NEA Files: Lot 55–D36

Memorandum Prepared in the Department of State

top secret

The British and American Positions

[Here follow a table of contents and a summary.]

1. british position

a. Background:

Traditional British policy in the Middle East, regardless of the party in power in the United Kingdom, has centered around the hard core of Empire defense, with emphasis on communications. Subsequently, oil became an additional and related vital interest. Commercial advantage was not overlooked, but defense was the prime factor in basic policy decisions. Following the dismemberment of the Turkish Empire as the result of its participation in World War I on the side of the Central Powers, the policy which the British pursued in maintaining these vital interests was to deal individually with the countries of the area by asserting special political relationships (mandates, protectorates, treaties of mutual assistance, etc.) backed by the threat of the use of military force by small but effective garrisons maintained at bases selected for their strategic importance.

During the period between the two World Wars, it was possible to implement this policy with a fair degree of success owing to the lack of any strong external pressures and to the relative quiescence of nationalism in the area. It was also used with a considerable degree of effectiveness during World War II, but severe external pressures exerted on the area during that period, coupled with a recrudescence of Arab nationalism and the emergence of a strong Russia on Britain’s communications flank, convinced a number of British officials that this policy, always highly unpopular with the Middle Eastern peoples, had outlived its usefulness and they began casting about for a new policy designed to meet these new developments, while at the same time assuring Britain’s strategic position.

The formula found to meet these requirements was inspired by the war-time experience of the Middle East Supply Center and the office of the British Minister of State in Cairo and took the form of dealing with the states of the area regionally rather than individually and of substituting cooperation, particularly of an economic nature, for the assertion of special rights under threat of the use of force. In short, the idea was to present Britain in the role of a benevolent and welcome senior partner in developing the Middle East in order to prevent further degeneration into acute nationalism hostile to British influence.

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Originally formulated in a memorandum by Minister of State Casey, dated August 1943, this plan was discussed in the conversations on the Middle East held by Mr. Wallace Murray, then Director of the Office of Near Eastern and African Affairs, with British officials in London in April 1944. At that time, agreement was reached on the desirability of an autonomous economic institution designed to serve the peoples of the Middle East and operated and supported by them, but it was decided that the nature of British and American participation was difficult to visualize and should be left for future consideration. There is no doubt, however, that British thinking on this subject always contemplated British participation regardless of such attitude as we might take.

Upon Mr. Bevin’s becoming Foreign Secretary in 1945, the idea of a regional approach on an economic level to the Middle Eastern problem was one which seemed to have an immediate appeal and in a series of speeches in Parliament and elsewhere he extolled the merits of a new relationship between Britain and the Middle East in which “partnership” would be substituted for domination, the mutual defense needs of the Middle East countries and Britain assured, economic disparity between the extremely rich and extremely poor adjusted by raising the standard of living, British technical abilities placed at the service of Middle East development, extreme nationalism curbed, etc. In pursuance of this policy he had set up a Middle East Office in Cairo and a Middle East Secretariat in London as successors to the Middle East Supply Center in order to serve in an advisory capacity on economic cultural, and social affairs.

b. Present Situation

The sanguine hopes which Mr. Bevin entertained for this new approach to the Middle Eastern problem have not been fulfilled. Severe economic dislocation and manpower shortages in the United Kingdom have made it difficult to provide the resources or technical assistance required to meet the development needs of the area. Furthermore, the Governments of the Near East have been suspicious of the Middle East Office and have in general boycotted it. The Palestine situation has envenomed political relations with the Arab states. The strategic aspect of the problem has been rendered difficult by the failure of the Arab states to recognize the mutual aspect of the defense problem. Soviet pressures have been intensified. Furthermore, the situation has been further and seriously complicated by the attitude of the left-wing group in the British Labour Party whose insistence on the withdrawal of British troops from Greece has been interpreted by some as possibly going so far as to look to a general abandoning of British responsibilities in the Middle East and leaving the United States holding the bag. [Page 513] In any event, there is no doubt that for the first time in Britain’s long association with the Middle East, political decisions affecting that area are now being taken with an eye to the internal political situation in the United Kingdom rather than solely in the national interest.

Given this background, it is not difficult to see the motive behind Mr. Bevin’s approach to the Secretary at Moscow in March or the reason for his emphasis on the political and economic aspects of the forthcoming conversations. The fact would seem to be that the British realize their inability to implement their political and economic policy in the Middle East without American help but they hope that such cooperation on our part will not preclude their retention of a certain special position in the area. The question is whether the British would be prepared, in consideration for such assistance, to maintain primary military responsibility for the area and whether the type of political and economic cooperation which they desire would fall within our current capabilities and policies.

2. american position

a. Background:

Contrasted with traditional British policy in the Middle East, American policy was concerned in the past with little more than extending protection to American philanthropic and missionary activities and the assurance of the equality of opportunity for a nominal exchange of goods. World War II brought us into the area militarily, although almost exclusively in the role of supplier of the needs of the British and Russian forces, and also as participants in the Middle East Supply Center.

Our present thinking regarding the Middle East, however, goes far beyond such limited objectives. We now take full cognizance of the tremendous value of this urea as a highway by sea, land and air between the East and the West; of its possession of great mineral wealth; of its potentially rich agricultural resources. We also realize the serious consequences which would result if the rising nationalism of the peoples of the Middle East should harden in a mould of hostility to the West. Our main objective is therefore to prevent great power ambitions and rivalries and local discontents and jealousies from developing into open conflict which might eventually lead to a third World War. It is our policy to take whatever measures may be proper to promote directly and indirectly the political and economic development of the peoples of the Middle East and to support in that area the principles of the United Nations. In the implementation of such a policy the implications of recently and clearly demonstrated Soviet expansionist aspirations in the Middle East obviously need no elaboration.

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b. Present Situation

The essential fact is that because of clear Soviet aspirations in the Middle East which, if fulfilled, would have a disastrous effect not only on American interests in the area but on our general position vis-à-vis the Soviet Union, it is essential that Soviet expansion in that area be contained. Given our heavy commitments elsewhere and Britain’s already established position in the area, it is our strong feeling that the British should continue to maintain primary responsibility for military security in that area. In taking that position, we recognize the legitimate right of the British to inquire regarding our general intentions in the Middle East and we have already given them assurance that the cornerstone of our thinking is to maintain the British position in the Middle East area to the greatest possible extent. In giving this assurance, however, we pointed out that the means by which such a British position might be maintained would require very careful consideration in the light of developments in the Middle East as a whole, taking into account popular sentiment in the countries of the area and external pressures and influences which might be brought to bear upon them. It is to these considerations that the forthcoming conversations will be directed.

c. Suggested General Lines of American Approach

1) Military

The general line of our policy in this respect has been postulated in the preceding section. Specific questions which will presumably arise in this connection will be the retention of British troops in Greece and the retention of present, or obtaining of alternate, bases, particularly as regards Suez. On the first of these subjects, we have already acquainted the British fully with our views and we shall doubtless wish to maintain that position very strongly in our conversations. Regarding the subject of bases, this subject is treated specifically in a following section, but, generally speaking, it is believed our present thinking regarding the subject as a whole should be satisfactory to the British. Details of military cooperation in their more technical and specific phases will, of course, be discussed by our respective military experts and do not fall within the scope of this paper.

2) Political

Considered separate from military and economic matters, collaboration between the British and ourselves on the political level in respect of the Middle East is by way of being an accomplished fact and presents no serious complications in its general aspects. Certain forms of special British political privilege in the area, which formerly caused minor friction in our relations, have been adjusted and the war-time custom of free and frank exchange of views at both high [Page 515] and technical levels has been maintained. There is indication that the British may suggest formalizing this cooperation in much the same way that they did during the Murray conversations in 1944, which resulted in the sending by them and by us of circulars to the field and in that event we would presumably lend a sympathetic ear. From our point of view, however, no particular need for such action is perceived.

Regarding specific cases, there are certain problems which will require serious discussion. Palestine will doubtless be the most difficult and the political aspects of our respective policies toward Iran and Greece may need clearing up. On the other hand, our differences in views regarding the question of British relations with Egypt and the disposition of the Italian colonies would appear to be narrowing. These points and other specific political questions are taken up separately in Section C.1

Generally speaking, it is expected that political questions per se will not loom as large in the forthcoming discussions as will, on the one hand, the political implications of our efforts to assure continued British military responsibility in the Middle East and, on the other hand, such arguments as the British may advance in order to obtain our economic support in the area, not only in substance but in a form designed to assure a special British position.

In any event, care should be taken to avoid becoming involved in any agreements with the British of the “sphere of influence” or “regional approach” variety. The first would not only be unacceptable in substance but would necessitate a degree of secrecy which could never be maintained. The second, as conceived by the British in the Middle East, becomes not so much a regional scheme in the sense that it implies joint effort in seeking a common objective, but rather a form of intermediate control which would have the effect of limiting direct action by the countries of the area in a manner hitherto unacceptable to them.

3) Politico-Economic

Economic considerations have been introduced by British initiative. The Foreign Office has suggested that the raising of living standards of the peoples of the Middle East be discussed. In the circumstances the subject is for us primarily politico-economic in character.

Without doubt our economic interests stand to gain from appropriate and satisfactory measures of Anglo-American collaboration in the area. There are also individual economic matters of specific character with respect to which British cooperation would be helpful to us. There is however no major question affecting our economic interests [Page 516] in the area, of such critical urgency that we must seek its inclusion in these discussions.

The politico-economic question raised is the following: What action lies open to us in the economic field by which we can meet the British position, in order to induce or enable the British to meet our position in the political and strategic field?

Until the British position and desires with regard to economic questions are more specifically elaborated by them, we can only infer their nature. The analysis of the British position in preceding paragraphs supplies this inference. The British, it would appear, realize their inability to implement their economic policy in the Middle East without American help. They hope however that our cooperation will not preclude their retention of a certain special position in the area. Their desire to include discussion of Middle Eastern living standards, taken in the light of the views expressed on this subject by Mr. Bevin and by Foreign Office representatives, appears fully to support this inference.

It would be possible to describe the situation in terms of a simple bargain. If for political and strategic reasons we want them to hold a position of strength in the Middle East, then they must have from us economic concessions with respect to the area which will make it worth their while to stay there. This however would be over-simplification. British economic interests in the area are so important as to make it inconceivable that they would voluntarily pull out completely. It is sufficient simply to mention the importance of their interests in petroleum development in Iran and the Arab States. These and other economic interests serve as anchors to hold them in the Middle East.

Nevertheless there is the essence of truth in the over-simplified statement. In view of their seriously weakened economic position, it will be necessary for us to make some sort of economic concession, and to meet their desires in some degree with respect to Anglo-American economic collaboration. This will be necessary in order to enable them to meet our desires in the political and strategic field. It will also possibly be necessary in order to dissuade them from considering alternative lines of policy such as collaboration with another major power which might be very disagreeable to us.

We have already given assurance that the cornerstone of our thinking is to maintain the British position in the Middle East to the greatest possible extent. Presumably this covers economic as well as political and strategic elements. In giving this assurance we have pointed out that very careful consideration would have to be given to the means by which the British position might be maintained. It therefore follows that the specific economic proposals they may be expected to bring forward will be subject to very careful study.

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Until such proposals are made, and their specific character known, it is not possible to formulate a detailed position with respect to them. Sufficient is known and can be inferred as to their probable character, however, to permit a general line of approach to be formulated.

The general nature of the British views is indicated in Mr. Bevin’s memorandum of March 1947. He expresses British interest in raising living standards in the Middle East as a contribution to political stability and security. He assumes we concur in its importance. He says that his Government hopes with the goodwill of the Middle Eastern peoples to assist them in achieving economic improvement, and he assumes that our activities in the area will likewise expand. He suggests that this will offer considerable opportunity for useful Anglo-American cooperation, and he points to the International Bank as a source for capital requirements.

Subsequent informal conversations between British and United States Embassy officials in London have elaborated the subject somewhat. In particular, they have raised the question of procedure for Anglo-American official cooperation. Two alternative procedures have been indicated, the one contemplating organized machinery for cooperation, the other full and frank but informal collaboration in Washington, London and elsewhere. The latter has apparently, for the time being at least, become the more approved choice. Finally, the rapidly increased pressure of Britain’s economic difficulties over recent months has been reflected in the indication that Britain will be able to give very little financial help. “It is beginning to look”, a British official stated, “as though only the United States Government can give practical help to the Middle East. We certainly hope that you will.”

In short, it appears that the British Government wishes to see economic conditions improved in the Middle East and standards of living raised; it wishes to contribute thereto with the goodwill of the peoples of the area; it hopes we will also contribute and believes the major substantive contributions must come from us; it further hopes that our contribution will be rendered in a manner compatible with their own and in support of British policy and objectives in the area; it hopes for Anglo-American collaboration which will enable the British Government, in Mr. Bevin’s words, to take a bold lead, and receive our moral and presumably more tangible support.

Certainly Mr. Bevin is correct in assuming our great interest in economic improvement and raising of living standards in the Middle East as a contribution to political stability and security. Presumably likewise we wish to contribute what we properly can for such purposes. A favorable attitude toward appropriate Anglo-American cooperation with respect to that area was agreed upon in principle in 1944; and our [Page 518] general policy of support for the British position in the Middle East has already been expressed.

The question is therefore, along what lines can we render support to the British position? In what manner can we respond positively and favorably to such specific requests and proposals as the British may make? What action can we take in the economic field to support the British lead in the Middle East and thereby support our own political and strategic requirements? While we await the specific expression of the British ideas on the subject it is possible to clarify our position somewhat along two general lines.

The first is to consider the application of our general international economic policy to the situation. The second is to consider the specific means and procedures by which positive aid could be rendered to the Middle East in collaboration with the British Government.

The general principles of our economic policy need not be considered as limiting factors. The purpose of considering their application is rather to define the general manner and lines along which action might be taken. It is therefore necessary only to consider the basic principle which is that we favor the pursuit of economic objectives through policies of equality of opportunity and maximum freedom of competition, avoiding preferential, discriminatory, and monopolistic arrangements; and that we recognize the right of other peoples to their own freedom of choice and initiative in determining the manner in which they shall handle their internal problems in seeking to promote their own welfare.

It follows from the foregoing that:

Recognition and emphasis should be given to the importance of stimulating and promoting the initiative of the Middle Eastern Governments and peoples themselves in determining and carrying through the projects necessary to their welfare. The projects should be considered as theirs: Theirs being the choice as to what should be undertaken; and our part being to provide, if they desire, technical and other advice and counsel to promote the effective fulfillment of their desires, if we think them wise, and to provide such material assistance as we may be able and prepared to offer.
We could not enter into agreement with the British to divide the area into “spheres of influence”. We could not agree that they should concentrate their efforts upon assisting this country and we that country. Even if we were willing to contemplate such a policy it would not be practicable under our economic setup. We could not effectively and specifically direct private American enterprise exclusively in this or that country nor undertake to police that enterprise along such lines. On the other hand, we could direct our own official activities and seek to stimulate or restrain private American enterprise within the degree to which that enterprise is subject to our influence and control, along lines which avoid unnecessary conflict with British policies or interests. For that purpose of course such policies and interests must be clearly [Page 519] and continuously known to us and be essentially agreeable to our views.
We could not agree to monopolistic or cartel arrangements under which, through some procedure of organized collaboration, British and American advice and assistance would be available to Middle Eastern countries only through a single organized channel. Our economic setup would make monopolistic procedure of this nature difficult to enforce, if at all practicable. A more serious objection lies in the fact that such action would deprive Middle Eastern countries of their freedom of choice between competing sources or markets. It would likely appear to them as an attempt to substitute collusive foreign domination for their own initiative and independence which it is our general purpose to support and stimulate. Consequently it is important that in pursuing possibilities of Anglo-American cooperation we avoid even the appearance of such action, such as would result from any organized form of official Anglo-American collaboration.

It is not believed that the foregoing will seriously circumscribe the extent to which we can take a positive and favorable position toward the proposals to be expected from the British. For the moment at least the school of thought in the British Foreign Office favoring informal procedures of frank interchange of views is reported to have won ascendancy over those who favor the principle of spheres of interest and of organized Anglo-American cooperation. Also, Mr. Bevin’s memorandum lays stress on the consent of the Middle Eastern peoples themselves. He refers to the endeavors of the British Government “to assist Governments of Middle Eastern countries and stimulate them to work out schemes of economic development”; he speaks of opportunities “for assisting and advising the Middle Eastern countries in the execution of their economic development plans”; referring to extensive outside assistance required for their development programs; he says “His Majesty’s Government hope that they will be able with the goodwill of the Middle Eastern countries to make an important contribution to this end”.

It should therefore be possible to find ways and means of meeting anticipated British requests for collaboration and support along the following lines:

The British might be assured of our support and interest in furthering the essential objectives by rendering assistance in improving standards of living in the Middle East.
They might be assured of our willingness to maintain, on a continuing basis, informal exchange of views and information with them, to the end of promoting the maximum degree of consistency between British and American official action in the pursuit of mutually agreed purposes in the area.
They might be assured of our intent to reexamine the desirability of further circular instructions and other appropriate action designed [Page 520] to promote and encourage close and frank collaboration between our Missions in the area.
They might be led to expect that insofar as we are informed of and agree with their purposes and policies and the motives underlying their actions in the area, we would seek to avoid on our part actions calculated or serving to undermine the British purposes and position, and we would seek to guide and restrain our private commercial interests to the same end.
If they indicate fear that our present economic strength relative to their own will enable our private interests to “capture the markets” to British disadvantage, and establish a preferred position through preclusive or monopolistic arrangements, we might point out: that adherence to the general principles of equality of access and maximum freedom of competition will serve as a protection to British as well as American and other commercial interests; and that as a matter of fact the extent to which American business can “invade the markets” of the Middle East is limited by the shortage of dollars and the causes of that shortage.
We might offer to undertake a joint review of the various institutions which may be useful in furthering our mutual economic purposes in the area; we might agree that when useful recourse may be available to international institutions with British and American membership, we should seek to use our joint influence toward the mutually agreed purposes.
We might accordingly agree to joint exploration of the usefulness and means of promoting successful recourse to the International Bank for development financing in the Middle East, and to the International Monetary Fund so far as this institution may be able to help alleviate present Middle Eastern exchange difficulties.
We might undertake to examine the possibility of recourse in appropriate specific instances to the United States Export-Import Bank for the purpose of financing Middle Eastern requirements for United States export products, and to support such recourse to the Bank in appropriate instances.
We might further suggest that joint exploration be made of the possibility of devising special arrangements to encourage the participation of private capital in Middle Eastern development. It may be that arrangements could be devised under which private capital could participate, together with private technical skill and management, in promoting economic development in Middle Eastern countries, the British and the United States contributing in accordance with their abilities.

It is not to be expected that in preliminary discussions definite conclusions can be reached or definite undertakings made with respect to specific projects. It should however be possible to develop a closer general acquaintance with each other’s point of view, to remove unnecessary grounds for misunderstanding or distrust, and to agree upon scope and methods of further exploration of such specific projects as may be of interest. Some of these are indicated in Part III [C ?]. The immediate general purpose can perhaps best be summed by the remark [Page 521] made to a representative of the United States Embassy in London by an official of the Middle East Secretariat to the effect that American British cooperation in the area depends “more on a state of mind than anything else”.

  1. The reference is to the section on “Specific Current Questions”, infra.