. Fact is most Iranians would be impressed and quite a few dismayed by what is becoming virtual stampede in direction of Soviet Bloc, e.g. steel mill, barter agreements, HIM's visits to five Commie countries, etc. My own impression is Soviets and many Iranians would consider this as sign of weakness on Shah's part, particularly if pell mell rush to Soviets is now topped off with arms deal. I pointed out what a triumph all this would represent for Soviet policy in Iran and in Middle East. Shah said it was USG's fault e.g. high prices, R and D costs, etc. Once again I reviewed what we have done to be responsive. 10. Although acknowledging there many different circumstances particularly in economic field, I drew parallel of "red prince" Badr in Yemen. He too had been impatient with West, had gone to Moscow, been wined and dined, and delightedly embarked on arms procurement road with Soviets. Months later, when he was murdered by recipients those arms, Soviets shed no tears but cynically and quickly recognized his successors. Shah opined that Soviets had also worked through Nasser, but then went off on tangent re American recognition of Sallal regime. Shah made clear he intends to purchase five years' supply of spare parts for equipment acquired from Soviets. 11. Shah contended by proper instruction American people could be persuaded of wisdom his buying non-sensitive arms from Soviets. I said this simply not realistic. On contrary, fact that he has been such an admired and responsible friend likely cause added bitterness of jilted lover. Emphasized, as in point F, impossible predict future of concessionary military programs, both grant and sales. 12. Referring to Al Friendly articles, I said Shah has always had good image in U.S. and particularly recently. This highly gratifying. I said it incomprehensible why he wishes tarnish this image in such dramatic fashion. I quoted Shakespeare re money being trash but good name is all-important. 13. When making point re security complications (noted in point F), Shah insisted Soviets would be kept in check. There would be no Iranians trained in Soviet Union and Soviet technicians training in anti-aircraft usage would be kept apart and returned as soon as possible. Again, I said, Shah is being unrealistic. In any case, there no question in USG minds that opportunities for Soviet penetration and subversion would multiply and would effect our willingness supply equipment. Shah said USG seeking "excuses." I pointed out India and Iraq are examples where US furnishing no sophisticated arms. 14. Shah said he wants proceed with procurement those items he ready purchase from U.S. He wondered re next move, e.g. letter from Minister of Court to us. I said it not possible make such move until total picture is clear. For example, how could we make an agreement without knowing whether Iran will order Hawks. Shah said he would in any case require three battalions and that would eat up too big a chunk of available credit. He simply wants order from U.S. those items which he clearly wants. If USG unwilling sell F-4's Shah said, he will turn to French Mirages, and there is, he added, some urgency re this matter. I reminded him that when prior to his departure we expressed readiness to provide additional $200,000,000 credit it was made clear that if substantial purchases made elsewhere this would reduce total available from USG. It was obviously time to make this point again for Shah was visibly shaken by it. 15. Shah went into inequities of "strings" and "taking orders." He referred to our "puppets" elsewhere which he did not care to emulate. I asked him to name one. He couldn't. I said even General Ky in whose country USG is investing $20,000,000,000 is, sometimes to our pain, his own boss. Human beings everywhere, including Americans, have same instincts as wish of wanting be "independent." There is no attempt, I said, for USG to give Shah "orders." There is, however a great challenge to both our countries to translate former aid-dependent relationship into something normal, natural, constructive and durable. I said I was sure this was his intention, even as it ours, but it is something that must be done gradually and may not survive drastic move as his turning to north. Irritated by phrase "turning to north," Shah reiterated his old line that over these past months USG has failed to respond satisfactorily to his appeals including indications that he would, if necessary and as much as he disliked it, increase trade, including initiation of some arms procurement, from East Bloc if USG and oil companies persisted in their disinterestedness. 16. Throughout conversation I stressed to Shah importance of his maintaining his maneuverability. This is true in his handling of opinion in Iran, I indicated, (having in mind his forthcoming session with Parliament members). Shah said he is refraining from airing details of issue between our two countries, even in his deliberate efforts to fashion U.S. opinion as via Al Friendly and via Tom Brady who is currently here with New York Times. Shah agreed our diplomatic dialogue continue. 17. Comment. There is no longer question Shah has approached Soviets for Ack Ack guns and SAMs. He indicated several times curiosity re what Soviet response will be, even manifesting a little impatience over failure of Soviets to reply in past ten days or fortnight. He thought it might be their preoccupation with Warsaw Pact. Questions now are whether Shah can be persuaded to extricate himself from joint business (using technical loopholes) with Soviets, and if not how to shape our own response considering among other factors undesirability pushing him further into Soviet embrace. Meyer
154. Telegram From the Department of State to the Embassy in Iran/1/ Washington, July 12, 1966, 6:02 p.m. /1/Source: Department of State, Central Files, POL 17 IRAN-US. Secret; Limdis. Drafted by Eliot, cleared by Hare, and approved by Walsh. Repeated to CINCSTRIKE. 5931. 1. Following summary July conversation is FYI and Noforn. It is uncleared and subject to amendment upon review of memcon. 2. Khosrovani began by stressing Iranian friendship for US, hope that close relationship would continue and gratitude for past and present US aid. He said he instructed explain that momentum of development and reform programs must be sustained while at same time defense program requires attention in light Egyptian trouble-making in Persian Gulf. If US not able assist as much as before, Iran hopes it will understand if Iran procures what it needs at cheaper prices from elsewhere. Iranian military cooperation with US will be maintained and there should be no US apprehension. 3. Secretary replied he familiar with talks Ambassador Meyer has had on this subject with Shah and Aram. He said we have always held Shah in highest esteem and continue do so. Under his leadership Iran has never been more stable, secure and progressive. We have greatly valued relationship and hope it will continue. We understand what we have offered may not be as much as Shah wants, but it very large in light US fighting war and other burdens on U.S. taxpayer. 4. Secretary said Iran is of course as sovereign as U.S., but we are concerned about path on which Shah may be embarking because we do not see where it will lead. If there is trouble in area, it comes from USSR through its provision of arms to UAR and Iraq and its encouragement of trouble-making. Secretary said it difficult understand what Iranian arms purchases from Soviets will mean for Iran or for U.S.S.R. Soviet attitude to Iran well known, and Aram himself has in past commented on his concern about "friendly Soviet subversion." It not surprising Soviets might want sell arms cheaply, for example SAM's after their experience with them in Viet Nam. Of over 300 fired in Viet Nam only 14 on target, and head of Soviet missile program is in Viet Nam to see what is wrong. 5. Secretary added it difficult perceive longer-term effects on US-Iranian relations of contemplated Iranian steps. Since 1946 we have given strong support to independence and security of Iran. We don't know what Congress and American public will think about Iran's turning for arms to the principal source of trouble in area. This not something which executive branch alone can control. Hence reaction cannot be predicted, but we hope our relations will remain intimate as they have been of mutual benefit for past twenty years. In short, we concerned about future. 6. Secretary also pointed out we might have serious security problems if Iranian purchases from Soviets expose our sensitive equipment such as F-4's to penetration. 7. Khosrovani responded by saying admittedly USSR a threat, but immediate danger comes from elsewhere. He said Iran feels need as independent nation be able defend itself and stronger Iran will be better friend of US. He twice expressed hope we would make clearer in Tehran what it is we are prepared to offer, saying that Iran must make best use of its limited financial resources. 8. Ambassador Hare mentioned that we have been pursuing in Tehran question of program for our available credit and that Ambassador Meyer has told Shah we are considering second F-4 squadron. 9. Secretary said if there are problems about amounts of money and delivery dates this is because we are demonstrating in Viet Nam, by among other things spending extra billion dollars per month, that friendship of US is important to security of our friends. Most important security asset Iran has is friendship of US. 10. Khosrovani, saying he speaking personally, commented that there is a psychological factor involved in that at certain stage of development countries feel they should have independent means of defense. 11. Secretary responded Iran's armed forces are for defense of Iran and Iran's policy is independent but repeated we do not understand what it means for Iran to turn for arms to the source of trouble in the area. 12. Khosrovani asked if this would not neutralize Soviet policy, to which Secretary replied it works other way too and Soviets may want have important influence on Iranian policy. Replying US should not worry about that as GOI will maintain close ties with US military mission, Khosrovani said Iran wants to be free to procure in any available market. Iran understands, he said, value of US friendship and is grateful and hopes any new steps will not be misunderstood. 13. Secretary concluded conversation by once again stressing US has respect for Shah's great service to his country and has continuing desire for friendship but does not have complete understanding because we do not see where contemplated steps lead. Rusk
155. Memorandum From Vice President Humphrey to President Johnson/1/ Washington, July 13, 1966, 10:30 a.m. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. No classification marking. Attached to a July 14 draft memorandum from Rostow to the President noting that the Vice President had hit the nub of an Iranian problem they had been struggling with: "When the Shah feels cut off from you, he reads our every act as a rebuff." It is not clear whether this memorandum was sent to the President. Another copy of the memorandum (ibid., NSC Files of Harold Saunders, Iran 4/1/66-12/31/67), is attached to a July 13 note from Bromley Smith to Wriggins noting that it was for a memorandum from Rostow to the President. A notation in Wriggins' handwriting on the note reads: "See WWR memo for President 7/19/66" (Document 157). Over the years I have gradually developed an increasing appreciation for what Iran does in the world. The Shah has worked closely with Israel. Iran is the only country in the Middle East contributing directly to South Vietnam. Recently I met the Shah's brother socially, as well as several other well informed friends of Iran. Their story is always the same: Please tell the President that unless something happens to change his mind, the Shah is going to buy a package of Soviet arms on the relatively easy credit they dangle in front of him. Our executive departments are struggling to come up with the right answer; since April they have wrestled each other without decision. I know how overcrowded your calendar is and I would only suggest adding to it for the most important reasons. In the present circumstances I feel it would be wonderful if you would invite the Shah to come talk to you. He wants to hear from you personally what a grand guy he is, and how much you love him. He wants to tell you his fears and he needs to be reassured by you. Only the President, himself, can persuade the Shah against taking the step he is now contemplating.
156. Memorandum From Harold H. Saunders of the National Security Council Staff to W. Howard Wriggins of the National Security Council Staff/1/ Washington, July 14, 1966. /1/Source: Johnson Library, National Security File, NSC Files of Harold Saunders, Iran, 4/1/66-12/31/67. Secret. Howard: Jim Critchfield called to explain the two tacks the Agency is going to take with the Shah: 1. In the next few days [less than 1 line of source text not declassified] will be giving the Shah a rather complete technical commentary for his eyes only on the performance of the Soviet missiles. He feels this will thoroughly demonstrate that the Soviet missile is a third rate product which will be increasingly obsolete in the next couple of years, especially as the countermeasures to it will become as widespread as the missile itself. 2. [less than 1 line of source text not declassified] will tell the Shah that no one of his friends [less than 1 line of source text not declassified]--though they have sympathized with the Shah's viewpoint for many years--agrees that he is doing the right thing now. First, he will set off a train of events here in Washington where everyone is preoccupied with Vietnam that no one can see the end of. If he can just be patient, Washington is increasingly aware of the Shah's legitimate interest in the Persian Gulf and is working its way to encouraging him to take a larger role there. On the Middle Eastern theme, with recent developments in Iraq, the gap between the Shah and his potential adversaries is narrowing. Moving to the Soviet Union now would just undermine this very hopeful trend. Critchfield reiterated his feeling that the chief ingredient of this problem is the Shah's sense of being cut off from the President. The Shah believes that the letters the President sends him are drafted in the State Department and, therefore, he has had no direct communication with Lyndon Johnson since the President took office. Critchfield says he argued with Bill Moyers and others in the White House discreetly that during the Shah's recent trip we should invite him to fly over from Morocco for a few hours to see the President. Moyers and others felt the President should not be involved, so we missed that opportunity for a quiet morale boosting exercise which would have stopped this whole Soviet ploy in its tracks. I commended Critchfield for the private approach he is planning to have made. I told him what we had in mind to proliferate the impression that Washington is deeply disturbed by the Shah's move. Critchfield feels we missed a golden opportunity to have the Shah here back in June but is not sure that now, in the wake of Brady's article, we could do this. He promised to keep us posted. HHS/2/ /2/Printed from a copy that bears these typed initials.
157. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, July 19, 1966, 6 p.m. /1/Source: Johnson Library, National Security File, Special Head of State Correspondence File, Iran, Shah Correspondence, Vol. II. Secret. A handwritten "L" on the memorandum indicates that it was seen by the President. We are down to the wire in our arms negotiations with the Shah. He still feels that the $200 million package we offered does not include all the air defense he needs; and he has approached the U.S.S.R. for surface-to-air missiles and anti-aircraft guns. We included both our Hawk missile and some AA guns in our package, but Soviet prices are lower. Part of the Shah's move is traditional Persian bargaining. But there are other elements: --He feels neglected and taken for granted; and he rightly sees these negotiations as a way to gain attention. --He genuinely fears that the UAR and Iraq have designs on his oil-producing southern provinces. Our cutting off Ayub's military aid last fall left him suspicious that we would do the same to him in a fight with local non-Communist enemies. --He sees short-run domestic political advantage in showing he is not a U.S. puppet. We are trying through both formal and informal channels to dissuade him from buying Soviet equipment. If he wishes to diversify his sources of hardware, Western Europe would make more sense and be acceptable to us. Defense says security would prevent our selling advanced equipment if Soviet technicians come to Iran. Congress would also give us a hard time if another ally turns to Communist arms supply, although the problem arises in good part because military aid funds are too low. Most important, while the Shah's reform program is going well, Iran is far from out of the woods politically. We wish to avoid his inviting the Soviets into Iran to meddle in what may still be a turbulent process of evolution. On balance, we would rather not see the Shah buy equipment on the scale he contemplates. Though oil revenues are good, we fear he is overreaching his ability to repay in the years ahead without cutting into development. We have set up an annual joint review to keep the military-economic balance firmly before the Shah. But the fact is that he believes the Arab threat is urgent; and he believes security comes first. With the British pulling out of South Arabia and retrenching in the Persian Gulf, I'm not sure he isn't right. He is dead earnest when he says he will buy this hardware somewhere if we refuse to sell it. Soviet equipment is the cheapest, though Soviet missiles are poor in quality, at least when manned by North Vietnamese. Our choices now are to: --Tell him that we have gone the limit and that if he buys Soviet hardware he will jeopardize our continued military aid. Chances are that he would go ahead anyway if only to underline his independence, and we would have to make up our minds to adjust to an increasingly neutralist Iran. --Offer one more concession in substituting 32 rehabilitated F-4C aircraft for the 12 new F-4D's in our initial offer. Secretary McNamara could take these out of our inventory in late 1968 and pass them on at second-hand prices, so the cost to us would be the difference between that price and our cost of replacing those planes with newer models for our own inventory. I share the judgment of Secretaries Rusk and McNamara that we should make this final offer. We would still try to keep the Shah within the total credit ceiling you approved, but we would have to absorb about $30 million in additional costs to the USAF via our FY 1967 supplemental. This would round out our effort to meet his most legitimate air defense and other needs at good prices. Secretary Rusk also recommends you send the Shah a letter. I have thus far resisted involving you directly in the bargaining which has been going on. But now that we are about to make our final move, I think a letter is a good idea. Part of our trouble is the Shah's familiar feeling that he is cut off from you. This letter would show that you fully understand his real worries and have personally tried--within the limits of your problems--to accommodate him. Attached is for your signature, if you approve./2/ /2/Document 158. Walt
158. Letter From President Johnson to the Shah of Iran/1/ Washington, July 20, 1966. /1/Source: Johnson Library, National Security File, Special Head of State Correspondence File, Iran, Shah Correspondence, Vol. II. Secret. Your Imperial Majesty: I have followed closely Ambassador Meyer's reports of his recent conversations with you. He has told me of your concern over Iran's defense requirements, and I want to share with you my own views on the developing situation before us. Candor between friends is essential to mutual understanding and my views are offered in that vein. The total relationship between the United States and Iran, and particularly our cooperation in military matters, has been cordial and it has met the interests of both our countries. The U.S. for its part sincerely hopes that circumstances will permit this to continue in full effectiveness. For we share a common view of certain basic problems. Thus we both understand that, while the immediate threat of Soviet military aggression has receded, indirect pressures continue and the Soviet aim of communizing Iran remains the same. I know clandestine radio broadcasts remind you daily of this long-range threat. You have shown your understanding of Communist aims by sending an Iranian team to Vietnam, and I am strengthened by this demonstration of your faith in our purpose there. We also share the realization that the Middle East is undergoing rapid change. The unfolding situation, particularly in the areas south of Iran, demands our close watchfulness, as it embodies both potential opportunity and potential danger. At a time when the United States is heavily engaged in the defense of freedom in Asia, we are no less interested in continued stability in the Persian Gulf area. We welcome your determination to help maintain that stability. As responsible leaders, we share the awareness that our task is to make inevitable change as orderly and constructive as possible. It was thus against a background of continuing comradeship between our two nations in facing together a complex and dangerous international environment and of concern for Iran's security that we have offered an additional $200 million credit for the purchase of military equipment. We have been seeking by all means to develop fair and reasonable terms. We are also urgently working further on the particular questions of price and delivery dates for two squadrons of F-4 aircraft. Our resources are, of course, burdened by the defense of free world interests in Vietnam. And they are limited, for military assistance purposes, by the Congress. Nevertheless, it remains our intent to respond to your security needs; and I believe we have done so. You should have no doubt of our desire to help Iran. But you should also understand that if Iran were to enter into an arms arrangement with the Soviet Union or with other Communist countries, this would confront us with serious problems in carrying forward our military assist-ance. While you may see short-term advantages to such a step, I see major long-term disadvantage, both political and technical. First, I cannot believe that any of us will profit by the Soviets' coming any closer to the Persian Gulf than they already are. I would not guess that they regard it as in their interest that the stability of this area be increased. Second, it would confuse our Congress and our people concerning Iran's intentions. I cannot predict precisely what the reaction here would be; but it would certainly be unfavorable to the interests which we share in strengthening Iran's defenses. Third, on the technical side, I am certain you can appreciate our intent to protect sensitive American equipment from compromise by Soviet military technicians. Our purpose in aiding Iran has been to preserve and strengthen your country's independence. We are proud to have contributed to the gathering political and economic strength of Iran under your wise and skillful leadership. If Iran should turn to the Communist nations for arms, we will not be so shortsighted as to turn from our close relationship. But I do fear the impairment of our military assistance program. Therefore, I hope that you will look only to Free World sources of arms in meeting your security requirements. You will, of course, weigh this matter in the light of Iran's basic interests as you see them. I did, however, want you to receive my views personally and with the complete candor our partnership requires and deserves. I look forward to going more deeply into this and other problems of common concern when it becomes possible for us to meet. I will also very much want to hear directly from you more about the heartening economic and social progress Iran has made under your skillful leadership. Unfortunately, with our coming elections, I doubt we can manage to get together in the next several months. Perhaps early in the new year we could find a mutually agreeable time for direct discussion. In the meantime, I wanted to share with you now--in the spirit of the partnership I feel--the problems which might arise. Sincerely, Lyndon B. Johnson
159. Memorandum From W. Howard Wriggins of the National Security Council Staff to the President's Special Assistant (Rostow)/1/ Washington, July 22, 1966. /1/Source: Johnson Library, National Security File, NSC Files of Harold Saunders, Iran Military, 4/1/66-12/31/67. Secret. SUBJECT McNamara and Vance have decided that we cannot add $30 or $40 million to the nearly $1 billion supplemental in order to provide planes for the Shah at concessional prices (and simultaneously modernize the U.S. air force more rapidly) by taking 2 squadrons of F-4's out of inventory for the Shah in 1968. McNaughton tells me that there were three reasons for this: (1) FYI, the F-4C's are not as maneuverable as they should be, and he doesn't want the Shah to have them because this fact would then become widely known. (2) He does not want to decide now whether and at what pace he wants to permit the air force to replace the F-4C's. This decision will not be coming up for six weeks to two months. (These reasons have nothing to do with the Shah or Iran.) (3) He thinks that if the Shah wants to be so foolish as to go to the Russians for equipment and risk cutting off his supplies from us, as was made unambiguously but delicately clear in the letter to the Shah, he should feel free to try it. McNamara does not think it the end of the world for the Shah if he does procure something from the Soviets. What is important is what he procures and our own reaction to it. McNaughton has warned McNamara that he should expect flak from State on this. And he admits he might be amenable to the argument that --the Shah is unusually nervous and in a particularly irrational season; this has been accentuated by the action we took last year vis-à-vis Pakistan to bring them in line; --the Shah is now particularly anxious about the Persian Gulf, Nasser and the British pull-out; --we are seeking to ensure rights for intelligence facilities; --by the Shah's peculiar chemistry, the prices and quantity of planes have become for him the touchstone of whether or not the President is his friend. I would add: --the political climate here, in an election year, may or may not permit us to control our own reaction to an Iran which appears to be following Ayub off the reservation, however understandable this may be to us specialists; --you will recall the President's hope, expressed to Armin Meyer and you, that "his people" would "do their best" to meet the Shah's needs; --a forthcoming offer now may well direct the Shah's purchases to purely token acquisitions of ack ack. No offer now maximizes the chances of a substantial lurch toward the Soviets as the Shah broods over the Gulf and Nasser-in-Iraq. I would therefore urge a call to Alex Johnson to see how hard he weighed in (probably not very hard) on political grounds yesterday, and then a call to Vance or McNamara to express the President's concern. This should wait till Secretary Rusk makes a personal push with McNamara tonight or tomorrow. Howard Wriggins/2/ /2/Printed from a copy that bears this typed signature. [Continue with the next documents] |
