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

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

Tehran, December 29, 1965, 0835Z.

929. US-Iran Military Cooperation.

1. Shah’s Purposes. In conversation 28th, Shah made studied effort to persuade U.S.G. of: a) what he considers need for $200,000,000 augmentation Iran’s military establishment, and b) his desire to maintain U.S. supply pattern to maximum extent possible.

2. Reasons for Revision. In citing reasoning behind augmentation Shah cited:

A. 1964 Reservations. When 1964 Memo of Understanding was signed Iranian authorities, according to Shah, had made clear their belief that joint military program envisaged was inadequate, particularly since circumstances might change. Furthermore, Iran as independent country had reserved right to alter program if it determined it to be necessary for national self-defense.

B. International Developments. Since 1964, there have been various international developments which have left their imprint on Iran’s judgment of its defense needs: (1) Vietnam where USG intervention is necessary but not particularly desirable course of action; (2) Indo-Pak hostilities with lesson that a small nation must have sufficient independent defense capability to handle itself in regional quarrel for up to three months; (3) Cyprus where Soviets playing chameleon role but people of country still suffer; and (4) instability and uncertainty of Arab world as witness collapse of Haradh Conference, Nasser’s non-withdrawal from Yemen, Iraq’s subservience to Nasser and ever festering Arab-Israel question.

C. Persian Gulf Vulnerability. More specifically Iran’s attention is increasingly riveted on Persian Gulf because of: (1) almost inevitable British withdrawal; (2) Syrian and Iraqi agitation re Khuzistan; (3) development of Kharg Island which makes Iranian crude oil exports almost totally vulnerable to one surprise attack; (4) King Faisal’s increased interest in cooperating with Iran, but until both have military establishment of reasonable respectability such cooperation is ephemeral; and (5) Iran’s obvious destiny along with Saudis, as heirs to British, to protest security and tranquillity of Gulf not only from predatory regional threateners but in interest of whole free world.

D. Unfavorable Comparisons. As far as Iran’s defense is concerned, Shah believes that USG has “built two-thirds of dam” and should complete it if Iran’s defensive role is to be useful. Shah again noted Saudis, who have much less need than Iran, are being allowed to purchase $400,000,000 or more from Western sources, including three battalions of Hawk missiles. He wondered why we continue to “beef up” Turkey in much more favorable way than Iran, e.g. nine destroyers, submarines, etc. (I noted: his impression of U.S. MAP program in Turkey is exaggerated, Turkey has always had much larger military establishment, Turkey has no $500,000,000 annual oil income, and in U.S. public opinion Turkey still ranks high for its effective role with U.S. in Korean War.) Shah went on to point out Soviet-supplied neighbors, notably Iraq, continue to get MIG–21’s and other equipment more efficient than what Iran has.

E. U.S. Ally. Making clear his continued dedication to U.S.-Iran alliance, Shah once again said if Soviets cross frontier it would be world war and Iran would count on U.S. support. He believed however that Soviets at least for present have peaceful intentions. If regional hostilities were to develop, Shah added, he doubted, as he had observed to NYTimes man Brady, that Iran could “count on” active U.S. military help. Conclusion, therefore, was clear: Iran itself must be in position to cope with such trouble.

3. Nature of Augmentation. Shah listed his additional military needs as follows:

A. Anti-aircraft Defense. Shah said he anxious to have U.S. military expert survey Iran’s air defense needs, so as to determine where various items such as Hawks and early warning equipment can most efficiently be installed to give Iran best protection. He said he is considering British bloodhounds but seemed interested when I suggested his greatest threat is from low-level attack which is better countered by Hawks.

B. Aircraft. Shah said there is no question Iran will need higher performance aircraft than F–5. Question is which one. He disclosed he is giving serious consideration to Mirage, which he considers equal to MIG–21. There is also possibility of F–4C but price is probably $2,500,000 or $3,000,000 which is almost twice as much as Mirage. TFX would be best plane but Iran cannot afford aircraft which costs $5,000,000 or more per copy. Shah said his first choice F5X if and when it ever goes into production. As Shah sees picture, two squadrons of one of these higher performance aircraft should replace the eighth and ninth F–5 squadrons which according 1964 agreement Iran would purchase from U.S. Meanwhile, Shah feels that for efficiency purposes size of present F–5 squadrons should be increased from 13 to 16 planes each. He said Iran is prepared to purchase 21 F–5’s necessary to enlarge seven MAP F–5 squadrons to this size.

C. Naval Vessels. Shah said present key question is whether in expanding his naval security capability in Gulf he should get three small vessels (presumably recommended by British to General Toufanian) or one modern destroyer which Chief of Italian Navy recommended (at cost of $40,000,000). Noting problems of manning ships when present Iranian Navy already understaffed, I told Shah he wise in taking careful look before he leaps.

D. Tanks. Shah said his M–47 tanks will eventually be phased out and he remains interested in possibility of Sheridans as their replacement.

4. U.S. Attitude. After appropriate remarks concerning longstanding friendly US-Iran relationship in military field, I told Shah his explanation of situation would be helpful in Washington. It no secret that recent $200,000,000 authorization had caught his U.S. friends by surprise. It not our intention to back-seat drive, but we did have close relationship translated into mutual commitments in 1964 agreement designed to provide Iran with biggest bang per buck. He must realize questions would inevitably arise in Washington, notably on Capitol Hill, as to need for USMAP grant component in that program if program ignored by Iran. I acknowledged it is difficult to argue that 1964 circumstances immutable, but at same time we would need valid explanations such as he had just given in order persuade Congress to continue providing necessary funds. It was good particularly to hear, I said, that he continues to respect 1964 agreement, even though he considers modifications necessary.

5. U.S. Pattern. Shah said it obvious Iran has every interest in continuing to obtain military equipment from U.S. To change pattern of supply would only compound Iran’s military problems. He therefore sincerely hoped that U.S.G. would consider his revised needs promptly and let him know at an early date prices, financing terms and availability. He emphasized that while decisions must be made in near future, point is that in most cases it would be two or three years before equipment would actually be delivered.

6. Economic Frame-work. While appreciating Shah’s eagerness to make decisions, I noted that important element in our 1964 agreement was fitting Iranian military program into Iran’s economic capability. Shah reiterated his usual points that economic development is useless if it is not secure and that Iran’s income is continually rising (again he mentioned $2,000,000,000 target by 1970). Moreover, his Chief Financial Advisor, Central Bank Governor Mehdi Samii, had noted that recent parliamentary authorization for $200,000,000 in fact made it possible for Iran to contract for more than that amount of military equipment if necessary. Shah again noted that 1964 program would cost $280,000,000 or $80,000,000 more than anticipated (including addition of 60 to 90 day supply of ammo. Ninety day supply is necessary, Shah said, because in any case it requires three months to transport materiel from U.S. and off-loading of explosives is impossible in heat of Persian Gulf summers.) Shah said his economists had recently produced economic data which made clear Iran’s capability for proposed military purchases but he did not seem clear whether this was last annual review or something subsequent. In any case, Shah said he realized U.S.G.’s interest in economic aspects of his military program and he would assure that appropriate consultations would take place.

Comment. Believe this conversation has been helpful in restoring to some degree dialogue re Iran-U.S. military relationship. At same time it is clear Shah is determined to make early decisions, specifically re anti-aircraft equipment, high performance aircraft, and naval vessels. Re anti-aircraft equipment, we can gain time and keep Shah content by favorable response to request for experts’ survey which he has now thrice made (Embtel 850² and Shah’s talk with Jablonski 23d). Re naval craft, I am sure Shah would similarly appreciate some expert US advice. Even though he has not made specific request. Most troublesome item will be aircraft. For year now, Shah has been eager because of long lead-time to make decisions with respect to post F–5 period. Obviously French salesmen have gotten to him glamorizing the Mirage and such representations by French and others will undoubtedly whet his appetite further. One way of forestalling precipitate action in this field would be to provide info re prospects of an F5X. If Shah felt there were hope of his buying F5X, we would not need to worry about Mirages, Lightnings or even MIGs.

Meyer

1. Source: Department of State, Central Files, DEF 19 U.S.-IRAN. Confidential. Repeated to CINCEUR, CINCSTRIKE, London, and Paris.
2. Dated December 10. (Ibid., POL IRAN-U.S.)