233. Telegram From the Embassy in Iran to the Department of State 0

2055. In an hour farewell audience with Shah we discussed Washington visit. Shah said primary topic he intended to raise was question of future of Iran and assistance both military and economic which US might be prepared to extend. Iran was in a period of transition but badly needed assistance at this time. He convinced however that in five or six years Iran would be prosperous and wealthy country on basis its oil revenues alone without considering other development projects. He hoped very much US Government could also assist in interesting further American private capital to come into Iran now that door had been opened by new oil agreement.1

As usual he was insistent that US must supply more military hardware. He asked specifically when he might expect word as to action Joint Chiefs of Staff had taken with respect to recommendations of BP military committee. It was essential Iran should have a navy and he hoped very much arrangements could be made to receive a certain number of young Iranians at US Naval Academy as well as personnel at other naval schools. He also expressed hope that training of Iranian jet pilots could be greatly stepped up and said he was convinced if a call for volunteers was put at beginning of a school year instead of as recently during middle of school year response would be so great there would be no difficulty in choosing any number of suitably qualified candidates.

With regard to political future Iran he felt possibility of a unification with Pakistan should not be entered into lightly but only after full and searching study of possibilities and problems both as respects the two countries but also with respect to whole area. He felt advantages of such union were largely on Pakistan side since Iran had greater economic and social stability and prospects for great prosperity in near future. He envisaged [Page 547] that eventually Iran could out of its oil and other revenues assist in development of Pakistan with its poorer resources and greater population pressure. He was of course going to examine this proposed undertaking with President Mirza in Karachi and was going there with this purpose specifically in mind. He was looking forward very much to a general discussion with the President and with the Secretary on the whole problem of the Middle East. He felt that Nasser’s visit to Russia was taking an even more dangerous turn than he the Shah had anticipated and that Nasser by his speeches seemed to be lining himself up more solidly with the Soviet bloc. The Shah was very pessimistic about Iraq even though he said Nouri said had situation under control temporarily. He observed that there seemed to be even more popular support for Nasser in Iraq than there was in Syria or in parts of the Egyptian population.

  1. Source: Department of State, Central Files, 788.11/5–658. Confidential. Repeated to Ankara and Karachi. A brief summary of this telegram was included in the supplement to Staff Notes for the President, No. 367, May 14, which was seen and initialed by the President. (Eisenhower Library, Whitman File, Eisenhower Diaries)
  2. On June 1 the Shah approved an agreement between Iran and Standard Oil of Indiana for exploration of offshore oil in the Persian Gulf. Under the terms of the agreement Iran received 75 percent of the net profits and Standard of Indiana received 25 percent. Standard Oil of Indiana also paid Iran a $25 million cash bonus for signing the agreement and made other less significant concessions to Iran that made the agreement the most advantageous to a producing country signed to that date. President Eisenhower was told that the agreement “had been greeted with incredulous delight by the people of Iran and hated by their government as a global precedent for the underdeveloped nations.” (White House Staff Notes No. 365; ibid.)