Foreign Relations of the United States, 1955–1957, Near East Region; Iran; Iraq, Volume XII

387. Briefing Paper¹

Washington, February 5, 1957.

NSC 5703 (U.S. POLICY TOWARD IRAN), JANUARY 28, 1957²

1. This paper covers the third “Prochnow Committee” country which the Planning Board is presenting, pursuant to the President’s direction last October: first, Pakistan—last week, Korea—now, Iran.

2. This paper is presented in traditional form, and not as Alternative Programs as we did for Korea—for reasons I shall mention. We have assumed in the paper that the Joint Resolution will be approved by Congress.

3. In preparing the paper, the PB considered:

a. The existing policy paper on Iran (NSC 5504, January 1955).

b. U.S. basic national security policy, as implemented by military and economic aid programs to Free World nations.

c. The Council’s injunction of May 1956 that the PB in reviewing country policies in the light of the Prochnow Report keep always in mind that the aggregate of US aid programs to foreign countries would require total U.S. resources beyond amounts likely to be available for such purposes and would in many instances place burdens on recipient countries which their resources will be unable to bear over a sustained period.

d. The Prochnow Committee Report, which suggested alternative levels of military and economic aid for Iran and analyzed the effects of adopting each such level.

e. The JCS statement of minimum force objectives for Iran (December 5, 1956), prepared pursuant to the President’s directive.³

4. Under the existing Iran policy adopted in January/55:

a. Military and related aid: Total: $42.7 million in fiscal years 1955–56 (expenditures) to develop forces:

(1) with defensive delaying capabilities at Zagros line

(2) with improved capabilities for internal security

(3) to enhance the prestige and morale of the government, and

(4) to increase the Iranian people’s confidence in Iran’s ability to defend itself. (NSC 5504, paras 11, 20)

b. Economic and technical assistance: Total: $132 million in fiscal years 1955–56 (expenditures)—primarily to help Iran’s budget and also for economic development until she should receive sufficient oil revenues. (NSC 5504, paras 6, 9, 24)

5. Prochnow Committee Alternatives (F 1957–60 in NOA)

	First Alternative	Second Alternative
Military:	$80 milliona	$197 millionb
Economic and Technical:	$57–63 millionaa	$135 millionbb
a. Forces capable only of maintaining internal security; a level risking adverse Iranian reaction. aa. Only technical assistance after FY 1957; a level risking serious inflation and uncertainty as to U.S. intentions. b. Adds, with outside air and logistical support, capabilities for fighting delaying actions against Soviets at Zagros passes; a level solidifying Iran’s pro-West affiliations. bb. Includes economic and technical assistance through 1960; a level improving likelihood of completing development program without serious inflation.

6. Recommendations of JCS as to Minimum Force Objectives

a. Six full strength and six reduced strength infantry divisions (instead of 8 light infantry and 4 light armored divisions), and 5 infantry brigades.

b. Premised on initial defense at the Elburg rather than the Zagros line. (For basis of JCS recommended force objectives see memo for NSC of 12/5/57 [12/5/56] paras. 3–5 and 6–b)

7. PB recommendations in NSC 5703

a. Accepts missions on which JCS recommendation as to forces were based—para 18–b.

b. Cost for 4 year period of military aid: $224 million—more than higher Prochnow level of $197 million (Reason: $48 million for military construction arising from Elburg defense concept, not included in Prochnow estimate, partly offset by reduced costs resulting from new military assistance pricing policy.)

c. Cost for 4 years of economic and technical aid: $145 million— more than higher Prochnow level of $135 million (to be on a declining scale; to be insofar as possible on a loan basis; to avoid general budgetary aid and emphasize economic development so far as possible; to be administered so as to influence the Iranians to make effective fiscal and administrative reforms).

8. Basis for PB recommendation

a. Iran has gone all-out for the West—suppressed the local Communist party, joined the Baghdad Pact, sided with the U.S. in the UN.

b. Iran is basically vulnerable to Soviet attack and penetration (1200 mile contiguous frontier), and feels over-extended (paras 3, 7).

c. Iran is not absolutely certain of U.S. military support when the cards are down—no mutual defense treaty; U.S. not Baghdad Pact member. The implications of the Joint Resolution are not yet known, (e.g., will it mean more aid to Iran?) (paras 3, 8, 9).

d. Despite progress since 1953, age-old weaknesses plague the Iranian Government and threaten its continued existence. It seems incapable of efficient Western-style administration. Oil revenues are up to $160 million a year and rising; there has been some recent progress toward balancing the budget, but deficits continue (paras 4–6).

e. The Shah needs military aid to enhance his prestige as well as for security. Bolstering Iran’s security will improve U.S. influence toward solutions of internal problems (paras 7, 9, 17).

f. U.S. wants to keep Iran independent, pro-Western and stable. Substantial military and economic aid are the price needed to achieve this result. U.S. aid has very great political impact on Iran (paras 6–a, 7, 9–11,17, 25).

[Here follows a table entitled “Comparison of Programs.”]

1. Source: Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5703/1 Series. Top Secret. No drafting information appears on the source text. According to a covering memorandum from Marion W. Boggs to the Planning Board, February 5, this paper was for the use of Cutler in briefing the NSC on February 7.

2. NSC 5703 was initially prepared by the Department of State on December 26 and submitted to the NSC Planning Board on December 27; see footnote 2, Document 378. The draft was revised by the Planning Board Assistants on January 14 and discussed at a meeting of the Planning Board on January 22. A memorandum from Cutler to Sherman Adams, January 28, summarizes the situation as of the January 22 meeting and after:

   “Thereafter the Board went to work on a proposed new statement of policy on Iran. Not only is this country one of the so-called ‘Prochnow’ problem areas, but it is, of course, affected by the Joint Resolution now pending in the Congress. I was far from satisfied with the draft as presented and have been working since with the NSC Staff in order to suggest improved organization of this report and clearer analysis of the real issues confronting the United States in Iran.” (Eisenhower Library, Staff Secretary Records)

   The draft submitted to the Planning Board on January 22 is in Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5703/1 Series. It was revised by the Planning Board Assistants and submitted to the Planning Board on January 25, where it was approved for NSC consideration. (NSC Planning Board Record of Meeting, January 25; Ibid.) On January 28, NSC 5703 was submitted to the NSC; a copy dated January 28 is Ibid., S/S–NSC Files: Lot 63 D 351, NSC 5703 Series. The paper was discussed by the NSC on February 7 (see Document 391) and was approved as NSC 5703/1, February 8, Document 392.

3. Document 372.