Foreign Relations of the United States, 1955–1957, Near East Region; Iran; Iraq, Volume XII

344. Memorandum From the Director of the International Cooperation Administration (Hollister) to the Under Secretary of State (Hoover)¹

Washington, January 23, 1956.

SUBJECT

• Policy Decision on Iran Military Support Program

The purpose of this memorandum is to secure a basic high-level consideration of, and specific decision concerning the nature and scope of, a military support build-up in Iran before actually undertaking a program, the scope and ramifications of which, while obscure, are obviously far-reaching.

As I understand the situation, it is about this:

Although there are JCS approved force bases and goals² and a general statement of military objectives in Iran,³ these do not provide specific guidance as to the nature of the military program that the U.S. should pursue, and there seems to be no agreed mission for Iranian troops in any regional defense plan. U.S. training teams are now at work in Iran attempting to test the susceptibility of the Iranian troops to Western (Army) training, so that a realistic evaluation can be made of Iran’s proper place in a Middle East defense arrangement, but decisions based on the training team experience are not expected before 1957. NSC has indicated an emphasis on an internal security mission for the Iranian army and, also, suggested progress toward building defensive capabilities.

The country team has proposed a major relocation program which would move the major army strength to defensive positions in the south, and has proposed as a first step that specific projects be undertaken in FY 56, including a jet air base, barracks, roads, and fortified positions in the mountain passes.⁴ The Department of Defense position is that given a general objective of building increased defensive strength, these are the types of projects which are financeable and which will contribute to that goal.

The Department of Defense has not yet asked formal program approval for those projects, having found it necessary to go back to the MAAG for additional information, but has requested approval for $950,000 and one million rials under Direct Forces Support and Defense Support, respectively, to finance engineering contracts so construction can begin.

It seems to me that the above facts raise a major issue. We seem to be in the position of starting a large construction and relocation program without specific determination that this is the program which the U.S. finds in our interest. This is a major undertaking with numerous implications and certainly deserves careful consideration. If we are going to go ahead with this program, we ought to so decide, as a matter of major policy rather than in the course of a routine program approval. For that reason, I am calling this directly to your attention. It is getting late in the year; if much progress is to be made, we will have to start quickly on the procurement of commodities designed to generate the local currency required. Aside from the general principle, a few of the considerations which make me reluctant to approve the beginning of such a program without a specific decision are:

A. Economic implications.

While the construction requirements for this program have not been defined, the MAAG proposal indicates that there is an insufficiency of both skills and materials in Iran; both must be imported. Even with some imports, there is obviously added strain on the local resources, competition for building materials, increased wages and consequent demand for consumer goods, creation of new industries to provide materials, etc. It is, of course, difficult to appraise the total economic implications in the absence of knowledge concerning an acceptable plan to be effective over the course of years; but it is obvious that the ramifications are significant if such construction is undertaken and continued.⁵

B. Implications for U.S. aid program.

Equally insusceptible of appraisal are the implications for U.S. aid. The field proposal for FY 56 is about $7.5 million Direct Forces Support and $17.5 million Defense Support for local currency to be obtained by the import and sale of commodities. It is quite clear, however, that this will not complete the projects. The field proposal for FY 57 is another $14 million Direct Forces Support and $25 million Defense Support, part of which would be to complete (or enlarge) the projects to be begun with FY 56 funds. Neither these nor other “budgetary support” proposals take into consideration the economic implications in Iran, referred to above, of such expanded activity. While I am not aware that decision has been reached to accept or approve the so-called McClure plan, of which these projects appear to be part, the total cost of that plan has been estimated in the hundreds of millions.

C. Effect on attainment of other U.S. objectives in Iran.

It is my understanding that the Iranian forces are still far from properly equipped physically or from the standpoint of morale to become completely effective on internal security, and while the proposed projects together with MDAP deliveries may have some effect, there is still the problem of pay raises and improved allowances and subsistence. Even without further improvements in this regard, the budgetary deficit is now running at about $80 million per year, and it does not appear possible for us to cease all support for the regular government activities. This support has been running about $5 million per month. I understand that the Mission is about to propose a firm program, identified principally with such items as internal security, of about $4 million per month. FY 56 aid presently programmed for Iran is reported to meet the deficit only through this month, and you are well aware of the pressures building up to continue this type assistance. Our technical cooperation program is large and it requires substantial commodity assistance for the generation of local currency, in addition to the TC appropriation. It is clear that we have not made sufficient provision for all of these programs in our proposed request to the Congress for FY 57 funds. ($45 million Defense Support, $14 million Direct Forces Support, $8 million TC.)

It seems to me that we are heading toward the very kind of situation in Iran which we should seek to avoid and which the Cabinet and NSC looks to us to avoid, except on the basis of conscious decision in the U.S. interest. There are impressive reasons for a careful evaluation, completely aside from considerations strictly military (ability of Iranian forces to become effective; defensibility of the area; internal security versus national or regional defense) and political (the adverse reaction of the populace to the “Zagros line” movement, which might be considerable judging from the repercussions of the December 5th Time article which resulted in a government denial, the repression of Iranian newspaper speculation, efforts to prevent public discussion, and the Prime Minister’s request that we seek to keep such stories out of American publications). Finally, there is our own ability within the resources made available to us by the Congress. I realize full well that there are also compelling reasons for undertaking programs which will facilitate progress, build strength, and demonstrate our association with this country which has taken an historic step in aligning itself with the West. I therefore recommend:

1. Temporary deferment of program approval for the engineering contracts.

2. Careful further appraisal by JCS of more detailed military objectives and plans.

3. Priority consideration of the above questions by the Committee on Certain U.S. Aid Programs under Mr. Prochnow⁶ since this is a case where findings can have an almost immediate effect on our operations.

4. Specific decision on a program on which we are to proceed, including FY 56 program and FY 57 program to be assumed in the forthcoming Congressional presentation.

John B. Hollister

1. Source: Department of State, Central Files, 788.5–MSP/1–2356. Secret. Also addressed to Assistant Secretary of Defense for International Security Affairs Gordon Gray.

2. Apparent reference to a memorandum from the JCS to the Secretary of Defense, January 4, 1956, “Modification of MDA Programming Guidance for FY 1957,” and enclosure A, “Revised MDAP Force Objectives.” The statement of objectives for Iran reads as follows:

   “1. MDAP Objectives

   “Consistent with Iran’s ability to utilize it efficiently to continue to provide such military assistance as is required to maintain internal security and to provide some resistance to external aggression. Further, if Iran becomes a member of a regional multilateral defense organization satisfactory to the United States, the United States should consider assisting Iran in equipping forces required by the plans of such an organization.” (National Archives and Records Administration, JCS Records, CCS 092 (8–22–46)(2))

3. Apparent reference to a memorandum from the JCS to the Secretary of Defense, February 25, 1955, “Objectives for the Department of Defense Internal Security Plan,” and appendix A, “Major Military Objectives for the Period Through June 30, 1959 for Major Strategic Geographic Areas.” The statement of objectives for Iran reads as follows:

   • “1. Insure availability to United States and its Allies of the military resources, strategic positions and passage rights of Iran as may be required, and the denial of the area to the Soviet Bloc.
   • “2. Assist in development of Iranian armed forces capable of maintaining internal security and having defensive delaying capabilities which would make a useful contribution to Middle East defense.
   • “3. Promote Iranian participation in Middle East defense arrangements.
   • “4. Be prepared to provide military support to any non-Communist Iranian government or elements, in the event of either an attempted or an actual Communist seizure of power in Iran.” (Ibid., CCS 381 U.S. (1–31–50))

4. Reference is to telegram 1748 from Tehran; see footnote 6, Document 305.
5. A note in an unidentified hand at this point in the margin of the source text reads as follows: “There is currently unemployment which will hold wages steady. Cement mill at Shiraz may cut [?] imports.”
6. See Document 358.