Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

108. Telegram From the Embassy in Iran to the Department of State¹

Tehran, November 25, 1965, 1550Z.

776. Shah and US. At outset Thanksgiving Day conversation, Shah agreed with me that time had come for mutually frank discussion. Two-hour session resulted with following highlights:

1. Incipient Divergence. Shah said he had uneasy feeling growing estrangement between US and Iran. Agreeing, I said purpose my audience was obtain better understanding Iran’s policies and seek provide him better understanding of USG problems.

2. Rehash of Grievances. Obviously planned, Shah rehashed what he considers unhappy developments in U.S.-Iran relations. This time instead of harking back to Azerbaijan days, he began with mid-fifties and U.S. refusal join CENTO. He also contended U.S.G. sought to dictate Iran’s policies from days of Gerry Dooher (who “wanted to be Lawrence of Iran”) to Amini days of early sixties. He recalled President Kennedy, during Shah’s Washington visit in 1962, had gone out of his way to inform Shah that U.S.G. had two favorite Prime Ministers, Amini and Karamanlis. Amini’s premiership had been disastrous. Stating publicly Iran was bankrupt, Amini precipitated tremendous flight of capital and economic depression. More recently U.S.G. has sought to dictate in minutest detail what his military establishment may and may not have. In all honesty he felt Iranian authorities here are in best position to assess Iran’s security needs.

3. Relations with Soviets. In rehashing grievances, Shah recalled how in 1959 at insistence his Western allies he rejected offer of non-aggression pact with Soviets. Subsequently whole world witnessed USG attempts to relax relationship with Soviets. When Test Ban Treaty was signed, large U.S. Congressional contingent appeared in Moscow with all sorts of prophecies re new era in U.S.-U.S.S.R. relations. It was only natural, Shah said, that Iran would not want to be left out in cold. Accordingly, Iran began probing Soviet expressions of interest in relaxed Iran-U.S.S.R. relationship. Until now evidence is that Soviet intentions are reasonably honorable. Accordingly, as long as Soviets behave themselves, Shah said he sees no objection to neighborliness particularly in economic field.

4. Steel Mill. Among grievances, of course, was long-standing Western rejection of Iranian aspirations for steel mill. Shah said steel mill had become dream of all Iranians, dramatic symbol of Iran’s movement into modern world. So when Soviets made attractive offer, Shah accepted. He acknowledged recent active interest of Western consortia but said their efforts were to no purpose for they could not possibly compete with Soviet offer unless they would make gift of steel mill. He was referring to his well-known thesis that by paying for steel mill with natural gas, until now wasted by flaring, Iran is in effect getting steel mill from Soviets for nothing.

5. U.S. Reactions to Steel Mill. I pointed out to Shah our understanding of Iran’s acceptance of steel mill. Realized it had political advantages for Shah as well as economic (he demurred slightly). Noted that during my Washington consultations number of officials had pointed out there benefit to U.S. as well as Iran in relaxed Iran-U.S.S.R. relationship. Shah said he knew this but some “junior officers” have been “critical.” I took occasion to point out that number Iranians misquote Americans to Shah feeling they can improve their own standing with him by relaying sensational reports. Shah said he fully cognizant of this racket.

6. $200,000,000 Military Build-up. Shah expressed deep gratitude for close U.S.-Iranian military cooperation. He felt, however, that there had been serious U.S.G. misunderstanding of his true needs and this has resulted in glaring weaknesses in his security establishment. He stressed throughout conversation his need for anti-aircraft capability and naval units in Persian Gulf. He did not mention aircraft (General Khatemi has made clear to US that he wants hold to USAF cooperation).

7. Less Favorable Treatment. Shah complained we had supplied military equipment more generously to number countries, including many who have been less staunch friend of U.S. than Iran. Again he recalled his support for U.S. policy in Viet Nam. Shah also said Turks being more favorably treated, e.g. $160,000,000 this year in MAP grant aid, twelve destroyers (to Iran’s none), etc. Indicating his figures exaggerated, I pointed out U.S.G. still has sizeable $45,000,000 grant component in Iran program and Turkey does not have $500,000,000 annual oil income. Shah agreed, saying he glad Iran has increasing capability to purchase its military requirements. Problem is U.S.G. unwillingness to supply even when he is willing to pay.

8. Military vs Economic. I pointed out to Shah that from purely selfish standpoint U.S.G. is doing itself disservice. U.S. could use $200,000,000 foreign exchange in view our increasing gold outflow. Fact is our Washington colleagues put Iran’s interest above our own. They sincerely believe Iran should limit Iran’s military expenditures in favor economic development. Shah said no one excels him in desire for Iran’s economic development, paid for with Iranian funds. This launched him on description of progress to date. Including success of his dramatic reform program which, he said, has taken wind out of sails of Communists as well as opposition elements inside Iran.

9. Revised Program. Referring to our 1962 and 1964 agreements Shah said even at time of signature Iranians had indicated their fears that envisaged program would be inadequate. In fact, in letter approving agreements they had noted that situation could change and modifications required. Stressing need for both countries adhere to agreements, I acknowledged that nothing in life is immutable. If threat has altered and if weaknesses have developed in program, they could be talked out and appropriate revisions made. What was hard to explain was sudden unilateral Iranian action.

10. Anti-aircraft Plight. Shah said he had several times sought to make clear to US his deep concern re anti-aircraft defense. He had highest regard for U.S. military but even they can make mistakes. In Viet Nam only eight percent American aircraft being shot down by missiles; 92 percent by ground-fire. This has precipitated total revision US military thinking re anti-aircraft defense. Unfortunately, previous erroneous evaluation is partly responsible for Iran’s lack of air defense.

11. Naval Units for Gulf. Noting vulnerability Kharg Island, vital importance Khuzistan and increasing number off-shore drilling operations, Shah said he simply must have naval capability in Persian Gulf. US has steadfastly denied him destroyers. He is determined to obtain that type vessel. He feels his need is as valid as is that of Turkey.

12. Arab Threat in Gulf. Shah said he realizes U.S.G. does not consider Arabs as threat to Iran. I corrected him to say that we consider threat less formidable than does he. Re Iraq, Shah said just last week four Iraqi tanks crossed Iranian border and captured small Iranian mule train falsely suspected of carrying arms to Kurds. Nasserism could without too much difficulty take over Kuwait or other Gulf principalities. Syria has openly advocated Arab move on Khuzistan. Iraq has same objectives, even though only Qassim stated them publicly.

13. British Withdrawal. Shah predicted by 1968 British will have withdrawn from Aden and by 1970 probably from Gulf principalities. I called his attention to fact that Iran Del at UN had joined wolf-pack in voting resolution against British in Aden. Shah said Iran had no alternative but to vote against colonialism. Meanwhile, since British influence one way or other will be withdrawn, Iran remains single constructive free world power capable of protecting commerce and peace in Gulf area from predatory elements including Communists.

14. Saudi Potential. Shah said he looks forward to Faisal’s forthcoming visit to Tehran. While disturbed that Saudis seem be able obtain substantial equipment from U.S. and U.K. in contrast to his own less successful efforts, Shah said he welcomes military strengthening of Saudis. Asked whether Saudis might play role in security of Gulf principalities (as for example by federation), Shah said he saw no objection, provided such consolidation was definitely non-Nasserist. Shah added Iran has no territorial aims on Gulf’s southern shore (he did not even mention Bahrain).

15. Syria. Referring to Syria, I expressed view that Damascus pronouncements are chronically so wild that no one pays any attention to them. By reacting as Iranians did to Syrian PriMin’s statement re Khuzistan, it merely convinces Arabs this is an issue re which to make more noise. Shah professed to agree.

16. Shah in President’s Shoes. In trying explain U.S. problems, I asked Shah to put himself in President’s shoes. I expressed opinion that Presidents are products of their times. Eisenhower was chosen over very able Stevenson because Americans at that point wanted complacency and approved Eisenhower’s father image. Kennedy captured American imagination with theme that he wanted get U.S. on move again. World liked Kennedy because of his quivers and arrows foreign policy. (I noted in passing that Shah’s complaints re U.S. intervention via Amini stemmed from days when under Kennedy leadership US was trying play more active role in world affairs. In any case, Amini was Shah’s choice not that of U.S. Shah said Amini had been intriguing for job since his days as Ambassador in Washington.) I said U.S. people have become increasingly disillusioned. After two world wars and $110 billion in foreign aid, all to preserve freedom abroad, there is epidemic anti-Americanism in numerous foreign countries. We know it only represents minority who loudmouthed and who by melodramatics capture press headlines. Pity is that some leaders cater to such demagoguery. Americans too are human beings. They resent failure of other people appreciate their endeavors. They doubly resent indignities such as having their SecState spat upon. They want their President take hard look at foreign relations. This is what President Johnson is doing. Where there is aggression as in Viet Nam, President takes vigorous action and U.S. people overwhelmingly support such policies. But fact that they have to do this thankless job (240 lives lost last week alone) virtually alone causes them to pause. Shah recalled his own support in world capitals for US policy in Viet Nam and expressed apparently sincere view that American boys are “fighting gallantly” in Viet Nam.

17. Hard Look at Aid Projects. With above background, I said it not surprising Congress been increasingly critical foreign aid program. It is my understanding President himself is personally checking all foreign aid commitments. Shah said he understands this natural American attitude. He felt problem with foreign aid was “way it was handled“, e.g., too many strings, etc. I said reason Congress injected one proviso after another was increasing public concern at lack of foreign appreciation.

18. Second Tranche Paper-work. During conversation Shah spoke with utmost seriousness re delay in completing second tranche paper-work, which was to have been finished when Samii was in Washington two and half months ago. What worries him most, Shah said, is that if Washington can delay paper-work in this way, same “uncertainty” can apply to Iran’s supply of military equipment. I reiterated that until now there been no interruption in supplies as scheduled. Shah again referred to Pak experience. He realized we would say Iran is different but even if there is “only one chance in million” that Iran would find itself in same plight if Pan-Arab dispute arose, he could not take that chance. He said some of his military are now in Europe checking on anti-aircraft and naval equipment. He sincerely hoped early answer would be received from Washington re second tranche since he would “hate to move” in direction which would neither be in U.S. or Iran’s interest. He reiterated his desire to work in close harmony with us and to “buy American.”

19. Soviet Aim; Rupture U.S.-Iran Military Cooperation. I called Shah’s attention to current output of Communist-bloc anti-Iranian clandestine broadcasting stations. Major attack is on U.S.-Iran military cooperation. Noting that he has chosen to go along with first stage of classic Communist strategy, i.e., alliance of Communists with national aspirations, obviously Soviets now concentrating on second stage, i.e., disrupting Iran’s ties with West. I sincerely hoped Shah would block this Soviet move. Shah said it is U.S. which by second tranche delay is aiding Soviet objective. I closed conversation by quoting Arab proverb “You can’t clap with one hand” and expressed hope nothing would intervene to disrupt basic friendship which exists between our two countries including our military cooperation. Shah cordially agreed.

Meyer

1. Source: Department of State, Central Files, POL IRAN–US. Confidential. Repeated to CINCSTRIKE, Ankara, Baghdad, Cairo, Jidda, Karachi, London, Moscow, and USUN.