788.5 MSP/12–2353
No. 399
Memorandum by the Assistant Secretary of
State for Near Eastern, South Asian, and African Affairs (Byroade) to the Secretary of State
secret
Washington, December 23, 1953.
Subject:
Attached (Tab A) is a summary of the main points in a memorandum containing
the tentative views of Ambassador Henderson on future aid to Iran. The memorandum was
transmitted under cover of a letter from the Ambassador to Vice President
Nixon.1
It might be helpful for you to read this before the NSC discussion of Iran this week.2
[Tab A]
secret
United States Aid to Iran
- 1.
- Emergency Financial Aid. The following
contingencies will face us in March or April 1954 when US emergency
aid to Iran is exhausted:
- (a)
- An oil settlement concluded within the
next few months. In such an eventuality, the
Iranian Government will need extraordinary financial
assistance to tide it over until large quantities of oil
begin to flow. We should be prepared to extend to Iran $15
to $25 billion for this purpose.
- (b)
- No oil settlement, the fault lying in
our judgment with the British. If the Iranian
Government shows what we consider to be a
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reasonable attitude but
agreement is prevented by unduly harsh demands on the part
of the British, we will have to decide whether to continue
aid or face the consequences of the fall of the Zahedi Government. In such
an eventuality we should support the noncommunist elements
in Iran, furnishing not less than $5 million monthly (a
rough estimate) in order to permit the Iranian Government to
meet essential expenditures.
- (c)
- Settlement delayed for technical reasons
due to no fault of the British or Iranians. With
the best of intentions on both sides, the factors involved
are extremely complex and settlement may not be concluded
until US emergency aid is exhausted. In such an eventuality
our emergency aid program should be extended on a temporary
basis, providing $5 to $6 million per month for several
months.
- (d)
- No oil settlement, the fault lying in
our judgment with the Iranians. Should emotional
public opinion in Iran force the Iranian Government to make
demands which are unacceptable to the British and which we
would consider unreasonable, it is unlikely that we would
support Iranian intransigence by continuing emergency aid
even though its cessation might result in the collapse of
Iran and its fall under communist control.
- 2.
- The Regular FOA
Technical and Economic Assistance Program. Point 4 is now
widely appreciated, and its regular program should be continued at
the current level in the next fiscal year—no less than $24 million,
and FOA should transfer as many of
its programs as possible to Iranian Government apparatus so that by
June 1955 the Iranian Government will have assumed the
responsibility for continuing much of what FOA is doing in Iran. This recommendation is based on
the assumption that there will be an oil settlement before June 30,
1954.
- 3.
- Military Assistance. The US should decide
on a policy of endeavoring to strengthen the Iranian army so that it
might have capabilities of delaying for at least a limited period
the advance of Soviet troops across the country. Leaving aside the
needs of the Air Force, it is understood that the cost to the US of
carrying out this policy would be considerably less than $10 million
during the remainder of this fiscal year and less than $35 million
during the next fiscal year. The adoption of this policy would
strengthen the will of the Iranian army and of the Iranian people to
resist communist pressure on Iran.
