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

42. Memorandum of Conversation¹

New York, June 12, 1964.

SUBJECT

• Military Modernization Discussions with the Shah of Iran

PARTICIPANTS

• The Shah of Iran
• Defense
• Major General George, Eckhardt, Chief MAAG/Tehran
• Colonel W.B. Taylor, DOD/ISA
• Colonel Ray W. Hodgson, DOD/ILN
• State
• John Patrick Walsh, NEA/NR

At the request of the Shah, Defense/State representatives met with him in New York on June 12. The meeting was held in his suite in the Waldorf Astoria. It began at 6:45 p.m. and lasted about an hour and twenty minutes. Since the DOD group arrived at about 6:40, we only had a few minutes to discuss our position and no opportunity to see the specific position papers which General Eckhardt utilized throughout the session.

The atmosphere was friendly. The Shah had just arrived some minutes before from Los Angeles. He appeared tired and somewhat melancholy. One had the impression that the demonstrations in Los Angeles had depressed him. There was a huge crowd in front of the Waldorf. According to the police, it was entirely friendly with no demonstrators present. Nevertheless, the fact that he had once again been confronted with a large crowd may have recalled to his mind some of his irritation about what happened in Los Angeles. At one stage in the discussion, the Shah said that he was subject to what one might call an international conspiracy led by the communists with the active assistance of Nasser and the Arabs. In one demonstration in Los Angeles, according to the Shah, there were only six Iranians and the other demonstrators seemed to have been American communists and Arab students. He spoke with manifest irritation about an incident in Los Angeles; apparently a plane flew over the ceremony at UCLA carrying a banner that said “If you want a fix, see the Shah.” He said he asked people “What is a fix?” and they told him it was heroin. He said with bitterness that this smearing attack was made against him despite his efforts to kill off this dirty drug. If I am involved in heroin, he added, one should say that I am a terribly poor salesman and that I am working against my “sales interest.”

He went on to say that he was going to stop off and see King Hassan who had invited him to talk about Nasser. He said Hassan was having trouble with Nasser, which is a common experience. He said Nasser was giving arms to the Algerians to kill Moslem Moroccans; he was giving arms to Greek-Cypriots to kill Turkish Moslems; he was threatening the life of the Shah, a Moslem.

In accordance with the position agreed upon in Washington, the Shah was informed that the United States is prepared to conclude a sales agreement in FY 1965 for 176 M–60 tanks and four C–130 transport planes with deliveries to occur on a phased basis. He was also informed that we are prepared to begin negotiations at an early date in Tehran of a broader program covering the FY 1965–69 period, which would include both credit and grant equipment elements. Subject to Congressional authorizations, grant MAP would be continued in the three years after the end of the current Five-Year Plan, namely in FY 1967, 1968, and 1969. It was emphasized that the United States participation in the proposed negotiations would be under the direction of Ambassador Holmes who would be assisted by technicians from Washington to the degree deemed necessary.

The Shah was clearly pleased by United States responsiveness in respect to the modernization requirements of the Iranian military structure and by the decision to continue MAP grants. He indicated that he would begin preparations for negotiations as soon as he returns to Tehran this week.

General Eckhardt was under direct instructions from Secretary McNamara to inform the Shah that we would be prepared to begin the negotiations within a week’s time. I told General Eckhardt before the meeting started that he should carry out his instructions, but that we would have to inform the Shah that other elements of the American Government doubted our ability to hold the discussions that quickly. Both these points were conveyed to the Shah and it was evident that there was not a problem involved insofar as he was concerned because he himself will not be ready as quickly as the Secretary had hoped. It seems probable that a target date of about July 8 would be logical. If a Team arrives much before that date, it is likely to cool its heels waiting for the Iranians.

It will be recalled that the Department of Defense had strongly desired the preparation and submission to the Shah of a detailed memorandum of understanding which ostensibly would have been initialed by him. We had opposed this proposition and of course it did not take place. For what it is worth, it is my opinion, and I believe the opinion of General Eckhardt, that the Shah would not have been pleased had we followed that plan and that he would not in fact have initialed that paper or any other paper. He was not prepared, in my opinion, to negotiate while in the United States.

Tanks

In opening the subject of tanks, General Eckhardt informed the Shah that Secretary McNamara had looked very closely at the question of the desirability of furnishing the M–60 and/or the M–48A3. It was the viewpoint of the Secretary that, taking a variety of factors into account, it would be desirable to furnish M–60’s. The indicated price per unit with one year’s spares would be $220,000. This would be about $70,000 more than the indicated price for an M–48A3. On the other hand, the M–60 is a better piece of equipment. It could be maintained for a longer period of time and it would be better from a supply, maintenance, and operating viewpoint to concentrate on one tank instead of having a combination of M–60’s, M–48’s and M–47’s. In response, the Shah said he was pleased by this decision. He felt it was wise. He said he wanted a tank that was good for eight or ten years, and that the M–60 was best for this purpose. He, too, had been worried about the proliferation of models.

On the subject of the proposed M–41 light tank, General Eckhardt said that the United States Army had looked at this question very carefully and recommended that the Shah not take M–41’s. The General said that there would be a maintenance problem with the tank within several years and that its adoption would again create proliferation problems. He said that the Army felt the Shah would be better advised to use the in-country M–47’s for the purpose he had in mind with respect to the M–41 and, if this recommendation were adopted, there would be a net indicated savings for Iran of about $12 million. The Shah again said that this seemed wise to him and he believed that it was the proper course for Iran to pursue.

The Shah then raised the subject of armored cars. In reply he was informed that the United States Army recommended he not enter this field. We do not use armored cars in our own Army. There are none produced for United States Government account although both Cadillac and Chrysler produce this equipment for export purposes. It was pointed out that their products are competitive with the products produced by other countries but again to the extent that this type of equipment was needed the requirement could be covered by a judicious use of M–47’s. The Shah said he was inclined to accept the recommendation in this respect, but he would wish to review this subject in the course of the Tehran discussions.

Other Equipment

The Shah raised the question of certain other equipment that he had inquired about at the meeting on June 8, such as machine guns, APC’s, and howitzers. He was informed these would be available and details would be provided in Tehran. Furthermore, it is quite possible that these would be supplied under MAP grant. He said he was grateful for this information, and nothing more was said about it.

Air Defense

The Shah asked what information was available in respect to the various elements of the air defense problem that had been discussed at the two earlier meetings in Washington. In reply, the Shah was asked what his reaction had been to his experience in flying the F–5A on the West Coast. The weary Shah brightened up at this point and for a few minutes we maneuvered an F–5A very high in the sky. He said it was a beautiful plane, highly maneuverable, very easy to fly, and with substantially better characteristics than he had understood. He said he was much impressed with the way the Northrop people had dealt with him when he was in their capable hands. He said as a Persian he had certain knowledge of the tactics of salesmanship. In this instance, he honestly felt that they had not overstressed or oversold their case and he greatly appreciated their approach to him. He then asked General Eckhardt if he had statistics available on the relative characteristics of the various Russian bombers. The General supplied this information with indications that the F–5A was quite capable of handling these bombers in a combat situation. The General went on to point out frankly that a MIG–21, which has quite high air defense characteristics, was in some respects clearly superior to an F–5A. On the other hand, its very short range would indicate that it could not effectively operate against an F–5A very deeply within the territory of Iran. The Shah appeared impressed by these points. He said that he now felt that he should not plan on utilizing the F–4C. He said the F–4C is a superior airplane; on the other hand, it would be terribly expensive in money terms and again would involve a proliferation of aircraft models and would be hard for his people to handle. He therefore was coming to the conclusion that he ought to plan in the years ahead on replacing his F–86 squadrons with F–5A’s. He said that he was hopeful that the armament people would be successful in their efforts to produce a better missile for the F–5A, but this of course would remain to be seen. General Eckhardt said that we noted with satisfaction the Shah’s feelings about the F–5A and agreed there would be a very substantial savings in terms of money and men, if he would continue with this fine plane. The Shah said this was his point of view at this moment.

He went on to say that the modernization program for all his forces would have to go on. He very much doubted, however, that they would be able to make very much in the way of gains relative to the great strength of their potential enemies from the north. They would of course do their best. On the other hand, he was convinced they had a growing threat from the west. He was confident that Iran, within its resources, could make a positive improvement in its posture in this respect. He was determined to do this. He said that Iran and the United States had made very substantial investments in the Dezful and Hamadan airfields. These are very fine facilities which are of very great importance in a military sense both to Iran and to the United States. At this moment, however, they literally have no defense. It would be a very great pity if nothing were done about this problem and at some future time these facilities were knocked out. He said it was important to establish Hawk facilities at these airfields, and he wished now to obtain American views on the availability of such equipment. In reply he was told that we did have a Hawk battalion which could be made available and that we would be prepared to discuss this in greater detail in the course of the negotiations in Tehran. It was indicated that this particular battalion could be made available at about $21 million. The price of a battalion at a later date would probably be significantly higher. He said he would be interested in obtaining this battalion and that he would contemplate possibly splitting it with two batteries at each airfield. He then asked about the characteristics and potential availability of Nike Hercules. In reply he was told this of course was very good equipment. However, we had not made it available under MAP and it was very doubtful that we would. It is extremely expensive and very difficult to man in an effective sense. He seemed to accept this as a logical and negative reply. He asked if there might be some equipment that could be made available to provide at least a low-level air defense capability for his airfields in the interim before the Hawks were in place, recognizing that this might be three years. He was told there were some twin M–40 “Dusters” available and that they might run about $50,000 a unit. He asked what the status was of the in-country 20 and 40 mms. which have been phased out of the Iranian force structure. The General replied that they were in very bad shape, but that it might be possible to find enough of them in usable condition to provide at least a modicum of defense and training equipment for these two airfields. If this were done, the General felt they probably should be turned over to the Iranian Air Force. The Shah thought this was a good idea and requested the General to look into it when he returned to Tehran and to discuss it with him at a later date. This was agreed.

The Shah said that at some time in the future he felt that Iran would need a second Hawk battalion and he wondered if it might not be possible and feasible to train simultaneously the manpower that would be necessary to handle two battalions instead of just one. He said he was thinking in part about the future need for some air defense about Bandar Abbas. He estimated that the Bandar Abbas port and navy “base” would be completed in about 1968. He also said that he very much hoped that the airfield at Bandar Abbas would be operational before that date. He said he had instructed the Plan Organization, which has the necessary funds, to proceed with this as fast it feasible. In this respect he recalled that he had mentioned the possibilities of pre-positioning American equipment in this area. General Eckhardt told him that there would of course be considerable strain in the training process in regard to the Hawks and this was something that would have to be discussed at a later date in greater detail. The Shah said he understood this and would look forward to further discussion in Tehran.

As a final comment in respect to aviation, the Shah said that he was pleased about the decision in respect to the four C–130’s and that he hoped that in the course of negotiations in Tehran decisions could be arrived at in respect to the additional four that would be required to complete their air transport force. He would ultimately wish to replace all his C–47’s with twelve C–130’s.

Navy

The Shah inquired if we had been able to accumulate information he had requested in respect to the possible purchase of a DD or a DE. He was told that we felt we could ultimately make available either a DD or a DE in a completely rehabilitated condition. The destroyer probably would be in excess of $3 million and the destroyer escort would be in the vicinity of $2 million. In each case Congressional authorization would be required for the transfer and it would be unlikely that either could be made available short of two or three years. The Shah said that this was all right because it would take some time for his people to be ready to utilize units like this effectively. He was also told it might be possible to make available a new frigate. This would not require Congressional authorization but the price would be in excess of $4 million. While the Shah did not appear to be much interested in the frigate, he did indicate a desire to discuss this matter further in the coming discussions in Tehran.

In sum, the Shah was informed that (1) we were prepared to sell him 176 M–60’s and four C–130’s; (2) MAP grant assistance would be continued in FY 67–69; (3) that we were prepared to begin negotiations in Tehran in one week, although we had doubts about the feasibility of such an early date; (4) these negotiations would cover the modernization requirements of the Iranian forces in the FY 65–69 period; (5) that a Hawk battalion would be available at about $21 million; (6) that his other requirements, such as machine guns, howitzers, and APC’s, would be provided. He was manifestly pleased.

1. Source: Department of State, NEA/IRN Files: Lot 69 D 178, Iran, 19-4-a, Five-Year Agreement, 1965–69. Secret. Drafted by Walsh.