Foreign Relations of the United States, 1969–1976, Volume XXVII, Iran; Iraq, 1973–1976

26. Memorandum of Conversation¹

Washington, July 24, 1973, 4 p.m.

SUBJECT

• Meeting between the Shah of Iran and the Secretary of Defense

PARTICIPANTS

• Iranian Side
• The Shah
• Ambassador Ardeshir Zahedi
• United States Side
• DoD
• Secretary of Defense—James R. Schlesinger
• Deputy Secretary of Defense—William P. Clements
• Chairman, Joint Chiefs of Staff—Admiral Thomas H. Moorer
• Assistant Secretary of Defense (ISA)—Robert C. Hill
• Chief, ARMISH/MAAG Iran, Major General Brett, USAF
• State
• Ambassador Richard Helms, U.S. Ambassador to Iran

Summary

The meeting, lasting slightly over one hour, was conducted in an informal and cordial atmosphere with the Shah leading the discussion which covered a wide range of subjects. The Shah opened the discussion by stating his pleasure at having a U.S. Air Force officer assigned as MAAG Chief since his current emphasis is on air power, with Navy modernization also to be given special consideration. He expressed Iran’s continued willingness to sell oil to the U.S. but stated that it must be at comparable prices to what Iran pays for U.S. commodities before U.S. inflation. In this context, he said that the settlement between Iran and the oil companies was a “brilliant breakthrough” and good for twenty years.

The Shah discussed the situations to his West and to his East. The situation in the West is unchanged and still threatening but the coup in Afghanistan will force him to provide a deterrent force in that area as well. He also expressed his concern for the viability of Saudi Arabia since, if Afghanistan could fall, so could Saudi Arabia. And if it did, Saudi Arabia would become extremist like Libya. He discussed at some length the encroachment of the Russians throughout the Horn of Africa and within South Yemen, as well as the distinct possibility of Russian influence in Afghanistan which would allow the Soviets to achieve a base in the Indian Ocean. The implication of his statement seemed to be that this would be achieved at the expense of Pakistan.

In consideration of these events, the Shah firmly believes he must have sufficient air power (F–14’s, F–15’s and possibly A–10’s) to deter his enemies (“Russian puppets”) and, if necessary, strike them on their own territory. He also believes Iran must go into the Indian Ocean with a capable Navy, if it is to be a viable power within the region and assume the proper responsibilities of a country having Iran’s capabilities.

The meeting ended on the note that further discussions of a similar nature would take place at the meeting on Thursday, 26 July.

Discussion

The meeting began slightly after 1600 and lasted for approximately one hour. It was conducted in an informal and friendly manner with the majority of the comments being made by the Shah, either at his own initiative or in response to questions by Secretary Schlesinger or Deputy Secretary Clements.

After the initial greetings, during which General Brett was introduced as the new Chief ARMISH/MAAG, the Shah stated his pleasure at having an Air Force officer as the new Chief. His reason for this is that the current emphasis in Iran is on the Air Force, although the Navy will also receive increased consideration. The Navy must receive attention in the immediate future, as there is a need for Iran to go into the Indian Ocean.

The Shah then shifted to the question of oil. He emphasized Iran can not sit on it, but must move it into the world’s markets. However, Iran expects to trade oil for U.S. commodities at comparable prices to what Iran pays for those commodities before the impact of U.S. inflation. He emphasized that inflation was a U.S. problem, not Iran’s, and if the U.S. wanted Iranian oil, it must be prepared to pay the price. (Note: The implication was a dollar price and not a political one.) The Shah added that Iran has come to terms with the oil companies, and believes this issue is settled for the next twenty years. He emphasized that he believed this to be a “brilliant breakthrough.”

Secretary Schlesinger then commented about the indications of developing stability to the West (of Iran), and requested the Shah’s views on the use of his Air Force and Navy in the future. The Shah responded that the Air Force was needed to “sweep from border to border.” Iran needed an Air Force with the striking capability to take care of local dangers, without causing a confrontation between the major powers. In this way Iran would have the best deterrent possible. The capability to destroy enemy equipment by air power prior to its commitment against Iran—which ground forces cannot do—allows Iran to “liquidate” the problems while the major powers are engaged in a dialogue over their hot lines. The Shah emphasized, at this point, that Iran would be wise and not misuse its military forces.

The Shah continued that there is a danger in the coalition of the Baathist Parties (of Iraq and Syria) since he was not sure that their power will be used against Israel. In fact, in the recent past the Syrians have used their military power against Jordan. Some other Arab countries talk of doing away with Jordan and forming a Palestinian state and such a state would have to adopt an extremist policy, one that would be ultra-nationalistic. If Jordan goes, there would not be much chance for Saudi Arabia to continue under its current moderate regime. If Afghanistan was ripe for a coup, Saudi Arabia is much riper and if this occurred, Saudi Arabia would also go the extremist route. Secretary Schlesinger then inquired if the Shah meant like Libya and the Shah responded that this was exactly what he meant.

The Shah then turned to his East, specifically addressing the coup in Afghanistan. He said that if it were just a change of monarchs, then we could expect more of the same. But it was not; Afghanistan is now a Republic, but not in the sense that the U.S. views a Republic. (Note: Inference being it is not democratic and leans toward Communism.) Moreover, President Daud is probably only in temporary control and he could readily go, with the country moving rapidly under control of the Soviets. Thus, it is a most significant event and could promote a move by the Soviets to go to the Indian Ocean. (Note: The implication was that the Soviets would support a move through Pakistan to the Indian Ocean.) The Soviets would then encircle Iran and at the same time encircle China.

Given this situation, the Shah said his Air Force must be strong enough to destroy the Iraqis and any other “Russian Puppet Regime” within the region. In addition, Iran must build up its Navy for Indian Ocean operations. He added that Iran was not being eccentric, since it had the money and the people. However, speed-ups (military increases) would be based on the world situation, since he desired to build his forces with emphasis on quality.

As an example, the Shah pointed out that in response to queries about the mix of F–14’s and F–15’s for his Air Force, his answer has been that he would use the F–14 for aerial supremacy and the F–15 for aerial superiority. He stated that in his letter of intent he had asked for 3 squadrons of F–14’s—9 aircraft per squadron with 3 replacement aircraft—but he actually preferred 2 squadrons plus 2 replacement aircraft. However, in view of the enormous air space he must cover, 3 squadrons of F–14’s appeared necessary. With respect to the F–15, he was interested in 4 squadrons. (Note: In his meeting with General Williamson on 9 July 1973,² the Shah talked of 3 squadrons of F–14’s and 3 squadrons of F–15’s for a total of 30 and 50 aircraft, respectively, with a possible mix of 2 squadrons of F–14’s and 4 of F–15’s.) He stated he needed the four squadrons of F–15’s in order to have the flexibility to switch from area to area. His air defense radar is overlapping and can handle aircraft throughout the country, but now, because of the Afghanistan coup, he must cover the East with fighter aircraft.

The Shah stated that he is looking at the A–10, since it would allow him to release the F–4E’s and even the F–5E’s for the air defense role for which they, particularly the late model F–4E’s, are best suited. The A–10 appears to be very well designed for the support of ground forces, and this would be an economical use of all of his air power. Moreover, he will soon have an aerial refueling capability (six new KC 707’s) and can also convert the 707’s in his commercial air fleet to aerial tankers and replace them through the purchase of new commercial airliners, either multi- or tri-jet types.

Secretary Schlesinger commented that in our judgment Iran should wait for the full development of the F–15, and an Iranian decision on the F–15 might be premature at this time. The Shah responded that he agreed, but if the F–14 was ready, Iran would take it. But it would, however, be a pity to use the F–14 for other than the improved Sparrow or Phoenix role. He believed it could be equipped with a 20mm gun or even a 30mm gun. (Note: The implication was that the F–14 could be used in the air superiority role intended for the F–15 in the interim period before the F–15 was acquired.) Deputy Secretary Clements then pointed out that the new engine—“B engine”—for the F–15 has the same core as the new F–14 engine and that this engine is moving ahead. However, it is a year to 18 months away. The “B engine” could fit into the F–14, with the current model F–14’s being retrofitted to this engine, if desired. The Shah responded that this did not appear to be a problem as he was not sure that Iran would be ready for the F–14 before that time.

The Shah then directed his comments to his Navy stating his desire to equip his ships with the Harpoon, Standard and Sea Sparrow type missiles; and perhaps in the future, if developed, a laser-guided weapon. He added he believed that in order to get into the Indian Ocean, he needed ships of the Spruance class destroyer and asked Admiral Moorer for his views. Admiral Moorer responded that he agreed and that the Spruance class destroyers possessed good growth potential and were equipped with the new gas turbine engine. The Shah commented that we must study the Indian Ocean together. He also questioned if Iran could go into the area without submarines. Admiral Moorer replied that the value of submarines in the area would be in the anti-submarine role. He added, however, that he believed the first steps should be the acquisition of surface ships and maritime patrol aircraft, with submarines being out at the end of the line. He also remarked that the Persian Gulf was not suitable for high-performance submarines. The Shah commented on the effective use of helicopters for mining, and pointed out that the straits leading into the Gulf could be closed in three hours with helicopters. Admiral Moorer agreed that this was possible remarking upon our experience with mining in South East Asia.

The Shah then turned the discussion to the subject of Iran’s military capabilities, pointing out that he had told both his friends and his enemies of the direction in which Iran is moving. In terms of population, Iran in ten years time will be the equal of today’s population of France, the United Kingdom and Germany. He then gave some impressive figures on Iran’s current production for oil, steel, copper and aluminum and pointed out that in five years time, Iran hoped to have atomic power plants, if the USG was prepared to sell them. Thus, as an industrial nation, Iran possessed a natural export market since it has everything in-country needed to be productive; gas, steel, copper, and an effective working force. Iran was not plagued by strikes or other labor problems because of profit sharing by its workers. Therefore, it would be difficult for any country to compete with Iran, as by working and producing Iran can best the other regional countries. Because of Iran’s capabilities, it has to assume its responsibilities in the world, in much the same manner as has been done by the United States. He added Iran realizes it cannot have a military machine overnight. For example, it will take four years to acquire a Spruance class destroyer, but five years from now Iran will be different and so it can and must do these things.

Secretary Schlesinger then asked the Shah how he viewed the pressures from the Soviet Union. The Shah asked whether the Secretary meant by proxy, or by direct pressure. Secretary Schlesinger stated he was interested in both. The Shah responded that the indirect pressure through the Iraqis is unchanged. With regard to the direct pressure from the USSR, he has told the Soviets that Iran will fight to the end and will never surrender with the country intact, but will completely destroy it. Iran’s deterrent is their determination, which has been openly declared. The Shah said he responded to the President’s greeting today (A.M., 24 July 1973) by stating that Iran will fight and die for freedom.³ Moreover, the Soviets cannot accomplish their aim through subversion, as the workers are part of the government and country through profit sharing. Sabotage could be used but it would be ineffective, as it could be confined to occasional bombing resulting in little damage. To our great sorrow they can kill some people, such as was done recently to an American. (The recent murder of Lt Colonel Hawkins, USA assigned to the MAAG.)⁴ However, these people know they can expect from the government similar treatment, and therefore, their overall efforts are splintered, small and ineffective.

Deputy Secretary Clements asked the Shah if there was a different approach by the Iraqis. The Shah responded that the Iraqis had asked why Iran was arming and Iran had responded “for the same reason that Iraq was engaged in an arms build-up.” Deputy Secretary Clements then asked if the Shah was comfortable with the gas arrangement (gas treaty with Russia). The Shah responded that it was worth two divisions, as it generates money and does not swallow it up as do divisions.

Deputy Secretary Clements asked for the Shah’s comments on the South Yemen (YAR) situation. The Shah responded that North Yemen had asked for help from Iran. Iran was concerned about the Saudis’ role, since in the past, the Saudis could have helped but did not. Iran believes that maybe their quarrels were such that the Saudis could not or would not help. Iran felt that as a country North Yemen must remain free from the Communists. North Yemen has nothing, while Aden (South Yemen–PDRY) has a great deal. Even China is behind us, as they have moved out of the area. However, the Russians have moved in and taken over and are even backing the Dhofar rebellion. North Yemen must be helped, certainly with money. Like Jordan, North Yemen must not be allowed to fall. Here again is a Saudi inconsistency, as they are putting money into Arafat’s hands to bring about a Palestinian state in Jordan, which will cause serious problems for all stable countries in the region.

Deputy Secretary Clements then asked the Shah if he believed that Aden (South Yemen) threatened Oman. The Shah replied in the affirmative remarking—“why have the Russians furnished them with MIG–21’s and other modern military equipment”? The Shah added that one must not forget the entire Russian policy dating back to Alexander the Great—the desire for warm water ports. During World War II, Stalin asked Churchill for a port in the Dardanelles, as well as elsewhere; Churchill always refused. Since then the Russians have been gradually creeping into the Mediterranean, and wherever they can. There have been periods when the Russians have had more ships in the Mediterranean than the USG. They moved into Egypt, almost got the Suez, and are now in Aden, Somalia (Djibouti) and the island of Socotra. We can not shut our eyes to the in-roads the Russians have made. By beefing up their efforts in Somalia and Socotra, the Russians clearly threaten Ethiopia, and once Haile Selassie is gone, Ethiopia will be in grave danger, as his son is ineffective. In consideration of such a happening in Iran, Iran has changed its constitution to allow the Empress to succeed the Shah, if necessary. This has not been done in Ethiopia; Haile Selassie has made no provisions for his passing.

The Shah stated that as a result of these events and the overall situation, Iran must take a more and more important role in the Indian Ocean. He has openly established closer relations with South Africa, without any protests from Black Africa.

The Shah then commented that he could go on and on, but that time was running out. He informed Secretary Schlesinger that during their meeting on Thursday (26 July 1973) he would be most happy to answer any further questions. The meeting was terminated on this note.

1. Source: National Archives, RG 59, Central Files 1970–73, POL 7 IRAN. Secret; Sensitive; Exdis. Prepared by Brett and approved by Hill. The meeting was held at Blair House. In his briefing memorandum to Schlesinger, July 24, Hill reminded the Secretary: “Following President Nixon’s visit in Tehran in May 1972, the Shah told our MAAG chief that he had received a major understanding from the President to the effect that Iran could get all available sophisticated weapons short of atomic bombs.” (Washington National Records Center, OASD Files: FRC 330–78–001, Box 69, Iran 091.112, 1973)
2. On July 9, outgoing ARMISH/MAAG Chief Major General Williamson met with the Shah at his summer cottage on the Caspian. The memorandum of conversation was transmitted in telegram 84185 from ARMISH/MAAG Tehran to the JCS and the Secretary of Defense on July 10. (Ibid.)
3. The President’s welcoming remarks on the morning of July 24 and the Shah’s response are printed in Public Papers: Nixon, 1973, pp. 660–662.
4. See Document 18.