Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

162. Memorandum of Conversation¹

Washington, July 26, 1966, 11:30 a.m.

THOSE PRESENT

• Ambassador Khosro Khosrovani (Iran); Howard Wriggins

I first expressed Mr. Rostow’s regret for not being able to meet with the Ambassador, but that he had unexpectedly been called upstairs by the President before a Cabinet meeting that was to follow about 12:15. I suggested we have our discussion, and then if Mr. Rostow returned, he could carry on.

Ambassador Khosrovani made six main points:

1. Iran is America’s closest friend in the Middle East; it is the only one which has stood with us on behalf of our policy in Vietnam. The Shah argued for three days in Bucharest in order to water down a sharp Rumanian communique. We have stood side by side in the anti-Communist struggle.

2. However, Iran has found that the direction of the threat to Iran has been changing somewhat over the past two or three years, as Soviet policy toward Iran has become more civil while Soviet military support for the Arab countries has radically increased. This has happened at a time when British power is withdrawing from the area, particularly the Persian Gulf. The Shah believes that America’s reaction to this changed situation has not been as responsive as the threat from the Arab countries has required.

3. While he has great respect for our military experience and the competence of our military specialists, the long discussions preceding each decision on military support have sometimes appeared like foot-dragging and have often been humiliating as foreign advisors tell him that they know better what he needs than he does—a contention the Shah is unwilling to accept.

4. With the U.S. switch from grant assistance to credit sales, the unwillingness of the oil companies to increase Iran’s oil liftings, and the Shah’s need to channel resources into development, the Shah was having increasing difficulties in meeting his rising defense requirements. He therefore found it necessary to seek out the cheapest source of supply, which is now the Soviet Union. This is regrettable, but the Shah has seen no alternative.

5. While the United States is understandably fearful of any Soviet presence in Iran, the Iranians have been dealing with the Russians for many generations. They have a “feel for the real dangers.” Now, the more immediate danger is from the revolutionary Arab world.

6. Ambassador Khosrovani is not at all convinced that “all is lost.” So far as he knows, the Shah has not been pressing Moscow hard for an answer. The Ambassador believes that if we can provide fairly promptly a forthcoming answer to the present negotiations, the Shah may not feel it necessary to go forward with his Russian explorations. He hopes very much that whatever misunderstanding that appears to have come between us will easily be overcome. He knows the Shah has no desire to change in any way the essential relationship between our two countries. He hoped very much to be able to see Mr. Rostow personally.

Mr. Wriggins’ main points were:

1. We ourselves have been puzzled and frankly somewhat annoyed by the Shah’s approach to this problem. In 1964 we provided $200 million for a 5-year defense program.

2. Within less than two years the Shah raised another $200 million for defense purposes; and then appeared to expect us to immediately respond. We did provide a special military mission to examine the problem.

3. While the Shah may have felt that this was not entirely sufficient, it made substantial recommendations which we actively pursued toward another $200 million—more than doubling our assistance within a five-year period. While we were examining this problem, we were suddenly informed that he is seeking assistance from the Soviet Union. (The Ambassador replied we should not have been surprised—we had had plenty of warning from the Shah’s advisors.)

4. We have never argued that he wasn’t independent or that he didn’t have the power to make his own decisions. Of course he did. Indeed, as a long-time student of politics outside of North America and Western Europe, I fully understood the desire of governments to demonstrate their independence. All we were attempting to do was to make quite sure that the Shah understood that in choosing this way of demonstrating his independence, there could be serious consequences, however unpredictable. As the Secretary and I have pointed out before, it was impossible to predict how the Congress would react if Iran, an old and close ally against Communism, began to accept substantial quantities of military equipment from the Soviet Union. It also raised the problem of protecting the security of our advanced equipment. This was not like India, where no advanced equipment had been sent. The fact of the presence of Soviet technicians in Iran would pose us considerable difficulty. The Shah, I knew, would take these considerations into account as he attempted to add up what he considered to be to the best advantage of Iran.

We both expressed our pleasure at seeing each other again and discussing this matter once more. We both hoped nothing would stand in the way of continued close collaboration between our two countries.

He expressed the hope that he could greet Mr. Rostow before he went on leave tomorrow afternoon—simply a courtesy call of a few moments, if that were possible. (He had obviously reported home he was seeing Mr. Rostow, and wanted to be able to report home that he had seen him.)

I told him I would do my best to arrange a convenient time, though I made it clear it would be difficult to arrange on this short notice.

HW

1. Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66–1/69. Secret. Copies were sent to Rostow, Hare, and Saunders.