Office of the Historian

87. Memorandum From Harold H. Saunders of the National Security Council Staff to Robert W. Komer of the National Security Council Staff1

Washington, June 8, 1965.

RWK:

FYI. Here’s a cable2 approving the second tranche of Iran’s five-year military purchase. Chief issues decided this way:

1.
Shah asked us to lift the $200 million ceiling to $230m. to raise war reserve ammo from 30 to 60 days. Our military go along with this (Greece, Turkey, 90 days; Korea, Thailand, China, small arms 90, other 60; Pakistan, India 60). However, decision recommended in this cable is to go ahead with the ammo but not raise the ceiling yet. Since this $90 million brings two-year total to about $140 million, we’ll be pressing the ceiling well before five years. Embassy says greatly improved revenue prospects warrant slight increase in ceiling. But leaving it intact now maximizes our leverage later.
2.
Iranians want to go back up to 172,000 man force level. DOD goes along, and even AID isn’t ready to fight over this.
3.
Stall on advanced aircraft, Hawk and Sheridan (which is still in R & D anyway). The planes will be the toughest to handle, and there’s some thought of putting the Bullpup missile and F–5 together but not this year.

AID feels the economic review this spring was a major step forward. Iranians worked from sound economic projections for the first time. The Shah is still working on the principle of putting hardware above everything else, but AID feels this is the resurrection of a useful economic dialogue.

So while the Shah is probably pushing reasonable economic ceilings, we may make progress by going along on the war reserve and force level in order to drag our feet on less reasonable requests. Any objection to the attached?

HHS 3
  1. Source: Johnson Library, National Security File, Robert W. Komer Files, Iran, 1965–March 1966. Confidential.↩
  2. Not found attached; see Document 88.↩
  3. Printed from a copy that bears these typed initials.↩