294. Memorandum From Robert W. Komer of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)0
McGB:
Ed Mason is back from Iran with most gloomy report. He thinks the economic situation an utter mess and Amini all washed up. Politically and physically Amini is a spent force who doesn’t even control his cabinet. As a result, the Iranian budget is about $170 million in deficit, since practically every ministry has upped its share 20–30 per cent.
Meanwhile the Shah sits back doing nothing; he reputedly said Amini is a US man so the US can support him. The Iranians are obviously going to ask for a budgetary loan, perhaps around $60 million. Mason feels budget support would be fatal at this point and would only be postponing the evil day unless the Shah will insist on adequate budget cuts. Ed is so discouraged that he plans to pull his Harvard team out as soon as their contract expires in September. State/AID reaction seems unduly passive to me. They send messages warning that we’ll give no new budget support but I have urged we also come up with positive suggestions as to how Shah and Amini can best cope with current [Page 726] mess. What both need at this point is not just exhortations but advice.
Shah may be unwilling to shore up Amini without a high-level prod from us. I am thinking of suggesting we give Holmes Presidential oral message to take in when he returns to Teheran on 19th. JFK would remind Pahlevi of economic discussions during visit and urge prompt and effective action lest it prove impossible to get Third Plan (and US contribution) under way on schedule.
- Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, Staff Memoranda, Robert W. Komer. Secret. Copies were sent to Kaysen and Hansen.↩