165. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1
Mr. President:
Herewith a final call for help from our Ambassador to Iran.2 The Iranians threaten to buy some Soviet military equipment from the Soviet Union unless we alter the prices and terms we have offered.
[Page 302]I have checked with Secretary Rusk3 and with Secretary McNamara. Sec. Rusk believes we should not try to impose this extra $30 million military aid burden on the Department of Defense and that, on balance, it might be good for us to see some slight loosening in our ties to the Shah. He has always been a little uneasy about our commitments to him.
Secretary McNamara believes that we should stand on our present position; although he is willing to consider helping marginally if his military aid is fully restored. But basically he does not wish to give in to the Shah’s “blackmail.”
I have a feeling that, whatever we do, the Shah is likely to buy some Soviet equipment because it would be good for him domestically, indicating that he is not wholly “subservient” to the U.S. and “normalizing” his relations with the U.S.S.R.
As Ambassador Meyer points out, there are certain risks in our present position. The Shah might behave irrationally and get in much deeper with the Soviets than we now calculate. On the other hand, he is asking to be treated like a grown up. Your letter to him was in a mature mood of partnership. I agree, therefore, that we should stand on our present position.
It seems to me possible—but not sure—that if we stand on your letter and do not go rushing in with an additional “carrot,” the Iranians may come back to us with a specific proposition which we might look at.
Let the situation rest as it is
Put on agenda for Tuesday lunch4
Organize a further “carrot”
See me
- Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66–1/69. Secret.↩
- Attached to the source text is a typed copy of telegram 451 from Tehran, July 28, which conveyed a message from Meyer to the President arguing that before the Shah got inextricably involved in an arms deal with the Soviets, the United States should make one last effort to avoid a serious set-back for U.S. interests in the area. Meyer stated that the only hope of avoiding excessive Iranian military involvement with the Soviets was an indication from the U.S. Government of better prices and terms. The Ambassador regretted bringing this matter to the President’s personal attention, but because there was so much at stake—not the least of which was U.S. strategic installations in Iran—he felt compelled to appeal personally to the President. (Department of State, Central Files, DEF 19 U.S.-IRAN)↩
- Rostow had telephoned Rusk concerning Meyer’s cable at 5:20 p.m. on July 29, saying that he did not want to send it to the President until he had Rusk and McNamara’s final position. Rusk said that State’s position was that they should not ask McNamara to take on another $30–$40 million in defense spending for this, and that it would not be proper for the United States to be blackmailed. The Secretary said that he was nervous about the behind-the-scene U.S. commitment from previous years and would not object to a little loosening up there. (Memorandum of telephone conversation between Rusk and Rostow, July 29; ibid., Rusk Files: Lot 72 D 192)↩
- The President checked this option.↩