Foreign Relations of the United States, 1961–1963, Volume XVII, Near East, 1961–1962

172. Letter From the Ambassador to Iran (Holmes) to Secretary of State Rusk⁰

Tehran, January 22, 1962.

Dear Dean: I indicated in my message of January 18 (Embassy telegram 530)¹ that without waiting for the separate section on Iran I would send you a letter with regard to the Military Assistance Steering Group’s report.² The section on Iran has just arrived and I am therefore able to address myself to both documents.

In summary, the principal faults and weaknesses, as I see them, of the Steering Group’s report lie in the fact that the conclusions give inadequate weight to four factors: 1) Although the key to drastic reduction in military aid without serious political repercussions is to persuade the Shah that U.S. forces will help him in Iran if he gets into difficulties, we know he knows, and the report likewise asserts, that this is not possible. 2) It is the judgment of all of us here that the Shah will not cut his forces from 205,000 to 150,000 if offered no more modernization than envisaged in the Steering Group’s recommended level of aid. 3) A further probability is that such a level of aid will impel the Shah to draw more heavily on Iran’s oil revenues for his armed forces—to the detriment of the country’s development programs. 4) There is a further problem involved in talking to the Shah about additional economic aid accompanying reduced military aid in that our own procedures make advance commitments of greater economic aid extremely difficult. The essence of my position, then, is that in the light of these facts alone the adoption of the Steering Group’s recommendations would entail much greater risks than are implied in the Group’s report—greater risks in fact than we can afford to take in this country.

In my view the report would in effect undermine the substantial political and financial investment which we have devoted to our Military Assistance Program here in favor of a new approach based on theory and supposed to be sold to the leaders of this country without the substance which might give it a chance of being persuasive. Thus, as we edge toward what might soon be regarded by the Shah as unilateral repudiation of our July 1958 commitment to him, he is to be asked to rely upon U.S. retaliatory power for Iran’s defensive military needs when no specific commitment of this power to Iran in various possible contingencies has been or is likely to be made. The Sixth Fleet can come quickly to the aid of Greece or Turkey; the Seventh Fleet is a powerful defender of our Asian friends to the South and East. But whence will come effective U.S. military intervention in Iran’s hour of need? The Shah fully comprehends the logic of geography in this respect. The report points out (paragraph 11 of the Annex) that “… a commitment by the United States to defend Iran has to be believable. Even if it were contained in an ironclad military alliance and territorial guarantee, it is apparent that for some time to come the United States could defend Iran against a determined attack only by the use of air-delivered thermonuclear weapons.” The report states, furthermore, that the increasing U.S. capability to intervene militarily abroad is earmarked for Berlin and possibly Southeast Asia.

With regard to the increased development assistance which the Iranian Government is to be persuaded to accept in place of military aid, the Steering Group itself confesses that it “has not been able to obtain a clear cut picture of what the long term shape of economic programs is likely to be in many of the subject countries”. It does not seem to me realistic to expect the Iranian Government to find the above approach persuasive, and to say, as the report does, that “the countries themselves should not be allowed to gain the impression that we are any less resolute in our intent to assist them in maintaining their independence nor that their military establishments are being so emasculated as to invite overt aggression or internal revolt” is to indicate unfamiliarity with the natural and to my mind logical reaction of the Iranian leaders in the face of a program such as that recommended by the Steering Group.

The report seems totally to disregard the value which our policy and position in the Middle East have derived from our Military Assistance program to Iran. This program has been instrumental in keeping this underdeveloped Moslem state, located on the borders of the Soviet Union, firmly on the side of the Free World in the cold war. The Steering Group report appears to assume that our military aid program for Iran can be radically altered against the desires of the Iranian regime while that regime’s adherence to the United States will remain as strong as ever. I am convinced that the concept held in some quarters that the Shah has no place to turn but to the United States is erroneous. Out of concern for his country’s security and worried by an apparent lessening of U.S. interest in this he might seek some accommodation with the USSR, with the concomitant adjustment of Iranian policy which the Soviets would require. We must not forget that the Shah was on the point of making such an arrangement with the Soviets before. I would ask: is it worth the candle to threaten so directly our political position in this area by adopting recommendations based on theory and unaccompanied, as far as I can see, by careful evaluations of the political risks involved? I would hate to see Iran, by turning to neutralism and accommodation with the USSR, demonstrate to us that there are points beyond which the needs and desires of an ally cannot be ignored. The catastrophic nature in that event of the consequences to U.S. interests need not be elaborated.

I hold no brief for large military establishments in countries such as this and in fact my recommendations on the Military Assistance Program for Iran for the period FY 62–67³ were designed to achieve a reduction of 50,000 men in the Iranian military establishment. At the same time I believe that the Shah of Iran has legitimate military concerns and that these can be met by us with an outlay of funds which is reasonable in light of the interests at stake here. Moreover, since this program, which I put forward in response to your letter of July 25, 1961, would not in my view impede our vital development assistance program here, I urge one more that it be adopted.

I must again, as I did in my telegram number 507,⁴ register my complete disagreement with the approach whereby $50 million would be envisaged, but not funded, for possible use to supply “glamor” equipment to persuade the Shah to reduce the size of the Iranian military establishment. We do not yet know what these funds would be spent for, assuming they were provided, but the idea of producing the equipment involved as “bait” rather than as part of a coordinated and logical program of modernization reveals a complete lack of understanding of the Shah’s position. The Shah will not reduce his forces except as he can be convinced that we will help him with a meaningful program for the improvement of his military establishment. And here let me point out that it would be wrong to dismiss entirely the possibility of bringing about significant improvements in the Iranian armed forces. Though we admittedly do not receive the same defense returns, dollar for dollar, in Iran as we may get elsewhere, progress is being made. I should point out, furthermore, that my recommendations of September 13 make introduction of the “advanced and sophisticated materiel”, referred to in paragraph 13 of the report, explicitly contingent upon progress in training and the ability of the Iranians to absorb it.

The approach envisaged by the Steering Group would not constitute a recognizable modernization program, nor would the amount of funds involved go far enough toward meeting the Shah’s wishes to convince him that he should reduce his forces. On the contrary, he would most likely reach the conclusion that he must get the equipment he needs either by taking the necessary funds from Iranian resources which would otherwise be devoted to development or by accepting economic aid from the Soviets. Neither of these courses would be in the interests of the United States.

Turning to the Iran Country Annex, I should say that it suffers from the same basic weakness as the report itself—its conclusion is designed to fit a pre-ordained course, and the excellent reasoning against that course, set forth in the first nine pages of the Annex, is paid little or no heed. One example is the statement in paragraph 12 that “there would be a doubtful return in taking action which would reduce military and raise investment allocations by $130 to $140 million a year if the price for that re-allocation were to be a change in the Shah’s policy or in his determination and courage which would lay Iran, developed or undeveloped, open to Soviet influence”. To this very real possibility the authors of the conclusion apparently attach little credibility or importance.

But my main quarrel with the conclusion of the Annex is the erroneous evaluation of the basis of Iran’s present Western orientation. Paragraph 21 states that “the political value of such a (modernized military) program in maintaining Iran’s Western orientation is becoming more marginal in relation to the basic internal developments which we can influence better by other means” and paragraph 29 asserts that “the risk of an ultimate change in Iran’s foreign policy is no greater (indeed it is probably smaller) from displeasing the Shah than it is from failure to deal effectively with the forces of change in Iran”. This may be all right from the point of view of detached theory, but anyone who has closely observed Iranian political developments for any period of time knows that the Shah is still the basis of power here, that he is likely to remain so for the period with which our military aid planning is currently concerned, and that it is he, and he alone, who brought Iran into the pro-Western camp and is keeping it there despite the constant pressures from neutralist-minded politicians. Paragraph 14 realistically points out that it is not unnatural that a quid pro quo is expected for this, and our interest in preserving the current direction of Iranian foreign policy makes it well worth while for us to “ante up”.

As for the “forces of change” to which the Annex apparently attributes urgent capability, it is my view that changes are going to take place here gradually, as we are now witnessing, under the aegis of the Shah, who has publicly committed himself to a program of economic and social reform. It is to our interest to have the Shah in a position, by his having received or been promised a reasonable amount of what he wants from us, where we can exert effective influence to insure his continuing constructive role in furthering progressive change. How else, indeed, can we better promote the success of the policies we wish to see applied here?

I get the impression that the authors of the conclusion believe that the preferable way to seek to maintain our position here is to take action which will seriously displease the Shah but will better enable us to improve the lot of the Iranian people as a whole—“nation-building”. Let them make no mistake about this—the realities of the situation here are such that our position for the period under discussion will depend as much upon the Shah as upon the results of increased development assistance. These results are notably slow to manifest themselves politically here, and certainly to have an effect on the people’s attitude toward foreign policy. Moreover, such of the “forces of change” as are interested in foreign policy are opposed to Iran’s aligning herself in the world power conflict.

In the light of the above I strongly disagree with the classification of the military aid program as “activities of secondary importance”. The program is just as important as the development program to the maintenance of our position here, and should be continued at the level I have recommended.

I believe that at this point I have addressed myself to the main weaknesses and flaws of the Steering Group’s recommendation. I do not wish to draw out this letter by enumerating various other inconsistencies and oversights of the Steering Group’s report, beyond pointing out that there are some startling discrepancies between the figures quoted in paragraph 67 and elsewhere for past and projected military assistance to Iran, and those which are available to my staff here. A comparison of these figures is set forth in the enclosed tabulation.

I have gone on at some length because I am convinced that adoption of the Steering Group’s proposal would constitute a retrograde course. It would seriously hamper and retard the promising economic and social movement forward that has been sponsored by and has the continuing support of the regime here and would thus work against the very objectives that United States policy in Iran seeks to attain. I believe, considering the high stakes involved, that the risks entailed by such a course would be too great and I urge, therefore, that favorable consideration be given to my recommendations on the Military Assistance Program for Iran for the period FY 1962–1967.

Sincerely,

Julius

0. Source: Department of State, Central Files, 788.5/1–2262. Secret. A 1-page enclosure containing a tabulation of statistics relating to the U.S. military assistance program for Iran is not printed.
1. See footnote 3, Document 170.
2. See Document 169.
3. Holmes’ recommendations on military assistance for Iran were contained in a letter from Holmes to Secretary Rusk of September 13, 1961, that was written in response to a July 25 letter from Rusk to Holmes. Both letters are in Department of State, NEA/GTI Files: Lot 66 D 173, Task Force on Iran; see Supplement, the compilation on Iran.
4. Holmes advised Secretary Rusk in telegram 507 from Tehran, January 10: “I have just read special Steering Group’s report on military assistance to Iran and five other countries and consider it my duty to make you personally aware of my belief that, as regards Iran, it contains serious flaws and weaknesses. On basis my assessment political, economic and military factors here I am convinced that course recommended for Iran would be contrary to US interests here. I shall send more detailed comments as soon as I receive country chapter on Iran. Meanwhile, I urge that decision on report be held in abeyance, and I hope that you will be able to review my letter to you of September 13, 1961, as well as Embtels 349 of November 1, 1961 and 445 of December 14, 1961. These contain my views and comments on military aid for Iran, which remain valid.” (Ibid., Central Files, 788.5/1–1062)