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290. Memorandum From Secretary of State Rusk to President Johnson/1/ Washington, June 7, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Visit of Shah of Iran, 6/11-12/68. Secret. SUBJECT Our aim during the Shah's visit will be to reassure him that despite the forthcoming change in our Administration and despite our involvement in Vietnam and with our domestic problems, we wish to continue the intimate relationship we have with Iran. To this end, you might: 1. Speak to him of your conviction that no matter who succeeds you in the Presidency, our fundamental policy toward Iran will continue. 2. Tell him that we will do our best to continue our close military cooperation with Iran: --After careful review, we have determined that we can make available $100 million in credits for FY 1968. --For the longer term we must continue to have the support of the Congress for authority and funds to carry on the credit program, and we will do our best to convince the Congress of its desirability. 3. Take the Shah into your confidence on major world problems: --Vietnam. The Shah has played a helpful role in trying to bring about peace talks. --The Arab-Israeli problem. The Shah is concerned about King Hussein's position. --US-USSR relations. 4. Congratulate the Shah on Iran's domestic progress and on its self-reliant foreign policy: --We hope that Iran's military procurement will not impede its spectacular economic development. --We are confident that the Shah's awareness of long-term Soviet objectives will cause him to continue to limit Iran's involvement with the Soviet Union, especially in the military and political fields. --We do not desire to replace the British in the Persian Gulf, but strongly hope that the littoral countries, especially Iran and Saudi Arabia, can cooperate to ensure the Gulf's security and progress. The recent visit of the Shah to King Feisal in Jidda on June 3 is a welcome step in this direction. Dean Rusk Attachment POINTS THE SHAH MAY RAISE AND SUGGESTED RESPONSES 1. United States Military Credit Program for Iran a. The Shah may indicate concern about the uncertainty of our commitment to assist Iran with military credits in future years. You might respond by saying that all of our previous military credit agreements with Iran have been conditioned, like the latest one, on Congressional authorization, the availability of funds and annual economic reviews. b. The Shah may ask that the FY 1968 credit finance patrol craft (PG-84's) armed with Tartar ship-to-ship missiles, which he desires to defend against similar craft the Iraqis are to receive from the USSR. You might respond that the PG-84 armed with Tartar missiles is still in the development stage and that it would therefore be premature to fund them this year. We are examining other possible systems which could meet this requirement. c. The Shah may ask for assurances that we will supply him with the two additional squadrons of F-4's which he desires in the early 1970's. You might respond that we have no objection to supplying these aircraft if Congressional action and our annual reviews permit. d. The Shah might ask again about training for Iranian pilots. You might respond that per his request last summer we have allocated 75 spaces for Iran annually through 1970--half of the available pilot training spaces for all allied countries--and that any further increase would be extremely difficult. e. The Shah might ask that we supply US Air Force technicians to maintain the F-4 aircraft he will start receiving from us this fall. You might respond that even aside from the demands of the Vietnam war on our Air Force, we could not do this under our military assistance program, and suggest that Iran hire civilian technicians, possibly from McDonnell-Douglas Aircraft Corporation which the Shah will visit on June 14. 2. Oil a. The Shah may ask your assistance in persuading American oil companies to lift more Iranian oil so that Iran can obtain more oil revenues for its development program. You might respond that this is a matter for our private oil companies, adding that the statistics indicate that their performance in recent years has been to the great benefit of Iran as well as themselves. b. The Shah may ask assistance in opening up the American market to more Iranian oil. You might respond that U.S. oil import quotas are issued to domestic refiners who are free to procure their imports from any producing country; increased participation in the U.S. market for Iranian oil can best be obtained by the GOI's ensuring, in collaboration with producing companies, that Iranian production is economically attractive to American refiners who have the allocations to import crude oil.
291. Supplementary Memorandum From Secretary of State Rusk to President Johnson/1/ Washington, June 7, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Visit of Shah of Iran, 6/11-12/68. Top Secret; Nodis. SUBJECT Discussion: We do not propose that you raise it, but the Shah may raise with you the subject of our installations at Peshawar and the Pakistani request that we leave there by July 1969. Implied in any such question will be whether we are thinking of increasing our facilities in Iran as a result of the loss of Peshawar. In accordance with a decision you made in the spring of 1966, we have been taking steps, on a contingency basis, to make possible the transfer of some of the Peshawar operations to Iran. We have not yet decided, however, when any such transfers should be made or the extent to which it would be politically feasible to make such transfers, in the light of our relations with Iran and our desire to retain our existing facilities in Iran. Recommended Talking Points: You might tell the Shah, if he raises the matter, that we are still studying the situation caused by Pakistan's request that we leave Peshawar and have not yet reached any firm conclusion. You might assure him that if it turns out that we would desire to increase our operations in Iran, we would of course discuss the matter with him beforehand, any such increases would be minimal and inconspicuous, and we would hope that he would be able to accommodate them, as before, in the interest of the security of the Free World. ([less than 1 line of source text not declassified] will be speaking to the Shah along these lines on June 12 and before you see the Shah.) Dean Rusk
292. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, June 11, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Visit of Shah of Iran, 6/11-12/68. Top Secret; Sensitive. SUBJECT Your office visit with the Shah will be Wednesday/2/ at 12:30 p.m., but before the dinner and meeting tonight you will wish to know what is on his mind. As usual, he will wish to hear your views on major world issues, but three specific subjects especially concern him: /2/June 12. 1. He hopes for as much assurance as you can give on the continuity of US policy toward Iran. He was badly shaken by your March 31st announcement./3/ Armin Meyer has told him that any American President looking at the Middle East will recognize Iran's importance to us, but it will help for him to hear this from you. /3/On March 31 President Johnson announced that he would not run for re-election. 2. Related to this, he will try to find out how much he can count on us for arms supply. You have just agreed to the first $75-100 million sale in a $600 million six-year program. We stated our intention to go ahead year by year, but we had to say we can't commit ourselves ahead until Congress gives us new authority. The one thing you can do is to start off the conversation by telling him that we can go all the way to 100 million this year. (We had told him "$75-100 million" pending final review of funding possibilities.) 3. Whether or not the Shah talks much about the Persian Gulf, we want to urge him to cooperate with King Faisal. The British pull-out by 1971 leaves Iran, Saudi Arabia and the little Arab principalities face-to-face with a series of conflicting claims over territory and oil rights. We want the leaders on the ground to get together rather than looking to us to arrange a settlement. The Shah understands our position, but knowing you are watching will underline it. He apparently had a good airport talk with Faisal on his way here, and we hope he'll follow up. The one other matter that may come up--[1 line of source text not declassified]--is the fact that we may wish to move [less than 1 line of source text not declassified] intelligence facilities to Iran if Pakistan closes us down at Peshawar. Your best response is to affirm the importance of these activities and let [less than 1 line of source text not declassified] carry the ball. Walt
293. Memorandum From the Director for the Near East and South Asia Region of the Office of International Security Affairs, Department of Defense (Newcomer) to the Assistant Secretary of Defense for International Security Affairs (Warnke)/1/ I-23182/68 Washington, June 12, 1968. /1/Source: Washington National Records Center, RG 330, OASD/ISA Files: FRC 72 A 1498, 333 IRAN, 12 June 1968. Secret. SUBJECT The Shah told President Johnson last night at dinner/2/ that he plans to raise two military supply topics at their 1230 meeting today: (1) additional U.S. advisors/maintenance personnel to help Iran's armed forces assimilate advanced equipment being purchased from the U.S. and (2) the Peace Ruby air control and warning system which is to be constructed along the Persian Gulf. The Shah may also discuss his desire to buy fast gunboats with surface-to-surface missiles and/or his plan to purchase a national integrated communications system. /2/No record of this conversation has been found. 1. U.S. Advisors. The Shah wants to take delivery on two more squadrons of F-4 interceptors as quickly as possible. ARMISH/MAAG has developed a training plan which should permit the Iranian Air Force to operate and maintain these aircraft by 1971. The Shah wants these aircraft earlier, has investigated contract maintenance (by McDonnell) but finds it extremely expensive ($10-12 million per year). The Shah therefore concludes that we could save him this $10-12 million per year by adding about 200 U.S. airmen to our advisory mission to maintain the new aircraft. We are seeking to discourage this corruption of the role of the advisory mission (and the concomitant acceleration of Iran's procurement program), citing Vietnam requirements and our general cutbacks in U.S. personnel overseas. This point is adequately covered in the President's talking paper. 2. Peace Ruby. This four-station addition to the limited air control and warning system, built by the UK and the US, was purchased by Iran in 1966 to extend radar coverage and communication along Iran's Persian Gulf coast. Since that time, the delivery schedule has slipped nearly two years (1970 to 1972) owing to unforeseen path testing difficulties and unrealistic production leadtime estimates, and costs have increased sharply ($21.3 to $37.8 million) as a result of faulty initial estimates, system changes and equipment price increases. Iran has indicated that it plans to shift the program from a government-to-government arrangement to a direct contact with a US manufacturer. This would eliminate the time required for competitive bidding and restore the original schedule, but it would cost Iran a bit more than the USAF contract. We have no objection to this shift and have made certain changes in our joint credit arrangements to permit Iran to go this route if it desires. 3. PG-84 with missiles. The Shah is pressing to buy four of our new PG-84 (165, 240T) fast patrol boats with a General Dynamics-developed surface-to-surface configuration of the Tartar missile as its principal armament. We have sought to discourage this sale, at least for this year, noting that the missile has not been mated to the PG-84 by the US Navy, that the West German Tartar program is still in the development stage, and that we are not yet convinced that missile boats represent Iran's best defense against the Iraqi Komar threat (aircraft may well prove the most effective and least expensive response). 4. National Military Communications System (NIMCOMS). Iran presently has no effective national communications system. We have studied the situation for Iran and have made several recommendations as to an integrated military system. None of these has been accepted. With the Shah's agreement, Page electronics is now surveying at its own expense Iran's needs in depth and drawing up a program proposal. When this study is completed, Iran is expected to choose a contractor to build the system. If an American firm is chosen, we would expect to fund NIMCOMS under the credit sales program in future years, subject to Congressional approval. The White House Staff has asked that you and Mr. Schwartz be available to answer questions that may arise during the President's 1230-1400 meeting with the Shah today. We have passed your telephone number at the Madison to Mr. Sanders at the White House for his use, if necessary. Mr. Schwartz and Mr. Reed of my staff plan to stand by in their offices. Henry C. Newcomer/3/ /3/Printed from a copy that indicates Newcomer signed the original.
294. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, June 12, 1968. /1/Source: Johnson Library, National Security File, NSC Files of Harold Saunders, Visit of Shah of Iran, June 11-June 12, 1968. Top Secret. SUBJECT We hope the following will have been covered in your talks: 1. We will stretch this year's arms sale to the full $100 million. (You approved $75-100 million. Defense has found funding for the full amount, and Secretary Rusk recommends you tell the Shah.) 2. We'll do our best to help with his future arms purchases, though we can't commit ourselves beyond what Congress authorizes. You're confident any US Administration will recognize Iran's importance. 3. You're glad the Shah saw King Faisal. Stability in the Persian Gulf depends on their cooperation. (When they had a tiff earlier this year, you urged cooperation. This will show your approval.) 4. Approve attached joint statement./2/ /2/Attached but not printed; for text, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968-1969, Book I, p. 712. Here are answers on subjects the Shah raised last night: 1. If he asks about USAF technicians for Phantoms, you might suggest he hire civilians. Even aside from Vietnam demands, we can't do this under our military assistance program. 2. We're not sure which telecommunications problem he'll raise: --If it's financing his new national military communications system, we could consider military credit. --If it's aircraft control and warning, he could shave a few months by dealing directly with US suppliers rather than through USAF. 3. He may ask you to lean on American oil companies to lift more Iranian oil. We want Iran's revenues to increase, but we stick to the line that we have to leave this to our private companies. He may also ask help in letting more Iranian oil into the US to barter for US goods. We'd hate to commit ourselves on an oil import quota without knowing what he proposes. You might suggest that the oil expert with him (Mr. Fallah) talk to Tony Solomon. W.W. Rostow/3/ /3/Printed from a copy that bears this typed signature.
295. Memorandum of Conversation/1/ Washington, June 12, 1968, 11 a.m. /1/Source: Department of State, Central Files, POL 7 IRAN. Secret. Drafted by Eliot and approved in S/S on June 25. The meeting took place at the Blair House. The source text is Part II of II; Part I is ibid., S/S Conference Files: Lot 70 D 418, Visit of the Shah of Iran, June 11-12, 1968, Vol. I of II.
SUBJECT PARTICIPANTS H.I.M. Mohammad Reza Pahlavi, Shahanshah of Iran The Secretary The Shah said that it is necessary for Iran's defense forces in the Persian Gulf area to be ready by the time the British leave the Gulf. He expressed particular concern about Iran's having the capacity to deal with the missile boats that Iraq is receiving and to be able to counter the psychological boost given the Soviet Union through their fleet visits. He could not foresee Iran's having in the near future sufficient naval forces to cope with these problems because Iran has insufficient trained manpower. He looked instead to a combination of naval craft, aircraft and land-based missiles to take care of his country's needs in the Gulf. The Shah referred specifically to his need to obtain technicians from the US to assist Iran in maintaining the F-4's which will soon be received from the United States. He also referred to the need to carry through with the aircraft control and warning project in south Iran and also the national communications project. The Shah stressed that he must be able to plan militarily several years in advance and therefore needs assurance from us that we will be able to meet his needs over such a period. Responding to the Secretary's comment that we are now in our annual hassle with the Congress on our military assistance and sales programs, the Shah said that he had two suggestions. One is for the Defense Department to include Iran's requirements in its orders of equipment for American forces. This would tend to keep the prices for Iran down. Alternatively, the Defense Department might be able to persuade American arms manufacturers to give Iran special favorable prices. In either case, favorable prices would serve to offset the cost to Iran of financing it might have to obtain from commercial banks. The Secretary indicated that after our nominating conventions, it might be useful for the Executive Branch to discuss this subject with the candidates of both parties. He said that he believed the present leading candidates favor our program of military cooperation with Iran, and the Shah said that he also believes this to be the case.
296. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, June 12, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. SUBJECT After hearing the warmth of your statement to the Shah, I'm sure this is just a formality. However, we reserved for you the final go-ahead on making this year's military credit sale to Iran the full $100 million. You earlier approved $75-100 million assuming available funds. The Shah's negotiator is here and will sign an agreement Friday if you approve. Secretaries Rusk and Clifford recommend you do so. Funds are available./2/ /2/The "Approve" option is checked on the source text and handwritten notes indicate that Harold Saunders was notified on June 12 and that he notified the Iranian desk the same day. Walt
297. Telegram From the Department of State to the Embassy in Iran/1/ Washington, June 13, 1968, 2025Z. /1/Source: Department of State, Central Files, POL 7 IRAN. Secret. Drafted by Eliot on June 12. Cleared by Rockwell and Saunders and approved by Battle. Repeated to London, Jidda, Ankara, Rawalpindi, Kuwait, and CINCSTRIKE. 182515. Subject: Shah's Visit to U.S. 1. Shah arrived New York June 10, Washington June 11, proceeds Cambridge for Harvard honorary degree June 12, St. Louis to visit McDonnell-Douglas Aircraft Corp June 13, Chicago University June 14 to dedicate building in his name and financed by him, and New York June 15. 2. New York visit June 10-11 highlighted by background conference with leading editors, meeting with top-level financial men, and lunch with U Thant. Financial meeting was especially useful in terms drawing attention to Iran's burgeoning economy and investment opportunities, although Shah made special point that foreign firms investing in Iran can have no better than 50-50 arrangement. 3. In Washington President gave large dinner June 11 in Shah's honor and had discussions with him that evening and also following morning. Public remarks at dinner and private discussions reflected warm and close friendship of the two men and their countries. Shah also met with Secretary Rusk and with Dillon Ripley of Smithsonian Institution in connection with scientific cooperation between Iran and US. 4. Principal substantive subjects on Shah's mind in Washington talks were (a) need to bolster Iran's defense capabilities in light forthcoming British departure from Persian Gulf and (b) desire of Iran to sell additional oil to US on barter basis. Talks also reviewed general world situation including Soviet policies in Eastern Europe, Korea and Vietnam, and current situation in Near East. As in previous visits of Shah to Washington, exchanges on world affairs were full and frank, with basic similarity of views on both sides. 5. In light private nature of visit, press coverage has not been as great as during last August's official visit. Press has speculated primarily on military discussions. 6. About 100 students demonstrated on Shah's arrival at Waldorf in New York but were not seen by Shah or party. Two or three students appeared opposite Blair House on one occasion when Shah was departing for Blair House. Rusk
298. Memorandum of Conversation/1/ Washington, June 13, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Confidential. PARTICIPANTS Mr. Samii came in just to wind up a general discussion of economic development in Iran which he and Mr. Rostow had begun at the dinner for the Shah. Mr. Rostow began by placing Iran at that point on the development ladder where the "take off" is just about finished and the nation is beginning to diffuse its resources and technology into a broad range of new industries. He likened Iran somewhat to Mexico, noting that Iran was still just a little bit behind. Looking to the future, he felt that Iran's greatest increase in revenue would come not from pressing for marginal increases in oil earnings, but would come from the widespread expansion of processing industries. The important principle will be for Iran to reap the profits of value added to its raw materials rather than to let these profits go to processors outside Iran. Mr. Samii asked what he thought Iran should do in mining its metal ores. Mr. Rostow said he could not be sure without studying the resources and markets in detail, but in general he felt that Iran might look at the example of Sweden. He felt it would make sense for Iran to move gradually from selling raw ore into various stages of processing. He urged that Iran, in developing new processing industries in all fields, not be afraid of foreign capital to start with but to be sure in its initial agreements with foreign investors to provide for the gradual transfer of management and control to Iranian hands. He felt this would undercut much domestic opposition to the suspected "new-imperialism" of foreign capital and would avoid embarrassing political problems for both sides later. Mr. Rostow, as he had promised Tuesday night, gave Mr. Samii a collection of memoranda and articles on the need for high protein additives to improve nutritional levels (copies provided to NEA). Entirely apart from the human obligation to do our best by each child that is born, he said it makes sense purely from the hard-headed planner's point of view to insure that a developing country will have the best minds it can develop, and we have now learned that adequate diet is an essential part of producing those minds. Mr. Samii expressed his gratitude and asked whether we would be able to send someone out to help develop a project in this field, once his government had decided what it needed. Mr. Rostow said that Ambassador Meyer would certainly be prepared to discuss this when Mr. Samii was ready. Mr. Rostow also stressed the possible importance of educational television. He said that a country like Iran must learn to develop talent within the country and not to rely entirely on education abroad. Where there is a shortage of teachers, educational television can bring the best teachers to even the remotest areas. He recommended that Mr. Samii talk with Mr. McGeorge Bundy or David Bell at the Ford Foundation. H.H.S.
299. Memorandum for the Record/1/ Washington, June 14, 1968. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. Copies were sent to the Secretaries of State and Defense, the Bureau of the Budget Director, and the AID Administrator. SUBJECT As a result of his talk with the Shah on June 12,/2/ the President requested that memoranda be written on the following subjects presenting the basic proposition on each, the pros and cons and recommendations. The President would like to be as forthcoming as possible. /2/Attached to a copy of this memorandum in Department of State files is a typewritten note that reads: "Meeting between the President and the Shah, June 12, 1968: President Johnson had a private meeting with the Shah of Iran and no formal memorandum of conversation was prepared. However, the attached memorandum for the record from Walt W. Rostow concerning follow-up actions for the Department of State was prepared as a result of the meeting." (Department of State, S/S Conference Files: Lot 70 D 418, Visit of the Shah of Iran, June 11-12, 1968, Vol. I of II) 1. Can the U.S. buy more oil from Iran on the basis of its being 100% tied to U.S. procurement? One aspect of this is whether the Defense Department might buy more oil for Vietnam from Iran. The main problem is to assure that any sales would be incremental. 2. Can the U.S. provide USAF technicians in support of the F-4 aircraft that Iran is buying? The President wishes to give this sympathetic high priority consideration. What are the possibilities for meeting the Shah's concern? 3. Can we meet the Shah's concerns about his radar and military telecommunications systems, with particular reference to the slippage in time? Since this was not spelled out in detail, it may be best to do a memo on each as a separate problem, noting the Shah's concern and what the possibilities are of meeting it. 4. How can we give the Shah assurance that he can plan on obtaining arms from the U.S. for his five-year program, i.e. that his planning can be long range, not on a year to year basis? The President made it plain in general terms that, within the limits of our world-wide arms sales program, he felt that Iran should enjoy high priority and be able to buy high quality modern equipment from us. 5. What role can the Northup 530 aircraft play in the development of Iran's air force? What are the facts on the development and financing of this project and could Iran participate in any consortium type arrangement for its further development? 6. What is the best military way of dominating the entrance to the Persian Gulf? The Shah expressed his concern about the Russian Fleet and the Persian Gulf and asked whether we could fix surface-to-surface missiles owned and controlled by Iran on the islands in the Straits of Hormuz to dominate it. 7. The President asked the Shah to consider shifting some of Iran's dollar holdings from short term to a longer term basis to aid our balance of payments. The Shah, without committing himself, agreed that Governor Samii of Iran Central Bank should follow this up with the Treasury Department. I believe it is permissible, if the Shah's proposals as described are not clear enough to make possible an adequate response, to seek clarification of his concerns through Ambassador Ansary or Ambassador Meyer. WW Rostow [Continue with the next documents] |
