32. Special Talking Paper Prepared in the Department of State1

SVW–TP/1

SHAH OF IRAN VISIT TO WASHINGTON

June 5, 1964

MILITARY ASSISTANCE

The Five-Year Plan for the reorganization and modernization of the Iranian armed forces, drawn up jointly and now being implemented, seems to be working out quite well. Granted adequate Congressional appropriations, we intend to continue to do our part in this program, and we are sure Iran will continue to do its part.

We are pleased that United States and Iranian officers are now discussing the shape of additional measures of replacement, modernization and training which will permit further improvement in Iran’s defensive strength through the sixties and into the seventies. These plans should be analyzed carefully by both governments, with the view toward achieving a rational increase in military potential without limiting unduly the resources available for economic development and social welfare, which are also essential components of a broad security concept. Our various Joint CENTO exercises (especially the recent successful Operation DELAWAR) and the recent exercises involving the Concord Squadron demonstrate to us all the fact that United States and Iranian military capacities are mutually complementary.

We understand that the Shah’s greatest area of concern at present is in the replacement of tanks. In view of the shortage of United States military assistance funds, and Iran’s growing economic strength, we will not be able to provide replacements of Iran’s needs on a grant basis. We can, however, sell Iran up to 150 of our new M–60 tanks, to come off production lines during the next two or three years, along with the necessary spares and ancillary equipment. These tanks would be delivered to Iran at the same time that they are being put in service with our own forces, and at the same price we must pay, plus handling and transportation.

Iran could pay for the tanks on the same basis that we ourselves make payments to the manufacturers. If this is not possible for Iran, we would be willing to discuss limited credit arrangements. If these tanks are too expensive, the Shah could be offered a rebuilt tank of the M–48 series, retrofitted with the 105-mm gun, the M–48A3, at a cheaper price.

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A radically new tank, the Sheridan, may be produced later in this decade. No decision has yet been made to put it in production, and any discussions of procuring this vehicle are just not possible at present.

  1. Source: Johnson Library, National Security File, Country File, Iran, Shah’s Visit, 6/5/64. Confidential. Drafted by Bowling and cleared by Wheeler, John T. Hermansen (AID/PC), Kitchen, Colonel Taylor, and Jernegan.