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

399. Telegram From the President’s Special Assistant (Richards) to the Department of State¹

Karachi, March 28, 1957—9 p.m.

2632. From Richards. My observations on Iran following:

(1) Shah is in effect head of government. Prime Minister Ala administers his policies. Although sincere in desire to advance his concept of Iran’s interest Shah vain, indecisive, inclined to meddle in details and unable to delegate authority. On positive side he considers himself committed to anti-Communist course.

(2) Traditional landlord group still dominant force in country. This group remains feudal in outlook paying little more than lip service to reform.

(3) Iran’s own economic resources are now sufficient and soon will be more than adequate to meet development needs. It is not question of real need for cash as in Libya. Economic progress is dictated by ability to absorb and put financial resources to effective use. Thus scant economic justification exists for US aid.

(4) Shah, present government group, and generally speaking landlords firmly opposed to Communism, although latter likely shortsightedly to support any regime in effort maintain their position. Shah says he made decision in 1955 of joining Baghdad Pact to throw Iran’s lot in Western camp, having reached conclusion that in present world “neutrality” no longer feasible.

(5) However, I believe would be imprudent to discount habit of thought built up over years and instinctive preference of Iranians for trying to play both sides. In deciding to join West, Iran bent in unnatural direction and strong inclinations remain to whip back to neutral position.

(6) Shah appears obsessed with military matters which are obviously reserved as his personal sphere (Prime Minister stated at first meeting things are “outside my competence”). Our long discussion with Shah of Iranian problems included only passing reference made by him to economic and social needs. In essence, his military concept calls for “forward defense policy” involving defense of Iran at Elburz mountain passes. He argues Iran should have sufficient ground and air forces of its own to hold up attack until US strategic weapons have been brought into play. Iran is pivotal state in ME and its present weakness attracts attack. Shah obviously counts on expanded US military aid resulting from ME Doctrine and decision join Military Committee of Baghdad Pact. He spoke of need for guided missiles and area radar screen, admitting plans for latter should be developed through BP. Also spoke of Iranian willingness put airfields at US disposal in time of war. I said that strategic plans for area should be worked out through combined planning in BP Military Committee. I believe special effort may be necessary to get and keep Iranian military planning (and US support thereof) within framework of BP. Shah pressed mission to finance airfield at Qom for use by fighter aircraft. (Understand that field would be built to US specifications providing in time of war refueling point on way to USSR.) When I suggested such matters be discussed in BP Military Committee and pointed out US must be careful about direct support to bases on Russian periphery, Shah reacted by saying Iran sovereign country and would soon have financial resources to construct as many airfields as it wished. Believe that we should not delay unduly exercise of our influence in Military Committee directed toward keeping Iranian and other local aspirations within bounds.

(7) Unhealthy concentration on military is made more serious by bogging down of economic development. Plan Organization appears to have no coherent program. Apparently Plan director Ebtehaj, personal appointee of Shah, responsible in considerable part for ineffectiveness development effort because of vanity and failure delegate authority. View importance this mission believe it was discourteous and neglect his part to be absent visiting gulf ports. Believe fuller cooperation from him needed, [less than 1 line of source text not declassified] Failure of present regime to offer people homes clearly makes them receptive to promises from elsewhere. Mossadeq played effectively upon desperation of people. I was struck on trip to Caspian by apparent apathy of villagers along road. Faces showed no hostility but feeling of helplessness and resignation. Need is to use period of grace earned by removal of Mossadeq to show that in cooperation with West, present government can offer prospects of better way of life. So far government has failed to do so effectively.

(8) One important value of US aid may be in stimulating and pressing government to take necessary initiative. At present Iran welcomes US advisors without hostility and on surface accepts US advice. For example budget balanced on paper as result our urging. But we have not yet succeeded in breaking through long standing social and governmental apathy and inefficiency to spark necessary vigorous actions.

(9) Second principal reason for aid is purely political, in that it gives government necessary confidence and incentive to stay aligned with West.

(10) As in case of Turkey both Shah and Prime Minister emphasized desirability US membership BP. They also argued that aid should be channeled to friendly countries and US should beware of blackmail. Shah hoped American Doctrine would force countries of ME to take sides.

(11) No problems arose regarding Iran’s acceptance of ME proposal. Shah welcomed US decision assume responsible role in Me. Prime Minister Ala described himself as “very much heartened by guarantee”. Particular value was attached to provision regarding use of US forces. Proposals viewed as means of putting pressure on Egypt and Syria.

Iran tried to obtain as much economic and military assistance as possible. $102 million package presented covering four-year period and calling for $33 million in first year. Projects listed were railroads ($58.5 million), telecommunications ($4.7 million) airports ($28 million), ports ($6 million), pipe line ($5 million).

After consultations with Embassy, I decided to offer package substantially equivalent to that drawn up in Washington: (1) membership in Military Committee BP; (2) increase in military construction fund of $11 million ($6 million from military assistance funds plus $5 million as local currency component from FY 57 economic development funds); (3) small arms for Iranian army (estimated cost $1.5 million); (4) 100 two and one-half ton six by six trucks for army (estimated cost $.5 million); (5) regional projects under auspices BP—(A) telecommunications (approximately $2 million); (B) consulting engineer contract for Iran section of railroad linking to Turkish system (approximately $4 million). All of above aid would be on grant basis.

Iran which has extensive road construction program itself, showed no interest in regional roads such as stretches of Istanbul–Karachi highway. Instead emphasis placed on construction of Yazd–Kerman–Zahedan rail link, carrying railroad to Pakistan border. We agreed consider this project further after visiting other Pact countries but gave little encouragement. I made clear that final decisions regarding all regional projects must await completion my consultations with other BP members.

Copy of aide-mémoire left with Iranians transmitted separately. I also called attention orally to 15 day provision in Joint Resolution, growing opposition in Congress to foreign aid programs in general and sentiment in favor of loans. Nevertheless, after making clear I could make no commitments regarding future aid, I said I personally anticipated assistance to Iran would be continued in FY 58.

Both at technical meeting and in last plenary session Iranians expressed profound disappointment regarding magnitude economic aid. Prime Minister said Iran “had every reason expect more.” Before final meeting, one Minister asserted “this means exit of Ala.” It seemed however that above attitude assumed in considerable part for balancing purposes. At conclusion of discussions Director General of Foreign Office admitted this tactic followed and that Iran happy at outcome. Government and Shah particularly pleased at military assistance. As in case of other countries visited there was little evidence of gratitude but on contrary assumption that aid should properly be forthcoming from US.

Regarding economic assistance we believe regional funds would come from authority of Joint Resolution.

Re military assistance. Construction program essential for redeployment in support of forward defense strategy running into increased costs. Current approved program could not be accomplished without additional funds. Accordingly, authorized $6 million be added from defense funds plus utilization $5 million approved in the FY 1957 ICA program for Iran (and already available to USOM) to provide local currency component of these projects. Director USOM and CHMAAG concur. Through consultation with country team determined great impact possible, especially on Shah, from offer small arms. I told Iranians we would help but gave them no figures (or even order of magnitude). I have asked Major General Seitz who proceeding US March 27 consult with Defense on basis $1.5 million total to determine arms to be provided. Together with 100 trucks, funds involved approximately same as in package three prepared by Defense in Washington. We assume these programs do not require authority of Joint Resolution.

Action requested from Washington: (1) authorization additional $6 million for military construction; (2) approval use of $5 million ICA 57 program for local currency component military construction project; (3) program approximately $1.5 million small arms for Iran to be selected by CHMAAG in consultation Defense; (4) program 100 two and one-half ton six-by-six trucks for Iran; (5) confirmation that none of these programs (except regional economic projects) require authority of Joint Resolution.

1. Source: Department of State, Central Files, 120.1580/3–2857. Secret. Also sent to Tehran, London, Paris, Ankara, and Baghdad; repeated to Tripoli, Cairo, Khartoum, Addis Ababa, Jidda, Amman, Tel Aviv, Damascus, Beirut, Kabul, Athens, Tunis, Rabat, Rome, and New Delhi.