225. Memorandum From Harold H. Saunders of the National Security Council Staff to President Johnson1
SUBJECT
- Your Talks with the Shah—5:30 P.M. Tuesday and Wednesday2
The main purpose of your meeting is once again to reassure the Shah that you regard him highly and believe the U.S. has a stake in the success of his kind of reform. But as you know, he is a thoughtful man and is looking forward to serious talk. He will be flattered by any confidences you can share on your talks with Kosygin, your thoughts on Vietnam, your interest in Ayub, your feelings about the Middle East, and even your analysis of our own urban problems.
The new factor in the U.S.-Iran equation since his 1964 visit is his increasing independence. After long dependence on U.S. aid and years of feeling that only the U.S. could protect him against Nasser and the USSR, the Shah for better than two years has been feeling his way toward a more independent policy.
No one cause prompted this shift. Our cutoff of military supply to Ayub during the Indo-Pak war upset him. He has watched the changing temperature of U.S.-Soviet relations, which has made him re-think his own relations with Moscow. Domestic pressures have forced him to appear less “the American puppet,” especially as Iran becomes economically more self-sufficient.
As a result, he has eased into a limited relationship with the USSR. He has strengthened his relations with Pakistan and Turkey. He has supported the Yemeni Royalists and elements in South Arabia working against Nasser. He has—almost alone among the Moslem states—maintained a respectable relationship with Israel.
He is still feeling his way, and you may want to talk over the pitfalls in going too fast with the USSR. The Soviet role in the Middle East war has probably given him second thoughts, but your own experience with Kosygin might help him sort out the limits of working with the Soviets.
The other side of this coin for him is how heavily he can count on us for future arms supply. Under the current Memorandum of Understanding we are committed to provide another $100 million in credit sales. [Page 413] Even if the Church Amendment3 stands, we would be able to meet that obligation if you told Harold Linder to make the loan without a Defense guarantee. But the Shah probably assumes that; his main interest is whether we will go on supplying him beyond the term of the current understanding (1970). While you can say that politically we want a continuing military relationship, we’ll just have to wait to see where we stand with Congress. You may want to discuss your Congressional problem with him, since he will be seeing quite a few members of Congress.
More broadly, he will want to know what role we intend to play in the Middle East. One way to explain our position is to say, as you have in the past, that we don’t walk out on friends, so we’re not about to disengage. But then you might go on to describe the new spirit of regionalism you found on your Pacific trip and your hope that something similar might emerge in the Middle East. While we don’t want to commission him for any special job, we do feel he could play an important role in making this happen.
After stating your views, you might be interested to hear from the Shah what role he thinks we can play in the area in the future. A number of our moderate friends tell us frantically that we must do something to preserve the anti-Communist balance in the Middle East, but when we get down to specifics they have little to suggest.
Because of your own personal interest, you will undoubtedly want to hear from the Shah himself about the progress of his reform program. Although AID will be phasing out its activities in the next year, more and more American businessmen are moving into Iran and it might be interesting to ask the Shah how, without a formal aid program, he thinks we can participate constructively.
You will want to read Secretary Rusk’s two memos (“General”—Tabs A and B4 of the attached briefing book). If you have time, I think you would find useful the “Background” tabs on Iran’s relations with Communist countries (B);5 U.S. military aid (C);6 the Shah’s domestic picture with charts on economic progress (D);7 and our Congress’ attitudes toward Iran (K)./5/We’ll have a brief talking paper for you Tuesday.
- Source: Johnson Library, National Security File, Country File, Iran, Visit of Shah (con’t.), 8/22–24/67. Secret.↩
- August 22 and 23.↩
- On August 9 the Senate Foreign Relations Committee approved Senator Frank Church’s proposed amendment to the foreign aid authorization bill eliminating the “revolving fund” that the Pentagon had been using to finance arms sales to developing countries. On November 6 the House of Representatives Appropriations Committee exempted seven countries (including Iran) from the ban.↩
- Documents 218 and 219.↩
- Not printed.↩
- Document 220.↩
- Document 221; the charts are not printed.↩