31. Memorandum for the Record1 2

SUBJECT:

  • Meeting with The Shah of Iran
1.
The Shah and the undersigned had breakfast in the upstairs study of Blair House on 22 October. The meeting lasted from 8:1O to 10:00 A.M.
2.
At various times during this session, the undersigned briefed the Shah on subjects in which he expressed an interest: Developments in Sino-Soviet relations over the past year, the Soyuz 6–7–8 manned space mission (briefing memorandum attached), developments in Latin America, and Soviet subversive activities in the Middle East and Western Europe.
3.

The undersigned told the Shah that he was disturbed over the lack of substantive intelligence briefing with which we had provided him over the past year and that steps would be promptly taken to provide [less than 1 line not declassified] material on military developments in the Soviet Union and Communist China.

([less than 1 line not declassified]: Let us arrange a system whereby you will be provided from [less than 1 line not declassified] with periodic reports on these and other subjects of interest.)

The undersigned took occasion to thank the Shah for the approval he gave permitting construction of [less than 1 line not declassified] on the Persian Gulf. The Shah nodded his head, expressed his interest in the project, then went on to say that as long as we are not interested in having U.S. A. shining in neon lights on our installations, he is prepared to have us locate in Iran almost any kind of technical collection equipment we desire. [1 line not declassified]

4.
In connection with the Persian Gulf and Saudi Arabia, the Shah stated that King Faysal had assured him in Rabat that if the Shah satisfactorily settled the Bahrein problem, he (Faysal) would make a public statement announcing that Saudi Arabia would make common cause with Iran in the Gulf area. The Shah added rather mournfully that no one has tried harder than he to get a satisfactory arrangement with Bahrein.
5.
In discussing Iraq and the disposition of a majority of Iraqi forces toward Iran, the Shah commented that he was certain Soviet intelligence in Iran was spying on behalf of Iraq. He is obviously concerned about Soviet build-up of Iraqi forces and wondered aloud whether they would be encouraged to move against him. After some discussion of this, we agreed that this was an unlikely eventuality within the immediate future.
6.
Commenting on his current visit here, the Shah stated, “Relations between our two countries have never been better”. He feels that he and the President are agreed in their assessment of affairs in the Middle East, and he believes that the President intends to help him build up his air force and economy to permit Iran to be a stable force in an unstable Middle East. The Shah pointed out that he must have strong air power to maintain himself against irresponsible leaders in the countries around him. He recognizes that due to the mountainous terrain of Iran, it would be most difficult for land armies to mount an invasion of his country, but he insists he needs high performance aircraft and adequate naval boats to maintain his position, particularly in the Persian Gulf area. He added that the United States can be assured he has no designs on a single square inch of any other country’s territory and that he is interested only in preventing adventureism on the part of his neighbors, particularly the Arab states. He pointed out that he must develop funds to purchase military and developmental equipment from the United States, this being only possible either through selling more oil via the Consortium or by being successful in getting the United States to give Iran an oil import quota. In exchange for such a quota, he is prepared to assure the United States that he will spend every cent of the money earned purchasing American equipment directly from the United States, thus contributing to American balance of payments, perhaps to the extent of $400,000,000 a year. (It was not clear to me how he arrived at this figure and whether or not it was a one-time projection or a continuing one.)
7.
The Shah spent a few minutes discussing agricultural development in his country. He described the system he has devised whereby the small farmers are being encouraged to contribute their land to a larger holding unit in exchange for shares in the earnings of this new entity. These larger groupings in turn will permit the use of modern agricultural machinery and the development of advance agricultural methods. The Shah was obviously pleased with the way his new scheme is working, and in answer to my question, he described how his personal study of communal farming systems in countries like [Page 3]Israel and the Soviet Union had led him to propose a different, indigenous plan for Iran. He commented that the Yugoslavs were ahead of the United States in their display of interest in introducing modern agricultural methods to his country. In this connection, he described what the Yugoslavs refer to as “vertical agriculture”. At another point he said that John Deere and Company are being encouraged to build a farm equipment factory in Iran.
8.
Looking to the future, the Shah proposed that the United States “augment” its intelligence collection activities in the Middle East-Indian Ocean area. He underlined that Iran has no external intelligence service which can do this job, pointing out that it takes a long time to develop an adequate foreign intelligence system. [text not declassified]
9.
The meeting was, as usual, frank and cordial. The undersigned has never seen the Shah more self-assured or more confident. in the prosperous future of his country.
Richard Helms
Director
  1. Source: Central Intelligence Agency, 80 B 01285 A, Box 11, Folder 9, DCI (Helms), Memo for the Record, 01 January 1965–31 December 1972. Secret. The meeting took place at Blair House. The briefing memorandum was not attached.
  2. Director of Central Intelligence Richard Helms met with the Shah for a wide-ranging discussion of Sino-Soviet relations, regional developments, and U.S. intelligence installations in Iran.