275. Telegram From the Embassy in Iran to the Department of State0

510. For Parker HartNEA. Reference: Embtel 509.1 I hope that you and Lewis Jones will be able to give your personal attention to the developing situation here as set forth in reftel which outlines a number of difficult problems we will have to take up with Shah in near future. In addition we can’t overlook fact that there is going to be keen Iranian [Page 652] disappointment if US does not at CENTO Meeting adhere to Pact or announce additional loan and military aid which are principal Iranian objectives.

The outlook is difficult to assess as we are dealing with a government completely controlled by one man who at best is unpredictable. It is our guess that if the actions proposed in paragraphs two and three of reftel2 are effectively carried out and if possible augmented by a visit to Iran by the President, as hinted at in press recently, we will be able to maintain the status quo. On other hand, if Shah should embark on new course, it may lead to a semi-neutral Iran with a weakened CENTO or even, as an extreme possibility, to his abdication. I need not further comment on adverse effect which such developments would have elsewhere in ME. All things considered I doubt there is any real alternative to strong support for Shah and present GOI. Any other method of shoring up this vital sector of our front line with Soviet Union could well cost more money and might involve American forces.

  1. Source: Department of State, Central Files, 788.5–MSP/9–1059. Secret; Limit Distribution.
  2. In telegram 509, September 10, the Embassy listed eight subjects that it believed would trouble U.S.-Iranian legislation during the next 4 months. These were: 1) reduced U.S. budgetary aid for fiscal year 1961 requiring a stretching out of Iran’s military buildup; 2) delay in military construction; 3) lower FY 61 DLF lending; 4) reduction of ICA technical assistance; 5) lack of financing for construction of the Turkish-Iranian railroad; 6) insufficient funding for the proposed Hamadan airfield; 7) denial of Iran’s request for two destroyers; and 8) refusal to provide Iran missiles or missile training. (Ibid.)
  3. In these paragraphs of telegram 509, the Embassy suggested an elaborate series of briefings and discussions with the Shah and the Iranian military to cushion the shock that the United States was planning to stretch out Iran’s military buildup and delay support of military construction. The Embassy should also point to the positive elements in the assistance program, including the transfer of two corvette destroyers and anti-tank missiles.