255. Memorandum From the Deputy Secretary of Defense (Gilpatric) to the Deputy Assistant Secretary of Defense for International Security Affairs (Bundy)0


  • NSC Standing Group Session on Iran

At yesterday’s meeting of the NSC Standing Group on the above subject, State tabled the attached comments on the questions raised in Mr. McGeorge Bundy’s memorandum of May 17, 1963.1 The principal comments made by members of the Group in the ensuing discussion were as follows:

The Shah has done all right up to now on land reform and should be furnished with the technical assistance needed by the Government of Iran to carry through on the program.
The MAP agreement seems to be in satisfactory shape although the force reduction program should be monitored and an eye should be kept on the increase in the defense budget.
The principal concern expressed was over the economic and fiscal policies and goals of the GOI and over the apparent reluctance of the U.S. Ambassador to press the GOI very hard in these matters. The view was also expressed that there should be more specifics and hard objectives to buttress the rather general recommendations in the Secretary of State’s memorandum to the President of April 20, 1963.
It was left that the Ambassador would be advised that the requests made in his message of May 15 (996)2 would be dealt with affirmatively subject to checking on the attitude of the Export-Import Bank and putting the PL 480 assistance in the form of a soft loan rather than a grant.

A memorandum on the results of the meeting will be circulated out of Mr. Bundy’s office.

Roswell Gilpatric
  1. Source: Washington National Records Center, RG 330, OASD/ISA Files: FRC 67 A 4564, Iran 691.4–692, 1963. Secret. Stamped notations read: “Noted by Mr. Sloan” and “Mr. Bundy has seen.”
  2. Prior to the Standing Group meeting, Talbot sent a briefing memorandum to Harriman along with copies of McGeorge Bundy’s memorandum to the members of the Standing Group concerning the meeting on Iran and the Department of State’s response to Bundy’s questions. (Department of State, S/S-NSC Files: Lot 72 D 316, NSAM 228) For texts, see the Supplement, the compilation on Iran. Additional documentation is in Department of State, NEA/NE Files: Lot 68 D 51, POL 1–1 NSAM 228-IRAN.
  3. Telegram 996 from Tehran, May 15, contained Ambassador Holmes’ review of the Iranian economy. (Ibid., Central Files, E 12 IRAN)