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
[Annex]
Draft Memorandum to President Truman28
From the various memoranda which have reached you from this
Department, and from other sources, I feel sure you are aware that
the Near East is a highly dangerous trouble-spot. We feel in the
Department that this Government is inadequately provided with the
means for exerting its influence for peace and security in that
area. Among recent developments indicative of the unstable situation
in the Near East, the following may be mentioned:
- 1.
- Soviet Russia has informed the Turkish Government of its
desires with respect to Turkey which, if granted, would mean
the impairment of Turkey’s sovereignty and freedom of
action.29
- 2.
- In Iran, a friendly, independent country, Soviet troops
have occupied the northern part of the country, British
troops the southern part. Britain and Russia are under
obligation to remove their troops not later than six months
after the end of the Japanese war,30
but each mistrusts the other and Iran mistrusts both.
- 3.
- In Syria and Lebanon, the French failed, as a result of
British action, in an attempt to thwart by force the
exercise of effective independence by those countries. The
French are now using other forms of pressure, including
financial pressure, to accomplish their purpose.
- 4.
- Both Arabs and Jews are becoming more restive in Palestine
and disorder may break out at any time which might spread
throughout the Arab World.
- 5.
- In Saudi Arabia, where the oil resources constitute a
stupendous source of strategic power, and one of the
greatest material prizes in world history, a concession
covering this oil is nominally in American control. It will
undoubtedly be lost to the United States unless this
Government is able to demonstrate in a practical way its
recognition of this concession as of national interest by
acceding to the reasonable requests of King Ibn Saud that he
be assisted temporarily in his economic and financial
difficulties until the exploitation of the concession, on a
practical commercial basis, begins to bring substantial
royalties to Saudi Arabia.
- 6.
- Great Britain and France, which since the last war have
exercised spheres of influence in most of the Near East have
failed to
[Page 46]
take
adequate steps to look after the welfare of the masses. The
peoples of the region remain for the most part ignorant,
poverty-stricken and diseased.
Moreover, the position of the British and French in the Near East has
been greatly weakened as the result of the two world wars. Soviet
Russia is showing marked interest in the area and is proceeding
along its customary cautious but firm and calculating lines, to move
into the picture. Hence, there is danger that the Near Eastern
peoples in the absence of any indication of a tangible nature that
the United States is prepared to play an active role in raising
their economic and cultural levels will look to Soviet Russia for a
cure of their economic and social ills and as the mainspring of
power in the Near East.
It seems to us to be important that this area, because of its
resources and geographical position athwart the sea and air routes
between East and West, should be in the hands of a people following
the paths of democratic civilization rather than those of Eastern
dictatorships. The British publicly and officially admit that they
are no longer able to keep the Middle East in order without our
help. We are inclined to believe that a policy of inactivity or
“drift” on our part will result in a progressive deterioration of
the influence of democratic civilization in the Near East.
In view of certain characteristic British failings, we must, however,
lend our assistance in a manner which would be in accord with the
principles to which we have publicly adhered. If we are to serve our
higher long-range political, economic and strategic purposes, our
activities in the Near Eastern area must be based upon the
political, educational and economic development of the native
peoples and not merely upon the narrow immediate interests of
British or American economy.
At the present moment, this Government has but three non-military
tools with which to work in the Near East and to place sufficient
American impress on the region to win and hold it for the Western
World. Those tools are:
- (a)
- Note-writing by the Department of State;
- (b)
- Propaganda regarding the high principles to which we claim
to adhere;
- (c)
- Government loans made on a commercial basis and repayable
in dollars.
These tools are hopelessly inadequate.
It is clear that unless the situation is handled firmly and
adequately, a situation might well develop in the Near East which
would result in another World War. This is said with all due respect
for the United Nations Organization. The development of such a
situation could not be prevented merely by the reaching of temporary
[Page 47]
understandings among the
Great Powers at the expense of the Near Eastern peoples. Any
cooperation among the Great Powers based upon a policy of joint
exploitation of the population of the Near East cannot be permanent.
Long range policy and planning looking to the political independence
and the development of these areas, together with adequate means of
implementation of such policy are essential.
The blunt fact is that, in the existing circumstances, we have sore
need for funds to be used in political and strategic situations in
which repayment with interest, in dollars, cannot be guaranteed
because currency exchange and trade do not happen to run in the
right direction.
Three specific cases might serve to illustrate our difficulties.
1. Saudi Arabia. For nearly a year we have
known that some money—about ten million a year for the next five
years—would be necessary to obtain an economic stability in that
country sufficient to give a reasonable security to American
interest in the vast Arabian oil fields. This project, together with
subsidiary projects, has been shunted around month after month in
the Government departments while the interested officers were trying
to determine whether the Export-Import Bank could safely make a
loan, or whether legislation should be sought, involving the risk
that it might become a football for special, short-sighted
interests. We have attempted to work through the Army, but the King
of Saudi Arabia has now stated flatly that he wants us to work
through the civilian agencies.
This is an outstanding example of the fact that we lack money for
long-range, general political and strategic use for the purpose of
winning the peace in that crucial part of the world. The official in
the Department directly responsible for Saudi Arabia has just
resigned after fourteen years service abroad and in Washington,31 because of his feeling that he is unable to do
anything constructive and of his unwillingness longer to assume
responsibility for the protection of American interests in that
country.
2. Palestine. It is not necessary to stress
the dangers of this situation. Whatever short or long-range solution
is put forward, unless it is associated with the expenditures of
large sums in connection with the carrying out of a far-reaching
development plan applied not only to Palestine, but also to
neighboring countries, will surely result in bitter altercation and
bloodshed. It will also result in domestic political repercussions,
and heavy pressure from the Near Eastern countries.
3. In the case of Syria and Lebanon, where our policy has been to
assist these countries in attaining their independence, some
financial assistance is required to help them get on their feet
economically.
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Otherwise the
French through their control of the bank of issue and of financial
resources, may by economic means succeed in compromising the
political independence of the Levant States to such an extent as to
cause uprisings in the whole Arab world. The Levant Governments are
aware of the situation and have appealed to us for a Training
Mission and for equipment for their gendarmeries in order to maintain internal order.32 We have no
way to meet this request.
Under existing conditions our policies in these situations are not
worth the paper they are written on because we have no prompt and
effective means of carrying them out. These are all cases in which
for want of a nail, the shoe may be lost, and for want of a shoe the
horse may be lost. It would not be going too far, in the opinion of
this Department, for this Government, in the interest of peace and
security, to spend up to $100,000,000 a year for several years until
the Near East is safely stabilized politically and
strategically.
Obviously, we can no more win the peace than we could win the war if
we must go to Congress to justify and obtain piecemeal
appropriations for political and strategic purposes. Would it be
politically possible to prevail upon Congress to provide a
discretionary Presidential fund for such purposes, to be
administered jointly by State, War, and Navy, which should also be
in a position to recommend to the President by joint action, the
expenditure of money for these purposes which may be available in
other appropriations.
We plan to discuss with the War and Navy Departments, either by means
of the existing State, War, and Navy Coordinating Committee or
otherwise, the ways and means for planning and carrying out our
long-term political and strategic objectives abroad and particularly
in the Near East. The conclusions reached will, of course, be placed
before you for your consideration and concurrence.
