329. Editorial Note

At the September 14 meeting of the OCB, the paper on the internal security situation in Iran (see supra) was discussed. The following extract from a memorandum from Max Bishop, Operations Coordinator in the Office of the Under Secretary of State, to Allen, September 15, contains a report on the discussion of Iran at the OCB meeting:

“1290–d Report on Iran

“Mr. Hoover discussed the problems of Iran at considerable length and made inter alia the following points: The NSC has recently discussed the Iranian problem; both the Department of State and CIA are deeply concerned at general developments, trends and attitudes in Iran; that whether Iran stays active on the side of the Free World or reverts to its traditional role of neutralism depends in great part on the military program and military developments in Iran; and that the Shah has personally built a great deal on the armed forces program.

“Mr. Hoover went on to point out that a year ago last February the Shah had burned his bridges and come firmly over to the side of the United States, that subsequently he had come to the United States and had been given promises and commitments by the President and other officials of the United States. These promises were not in goods or dollars but in programs. Mr. Hoover urged Assistant Secretary Gray of Defense to dig into this problem and take a good look at it in the expectation that in the very near future State will be sitting down with Defense for a thorough review of the entire Iranian situation. Mr. Hoover felt that we would have to face up to this problem and make some basic decisions on the proposals which Iran has made recently, undoubtedly with the Shah’s full blessing. In regard to these proposals, Mr. Hoover said once we strip away the ‘rug bargaining’ items, such as Bahrein, we have to take the Shah seriously. General Cabell of CIA expressed complete agreement with everything that Mr. Hoover had said and added that the British are also greatly concerned about developments and trends in Iran. Dr. FitzGerald pointed out that at the end of the year we will have to tell the Iranians that we will not continue budget support. Mr. Hoover discussed this problem briefly, stating that we are certainly not going to give the Iranians budget support and balance their budget for them; that they have adequate oil revenues, in fact, more oil revenues than they had anticipated. He said again that he and General Cabell would be sitting down with Gordon Gray and others from their respective agencies soon to discuss this problem.

“The report was noted.” (Department of State, Central Files, 100.4–OCB/9–1555)