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

320. Memorandum From Secretary of State Rusk to President Johnson¹

Washington, December 2, 1968.

SUBJECT

• Your Meeting with the Prime Minister of Iran, December 5, 1968, at 12:00 noon

Our aim during the Prime Minister’s visit will be to assure him, and through him the Shah, that despite the forthcoming change in our Administration, we will wish to maintain our present intimate relationship with Iran. We also wish to give recognition to the important role played by the Shah’s advisers, as represented by the Prime Minister, in Iran’s domestic progress and international statesmanship. To these ends you might therefore:

1. Tell him of your conviction that the new Administration will have the same regard for Iran and the Shah and the same interest in preserving our close ties as your Administration has had.

2. On Iran’s domestic progress:

a. Express your admiration for the strides that have been made, in which the Prime Minister has played a major role.

b. Indicate your belief that private American enterprise will continue to be attracted by investment opportunities in Iran.

c. While referring to our desire to maintain our close military relationship with Iran: (1) express the hope that Iran’s military procurement will not impede its spectacular economic development and (2) indicate that any compression of the currently planned five-year military procurement program would have financial and economic implications and would also not seem to be warranted by the military situation.

3. On international issues:

a. Take him into your confidence on our view of the situation with respect to Vietnam, the Arab-Israeli problem and Soviet policies in eastern Europe and elsewhere.

b. Indicate pleasure concerning the Shah’s recent visits to Saudi Arabia and Kuwait and confidence that the security of the Persian Gulf area following the British departure in 1971 will be assured by cooperation among the littoral countries.

Dean Rusk

Attachment

POINTS THE PRIME MINISTER MAY RAISE AND SUGGESTED RESPONSES

1. United States Military Cooperation with Iran

The Prime Minister may raise specific problems connected with our military credit sales program for Iran. He may indicate a desire to have our planned five-year program compressed into three years. For example, he may ask that the delivery of the two additional squadrons of F–4 aircraft desired by Iran be advanced from the currently contemplated 1971–72 period to 1971 when British forces are scheduled to leave the Persian Gulf.

You might respond that within the bounds set by Congressional authority and appropriations, you expect our military cooperation with Iran will continue. On specific problems, you might say that they are being communicated to us through Ambassador Meyer and that you expect they will be considered during our joint annual review of our military credit sales program this coming spring. You might say that while we understand Iran’s concern for the security of the Gulf, Iran’s military strength is capable of handling any currently envisaged threat in that area. Any acceleration of presently planned Iranian military procurement or compression of the planned program into less than five years would not only have economic and financial implications but would also not seem to be warranted by the military situation.

2. Oil Matters

The Prime Minister may ask assistance for Iran to sell additional oil to the United States under barter arrangements, to sell additional oil products for our Far Eastern Defense forces or even to sell oil directly to a U.S. stockpile.

You might respond that sales of oil to the United States are governed by our oil import policy under which import quotas are given to domestic refiners and not to foreign countries. Increased participation in the American market for Iranian oil can best be obtained by Iran’s ensuring, in collaboration with the producing companies, that Iranian oil is economically attractive to those American refiners who have import allocations. Likewise, the Department of Defense purchases oil products on the basis of competitive bidding, and if Iranian companies can supply the required quantities at competitive prices, the Department of Defense would be pleased to purchase them. There are no plans at the present time for either civilian or military stockpiling of petroleum or petroleum products in the United States.

1. Source: Johnson Library, National Security File, Country File, Iran, Visit of Prime Minister Hoveyda of Iran, 12/5–6/68. Secret. Drafted by Eliot; cleared by Rockwell, Chapman, Eddison (AID), Reed (DOD/OASD/ISA), Akins, and Country Director for Saudi Arabia William D. Brewer.