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

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

Tehran, November 24, 1968, 0745Z.

7433. Subject: Military Sales to Iran. Summary. Shah’s complaint about projected delay in delivery of Sheridan tanks has been seized as opportunity for trying to divert him from virtual obsession with date of Dec. 31, 1971. That is date when British will have withdrawn from Persian Gulf. In effect Shah is trying to compress 5-year military purchasing into intervening three years. Specifically, case was made for deferring delivery schedule of fourth F–4 squadron. Shah was non-committal except to attach hope to oil barter deals with GM and other American companies.

1. After noting 16 Sheridans included in sixth tranche, Shah 23rd expressed concern that additional Sheridans not projected for delivery until 1972 or later. Suggesting General Twitchell more familiar with technical aspects such as two-year lead time, I said Shah’s question, however, raises broader issue of future program projection.

2. Describing as understandable his keen interest in end of 1971 target date (when British will have withdrawn from Gulf), I said in effect he is trying to compress five-year military program into three years. This in turn is incompatible with our projected $100 million annual credit availability. Shah agreed this is problem, adding if choices have to be made his air force and navy needs must come first.

3. I said I wondered whether precise date of December 31, 1971, is all that critical. Iran’s military strength is obviously capable of handling any currently envisaged threat in Gulf area. Moreover, if threat arises it will probably be as result of ferment of several years after British leave.

4. Thus I questioned whether having both third and fourth F–4 squadrons on hand by end of 1971 is really necessary. Shah himself had observed at Lavan Island that Iran’s international prestige has soared as result of news that Iran has Phantoms. As Kuss had said, their chief value is deterrence through “eye impact”. It seemed to me that essentially this objective can be served as well by three squadrons as by four by the end of 1971.

5. I told Shah I not questioning military value of four squadrons but merely whether their delivery might not be spaced out so as to give us elbow room to include in future tranches, if they are approved, other items which are important to five-year program. Meanwhile, we would be keeping options open for such things as possibly acquiring rehab F–4’s after Viet Nam conflict ceases.

6. Shah’s response tended to center on his confidence that oil barter deal with US companies may come to fruition. He obviously places great hope in Jim Zand’s proposals for exchanges with General Motors, adding that one of attractive aspects is GM will give sizeable discounts on hardware it sells. In short, he has vaguely in mind getting Sheridans via barter deals which he contends would be incremental to normal Iranian imports from US.

7. In addition to financial bind, I told Shah there is always problem of human resources. He readily agreed, commenting this is point with which he cannot argue. I pointed out still to arrive are 155 M–60 tanks whose payment included in sixth tranche. According to General Twitchell, I said, absorption capability of ground forces for tank is already over-strained. Shah indicated agreement but did not necessarily agree to translate this into lengthy delay in receipt of Sheridans.

8. In concluding general argument for easing up pressure to crowd as much hardware as possible in before end of 1971, I told Shah he should take long-view. USG has treated him well in past and all indicators are good for future. FMS legislation has been passed. Thanks to deliberations re FMS, our Congressional friends, as reflected in several personal letters I have received, are now more fully conscious of Shah’s fine leadership as well as Iran’s needs. Furthermore, his good friend, from whom only previous day he had received warm telegram, will be in White House. In a sense, I said, when USG made tough decision to let Iran buy Phantoms (first foreign release except for Britain), it was political decision. We betting on Shah to continue to exercise, as Nixon said in his telegram, “constructive statesmanship internationally”.

9. Comment: While all the points were made, discussion was not as neat and articulate as reported above, for Shah kept interrupting and going off on tangents. Therefore, it was a no-decision affair. But in my view ground has been prepared and perhaps seed planted. I pointed out that with sixth tranche out of way we now have time to ponder these things while undertaking next annual review and determining seventh tranche next June. Shah corrected me to say F–4 order must be placed by May.

Meyer

1. Source: Department of State, Central Files, DEF 12–5 IRAN. Secret; Limdis. Repeated to CINCMEAFSA/CINCSTRIKE.