252. Memorandum of Discussion at the 379th Meeting of the National Security Council0

[Here follow a paragraph listing the participants at the meeting and agenda items 1–3.]

4. U.S. Policy Toward Iran (NSC 5703/1;)1 SNIE 34–582)

In briefing the Council Mr. Gray summarized the four main questions which the Planning Board had seen fit to raise with respect to Iran after consideration at two Planning Board meetings. Mr. Gray pointed out that the Planning Board did not expect clear answers from the Council on these questions but did feel that they were of sufficient importance to be discussed at a Council meeting.

(A copy of the discussion paper on U.S. Policy Toward Iran is filed in the Minutes of the Meeting and another is attached to this memorandum.)3

Upon concluding his summary of the discussion paper, Mr. Gray turned to General Twining and put to him the first of the four questions set forth in the discussion paper, namely, “Does the effective elimination of Iraq from the Baghdad Pact require a change in the strategic military concept on which the Baghdad Pact’s planning is now based?” General Twining replied that no change whatsoever was required by the defection of Iraq. Not only would Iraq’s dropping out not affect Baghdad Pact strategy adversely, this development might actually be advantageous in some respects. Governor Herter, Acting Secretary of State, indicated his concurrence with General Twining’s conclusion.

Mr. Gray then posed the second of the Planning Board’s four questions; “In view of the fact that the overthrow of the monarchy in Iran was likely unless the Shah quickly undertook drastic and effective reform measures and in view of the fact that the Shah was unlikely to be willing or able to take such steps, should the U.S. continue its existing policy of endeavoring to enhance the prestige of the monarchy as the symbol of national unity and continuity, while encouraging a more consistent institutionalized relationship between the Shah’s function of broad national guidance and the Government’s specific administrative responsibilities?”

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Secretary Herter replied that the State Department was fully conscious of the intelligence estimate as to the likelihood of the overthrow of the Shah unless effective reforms were quickly undertaken. Nevertheless, the Department felt that the Shah was the only rallying point to which the U.S. could look for the moment. Moreover, there were at least some signs that the Shah was undertaking real internal reforms and was certainly attempting to improve his posture in the eyes of his own people. For example, he had just called the first press conference in the history of the monarchy.4 Moreover, the Shah is aware of his uncertain position in Iran. The Iranian Ambassador to Washington had discussed these matters with officials of the State Department, something which his predecessor had never been willing to do. Accordingly, things seemed to be moving in the right direction at the moment even though ultimately nothing might come of the Shah’s efforts. It was of significance that the Iranian Ambassador appeared so responsive to all our suggestions for improving the internal situation in Iran and strengthening the position of the monarchy.

Mr. Gray inquired whether in our discussions with the Ambassador from Iran we had discovered anything about the Shah’s attitude toward the possibility of a move in Iran in the direction of a constitutional monarchy? Secretary Herter replied that he did not think this subject had arisen in the conversations thus far with the Iranian Ambassador. He went on to state that it was not so much that the administrative institutions of Iran were so faulty, it was rather the corruption in the landed and governing classes. He repeated his feeling that the new Iranian Ambassador was a great improvement over his predecessor5 and that through him we had a much greater opportunity to influence the Shah’s actions.

Mr. George Allen indicated he concurred in a general way with Secretary Herter’s view that from the point of view of the U.S. policy, there was at the moment no alternative to placing our reliance in the Shah. On the other hand, Mr. Allen stated that he was not sanguine about the likelihood of serious social and economic reforms being undertaken by the Shah. In his own experience, continued Mr. Allen, the Shah was the type of individual who started off a course of action very boldly but usually did not stick to it. Accordingly, we should be aware that in our present policy we are probably living on borrowed time and that ultimately there will be a shake-up in Iran. Mr. Allen admitted that while this was his diagnosis of the disease, he could not suggest any cure. Secretary [Page 593] Herter replied by pointing out that the Operations Coordinating Board was engaged in making a progress report on Iran. He hoped that there would be no call for a review of the NSC policy statement on that country until after the OCB report was submitted to the National Security Council.

With respect to alleged reforms in Iran, Mr. Gray indicated that it had been stated in the Planning Board that while an income tax had been imposed in Iran, it was only about twenty per cent effective. In reply Secretary Herter inquired how this percentage compared with collections of income taxes in France. General Cabell also indicated his view that the effectiveness of an income tax was not a very reliable measure of the effectiveness of a government in countries such as Iran.

Mr. Gray then turned to the third question raised by the NSC Planning Board in the discussion paper on Iran. He pointed out that Paragraph 19 of the present statement of U.S. Policy Toward Iran (NSC 5703/1) specified that U.S. aid to Iran was to be “on a declining scale”. The July 1958 decision to increase U.S. military assistance to Iran would appear to void this policy guidance, since U.S. grants or loans at present or higher levels would almost certainly be required as a result of the July 19 decision. Although, continued Mr. Gray, Secretary Herter had suggested that there be no revision for the time being of NSC 5703/1, he (Mr. Gray) judged that we would certainly not be able to follow the old policy guidance given in Paragraph 19 in the light of these new commitments. Mr. Gray then said that as the discussion had proceeded, it might be summed up as follows: The Shah of Iran was likely to be removed from power but there was nothing the U.S. could do about it.

Mr. Fred Scribner, Acting Secretary of the Treasury, suggested that it might be a good idea for the U.S. Government to “stimulate” the Shah to record a better performance, “to frighten” him into undertaking some of the necessary reforms.

Mr. Mansfield Sprague, Acting Secretary of Defense, inquired whether there was anything hopeful in the proposal for a federation of Iran and Pakistan. Secretary Herter replied in the negative and said that the idea of this federation seemed to have dropped entirely out of sight.

Mr. George Allen observed that he was perhaps really not as completely pessimistic as he had seemed to be in his first statement with respect to the Shah. It might be, for example, that Iran would ultimately follow the example of Turkey, a nation which Iran watches very carefully. Thus it could be that in the end, that if the Shah were driven out, his government would be replaced by an Iranian Republic which would be anti-Communist along the lines of the example provided by the Turkish revolution.

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At this point Mr. Gray put the final question raised in the discussion paper, namely, the question of the attitude which the U.S. Government should adopt in the event that an attempt was made by nationalist rather than communist elements to overthrow the Shah, or drastically to reduce his powers. Mr. Gray asked if this Government should not be giving some thought to the possibility of a nationalist rather than a communist revolution in Iran.

Secretary Herter replied that he did not know the answer to this question but would again suggest that for the moment, the Council await the forthcoming OCB report on Iran and then proceed to a review of the existing policy statement on that country. General Cabell added the comment that he could not discern at this time any strong character on the Iranian scene who could replace the Shah.

Mr. Gray replied that we had not discerned any such strong character in Iraq either. Should we not therefore be thinking about what we would do as a government if events in Iran were to follow the same course as those which had resulted in the coup in Iraq …6 even if we were not yet able to identify any strong opposition leader in Iran.

Secretary Scribner inquired as to the relations between Pakistan and Iran. Were the relations of these two countries good or bad? Secretary Herter replied that on the whole they were pretty good but there was not much real inducement for Iran to federate with Pakistan and thus be obliged to share its rich oil revenues with the poorer partner.

Secretary Sprague expressed the opinion that it might be useful to appeal to Turkey and to Pakistan to assist us in exerting pressure on the Shah to institute and carry out the necessary internal reforms in Iran. Such a move would at least supplement our own efforts to influence the Shah’s course of action.7

At the conclusion of the discussion Mr. Gray said it was his understanding that the Council wished to defer any review of current U.S. Policy Toward Iran pending the early completion of the OCB report on that country.

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The National Security Council:8

Noted and discussed the subject in the light of SNIE 34–58 and an oral report by the Special Assistant to the President for National Security Affairs on the results of recent Planning Board discussions.
Agreed that a review by the NSC Planning Board of existing U.S. Policy Toward Iran (NSC 5703/1) should be deferred, pending early completion of an OCB report on Iran now in preparation.

[Here follows agenda item 5.]

S. Everett Gleason
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Gleason on September 18.
  2. See footnote 3, Document 251.
  3. See Document 249.
  4. See footnote 2, Document 251.
  5. The press conference on September 9 is the subject of telegram 578 from Tehran, September 11. (Department of State, Central Files, 788.00/9–1158)
  6. Ambassador Ali Amini was replaced by Ambassador Ali Gholi Ardalan on May 22, 1958.
  7. Ellipsis in the source text.
  8. Under a September 23 memorandum to Goodpaster, Executive Secretary Howe transmitted a memorandum that addressed this question. The memorandum, prepared by NEA, concluded that using Turkey and Pakistan would be counterproductive. Reasons given were the possibility of antagonizing the Shah and dissipating his current receptivity to U.S. suggestions, the appearance of combined intervention in Iranian internal affairs, and the loss of freedom of U.S. action entailed in such a joint campaign. (Department of State, Central Files, 611.88/9–2358)
  9. Paragraphs a and b constitute NSC Action No. 1986, approved by the President on September 23. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)