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

235. Memorandum for the Record⁰

Washington, May 2, 1963.

SUBJECT

• Minutes of the Special Group (CI) Meeting
• 2 p.m., Thursday, May 2, 1963

PRESENT

• Governor Harriman, the Attorney General, Mr. Gilpatric, Mr. Bell, Mr. Murrow, Mr. Helms vice Mr. McCone, General Krulak vice General Taylor
• Mr. Martin, General O’Meara and General Lansdale were present for Items 1 and 2
• Mr. Komer and Mr. Bowling were present for Item No. 3

[Here follow items 1 and 2 on unrelated subjects.]

3. Iran

The Group noted the Special National Intelligence Estimate and other memoranda on the situation in Iran¹ and took no exception to the conclusions stated.

Mr. Bowling in commenting on the Report prepared in reply to NSAM 228,² stressed that as a first priority we should support the Shah on the land reform program; the military assistance programs should be carefully monitored; we should support the Third Plan and use all of the leverage available to encourage more reforms in budgetary control and practices. He also elaborated on the recommendations contained in the Secretary of State’s memorandum to the President covering the interagency prepared report in reply to NSAM 228.

The Group discussed in detail the economic situation in Iran and expressed interest in the recommendation contained in the Report to expand our PL-480 Programs. Mr. Bell stated that negotiations on this matter are now underway at the Washington level and stated that Department of Agriculture was holding out for payment in dollars rather than local currency. The Group requested Mr. Bell to follow through on this matter.

Mr. Komer observed that we must take a more active advisory role in the economic and fiscal policy planning of the Government of Iran. The basic problem is how to exert pressure on the Government to loosen up its conservative fiscal policies.

Mr. Bell added that he had some doubts if our mission in Iran is pushing hard enough with the Government to make decisions in this area. Mr. Komer stated that for any effort in this area to be effective we must deal directly with the Shah and convince him of the critical need to get the economy moving. The key problem is to get the local economy moving and the only way to accomplish this is to push hard to get our ideas across to the Government.

While all agreed that these were matters for them to deal with in their individual capacities rather than a counterinsurgency matter, the Chairman indicated with the concurrence of Mr. Bell that State and AID would prepare a message to be sent to the field covering the foregoing points. The Chairman will clear this message with the Secretary of State upon his return to the United States.

At the request of the Group Mr. Bell agreed to ascertain if there is a need for additional agricultural technical experts to be sent to Iran to assist in carrying out the land reform program. Mr. Bell was asked to report back to the Group on the results of his findings.

[Here follows a section entitled “Miscellaneous.”]

James W. Dingeman
Executive Secretary
Special Group (CI)

0. Source: Department of State, Special Group, Counterinsurgency Files: Lot 68 D 51. Secret. Drafted by James W. Dingeman.
1. Reference is presumably to SNIE 34–63, Document 212, and to Rusk’s April 20 memorandum to Kennedy, Document 218.
2. Document 192.