Memorandum of Conversation, by the Assistant Chief of the Division of Near Eastern Affairs (Alling)
Mr. Hamilton and Mr. Davies26 called yesterday. Mr. Hamilton said that he would like to inform the Department of the most recent developments in connection with the proposal of extension of financial assistance to King Ibn Saud. He stated that about a week ago he [Page 641]and Mr. Davies had gone to New York to discuss this whole question with officials of the company. As a result of that discussion a letter had been drafted to Mr. Jesse Jones setting forth the company’s viewpoint. Mr. Hamilton and Mr. Davies had taken this letter over the past weekend to discuss with Mr. James A. Moffett at his summer home at White Sulphur Springs. At that conference it was agreed that Mr. Moffett, accompanied by Mr. Rogers,27 President of the Texas Oil Company, would present the letter to Mr. Jesse Jones. This was done in a conference on Monday lasting about two hours. Mr. Jones pointed out that he had up to the present been unable to find any way by which he could extend direct financial assistance to Saudi Arabia. He thought it might be possible, however, to extend such assistance provided collateral could be arranged. Apparently both Mr. Moffett and Mr. Rogers felt that such collateral could be forthcoming in the shape of deliveries of petroleum products for the use of the American Navy. Both Mr. Rogers and Mr. Moffett, however, expressed the view to Mr. Jones that it would be undesirable to handle this matter on a purely commercial basis in such a way that the funds to be turned over to Saudi Arabia would be handled by the Standard Oil Company rather than by the United States Government. In other words, they both attached great importance to a direct extension of credit to King Ibn Saud but agreed that such credit should be secured by deliveries of petroleum products. According to Mr. Hamilton, Mr. Jones said that he would be glad to explore this suggestion and let Mr. Moffett know his decision within the next two or three days.
Later in the day I saw Mr. Moffett and he confirmed all of the foregoing statements and added that from his own conversations with the President he was certain that the latter desired something to be done in the way of working out financial assistance for Saudi Arabia.