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160. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, July 23, 1966, 1430Z. /1/Source: Department of State, Central Files, DEF 19 US-IRAN. Secret; Priority; Exdis. Repeated to Moscow. 365. Ref: State 12039./2/ /2/Telegram 12039 to Tehran, July 21, transmitted the President's letter to the Shah. (Ibid.) The letter is printed as Document 158. 1. Delivered President's letter to Shah at Caspian morning 23rd. After careful perusal, Shah expressed appreciation for warm tone but observed that contents were identical with what I have been telling him. 2. Almost resignedly, Shah said everything depends on Russians. It was Iran which took initiative and it simply not possible for Iran call off approach made. 3. Shah said he first to recognize Russians "are my enemies." At same time, in his opinion USG cannot "reproach" him for what he did. He reiterated usual line about waiting many months for American responsiveness but, while he appreciated $200,000,000 credit, USG prices were high, terms were harder than they should be, and delivery dates were far off. Particularly indicative of USG lack of sympathy, he said, was limiting sale of F-4 aircraft to 12 (which would mean 3 per airfield). This reflected persistent Washington disposition to make decisions which Shah feels are within his competence. 4. Once again I pointed out USG had indeed been responsive. In addition to credit, we agreeing to make available best military equipment in world, e.g. F-4 aircraft, despite fact that we fighting major conflict in Viet-Nam which requires full complement such equipment. Moreover, as President's letter indicates, we continuing to review possibilities, e.g. F-4 situation. I made clear President's personal interest in Iran and current problem in particular. 5. Reiterating he on spot with Russians, Shah insisted that he would reject any Soviet proposals if there any conditions attached. This led to assessment, which Aram had conveyed (Embtel 319),/3/ that Soviets have so much to gain from mere disruption of US-Iran military relationship that other considerations, including conditions, are of secondary importance. Shah agreed with that assessment, but opined that USG seems ready to leave, "luggage packed and with first class tickets." /3/Dated July 21. (Department of State, Central Files, DEF 12-5 IRAN) 6. While recognizing that Shah may have gotten himself "in a box" with Russians, I expressed confidence he could extricate himself if he truly wished. Expressing assumption he "free man," I said I did not see why just because he had approached Russians he required effect purchases, particularly since it possible to demonstrate that most of Russian equipment could be refused on quality grounds, e.g., SAMs. Shah assured me he "under no obligation" but it also clear he is so psychologically. I questioned economics of buying "cheap" SAMs with 5 percent efficiency when Hawks, though more expensive, have many times effectiveness. 7. Shah had received from General Khatemi info we had passed along re Hawks vs SAMs (State 8922)./4/ To this I added additional info, e.g. SAMs been diagnosed by our specialists, their vulnerabilities determined, and counter-measures developed which in not too distant future will be available through normal arms channels; that 82 SAMs been fired in Viet-Nam in last 90 days without a hit; that Soviets withhold some of the SAM data so as to maintain key control; and that SAM ineffectiveness in Viet-Nam is despite fact they manned by Russians. Shah said Pak mission which recently in Moscow was told by Soviets SAM problem was due to incompetent Vietnamese manning them. (Comment: Any sure info Washington has on this point would be helpful to us.) /4/Dated July 15. (Ibid.) 8. Of parenthetical interest, Shah said Pak mission to Moscow at first ran into Soviet jibes re their American friends, their relations to CENTO and SEATO, etc. Subsequently, however, Paks were shown SAMs, a high quality tank with two anti-aircraft guns, truly remarkable mobile radar, etc. Asked if transaction concluded, Shah said no it is under Pak study. He implied Paks are worried about effect on their improving relations with USG. Shah said ChiCom equipment been provided to Paks completely "free of charge" (he agreed it is obviously for ulterior motive). Shah took occasion to emphasize importance Iran's keeping door open to Paks to avoid further entanglement with Commie countries. 9. Asked what specifically Iranians have asked of Russians, Shah said anti-aircraft guns, SAMs and "other things" not coverable via USG or British credit. Reluctantly he indicated tanks cannot be excluded. He said plans must be made for replacing M-47's. He had hoped for Sheridans. Reiterating no response yet received from Soviets, Shah said only clue was Soviet Military Attache recently asked an Iranian officer why Iran not interested in Soviet aircraft. Shah again assured that under no circumstances will he purchase MIG's. 10. Shah insisted he will tolerate no Soviet "conditions," e.g., ouster of ARMISH/MAAG, withdrawal from CENTO, or even stationing of Soviet technicians in Iran. Under interrogation, however, he appeared less sure that he could hold the line at just "some training of few students." To illustrate his firmness re "conditions" Shah said Soviet Ambassador when Shah was in Europe called on For Ministry UnderSec Qarib, and referring to NYTimes article, protested USG strategic installations in northern Iran. Shah said he sent word back to tell Soviet Ambassador to "mind his own business." Shah noted that in 1962 Iran had promised Soviets not to have foreign missile bases and Soviet Ambassador was told that no interference in Iran's internal affairs would be brooked from any quarter. (Comment: This is first time Shah has referred to subject of our installations in any conversation on arms sales.) 11. Shah was greatly impressed by two phrases in President's letter, i.e. U.S. "will not be so shortsighted as to turn from our close relationship". And President's fear that our "military assistance program" will be impaired. Shah bemoaned why would USG undertake "strong reaction" which would so clearly serve Soviet aim. Noting that it was not USG which has produced present situation, I said President in his letter gave three clear reasons why USG reaction inevitable. Even if Executive Branch were not involved, American people and Congress are. Moreover, potential compromise of highly classified equipment should certainly be understood by him. Observing that Soviets not bothered by such things as "this Congress business," Shah again said USG can always find "excuses." I said sharply this not question of "excuses." Then went into lengthy explanation of how USG does not want its Hawks, Blue Shark and F-4's compromised after example of Soviet SAMs. Pursuant to last para Embtel 311,/5/ I noted how difficult it would be to shield Soviet technicians from Blue Shark control, etc. Shah said he suspects Soviets already know much re U.S. equipment, and in my case he would shield US equipment, as for example by keeping Soviet technicians within walled compound way out in country. /5/Dated July 20. (Ibid., DEF 19-8 U.S.-IRAN) 12. Shaken but seemingly undaunted by Presidential declaration that U.S. military program here will be adversely affected, Shah reiterated his earnest desire that U.S.-Iran military relationship not be disrupted. He added, however, that if that came to pass, Iran would be able fill void from other sources. I reiterated that as long as Iran arms procurement is from non-Communist sources, USG does not object. Except for Soviet procurement, I agreed with Shah that there may even be advantage in diversification as a principle in order for Iran to have a more independent image. 13. Shah contended that while he turned to Soviets only because of USG's insufficient responsiveness, there may even be one or two good points favoring the move. For one thing, it would demonstrate to the people of Iran that Soviets are arms peddlers (a criticism heretofore reserved only for Americans) as well as peaceful steel mill providers. Secondly, Shah said that by his dealing with Soviets it may help "break Soviet offensive in building up a bloc of so-called progressive states" in Mideast. 14. This provided occasion expound my theory that Soviet motives are diabolical. Soviets have no qualms about fueling regional conflicts, I said, probably realizing that as with Pak-India conflict last fall those conflicts will run out of gas in couple of weeks and both sides welcome UN truce order. Meanwhile, Soviets pour arms into countries friendly to them to assure their friendship. Shah himself interjected that in process they wean America's friends and make them ripe for Soviet blandishments. Shah added that behind these moves Soviets are desperately trying shore up waning fortunes of Socialist-Communist system which is failing wherever it exists and which is doomed unless Soviets can divert attention from its failures. He cited Syria as product of these Soviet endeavors. I said this was precisely my main point, i.e., by loading up Mideast countries with arms Soviets can keep them weak and dependent. I said Soviet propaganda re "progressive" Mideast states, i.e., Syria, UAR, and Egypt, is hollow as long as Iran, Saudi Arabia, Lebanon and even "unviable" Jordan are doing so much better than "progressives." Obviously, I said, Soviets want to reduce all Mideast states to be Syrias. Shah agreed, but, of course, insisted that Iran has no choice but to build up adequate defense, as even Peterson mission, he added, had determined is necessary. Saying he doubted USG capable of handling several Viet-Nam situations at once, Shah said he continues to believe it is in USG interest to have Iran adequately equipped to deter or cope with regional threat in Persian Gulf area. 15. During course of conversation I pointed to President's warm hope that Shah and he could talk things out. Shah showed gratification at this point but at same time made clear that his decisions re military procurement cannot wait until early next year. 16. Comment: There was no indication whether or not Shah will reply to President's letter. Letter, however, was very timely both to get on record from highest US authority likelihood of significant USG reaction to Iran's purchasing from Soviets and at same time placing on record President's own desire to maintain close U.S.-Iran ties. My point in delivering letter personally was to provide additional info re SAMs and press point that if Shah really wants to he can find technical or other reasons for retreating from Soviet embrace. My impression is, however, that complete retreat is almost impossible, unless Soviets play their hand badly or unless USG comes through with some new proposals markedly more favorable in terms. Meyer
161. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, July 25, 1966, 1230Z. /1/Source: Department of State, Central Files, DEF 12-5 IRAN. Secret; Priority; Limdis. 378. For Hare NEA. Ref: State 13889./2/ /2/In telegram 13889 to Tehran, July 22, Hare asked for the Ambassador's judgment as to the probable Iranian reaction to a U.S. offer of an aircraft package of two squadrons of new F-4s (up to a total of 32 aircraft) at new aircraft prices with rough cost estimate of $50 million per squadron and probable delivery in late 1969 or early 1970. (Ibid.) 1. Even before we informed Shah we "considering" second F-4 squadron (State 4417),/3/ he insistent on need for two squadrons of 16 each. He himself had figured on basis one squadron of 12 or 13 for $39 million that two squadrons of 16 would cost circa $100 million. He considered this cost high but he might conceivably pay this sum: a) because he knows F-4 is best of its kind; and b) he and General Khatemi want keep air force in US hands. As to delivery, Shah's target date for completion of defense build-up is 1968, when British leave Aden and in his view Nasserist threat will become more serious. He will, therefore, be disappointed at prospect of delivery in 1969-70. /3/Document 152. 2. In President's letter, as earlier, we have indicated possibility two F-4 squadrons. Since Shah has had no reason to reckon cost at other than $100 million, proposal in reftel would represent nothing new nor special. It would, therefore, by itself not dissuade Shah from buying other things from Soviets. Meanwhile, French are pressing hard, and if his hopes for F-4's falter, Shah apt move quickly to purchase of Mirages (which he been offered at half F-4 price and better credit terms). He has made this clear in conversations with me. 3. My talk with Shah 23rd,/4/as well as comments from numerous top Iranians, have convinced me that if we hope have any chance keeping Soviets out, we are going have to offer something which clearly indicates extraordinary move by USG. As minimum, it means: a) noteworthy mark-down in F-4 price (probably on order 50 percent which is attractiveness of rehab F-4 proposal); b) reduction of $2 million in battalion price of Hawks (which Shah considers R and D surcharge); c) scaling down of surcharges on other equipment; d) expeditious schedule of deliveries; and e) ultimate availability under USG credit of Sheridan tanks. /4/See Document 160. 4. Above is tall order, but should be within USG competence. Underneath bargaining lies something more fundamental. Sahah remains obsessed with idea that since 1961 USG has shifted its affection from traditional friends and allies (he probably has read Schlesinger) to courting "third world." He is, therefore, looking for unmistakable sign that USG values Iran's friendship. For his simple barometer is prices, terms and delivery dates we offer for military equipment which he is prepared to purchase (instead of receiving as grant as heretofore) and which he considers essential for Iran's role, particularly in Gulf area after 1968. 5. Current Soviet aim, manifest in daily clandestine broadcasts, is ouster of US influence in Iran, particularly US military presence and our strategic facilities which military presence covers. While Embassy cannot guarantee that special move as suggested in para 3 will preclude all arms purchases from Soviets, we can guarantee that without such move Soviets will make major inroads and US interests will suffer accordingly. By making such a move, with attractive F-4 proposition at its heart, USG will: a) demonstrate to Shah USG's continued interest in assisting Iran to meet its reasonable defense requirements; b) provide Shah with bridge for retreating from excessive military involvement with Soviets; c) thwart Soviet efforts for ousting our facilities and other interests here; and d) assure healthy maturation of US-Iran relationship. If despite friendly USG move Shah still becomes entwined with Soviets, we remain free to adjust our policies as circumstances require. Meyer
162. Memorandum of Conversation/1/ Washington, July 26, 1966, 11:30 a.m. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. Copies were sent to Rostow, Hare, and Saunders. THOSE PRESENT I first expressed Mr. Rostow's regret for not being able to meet with the Ambassador, but that he had unexpectedly been called upstairs by the President before a Cabinet meeting that was to follow about 12:15. I suggested we have our discussion, and then if Mr. Rostow returned, he could carry on. Ambassador Khosrovani made six main points: 1. Iran is America's closest friend in the Middle East; it is the only one which has stood with us on behalf of our policy in Vietnam. The Shah argued for three days in Bucharest in order to water down a sharp Rumanian communique. We have stood side by side in the anti-Communist struggle. 2. However, Iran has found that the direction of the threat to Iran has been changing somewhat over the past two or three years, as Soviet policy toward Iran has become more civil while Soviet military support for the Arab countries has radically increased. This has happened at a time when British power is withdrawing from the area, particularly the Persian Gulf. The Shah believes that America's reaction to this changed situation has not been as responsive as the threat from the Arab countries has required. 3. While he has great respect for our military experience and the competence of our military specialists, the long discussions preceding each decision on military support have sometimes appeared like foot-dragging and have often been humiliating as foreign advisors tell him that they know better what he needs than he does--a contention the Shah is unwilling to accept. 4. With the U.S. switch from grant assistance to credit sales, the unwillingness of the oil companies to increase Iran's oil liftings, and the Shah's need to channel resources into development, the Shah was having increasing difficulties in meeting his rising defense requirements. He therefore found it necessary to seek out the cheapest source of supply, which is now the Soviet Union. This is regrettable, but the Shah has seen no alternative. 5. While the United States is understandably fearful of any Soviet presence in Iran, the Iranians have been dealing with the Russians for many generations. They have a "feel for the real dangers." Now, the more immediate danger is from the revolutionary Arab world. 6. Ambassador Khosrovani is not at all convinced that "all is lost." So far as he knows, the Shah has not been pressing Moscow hard for an answer. The Ambassador believes that if we can provide fairly promptly a forthcoming answer to the present negotiations, the Shah may not feel it necessary to go forward with his Russian explorations. He hopes very much that whatever misunderstanding that appears to have come between us will easily be overcome. He knows the Shah has no desire to change in any way the essential relationship between our two countries. He hoped very much to be able to see Mr. Rostow personally. Mr. Wriggins' main points were: 1. We ourselves have been puzzled and frankly somewhat annoyed by the Shah's approach to this problem. In 1964 we provided $200 million for a 5-year defense program. 2. Within less than two years the Shah raised another $200 million for defense purposes; and then appeared to expect us to immediately respond. We did provide a special military mission to examine the problem. 3. While the Shah may have felt that this was not entirely sufficient, it made substantial recommendations which we actively pursued toward another $200 million--more than doubling our assistance within a five-year period. While we were examining this problem, we were suddenly informed that he is seeking assistance from the Soviet Union. (The Ambassador replied we should not have been surprised--we had had plenty of warning from the Shah's advisors.) 4. We have never argued that he wasn't independent or that he didn't have the power to make his own decisions. Of course he did. Indeed, as a long-time student of politics outside of North America and Western Europe, I fully understood the desire of governments to demonstrate their independence. All we were attempting to do was to make quite sure that the Shah understood that in choosing this way of demonstrating his independence, there could be serious consequences, however unpredictable. As the Secretary and I have pointed out before, it was impossible to predict how the Congress would react if Iran, an old and close ally against Communism, began to accept substantial quantities of military equipment from the Soviet Union. It also raised the problem of protecting the security of our advanced equipment. This was not like India, where no advanced equipment had been sent. The fact of the presence of Soviet technicians in Iran would pose us considerable difficulty. The Shah, I knew, would take these considerations into account as he attempted to add up what he considered to be to the best advantage of Iran. We both expressed our pleasure at seeing each other again and discussing this matter once more. We both hoped nothing would stand in the way of continued close collaboration between our two countries. He expressed the hope that he could greet Mr. Rostow before he went on leave tomorrow afternoon--simply a courtesy call of a few moments, if that were possible. (He had obviously reported home he was seeing Mr. Rostow, and wanted to be able to report home that he had seen him.) I told him I would do my best to arrange a convenient time, though I made it clear it would be difficult to arrange on this short notice. HW
163. Letter From Vice Presidential Aide George Carroll to Vice President Humphrey/1/ Washington, July 27, 1966. /1/Source: Johnson Library, White House Central Files, EX FO-5, 6/30/66-8/31/66. No classification marking. SUBJECT You know Kermit Roosevelt. He is Vice President, Gulf Oil Company. He is also President, Middle East Institute. No American knows the Shah of Iran as well as does Kim. While he was still abroad he communicated with his secretary here in Washington and asked her to arrange a meeting with me upon his arrival. Therefore, the meeting which I now report was held with some sense of urgency. I learned its urgency as soon as we sat down to talk. The Shah saw Roosevelt for over three hours. Roosevelt's main conclusion is that the Shah feels that his special relationship with his closest friend, America, is coming to an end. The Shah feels that it is coming to an end because of the indifference of his American friends. American indifference hardly balances the scales because the Shah's input includes Iran's contribution to South Vietnam, Iran's recognition and assistance to Israel, Iran's standup fight against the incursions of Nasser, etc. The Shah feels that it has been a one-way street and that the United States does not really care any more what happens to Iran. He concludes that America does not care because what concerns the Shah does not concern the United States. The Shah is tired of being treated like a schoolboy, particularly by officials of the Agency for International Development. He believes that AID has no legitimate claim upon his right to his own views and to his own policies. The Shah cites, also, Secretary McNamara's handling of his arms package. This is a story in itself. The story is that the Shah feels that the United States is charging him more money in interest for a Hawk Battalion than anybody else. He feels that the money Secretary McNamara wants to charge him for other military items is usurious and discriminatory. Because of this maltreatment the Shah concludes that America does better by its enemies than it does by its friends. The Shah is certain that Nasser is given quicker and fairer treatment than is Iran. He spells out chapter and verse to show that the United States has shown no gratitude for his support in South Vietnam. Concerning the current withdrawal of British power from the Middle East, the Shah has led the way in realizing that this power vacuum must be filled and that Iran can relieve the United States of an appreciable part of the cost. Roosevelt says the Shah believes that Iran, Saudi Arabia, Pakistan, and perhaps Iraq can hold the line against Nasser and the U.S.S.R., but they must have the support and understanding of the United States. The Shah realizes that the reason why the Soviets have not yet responded to his overtures for arms is because the Shah wants SAM-2's and the Soviets do not want these missiles placed in a country which has an American military mission. The Shah knows that the Russians would like to respond positively but must hesitate over the question of missiles for Iran. The Shah wondered aloud to Roosevelt over how the United States and Iran could have arrived at a parting of the ways. Heretofore, the United States had realized the importance of Iran and its geographic location. The Shah's relations with the United States have been confidential, cooperative, and rewarding for both sides. The Shah could not understand how the United States could charge him more interest than it charged others. This seemed to be the last straw. Roosevelt said he had reported this conversation to Ambassador Meyer. He had also seen Walt Rostow early this morning. Rostow did not seem convinced of the seriousness of the situation, Roosevelt thought, and told Roosevelt that he thought the acceptance by Iran of Soviet arms represented an inevitable step in the "normalization" of U.S.-Irananian relations. Roosevelt said he planned to see Assistant Secretary Ray Hare this afternoon or tomorrow.
164. Letter From Vice President Humphrey to Secretary of Defense McNamara/1/ Washington, July 28, 1966. /1/Source: Washington National Records Center, RG 330, OSD Files: FRC 70 A 4443, Iran 091.3 MAP 1966, 28 Jul 66. Secret. A stamped notation on the source text indicates that McNamara saw it on August 2. Dear Bob: I hesitate to draw your attention away from other serious matters but I would like to call to your attention a situation of immediate danger to our relations with Iran. As a member of the Senate Foreign Relations Committee I was charged with the duty of studying the Middle East, including Iran. Throughout the years I learned that nothing is certain in that area except trouble, and that only quick footwork at the right time can avoid serious pitfalls. I know you share my deep appreciation for the Shah's contribution to the struggle in Vietnam, for his staunch defense of our policies during his recent swing through the Satellites, and for his unfailing support of the United States in the field of mutual defense. The fact that he is now turning to the Soviet Union to purchase arms is regrettable. Our intelligence services report that his movement toward the Russians could be far more serious than the immediate issue at hand. I wonder if the situation is correctable? I think we all would feel much better knowing that you had taken a personal look at the commercial details we are proposing to the Shah and hearing from you that you believe it proper to accept the high risks we are informed are involved. Sincerely, Hubert H.
165. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, July 29, 1966. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. Mr. President: Herewith a final call for help from our Ambassador to Iran./2/ The Iranians threaten to buy some Soviet military equipment from the Soviet Union unless we alter the prices and terms we have offered. /2/Attached to the source text is a typed copy of telegram 451 from Tehran, July 28, which conveyed a message from Meyer to the President arguing that before the Shah got inextricably involved in an arms deal with the Soviets, the United States should make one last effort to avoid a serious set-back for U.S. interests in the area. Meyer stated that the only hope of avoiding excessive Iranian military involvement with the Soviets was an indication from the U.S. Government of better prices and terms. The Ambassador regretted bringing this matter to the President's personal attention, but because there was so much at stake--not the least of which was U.S. strategic installations in Iran--he felt compelled to appeal personally to the President. (Department of State, Central Files, DEF 19 U.S.-IRAN) I have checked with Secretary Rusk/3/ and with Secretary McNamara. Sec. Rusk believes we should not try to impose this extra $30 million military aid burden on the Department of Defense and that, on balance, it might be good for us to see some slight loosening in our ties to the Shah. He has always been a little uneasy about our commitments to him. /3/Rostow had telephoned Rusk concerning Meyer's cable at 5:20 p.m. on July 29, saying that he did not want to send it to the President until he had Rusk and McNamara's final position. Rusk said that State's position was that they should not ask McNamara to take on another $30-$40 million in defense spending for this, and that it would not be proper for the United States to be blackmailed. The Secretary said that he was nervous about the behind-the-scene U.S. commitment from previous years and would not object to a little loosening up there. (Memorandum of telephone conversation between Rusk and Rostow, July 29; ibid., Rusk Files: Lot 72 D 192) Secretary McNamara believes that we should stand on our present position; although he is willing to consider helping marginally if his military aid is fully restored. But basically he does not wish to give in to the Shah's "blackmail." I have a feeling that, whatever we do, the Shah is likely to buy some Soviet equipment because it would be good for him domestically, indicating that he is not wholly "subservient" to the U.S. and "normalizing" his relations with the U.S.S.R. As Ambassador Meyer points out, there are certain risks in our present position. The Shah might behave irrationally and get in much deeper with the Soviets than we now calculate. On the other hand, he is asking to be treated like a grown up. Your letter to him was in a mature mood of partnership. I agree, therefore, that we should stand on our present position. It seems to me possible--but not sure--that if we stand on your letter and do not go rushing in with an additional "carrot," the Iranians may come back to us with a specific proposition which we might look at. Let the situation rest as it is /4/The President checked this option. Walt
166. Memorandum From the Joint Chiefs of Staff to Secretary of Defense McNamara/1/ JCSM-498-66 Washington, August 1, 1966. /1/Source: Washington National Records Center, RG 330, OSD Files: FRC 70 A 4443, Iran 091.3 MAP, 1 Aug 66. Secret. A stamped notation on the source text reads: "SecDef has seen Brief." SUBJECT 1. (S) Reference is made to JCSM-240-66, dated 15 April 1966, subject: "Report of US Military Survey--Iran (C),"/2/ wherein the Joint Chiefs of Staff informed you of their concurrence in the conclusions and recommendations of a tri-Service team which surveyed the equipment needs of the Imperial Iranian Armed Forces. This concurrence was based on a recognition of the need to maintain the primacy of the U.S. military presence in Iran. /2/Not printed. 2. (S) The Joint Chiefs of Staff are concerned that the Shah of Iran is dissatisfied with current U.S. offers to sell military equipment he deems essential for Iran's defense. He already has initiated action to procure certain equipment including SAMs from the Soviets. Recent messages from the Ambassador, CINCSTRIKE/USCINCMEAFSA, and the Chief, ARMISH/MAAG, indicate that the US offers must be more forthcoming if a major Soviet entry into Iran, with all its attendant disadvantages, is to be prevented. 3. (S) In view of this possibility and the serious deterioration in US/Iranian relations which could result, the Joint Chiefs of Staff: a. Reaffirm their judgment that it is essential to maintain the primacy of US military interests in Iran and that every effort should be made to prevent the Soviets from gaining a foothold through the introduction of military equipment and technicians into Iran. b. Recommend support of reduced costs, to include the waiving of R&D costs on all items contained in the approved equipment requirements, in order to make this judgment meaningful in light of the circumstances mentioned. c. Further recommend an offer of two squadrons of sixteen each F-4C aircraft at reduced cost with delivery to commence late in calendar year 1968. This offer requires inclusion of additional procurement funds for F-4E aircraft in the Air Force supplemental FY 1967 budget./3/ /3/On August 23 Acting Secretary of Defense Vance sent the Chairman of the Joint Chiefs of Staff a memorandum noting that he shared the JCS concern over the implications of the Shah's dissatisfaction with U.S. unwillingness to sell Iran military equipment he deemed essential for Iran's defense. Vance said that following a Defense-State-White House review, they had decided to offer the Shah several new concessions, including waiver of R and D charges on all items and two squadrons of F-4s. These had been conveyed to the Shah the previous week by Hoopes, and it appeared that the Shah now felt that the U.S. offer met most of Iran's needs, although it was not certain that this would forestall his purchase of Soviet anti-aircraft missiles. (Washington National Records Center, RG 330, OSD Files: FRC 70 A 4443, Iran 091.3 MAP, 23 Aug 66) For the Joint Chiefs of Staff:
167. Memorandum From W. Howard Wriggins of the National Security Council Staff to the President's Special Assistant (Rostow)/1/ Washington, August 2, 1966. /1/Source: Johnson Library, National Security File, NSC Files of Harold Saunders, Iran Military, 4/1/66-12/31/67. Secret. Walt Tuesday/2/ lunch discussion of military sales for the Shah. /2/August 2. No record of the Tuesday lunch discussion has been found, but see Documents 168 and 169. 1. The attached cables (Tehran 492)/3/ point out: /3/Dated August 1. (Department of State, Central Files, DEF 19-8 U.S.-IRAN) (a) Soviets reportedly have responded positively to Iran's request for military equipment, but no details agreed on yet; (b) Shah finally aware purchases from Soviets will present us with security problems; (c) Shah assures us he can deal with these; (d) Armin believes a forthcoming U.S. position will keep the Shah's purchases to a minimum; (e) the President's letter was very helpful in reassuring the Shah of the President's personal interest. 2. By a "forthcoming" position, Meyer means (Tehran 378):/4/ /4/Document 161. (a) mark-down of F 4's; (b) reduction of $21 million in batallion price of Hawks--Shah believes this to be the R & D add on which he thinks should long ago have been amortized; (c) scaling of surcharges on other items; (d) expeditious schedule of deliveries; (e) USG credit available for Sheridan tank in the future. 3. This is obviously a very tall order. We can't do all this, but now to fall back positions. Having seen the Secretary of State cave on prices for the planes, Hare is still hoping to remove R & D costs on the Hawks. I hope you can persuade McNamara to do at least that. 4. Attached is a memo from DOD/5/ on price variations in the military equipment purchased by Iran. /5/Attached but not printed. Howard Wriggins/6/ /6/Printed from a copy that bears this typed signature.
168. Memorandum From the President's Special Assistant (Rostow) to Secretary of State Rusk and Secretary of Defense McNamara/1/ Washington, August 2, 1996. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. A handwritten notation on the source text indicates that a copy was sent to Hoopes. This is to record the decision made by the President today that: 1. Mr. Townsend Hoopes would proceed to Tehran to explain to the Shah the budgetary limitations on our military aid; the nature and rationale of our administrative procedures in military aid; the non-discriminatory character of our price offers to Iran in the present package; and other elements which determine our position as set forth in the President's letter to the Shah of July 20, 1966. 2. Mr. Hoopes would be empowered to tell the Shah that we shall deliver military equipment to him under our various agreements on an accelerated basis. 3. He would be empowered also to say that, in response to the Shah's request, we are prepared to eliminate from the price of the Hawks the R&D costs imputed in our original offer. W.W. Rostow
169. Memorandum From W. Howard Wriggins of the National Security Council Staff to the President's Special Assistant (Rostow)/1/ Washington, August 5, 1966. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. SUBJECT Attached are draft instructions for Hoopes and Meyer/2/ in presenting our final offer to the Shah. Vance and McNamara have cleared, but we want to be sure this reflects your understanding of the agreement reached Tuesday in the President's presence. /2/See Document 170. In addition to outlining our positions on F-4's and Hawks, and offering to begin detailed negotiations, this reiterates the line we took in the President's letter: --U.S. considers its Iranian relationship important (sending Hoopes underscores this). --We want Shah to understand fully that our procedures and prices are not discriminatory (Hoopes will explain). --Our offer to sell F-4's and missiles conditional until Iran clarifies its position on buying from the USSR. --We consider our annual economic-military review important and will take into account the effect of Iran's third-country purchases in determining later credits. This is a fair statement of where we have come out. Since we can't meet all the Shah's requests, this states our limits while relying on Hoopes to make them as palatable as possible. This looks O.K./3/ /3/The options are handwritten and the first one is checked. [Continue with the next documents] |
