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

669. The following comments may be helpful in connection with preparation of reply to Shah’s letter to President of Jan 7.2

Important to realize that at time of writing letter Shah was not, and is not now, in one of the depressed moods which have in past resulted in excessive insecurity leading to appeals for military assistance. On the contrary, he is self-confident and self-assured. In addition to his continuing desire for military equipment beyond what we are providing him, Shah has what seems to me legitimate concern over what will happen when five-year military agreement comes to an end, particularly with regard to providing for replacement of equipment, such as M–47 tanks, which will become unsupportable toward end of current agreement. In addition, Iran is now having to assume certain military expenses (spare parts, consumable supplies) which were not commitments in the agreement but which the Military Assistance Program had previously covered. Shah’s long existing desire for military equipment beyond that provided in the agreement has not [now] been reinforced by marked improvement in Iranian financial position arising from increase in revenues from oil.

With regard to Shah’s attitude to the agreement itself, there is no doubt in my mind, despite language in his letter to President, that he does not consider that he has abrogated agreement or asked for formal renegotiation of it.

We will, of course, wish to stress essential validity of five-year agreement, underline our condition that it adequately provides for defense of Iran, convey our assessment that threat to Iranian security now less, not more, than at time agreement signed, and point out that we are meeting our commitments despite fund stringencies and expect Iran to continue to meet hers. However, Shah’s concern for post-agreement military needs is in practical terms by no means premature. I, therefore, think President’s response should be positive in sense of expressing our willingness to discuss reasonable on-going program of Iranian acquisition military equipment after expiration of agreement. Appropriate comments regarding possibility of declining US grant assistance or its replacement by military credit could be included as necessary. I would hope that possibility of credit at least could be indicated.

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Within this framework I could then explore in less formal manner more specifically what Shah has in mind and ascertain possibility of mutually satisfactory solution. I believe that if I am able to discuss problem of future program with him in reasonably frank terms, we will be able to contain within acceptable bounds his desire to purchase additional equipment now and ensure that such purchases are from us and compatible with our MAP and advisory program. I could also in this context pointedly remind Shah once again of danger that excessive Iranian purchases of military equipment now could call into question agreement itself and result in sharp reduction in US grant military assistance.

Reference should also be made to the Indian Ocean Task Group and to DELAWAR as evidence of US interest and ability to reinforce the security of Iran, and of increasing US capacity to deal with limited war situations.

With regard to Shah’s request that representative be sent here, we have since confirmed he had in mind military representative and referred to his November conversation with General Adams. This request probably arises from fact Eckhardt and I have held line firmly with regard to additional military equipment and Shah would no doubt like to attempt to influence such a representative in that direction. I would hope that President’s reply might make clear that his civilian and military representatives in Iran have his full confidence and are entirely qualified to discuss whatever the Shah may have in mind. To avoid brushing off request and in interest Shah’s personal relation with President, reply might note General Adams will be coming to Iran in March (we understand this is tentative plan) and this will afford opportunity for him to join Eckhardt and me in discussing military matters related to defense of this region.

With regard to international political aspects of Shah’s message, Dept will not require lengthy comments from us, but I put forward following.

Unlikelihood of non-aggression treaty should be mentioned as well as fact that such treaty, if it should come to pass, would in no way detract from our CENTO commitments. Question about USSR’s being allowed free hand in non-European areas should be vigorously refuted. Ref to USSR’s having discarded use of force as instrument of foreign policy could be used to lead to emphasis on need for economic development and social, administrative and political reforms to counter possibility of aggression through subversion, especially in vulnerable areas, which is only weapon available to Arabs at moment and in foreseeable future to cause trouble for Iran in Khuzistan.

Finally, the President would presumably refer at some point to the situation in Iran. Need to keep Shah’s attention focused on what remains to be done fully as great as requirement to approve his hopeful start. I believe [Page 12]we should avoid leaving impression that we share Shah’s view that his “comprehensive program…has now been fully implemented” but rather should indicate we are glad he is aware and actively working on the serious social, economic administrative political problems that beset Iran.

Holmes
  1. Source: Department of State, Central Files, DEF 19 US–IRAN. Secret.
  2. Document 2.