412. Letter From the Counselor for Political Affairs of the Embassy in Iran (Stelle) to the Officer in Charge of Iranian Affairs (Mouser)1
Dear Grant: I think the Embassy’s telegram 984 of November 17,2 which gave our initial comments on the Shah’s loan request,3 could usefully stand some informal amplification. The telegram refers to the possibility that U.S. aid may be necessary in getting the Iranians to use their own resources to meet their budget problem and the desirability that such U.S. aid should to the greatest degree possible come from readjustment of the present U.S. programs. As you are well aware, the military construction program is in dollar terms the largest and most important.
[Page 955]There is ground for difference of opinion, and there is difference of opinion, as to whether the military construction program brings us the political returns here which its expense should warrant. To the degree that it reinforces the idea that the U.S. has a permanent interest in Iran it is of obvious political importance, and a move on U.S. initiative to cut it down or to stretch it out drastically would have immediate political repercussions. The program is also useful in providing housing for military personnel and thus contributing to morale of the Army and its political dependability. The fact that much of the construction is outside of Tehran is also of political value since it helps to counter the widespread feeling that the regime only does things in Tehran and for Tehran.
On the other hand the program, considering its expense, has political shortcomings. The nature of the program is such that it will call for continuing U.S. contributions over a period of years. The resources we put into it are bound to have less political impact than the same amount of resources applied flexibly as occasion might warrant. Important elements of the population here ascribe little value to what we do for the Army and will judge the progress of the regime primarily in terms of political and economic developments. Even those people who are deeply concerned with the role of the Army, including the Shah, tend to think of the construction program as being directed primarily toward facilitating a redeployment of the Iranian Armed Forces which is being made in response to U.S. rather than Iranian wishes.
Those of us here who are primarily interested in the political returns from the construction program are not competent to judge its military and strategic value, but we do from time to time run into people who should be competent in this field who have questions even on this score.
The questions that can be raised about devoting so much of U.S. resources to the Military Construction Program naturally lead to the further question of whether or not this program might not be further stretched out and the resultant savings used as part of the leverage to get the Iranians to put their house in order. In the course of drafting the telegram referred to above there was discussion of the possibility of referring specifically to a stretch-out of the construction program as one of the readjustments we might undertake in meeting the Shah’s request. There was some feeling, however, even on the part of those who thought that it might be useful at this time to divert resources from the construction program, that suggestion of the possibility of a stretch-out might lead merely to a cut in funds for construction without compensatory addition of funds for other purposes. And of course there are some who feel that any diversion of money from the construction program would be unwise even if this money could be used [Page 956] for other assistance purposes. Accordingly the telegram contained no specific reference to the possibility of a stretch-out of the Military Construction Program.
Although it is not by any means an agreed Embassy view, I think it may be useful to you to know that some of us here have the feeling that if we could use some of the dollars that are now going to military construction for other purposes, and if the suggestion of such diversion did not just lead to loss of money for any kind of assistance, it would be a good idea.
Tehran is a fascinating place. I have been here long enough now to have some grasp of the fact that there are wheels within wheels on almost everything that happens, but I must confess that I am very far from knowing just what the wheels are.
Yours sincerely,
- Source: Department of State, GTI Files: Lot 60 D 533, Iran, Official and Informal Letters from Tehran, 1957. Confidential; Official–Informal.↩
- Not printed. (Ibid., Central Files, 888.10/11–1757)↩
- On November 9, the Shah requested from the United States through Ambassador Chapin a $50 million loan. [11/2 lines of text not declassified] The Shah stated that unless the loan could be secured for budgetary support, it might be impossible to justify to the Iranian people failure to accept Soviet assistance. (Telegrams 929 and 937 from Tehran, November 9 and 12; ibid., 988.724/11–957 and 788.5–MSP/11–1257, respectively)↩
- Printed from a copy that bears this typed signature.↩