411. Memorandum From the Director of the International Cooperation Administration (Smith) to the Deputy Under Secretary of State for Economic Affairs (Dillon)1

SUBJECT

  • United States Aid for Iran: Qom Airfield

Reference is made to your memorandum of November 15, 1957,2 requesting ICA to undertake the financing of Qom Airfield [with] up to $6,500,000 from Special Assistance funds.

In view of the determination by the Secretary of State that the policy interests of the United States in Iran require support for the Qom Airfield, and in view of the decision of the Department of Defense not to include the field in the military construction program, the ICA will prepare a program approval document and take other necessary steps to implement the project. Discussions with the Department of Defense will be initiated on the following assumptions:

1.
The airfield will be constructed by the U.S. Corps of Engineers according to the same general arrangements currently prevailing with respect to the military construction program in Iran. Funds to cover the dollar costs of the project will therefore be transferred to the Department of Defense from the Special Assistance Fund. The local currency component of the project will be generated by allocating Special Assistance funds for the importation into Iran of saleable commodities, the counterpart of which will be made available to the Gulf District Engineers. A special effort will be made to utilize Section 402 Commodities for the purpose of generating this counterpart.
2.
The commitment of the U.S. is limited to $6.5 million, which your memorandum indicates to be the estimated cost of minimum facilities (a runway, a control tower and fuel storage facilities). It is hoped that this limitation on the United States commitment will be [Page 954] made clear to the Government of Iran. No provision for the contingency of additional financing is being made in the FY 1959 Congressional presentation.

I am particularly concerned that the nature of the U.S. commitment is made definite, in view of the fact that initial review of this project in ICA indicates that its cost will probably be in excess of $6.5 million and that it may prove difficult to adhere to the minimum standards contemplated. General Seitz, the MAAG Chief in Tehran, in reporting a conversation with the Shah on the subject of Qom Airfield, noted that “when he speaks of an airfield he means complete to the last detail.”

J. H. Smith, Jr.3
  1. Source: Department of State, GTI Files: Lot 60 D 533, Iran, Qom Airfield, 1957. Secret.
  2. Not printed. (Ibid., Central Files, 788.5–MSP/l 1–1557) The arguments used in this memorandum were similar to those in Document 409.
  3. Printed from a copy that bears this typed signature.