150. Letter From the Deputy Under Secretary of State for Political Affairs (Johnson) to the Deputy Secretary of Defense (Vance)1
Dear Cy:
Ambassador Meyer informed the Shah of Iran in late May of the U.S. proposal for an additional military credit sales program to Iran of up to $200 million. The Shah left almost immediately for state visits in Romania, Yugoslavia and Morocco. Since his return to Tehran the Shah has conveyed to the Ambassador directly, and through his aides, some serious misgivings about our offer. His dissatisfaction stems from his almost obsessive concern for the security of Iran’s oil-rich province of Khuzistan and his conviction that equipment for the defense of this vital area must be obtained in the shortest possible time.
The Shah has mounted major pressure campaign to bring us around to his point of view, using a number of high-level Iranians and the British Ambassador in Tehran as channels of information as to what he might do if the United States is not more responsive to his needs. This has been in addition to his own personal contact with Ambassador Meyer. The principal spectre raised in this war of nerves has been the possibility that Iran would buy arms from the Soviet Union, if the United States could not offer Iran what it feels it needs at this time.
Obviously, the bargaining element is very strong in this dialogue, which is reminiscent of many exchanges with the Shah in the past. Times have changed, however, and Iran is receiving large oil revenues and is experiencing steady economic growth. The Shah, who more than any single individual is responsible for this progress, is riding high. Al Friendly’s article in the Washington Post gives a balanced picture of the Shah’s present strengths and weaknesses.
With this as background the question arises, if we are to preserve our special relationship with Iran, how far we need to go to meet the Shah’s demands. To accede completely is probably unnecessary, even if it were possible from the point of view of the resources available to support a military program in Iran. Nevertheless, the Shah has got himself committed publicly to an independent arms procurement policy. It will be impossible for him to retreat without some face-saving device. Should this be lacking, I fear the Shah could easily take steps which would jeopardize our position in Iran and which would be contrary to our national interest.
In the light of all this, we have concluded that present political hazards are great enough to call for a little “give” in our military proposal. [Page 270] The Embassy in Tehran has suggested a number of possibilities, including the sale of rehabilitated F4C’s at a cost substantially lower than the F4D’s now being offered the Iranians and the waiver of R & D costs in connection with the new credit program. A third possibility, in line with the Peterson Report proposal, might be increasing the size from 12 to 16 of the F4D squadron now being offered.
I would very much appreciate your reaction to these suggestions and your own judgment as to how we might best seek to keep our relationship with Iran on an even keel.
Sincerely,
- Source: Department of State, Central Files, DEF 19–8 US–IRAN. Secret.↩