Foreign Relations of the United States, 1961–1963, Volume XVII, Near East, 1961–1962

209. Memorandum From the Department of State Executive Secretary (Battle) to the President’s Special Assistant for National Security Affairs (Bundy)⁰

Washington, March 8, 1962.

SUBJECT

• State Visit of Shah of Iran—Military Assistance to Iran

Recent indications that the Shah of Iran is depressed and resentful over allegedly inadequate United States military assistance and over the alleged lack of American appreciation for his position and his accomplishments raise the possibility that the Shah may be considering abdication. His abdication would result in political chaos in Iran which could only benefit the Soviet Union in the long run. He has indicated that he wishes to visit the United States in the Spring rather than in the Autumn, when his visit was originally planned. In the enclosed letter (Enclosure 1)¹ to Assistant Secretary Talbot, Ambassador Holmes suggests that the time of the Shah’s visit be set forward if possible. We recommend that the visit be rescheduled for some time in the next few months, preferably in April. If you approve, would you notify me so that we can send the telegram (Enclosure 2)² to Tehran.

The interagency Military Planning Review Group had recommended to the NSC that an approach be made to the Shah that the Iranian armed forces be reduced by 25%, and that the Ambassador be authorized to inform the Shah that the United States planned to provide Iran in the period ending June 30, 1967, with certain items of military equipment, part of a total MAP multi-year program of about $300 million. Our Ambassador in Tehran has recommended strongly that any approach to the Shah to obtain a manpower reduction be accompanied by permission to inform the Shah of modernization to be contained in a much larger multi-year MAP program, to total about $424 million (Enclosure 3).³AID, acting in accordance with NSC Action Paper #2447,⁴ has coordinated an approved inter-agency recommendation to the NSC to the effect that the Shah be approached to obtain the reduction and that the modernization “package” to be offered at the time be based on a multi-year assistance program totalling $330 million (Enclosure 4).⁵

The principal cause of the Shah’s resentment against the United States lies in the quantity and quality of United States military assistance to Iran in terms of cash and hardware. The decision of the NSC as to the future multi-year program is therefore of central importance to the Shah’s attitude toward the United States and toward his duty to continue as the monarch of his country. Ambassador Holmes has objected strongly to the Steering Group recommendations (Enclosure 5),⁶ and argues that his much higher multi-year level is the minimum which can be counted on to keep the Shah in a cooperative mood and to effect the manpower reduction, which would have important and beneficial results in the internal political sphere and in the future of Iran’s economic development program.

The inter-agency recommendation to the NSC (Enclosure 4) sets up a multi-year military program lying between the Ambassador’s proposal and that of the Steering Group. We feel that the recommendation for an approach to the Shah based on the $330 million program should be accepted. Neither the military criteria for assistance to Iran nor the availability of military aid funds would justify a larger program. Moreover, a significantly larger military program would in our view unbalance the relationship between military and economic development expenses that is in Iran’s best interests at the present stage. However, this approach cannot be expected to remove the Shah’s present doubts as to the attitude of the United States toward him and the armed forces, nor will it result in more than the Shah’s reluctantly agreeing to a manpower reduction. For these reasons we recommend that the Shah be invited to make an early visit to Washington where full discussion might have the result of improving his state of mind.

The jointly agreed recommendation proposes that the Ambassador present our approach to the Shah as quickly as possible, so that he would have absorbed its meaning before his visit to the United States. This would be preferable to either (a) presenting such an approach at the time of the Shah’s visit, or (b) postponing its presentation until after his visit.⁷

Melvin L. Manfull⁸

0. Source: Department of State, Central Files, 788.11/3–862. Secret. Drafted by Bowling; cleared by McGhee, Johnson (G), Talbot, Coffin (AID), and King (U/PR). A typed notation on the source text indicates that the White House approved the memorandum on March 16 and that the telegram attached to it was sent. Komer forwarded this memorandum and its attachments to President Kennedy on March 9 with the following comment: “I strongly urge that, while approving an earlier visit, you reserve judgment on the thorny issue of how much military baksheesh we will pay the Shah until you can hear more arguments from both sides. For example, AID’s well-balanced paper (Tab 4) points out the difficulty in going over $300 million, and the likeliHood that we may have to commit some $400–600 million to Iran’s new development plan. Our job is not just how to keep this unstable monarch from kicking over the traces but how to cajole him into paying more attention to what we consider are the key internal problems confronting Iran.” (Kennedy Library, National Security Files, Country Series, Iran Subjects: Shah Visit) This copy of Battle’s March 8 memorandum is filed separately, but is clearly described in Komer’s memorandum. (Ibid., Iran, 3/2/62–3/26/62)
1. Letter from Holmes to Talbot, March 4, with attached [document number not declassified], not printed.
2. The draft telegram contained a personal message from President Kennedy to the Shah suggesting that the Shah advance the date of his visit either to April 10–16 or June 11–18. The telegram was subsequently revised; see footnote 2, Document 215.
3. Letter from Holmes to Secretary Rusk, September 13, 1961. See Supplement, the compilation on Iran.
4. See Document 169.
5. Document 208.
6. Document 172.
7. A March 22 memorandum from Talbot to McGhee indicates that President Kennedy neither approved nor disapproved the military-economic aid package transmitted with the March 8 Department of State memorandum, but rather decided to allow the Shah the opportunity to advance his visit to discuss the subject. (Department of State,S/S-NSC Files: Lot 70 D 265, 3/23/62 NSC Standing Group Meeting). See Supplement, the compilation on Iran.
8. Printed from a copy that indicates Manfull signed the original above Battle’s typed signature.