22. Telegram From the Department of State to the Embassy in Iran 1

842. Embtel 1018. Joint State/AID/Defense message. We regret apparent misunderstanding re Deptels 774 and 8262 and Embtel 988.3 Our authorization to you to discuss modernization requirements (Deptel 774) remains in effect. Caution contained in FYI portion para 3 of Deptel 6784 against any commitment re grants or credits also remains in effect.

Dept did not intend in Deptel 826 raise doubts as to US ability sell for cash tanks or transport aircraft to Iran in future. Discussions as to desirable timing and types of modernization, do not, we feel, imply necessity of commitment at present to supply particular type at particular time, as per second and third proposals contained Embtel 988.

Specific commitments for grant MAP in FY 66 and beyond are simply not possible, though results of your discussions in terms of what would be technically feasible and desirable should be most useful. Specific commitments regardless of payment considerations fall within this category.

FYI. We hope to be able to satisfy Shah re tank modernization through offer of sale to be made in course his visit here. C–130’s or other comparable types transport aircraft will be available for sale, and there remains of course possibility some types of transport aircraft and other modernization items under future grant MAP. End FYI.

  1. Source: Department of State, Central Files, DEF 19–3 US–IRAN. Secret. Drafted by Bowling on May 13, cleared by Walsh and in draft by Towsley and Haddad, and approved by Bowling. Repeated to CINCSTRIKE for POLAD Tampa.
  2. In telegram 1018 from Tehran, May 11 (ibid.), Holmes stated that he was puzzled by the apparent contradiction between telegram 774 (Document 16), which had authorized him to discuss with the Shah a reasonable modernization program without regard to financing, and telegram 826, May 8 (Department of State, Central Files, DEF 19–3 US–IRAN), which cast doubts regarding U.S. ability to provide replacement equipment for M–47 tanks and C–47 aircraft, regardless of payment considerations.
  3. Dated April 30; see footnotes 2 and 5, Document 19.
  4. Document 11.