Office of the Historian

378. Memorandum From the Director of the Office of Greek, Turkish, and Iranian Affairs (Jones) to the Assistant Secretary of State for Policy Planning (Bowie)1

Washington, January 11, 1957.

SUBJECT

  • U.S. Policy Toward Iran—Revision of NSC 5504

The suggested draft statement of Policy Toward Iran2 was intended to focus attention on certain new political problems in Iran which have emerged since the last policy paper was written and to revise policy on military and economic aid programs in consonance with the Prochnow Report on Iran.3

With regard to the first point, the great improvements which have developed in Iran since 1953 are largely the result of U.S. aid and support. Underlying these apparent strengths, Iran still is afflicted with age-old fundamental weaknesses which could undermine the gains of the last three years. Under these circumstances, it is important that the U.S. continue to aid and support Iran while bending every effort to induce reforms that will enable the country as a whole to catch up with the remarkable rapid superficial improvements in its economic resources, internal security and international posture. Some attention has been devoted to the impact of the Shah’s assumption, in April 1955, of personal leadership and direction of the Government. Finally, [Page 872] in the Policy Conclusions, an effort has been made to identify the principal internal factors affecting the ability of Western-oriented Iranian elements to continue in effective power, and the importance of U.S. aid and support in conditioning the ability of the U.S. to influence the Shah and Government of Iran.

With regard to military and economic aid programs, the suggested draft policy paper has been based on the selection of Alternatives 2 and 4 as set forth in the Prochnow Report on Iran. Alternative 2 describes a military aid program which would give Iranian forces “increased capabilities for sustained combat”, which, “with outside operational support (primarily U.S. air) and logistical aid might delay Soviet forces [less than 1 line of source text not declassified]”. Considering the progress Iran has made in the past three years, the highly cooperative attitude it is taking in supporting the U.S. in international affairs, the extremely vulnerable position occupied by Iran and the importance of strengthening the Northern Tier states at this time, we believe that a program of this size and scope is essential to the protection of U.S. interests. We have modified the cost figures given in the Prochnow Report only to the extent of eliminating from them the FY 1957 program which has now been funded. On the advice of “E” we have also stretched out the program so as to phase it through FY 1962 instead of FY 1960.

In addition, we believe that the U.S. should continue an economic aid program in order to maintain Iranian confidence in strong U.S. support of Iran’s radically new posture of open alignment with the West. Such a program will also enhance the U.S. ability to continue to influence Iran in the direction of economic improvements and fiscal and administrative reforms. The program outlined in Alternative No. 4 of the Prochnow Report would appear to be the minimum program that the U.S. could safely undertake. We have modified the Prochnow Report figures only by eliminating the FY 1957 program.

While there may be questions raised regarding these estimates, we felt that we were on the firmest possible ground in adopting the figures given in the Prochnow Report since it has the concurrence of Defense, Treasury and ICA.

  1. Source: Department of State, GTI Files: Lot 60 D 533, Iran, U.S. Iranian Relations, 1957. Secret. Drafted by Hannah. Bowie was also the Department of State representative on the NSC Planning Board.↩
  2. Reference is to a draft revision of NSC 5504, December 26, 1956. (Ibid., S/P–NSC Files: Lot 61 D 167, Iran, U.S. Policy Toward (NSC 5504)) This draft was subsequently submitted to the NSC in revised form as NSC 5703, January 28, and was approved by the NSC in final form as NSC 5703/1, February 7, with further revisions. Regarding the revisions and the final text of NSC 5703/1, see Documents 387 ff.↩
  3. Document 358.↩