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81. Memorandum From Acting Director of Central Intelligence Walters to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Message from [less than 1 line not declassified] Recounting His Audience with the Shah of Iran

[less than 1 line not declassified] has sent me the following message for you concerning his audience with the Shah of Iran on 5 October 1974:

“My audience with the Shah was devoted to a general political roundup with flashes of his toughness on oil, impatience with the United States’ permissive society, and drive to strengthen Iran in order to play a major role in the Mid East. [1½ lines not declassified]

“The Shah is very annoyed at the press campaign pointing to oil prices as the cause of inflation. He cited his figures that oil prices are only .4 per cent of U.S. and 1.5 per cent of world inflation; said rises were decided by ‘our’ oil companies; and attacked high food prices. He said uranium, energy and food should be handled by government level negotiations, not free markets. He was not mollified by my explanation that the main public confrontation with inflation is at the food counter and gas pump, which creates major political pressures whatever the fine distinctions of the economic experts. He was moved by the prospect of recession in developed countries (Italy, Japan, Denmark) opening the possibility of the revival of radicalism and exploitation by Soviet and Chinese Communists only to the extent of indicating he will probably extend funds to Italy if there is some hope they will not go to a Communist government. He noted he is already helping LDC’s.

“Regarding the Mid East, the Shah will prosecute aid to the Kurds to weaken Iraqi radicals, will send a full brigade to Oman, supported U.S. plans for Diego Garcia during his recent trip to South and Southeast Asia, etc., still concerned at possible Soviet pressure through Afghanistan and Pakistan towards Indian Ocean outlet, and solid on the [Page 248]necessity that the Soviets not have a veto on oil movements from the Persian Gulf. He has no objections but also no hope in recent Egyptian probes toward Saddam Tikriti in Iraq. He has the same attitude towards letting Egypt and Saudis try to buy off South Yemen. He also has no objection to additional Arab token forces in Oman, but has little faith in efficacy of this (will increase Iranians to brigade) or Saudi thoughts regarding taking over a corridor between Oman and Aden. His longer term suspicion is whether Egyptians will try to overthrow Saudi regime, take control of its resources and thus seek to reestablish Egyptian leadership of Arab World (implicit in this discussion was idea that Iran would not permit Gulf oil to be put in such hazard). He believes the Saudi regime is very weak and not going anywhere despite its resources. He will visit Cairo in January.

“[2½ lines not declassified] The Shah agreed that the hard rock character and narrow self-interest of the Soviet Party bureaucracy is only slightly affected by somewhat more modern technical and managerial class. He also agreed about Soviet imperial pretensions, especially in Mid East, and had praise for you and the U.S. alert last October as necessary to contain them. He will visit Moscow in November at their request. He accepted the unlikelihood of a Sino-Soviet reconciliation and the likelihood that the China succession to Mao and Chou will be collegial and more internally than externally oriented. He accepted the possible wild card that severe Western economic crisis resulting in revival of radicalism could rekindle revolutionary proselytizing on a substantial scale by both Soviets and Chinese.

“Regarding the U.S., he is thoroughly irritated at ‘permissive and irresponsible’ press and political debate and sharply critical of the exposure of CIA and other national secrets. He stated he would speak as he wished, but wondered if others would refuse frank exchanges if they taped and leaked so frequently. (My efforts to reassure him somewhat met no favor.) He is still anxious to profit from U.S. expertise in meeting Iranian needs for training manpower to handle technology by importing and looking ahead to producing. He sees this for approximately five years, following which, my impression is, he looks forward to an end of dependence on the U.S. in these field and playing a major role on his own.

“[1 paragraph (18 lines) not declassified]

In summary, thanks to the Shah himself and oil resources, Iran is well on its way to playing a leading role in the Mid East with a modernized elite, large economic resources and strong forces. Succession is always a question in an authoritarian regime, even a benevolent one, but each year reinforces the social and political momentum in the direction the Shah has set. I believe the U.S. can keep close to and benefit from this process and even influence Iran toward a positive regional [Page 249]and world role rather than a bid for area hegemony or other adventurism.”

Vernon A. Walters
Lieutenant General, USA
  1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL–152, Iran, Chronological File, 6 October–30 December 1974. Secret; [handling restriction not declassified]. The memorandum is also included in a packet of briefing materials for Kissinger’s November 1–3 trip to Iran. (Ibid., Box CL–153, Iran Trips, 1–3 November 1974)