891.51/7–749: Telegram
The Ambassador in Iran (Wiley) to the Secretary of State
886. At direction of Shah, Ebtehaj came to see me and General Evans this morning for purpose of discussing all aspects US aid to Iran. I had Wagner1 present for purpose of outlining to Ebtehaj some of the information recently given him in Washington. I was present during first one and half hours of meeting but then had to leave to lunch with Shah. Meeting continued for one additional hour.
On economic side, World Bank offer2 and Point Four assistance was explained. Ebtehaj indicated clear understanding of World Bank offer but indicated he was still opposed to loan. He indicated that considerable concern had arisen in certain quarters because of belief that oil revenues would have to be “pledged” to service loan. It was pointed out to him that commitment probably a better word than pledge but that the Bank certainly would have to consider Iranian ability to repay together with a clear definition and understanding of Iranian convertibility rights under the Anglo-Iranian agreement. He went on to say that he did not consider the World Bank offer to represent in any way US assistance to Iran, remarking that the World Bank was obliged to loan money to its member nations.
His reception of proposed Point Four assistance (he was told in this connection that if legislation is passed Iran might expect about 1.6 million dollars) was even more bitter. He remarked that the US had presented Point Four as a bold new idea whereas actually there was nothing bold about it but when viewed in terms of what Iran might get, only insignificance.
He inquired what consideration the US was giving to Iran’s request for a direct economic grant. He said that Ambassador Ala in Washington [Page 537] and the Foreign Minister here believed that the US had agreed to give direct economic assistance. I told him that I had given no encouragement whatever to such an idea and Wagner told him that he knew from recent experience in Washington that absolutely nothing along the lines stated had been said to Mr. Ala. He insisted that Ala had reported that when he could justify his request for $500,000,000 economic grant, the Department would give it further consideration.
Concluding economic phase of discussion Ebtehaj said that he believed Iran did not need any direct economic grant but would want military assistance.
The proposed military assistance to Iran was then discussed with him along the lines agreed to by the Department, i.e., that total figures were unknown to the Embassy and that countries being assisted would be given matériel and not dollar allocations. His reaction to the presentation of this subject was even worse than anticipated. His main theme was that the proposed US military assistance to Iran, which he thought would come to some $15,000,000 represented but a “measly” sum and an offer which might very well be refused. He said that the Iranians absolutely could not understand why out of $320,000,000 which he understood was earmarked primarily for Greece, Turkey and Iran, it should receive such a “measly” allocation. General Evans endeavored in every way possible to convince Ebtehaj that the giving power, the US, had to decide upon the amount of aid each country would be given, considering the overall situation and operating under the principle that the interests of the whole group would probably often be served by greater aid in certain areas. Ebtehaj did not agree in any way and stated Iran would be offended if not treated on a parity with Turkey. He thought that Iran might very well reject the small offer made to it.
He went on to say that it might have to consider changing its foreign policy, disassociate itself with the US and look elsewhere for support of its interests. He said that the situation would be incomprehensible to Iranians if the US gave liberal assistance to Turkey and treated Iran in such a shabby manner. He went on to say that Iran had suffered much during the war, being occupied even by US troops—“Thanks to our British friends”—while the US was buying goods from the Turks at exorbitant prices and dumping them into the sea to keep them from the Germans.3
It was explained to Mr. Ebtehaj that the proposed Military Aid Program visualized the eventual reduction in the size of the armies of the receiving countries in line with their increased effectiveness. He [Page 538] discussed this phase in detail with General Evans. The General told him that unless additional rials could be provided the present size Iranian Army should be reduced to achieve a more effective army. He was told that [at] present so much goes for pay, food, clothing, housing and other living expenses that present army does not have funds necessary adequately to support present combat forces in the field; hence it cannot fight effectively. Ebtehaj asked General Evans what size army was needed to guarantee the security of the country. He was told no nation could afford the military establishment necessary to assure security and some risk must be taken. The greatest security which can be afforded should be provided, thus the problem can only be solved by determining the funds that can be afforded the military expenses and building the army accordingly. He was told that in such determination the relative security that can be obtained for various expenditures should be considered. Once such determination is made the most effective military establishment possible should be set up within the funds decided upon. Ebtehaj did not agree. He felt that the minimum army essential for security should be determined by US-Iranian consultation, then the cost computed, then what Iran can afford determined, and the difference made up in money from the US under the Military Aid Program. It was pointed out that such had not been done in the past with other countries and was believed to be contrary to US policy. Ebtehaj insisted, however, that Iran should be treated as a special case both in view of its strategic value and the fact that it had been ignored in the past for so long when other countries had been receiving aid. He added also that the Shah would never agree to an army of less than 100,000 as he, the Shah, could only feel that through any suggestion along those lines the US was trying to destroy his army. He asked as a corollary to his argument why the Iranian people should be made to suffer (meaning an even more reduced standard of living) by being forced to support the army the country needed.…
He several times repeated the statement that the US offer of assistance, characterized as “measly”, might very well be refused. He said he could not understand how or why such small assistance was being proposed for Iran especially in view of the fact that he had discussed the importance of military aid to Iran with the State Department when he was in Washington last year4 and had received the Department’s complete agreement. He went on to say that it was very clear in his mind that the three people with whom he was talking were simply avoiding his question in refusing to tell him exactly, in dollars, how [Page 539] much aid Iran would receive. He said he was willing to make any bet that the US had told the Turks how much they would receive and went on to say that we could not expect Iran as a nation to be satisfied with the vague statements being made. He also went back to General Evans’ statement that it was up to the giving nation to decide where and how much aid would be given and claimed that the receiving nation, Iran, had just as many rights in this respect and said, in effect, that the US could not ram such “measly” aid down Iran’s throat and expect her to be happy. He said that as an Iranian he absolutely felt that any US proposed military aid of $15,000,000 was completely unacceptable and that should his recommendation be asked for it would be that the proposal be acknowledged with a “no thank you.” He expressed the view that the entire question should again be considered in Washington for he did not wish to see the US make “mistake” in not allocating aid properly.
I had been obliged as previously indicated to leave the meeting prior to the issuance of Mr. Ebtehaj’s more forceful pronouncements. He therefore suggested that we hold another meeting within the next few days during which he could make the Iranian point of view (as set forth above) completely known to me.5 While Ebtehaj is many times the victim of his own emotions yet his views on military aid actually represent those of the Shah.
At lunch the Shah today followed the same line as Mr. Ebtehaj except that he made an impassioned plea for direct economic aid referring to aid already given to Turkey and most of Europe including ex-enemy countries and now to Korea, while Iran which had been an ally had been ignored. He expressed amazement that the strategic importance of Iran to the Western world was not adequately appreciated.
- Joseph J. Wagner, Second Secretary of Embassy in Iran.↩
- In a
memorandum prepared on June 18 by the staff of the International
Bank for Reconstruction and Development appears the following
paragraph: “The Bank has already expressed to the Iranian
Government its interest in Iran’s Seven-Year Plan and indicated
its willingness and ability to participate in the financing of
appropriate elements in this Plan when its assistance might be
needed. If the Iranian Government wishes, the Bank is prepared
to consider now a small initial loan for some one, or possibly
two, specific projects included in an early stage of this Plan.
Furthermore, subject to satisfactory progress in implementing
the Plan, including the financial and administrative measures
necessary to make it effective, and taking into account Iran’s
need for external financing as then established, the Bank will
be willing to consider additional loans for other projects as
their preparation reaches the bankable stage. Any project
submitted for consideration by the Bank should be of a tangible
and directly productive nature and of demonstrable economic
value as have been those development projects hitherto financed
by the Bank.”
The International Bank transmitted a copy of this memorandum to Mr. Dunn as Acting Chief of the Division of Greek, Turkish, and Iranian Affairs on June 20 (891.51/6–2049).
↩ - For documentation on preemptive purchases of Turkish goods, see Foreign Relations, vol. viii, pp. 566 ff.↩
- For information on these discussions, see footnote 3, Foreign Relations, 1948, vol. v, Part 1, p. 186.↩
- Ambassador Wiley, accompanied by General Evans and Mr. Wagner,
held a further meeting with Mr. Ebtehaj on July 10, at which
much the same ground was covered as at the discussion 3 days
earlier. Mr. Ebtehaj “indicated Iran could afford to spend 2.0
billion rials upon its military establishment and by rough
calculation stated it looked as though Iran could maintain an
effective army of about 100,000 with such sum, provided an
additional 2.45 billion could be obtained over a 2-year period
for initial one-time expenditures. This latter sum I [i.e.,
Ambassador Wiley] gather is what he deems the only acceptable
assistance the US could render Iran.” Mr. Ebtehaj was said to
have repeated “many times” that the “US approach to Iran in this
vital question was not only incomprehensible and unacceptable
but also dictatorial in nature.”
Ambassador Wiley observed to the Department that he had “expected that Iranian reaction to our military assistance offer would be a most unhappy one. While I am certain there are many people here who would appreciate any US assistance to Iran, yet we are faced with the cold fact that the Shah will only be satisfied with complete parity with Turkey and that the more our assistance diverges from the Turkish total, the greater will be the sense of frustration and resentment toward the US.” (Telegram 902, July 11, from Tehran, 891.20/7–1149)
↩