Memorandum of Conversation, by the Assistant Chief of the Division of Near Eastern Affairs (Merriam)

Mr. Lenahan came in at my request to discuss the substance of Jidda’s telegram No. 27, July 3, 2 p.m., since with the exception of five persons all of the Americans now in Saudi Arabia are employees of the oil company.

Mr. Lenahan agreed that immediate evacuation was apparently not contemplated by the representatives of Casoc in Saudi Arabia, but that preliminary steps were felt to be desirable at this time. In response to questions he stated as follows:

The Company’s concession does not stipulate in detail the circumstances under which the concern may withdraw its personnel from Saudi Arabia and cease operations without loss or impairment of the concession rights. There is a force majeure clause which, of course, is open to interpretation by the Saudi Arab Government as well as by the Company. It would assist the Company, if it should become necessary to invoke force majeure, if our Government should order or advise American citizens to leave Saudi Arabia, and if our Chargé at Jidda should inform the Saudi Arab Government of his action. If for any reason the Department could not direct Americans to leave but only advise them to do so, that would be entirely satisfactory to the Company, which had no thought of asking us to do in Saudi Arabia more than we had done elsewhere.

I told Mr. Lenahan I felt sure that the Department would be glad to instruct the Chargé at Jidda at the proper time to advise American citizens to depart, and that offhand I could see no objection to the Chargé’s informing the Saudi Arab Government of his action. I reminded Mr. Lenahan that such advice was commonly issued well in advance of actual necessity to move out, citing the case of Egypt where American citizens had been advised to leave more than a year ago. I then raised the question whether, in view of the special conditions in Saudi Arabia, it would be advisable to issue an advice at this time, or to give the Chargé discretion in the matter.

Mr. Lenahan stated emphatically that it would be most inadvisable to issue such an advice at this time, as the Saudi Arab Government would be thoroughly upset in the conviction that evacuation would be carried out forthwith. He also believed, and it was the belief of his principals, that it would be undesirable to make the Chargé at Jidda responsible for timing the issuance of the warning. In that connection, Mr. Lenahan stated that the question of ceasing operations and evacuating the Company’s employees was closely bound up with strategic considerations of the highest importance, that the War Department [Page 580] considered Bahrein and Dhahran might continue in operation even after the oilfields and installations in Palestine, Iraq and Iran went. If they did go, nothing except Bahrein and Dhahran would be left in that part of the world and they would undoubtedly be continued in operation to the last moment. Therefore, the decision to evacuate would be a highly important one in which the military authorities would probably play the leading part, and should not be left to the discretion of any one official.

As regards denial operations, Mr. Lenahan said that a full account of preparations to date had been communicated about two months ago by Mr. Davies, President of Casoc, to Mr. James Terry Duce, Chief of the Foreign Division, Office of the Petroleum Coordinator, who in turn had informed General Pyron, the Army’s number one man on oil. General Pyron had expressed himself as entirely satisfied with the measures which had been taken and had advised that no further steps be taken for the present. It had been agreed that final denial operations would be undertaken purely as a military operation, by the British or United States forces or both. The Company felt that it would be most inadvisable to bring its employees temporarily into military service for the purpose.

Mr. Lenahan considered it highly unlikely that communications between this country and Saudi Arabia would be entirely disrupted. He pointed out that if the ordinary cables were eliminated, the Company’s own communication system would be available to us, and there was also the possibility that by the time matters became acute the War Department would itself have undertaken activities in Saudi Arabia and set up its own communication system.

It appeared clear from recent exchanges of information with the War Department that while various possibilities were being explored, that Department had no matured plan for taking over the defense or operation of Dhahran.