Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

264. Telegram From the Embassy in Iran to the Department of State¹

Tehran, March 6, 1968, 0730Z.

3626. Eyes Only for Under Secretary Rostow. Deliver at 8:00 a.m. Wednesday morning.

1. Recalling your congenial and constructive audience less than a month ago, Shah’s present state of mind, as reflected by Ansary, is indeed puzzling. Since Shah arrived on ski slopes, some spark must have ignited his cogitation, e.g., inflammatory reporting from Tehran or irritation over London Economist article re “The Intemperate Shah.” In any case Shah is brooding.

2. We not only one baffled. As you know, Alam continues not to consider situation serious. SAVAK called in CAS to ask what is behind all this and categorically assured CAS that SAVAK has no reports of our misbehavior. Hoveyda’s public remarks signalled Shah’s unhappiness, but even Hoveyda seems puzzled. He has invited me to en famille dinner, which is scheduled for Friday evening.

3. In analyzing cancellation of Saudi visit (A–417) and attack of Amini (A–465),² Embassy conjectured re motivations behind Shah’s current behavior. These included: a) his penchant for moodiness with which my predecessors have also had to cope; b) chronic Persian tendency to impute foreign hand behind any unpleasant development; c) intoxicating effect of such successes as last August’s visit to US, coronation panoply, and current economic boom; d) Shah’s almost messianic desire to transform Iran into a country as modern as any European during days of power remaining to him; e) sycophantism which tends to inure Shah from reality; f) escalation of inflammation by Foreign Ministry and, in case Amini, perhaps by Prime Minister; g) tendency of Persian monarchs to “show their teeth” and success of that tactic in recent devaluation issue with consortium; h) Shah’s desire to be world and Mideast leader; i) eagerness of all Iranians from Shah down to prove their “national independence” which here means from the US; j) cover Russian tactics of putting Iranians increasingly on defensive (particularly as prelude to Kosygin’s visit) by shrill broadcasts, overtly and clandestinely, to effect Iranian regime is stooge of Americans, etc.

4. All of these are contributing factors to present state of affairs. Undoubtedly the event which has catalyzed them and caused them to peak at this moment is British announcement of withdrawal from Gulf. It is important to make clear that in a sense Shah welcomes British departure as a new era with glorious possibilities for Iran. Thus to tell him we urging British to continue to play influential role in Gulf is of little beneficial effect.

5. Prompted by factors in para 3, Shah’s initial responses to challenge of Gulf’s future were gun-boat diplomacy in median line and “showing of teeth” by cancelling Saudi visit. While news of these sallies was carefully managed, many Iranians have reservations, including even some Cabinet ministers. Except from official organs and agents, plaudits to which Shah accustomed not been forthcoming. Although unexpressed, thinking Iranians are questioning government by whim, e.g. one day papers printed letters from heads of Parliament and Senate forswearing pilgrimage and three days later PriMin Hoveyda publicly bade farewell to first batch of pilgrims. Inevitably there is some concern about too close an embrace with Soviets. Sharp increase in government budget, especially military, is causing some grumbling as tax collection becomes more strong armed. Meanwhile, presumably for apolitical reasons, strikes are occuring in Iranian universities; they have been disturbingly well-coordinated. This adds to worries of Shah and GOI.

6. Outside Iran, Shah’s initial sallies in Gulf been greeted with disapprobation, notably in British press. (NYT may follow suit as energetic Tom Brady was here last week.) Officially, Shah knows USG disappointed re cancellation of Saudi visit and Median Line confrontation. Vis-à-vis US, he has guilt complex.

7. Shah knows Iran becoming somewhat isolated. Ostensibly honeymoon with Russians continues but frictions developing and Shah realizes Moscow is mortal enemy his regime. Nasser is his bete noir. Other Arabs, including Faisal, are in Shah’s view Nasser’s hostages and vulnerable to overthrow by radical Arabism. Shah is at odds with Ayub. Turkish friendship is not warm. Israel is convenient friend but not in same league with US.

8. Urgent questions are burdening Shah on Swiss ski slopes: Whether to authorize IPACI proceed with drilling on Saudi side of 1965 initialled line; whether to score fait accompli by occupying Tunb and other mid-Gulf islands; whether to oppose confederation of Gulf sheikhdoms; whether to take more active measures to demonstrate patriotism re Bahrein, etc. If he takes such steps, he jeopardizes relationship with US, the one country from which he can least afford to be isolated.

9. Key to US-Iran relationship is, of course, arms supplies. Shah vividly recalls American embargo on arms to Pakistan during latter country’s 1965 hostilities with India. He must be painfully weighing whether reorientation his arms procurement is practical possibility and if not how he can fashion Gulf policy without alienating Americans. Neither option is easy. Beyond military field, Shah realizes cooperation with US commercially and otherwise is sine qua non if Iran is not to become another Finland.

10. Meanwhile, Shah is in jam with consortium, which provides more than 50 percent of GOI’s income, this year around $800 million. Public bravado re intolerability of consortium irresponsiveness necessitates either new consortium concessions, which unlikely, or face-saving exit for Shah. Either way Shah will wish USG assistance.

11. How foregoing analysis reduces to Shah’s suspicions of American collusion with Amini only Byzantine, or perhaps Persian, mind can fathom. Certainly, one explanation is that best defense is good offense. Shah’s remonstrances through Ansary are in other words tactical, i.e. rationalization to US and to himself for actions he has recently taken, and for actions he may take in near future; also a pressure tactic on US vis-à-vis his problems such as arms, consortium and Gulf policy.

12. Perhaps silver lining is that Shah is coming to grips with reality. He is generating his own turbulence, which is preferable to our doing it. Situation is, of course, very delicate and our job is to deter Shah from irrational actions. At stake is future of Gulf, role Shah will play and our relationship with Shah as he plays it. Our recommendations are set forth in separate telegram.³

Postscript: There no objection your eliminating nodis label from this telegram if you so wish. Might also be worth repeating to London and other interested posts.

Meyer

1. Source: Department of State, Central Files, POL IRAN-U.S. Secret; Immediate; Nodis.
2. See footnotes 6 and 7, Document 263.
3. Document 265.