29. Memorandum on the Substance of Discussion at the Department of State-Joint Chiefs of Staff Meeting0

[Here follow 8 pages that include a list of 32 persons present (including among others General Lemnitzer, Admiral Burke, and General LeMay from the Department of Defense; Bowles, Lewis Jones, and McGhee from the Department of State; Rostow from the White House; General Cabell from the Central Intelligence Agency; William Bundy from the Department of Defense, Office of International Security Affairs); an index; and discussion of items I and II.]

III. Iran:

In response to an earlier request by the Chiefs, Mr. Bowles asked Mr. Jones to report on current conditions in Iran.

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Mr. Jones observed that the situation in Iran could never really be called good. Iran was somewhat like an individual who was consistently subject to a low grade chronic fever. Each time you took a new look at the patient there was no clear evidence of a crisis but sometimes the temperature was down a little, sometimes it was up a little. Mr. Jones noted that the Shah had been concerned that the new Administration might withdraw the support that had earlier been given to him by the U.S. President Kennedy’s letter and the recent visit of Ambassador Harriman had helped considerably to abate his fears.

In analyzing the February elections, Mr. Jones commented that the urban centers appeared to be free of communist infiltration; the opposition had been split by the student community and the followers of Mosadeq; the opposition appeared to have made gains in the student community but not in other areas; and the security forces were surprisingly efficient in dealing with election disturbances. In commenting on the security forces, Mr. Jones stated that there does not appear to be any significant rebel groupings in the security forces who are ready to cast their lot with the civilian opposition.

Mr. Jones noted that the Shah had lost some prestige following the election but had regained his position by firing four unpopular security chiefs and replacing them with men who were free of charges of corruption and brutality. In his concluding observation Mr. Jones remarked that the Shah continues to have a long range problem with the opposition, particularly the students and the Mosadeq followers. The Shah could become popular with those groups if he were to detach himself from the United States. He has, however, not shown any signs of wavering. In addition he has adhered to the highly unpopular economic stabilization program which is necessary if he is to deal adequately with his economic problems.

General Lemnitzer expressed his concern as to whether we will be able to continue our present military aid programs. As a result of the Shah’s last visit we had agreed to an accelerated program for Iran which we cannot continue under the proposed 1962 military assistance program.

Mr. Bundy observed that under the 1962 program Iran will be cut in terms of new programs but that he thought the expenditure and delivery level in 1962 would remain roughly the same. There was a serious problem with regard to the Defense Support Program which was on dead-center. In previous years we had given the Shah assurances on the Defense Support level by this time but we have not done so this year.

General Lemnitzer thought that the proposed program reductions for Iran would soon become apparent to the Shah.

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Mr. Bowles remarked that one of the first things we should do is determine what part of the military aid program is required for military purposes and what is for political purposes. With regard to the latter we might be able to meet this purpose by assuring the Shah of long term economic aid in lieu of military aid. General Lemnitzer observed that the Shah is very sensitive about the military program and in General Lemnitzer’s opinion our programs are clearly military and geared to the increased forces. Mr. McGhee observed that we have to face up to the fact that we will not be able to meet the 1958 commitment under the present $1.6 billion program for 1962. Ambassador Holmes will have to tackle this problem as soon as he arrives. It may be possible through other types of economic aid to pick up part of the Iranian budget which would free up funds to offset reductions in our DS levels.

[Here follows 1/2–page of discussion of item IV.]

  1. Source: Department of State, State-JCS Meetings: Lot 70 D 328. Top Secret.