Memorandum by the Under Secretary of State (Acheson) to the Secretary of State
Mr. Secretary: The attached file concerns the need of creating some sort of fund to be used for carrying out United States political and strategic objectives in the Middle East.
The Department has repeatedly come up against situations involving basic objectives of American policy, with which our Government is not prepared to deal except on the basis of obtaining specific Congressional authorization in each case. In several instances it would [Page 44] be embarrassing and difficult to justify publicly an appropriation for the particular purpose. One example is our inability to comply with the desire of the King of Saudi Arabia for loans of about ten million dollars per annum, to meet government expenditures until revenues begin to accrue from petroleum development projects. Similarly American economic officers in the Middle East such as Dean Landis and Colonel Harold Hoskins, have repeatedly complained that it is impossible to execute any consistent long-range economic program on which the local governments can rely unless the authority of the executive branch extends further than writing diplomatic notes and making loans on a strictly commercial basis.
The Office of Near Eastern and African Affairs and Colonel Hoskins (in his letter of resignation26) have suggested substantially similar proposals to meet this need. The substance of the proposals is that the Congress should create a fund (amounting roughly to 100 million dollars per annum) to be used in the discretion of the President upon the joint recommendation of the State, War and Navy Departments for the purpose of furthering the political and strategic interests of the United States in the Middle East. Loans from the fund would not be made on a commercial basis.
I believe that something along this line is important to enable us to maintain an effective voice in the dynamic and difficult problems of the Middle East. If you have time I recommend that you read the admirable presentation by Mr. Merriam, Chief of the Near Eastern Division, contained in a draft memorandum for the President which he prepared some time ago and is attached hereto.
I should appreciate receiving your views as to whether there would be any possibility of obtaining this type of authority from Congress and accordingly whether the Department should make a concerted effort at this time to prepare and back such legislation.27
To the Secretary of State on September 5, 1945, not printed. Colonel Hoskins had made a similar suggestion in an undated memorandum, a copy of which he had transmitted to the Director of the Office of Near Eastern and African Affairs (Henderson) on July 23, 1945 (890F.001 Abdul Aziz/7–2345).
With the departure of Colonel Hoskins from Cairo, the Department designated John P. Dawson as Acting Economic Counselor there, as of September 26, with the same concurrent assignments as those previously held by Colonel Hoskins. Finally, in telegram 334, February 25, 1946, the Department informed Cairo that the Office of Regional Economic Counselor was being temporarily discontinued “in view of the curtailment of its activities through elimination of supply and other wartime controls” by the Middle East Supply Center (800.50–Middle East/2–2546).↩
- In an undated memorandum to Mr. Henderson, Mr. Acheson stated: “I have talked with the Secretary who believes that this cannot be done at present.” (890.50/10–945) The memorandum was received in the Office of Near Eastern and African Affairs on October 18, 1945.↩
- Prepared by the Chief of the Division of Near Eastern Affairs (Merriam) and submitted to the Director of the Office of Near Eastern and African Affairs (Henderson) early in August 1945.↩
- For documentation on this subject, see pp. 1219 ff.↩
- For documentation on the evacuation of foreign troops from Iran, see pp. 526 ff., passim.↩
- W. Leonard Parker, who resigned as Assistant Chief of the Division of Near Eastern Affairs on June 30, 1945.↩
- For documentation on this subject, see pp. 1199 ff.↩