Foreign Relations of the United States, 1947, The Near East and Africa, Volume V

NEA Files: Lot 55–D36

Memorandum Prepared in the Department of State

top secret

[Washington, undated.]

Specific Current Questions

[Here follow a table of contents and a note which states: “The material included in this section was prepared by officers dealing with these matters in the interested geographical divisions of the Department and is intended primarily to furnish factual background regarding specific current questions which might come up for discussion with the British. Unless otherwise indicated, the views expressed represent present thinking at the the operational level rather than agreed Departmental policy.”]

1. military (non-technical) [questions]

a. Bases:

1) Egypt:

For reasons of regional security and stability we desire British troops to remain in the general area. Since under conditions of modern warfare troops in the Suez Canal area can no longer be considered to constitute an adequate defense of the Canal, since their evacuation is ardently desired by the Egyptians and since their continued presence might prove to be a liability rather than an asset from the point of view of possible Russian aggression, we hope they can be removed elsewhere in the area at an early date. We could not consistently, however, press for an evacuation until another major base, such as Cyrenaica, is made available. The Egyptian base is now used as the chief supply center for British troops in Greece and Palestine. It would be wise, however, to have the troops in Egypt reduced to the numbers provided for in the 1936 Treaty.¹ It is understood that this reduction has already begun.

Letters on the subject of British troop evacuation from Egypt and the possible use of Cyrenaica as a substitute base, were addressed by the Department of State to the Departments of the Army and Navy on September 18² (Enclosure # A1³). On September 26 the Secretary of the Navy expressed agreement that this subject should be discussed in the proposed talks with the British on over-all policy in the Middle East. In so doing, the Secretary pointed out that the Navy Department considered it of the utmost importance that the United States and other nations of the Western world should continue to have access to the resources of the Middle East and to have the use of sea communications through the Mediterranean. This made it essential that neither the Straits of Gibraltar or Suez should pass under the control of any power unfriendly to the United States and that forces friendly to the United States should be able effectively to control those two positions, which would be of vital importance even if sea communications through the Mediterranean were restricted. On September 29, the Secretary of the Army, with the concurrence of the Secretary of the Air Force, observed that Cyrenaica would probably be the best base to which British troops might be withdrawn in the event of their evacuation of Suez, but expressed the opinion that a final conclusion on this subject could not be reached without consideration of the over-all Mediterranean situation.⁴

2) Cyrenaica:

See foregoing.

3) Transjordan:

There would appear to be no objection to the establishment of a British base in this area since Transjordan is in treaty relationship with Great Britain permitting the stationing of British troops in that country.

4) Kuwait:

The British have indicated to us tentative plans for the establishment of an important base in Kuwait, possibly in conjunction with Iraq, and seem to feel that such a project could be carried into effect without serious opposition on the part of Saudi Arabia, despite the strong feeling between the ruling house of that country and that of Iraq. On the assumption that a satisfactory arrangement of this potential difficulty can be made, there would seem to be no reason to object to establishment of a British base in Kuwait, particularly since that state is under British protection.

5) Iraq:

The British evidently hope that current Iraqi agitation for treaty revision which would carry with it the loss of British base rights in Iraq may be met by the proposed sharing of the proposed Kuwait base. Assuming that such an agreement could be amicably reached and appropriately covered by treaty arrangement, there would seem to be no reason for objection by the United States Government.

6) Palestine:

It is our understanding that the British do not contemplate retaining a military base in Palestine beyond the termination of their political responsibility.

7) Cyprus:

The value of Cyprus as a military, naval, and air base is a matter for military determination. From the political point of view the fact that the great majority of Cypriots are of the Greek race and apparently desire Cyprus to be united with Greece, is worthy of notice. It may be observed, however, that in areas such as this where the number of people affected is small and the strategic importance great, the latter consideration is often prevailing.

b. Military Missions and Military Assistance:

1) Egypt:

In August the Prime Minister of Egypt, without any reference to the 1936 Treaty, requested the Acting Secretary and the Secretary of the Army to send Military experts to Egypt to assist in strengthening the military establishment.⁵ He was informed that no commitments could be made at present owing to the lack of enabling legislation. The Acting Secretary advised against the employment by Egypt of reserve officers but suggested that the Prime Minister might consider the advisability of inviting civilian engineers to advise the Government of Egypt regarding the setting up of appropriate war industries in support of a military establishment.

2) Syria:

Some time ago the Department discussed with British Embassy officials a request of the Syrian Government for an American military mission to train the Syrian Army. The Syrian request was not complied with, in view of the opposition of the French Government and our desire not to offend it, also because of the absence of legislation which would permit the delegation of U.S. military personnel beyond the formal termination of the war.⁶

3) Saudi Arabia:

There are approximately 75 United States Army officers and men at Dhahran today maintaining and operating the airport and carrying on a program to teach the Saudi Arabians to take over this field, King Ibn Saud is anxious that his people learn how to operate airports and, because of the backwardness of the Saudi Arabians in such matters, it is likely that this mission will have to stay in Saudia Arabia for a good many years to come.

BOAC is now flying into Dhahran and has requested servicing in the form of lodging, meals, and maintenance and service of planes. The British have been told that the United States Army is not in position to provide these services, but that the British can continue to use the airport if they provide the services themselves. Air France and KLM have similarly been advised. It is clear that the Saudi Arabian Government must take steps to organize these services, in order that the Dhahran Airport may be used to the fullest.

A small British military mission is stationed at Taif, Saudi Arabia, and is giving infantry training.

4) Iran:

The only military missions in Iran are the two from the United States—one to the Iranian Army and one to the Iranian Gendarmerie, both of which, if present negotiations are satisfactorily concluded, might be effective until 1949. The U.S. has approved an FLC credit of twenty million dollars [25,000,000] to Iran for the purpose of buying surplus combat and other supplies for the Iranian Army and Gendarmerie.⁸ Implementation of that credit is subject to the approval of the Iranian Parliament in the near future. Continuance of the U.S. military missions is contingent upon (1) passage of the Military Missions Bill by the U.S. Congress, and (2) willingness of the Iranian Government to recognize the usefulness of those missions by accepting their recommendations. Extension of the contemplated military material assistance to Iran now depends upon action by the Iranian Parliament. A favorable vote would be expected under normal circumstances, but there is a possibility of rejection in present circumstances as a gesture of propitiation to the Russians in the event that the Soviet oil agreement is not approved.

While the British have no special military missions in Iran, certain British air officers do train the Iranian Air Force in the use of British planes which at present constitute the entire complement of Iranian Army aircraft. A problem has arisen concerning the relative functions of the British aviation instructors and the U.S. aviation advisers attached to the mission to the Iranian Army. It is suggested that, in view of the over-all responsibilities of the U.S. Military Mission concerning organization and administration of the Iranian Army, the British Government direct their aviation instructors to coordinate their training with American direction of Iranian Army administration. The question of the training of Iranian pilots in the use of such American planes as may be acquired has also arisen, and consideration is now being given the relative merits of training in the United Stated and providing facilities for training in Iran on a continuing basis.

5) Turkey:

Under authority of the Greek-Turkish Aid Bill of May 22, 1947,⁹ the United States is furnishing Turkey military and naval equipment to the value of approximately $100,000,000. Virtually all of this will be provided as a gift. The Turkish Government has just made an informal request for an additional $100,000,000, primarily to cover anticipated military expenditures in the year 1948. We have little information as to the basis of this request and are doubtful of its justification. However, there is no doubt that the proper equipment and organization of the Turkish armed forces on a modern basis would require at least another $400,000,000, as reported by the American Survey Mission which visited Turkey in the first part of the past summer.

A U.S. Army–Navy–Air group will shortly go to Turkey to instruct the Turks in the use of the new equipment being furnished.

There is a small number of British Army, Navy and Air personnel in Turkey to give instruction in certain specialized fields.

(See* page 7a). [Here follows page 7a: “*The Turkish Government has requested our estimate of the international situation, with special reference to the Soviet Union and Turkey, to assist it in deciding whether or not to release one of the three classes now mobilized in the Turkish Army. Release of a class without replacement would reduce the size of the Army from about 485,000 men to about 330,000 men. It would effect a substantial saving in the national budget and would also release much needed manpower for productive work, but the Turks are hesitant because they fear it would encourage the Russians to put pressure on them and might discourage the Greeks and other peoples now being subjected to Soviet pressure.

We propose to inform the Turks that we do not consider war imminent and do not believe that the reduction in Turkish forces would materially affect the Soviet course of action towards Turkey. We intend to suggest, however, that the reduction be handled in such a way as to give the impression that it is merely a reorganization of the Turkish armed forces and to demonstrate that there is no change in Turkish foreign policy or Turkish determination to resist any attack.

The Turks have made the same request of the British Government which has, independently, arrived at substantially the same views as our own. The British, however, intend to present their views to the Turks in the form of direct advice whereas we plan merely to give our estimate as a matter of information with the specific reservation that the Turks must make their own decision. The Department of the Army is in accord with our position.”]

6) Greece:

Of the total $300,000,000 allotted to Greece under the Greek-Turkish Aid program, $158,000,000 has been earmarked for military expenditures. Some 25,000 tons of all types of military goods have arrived in Greece and an additional 30,000 tons are either en route or being loaded in U.S. ports. As some Greek Army equipment, particularly ordnance, is largely British, U.K. material continues to be sent to Greece. Since May 22, 1947 this material from the U.K. has been paid for by the U.S.

U.S. Army and Navy officers are furnishing advice to the Greek Army on logistical questions. Consideration is being given to the possibility of Americans furnishing operational advice to the Greek Army. A decision in this matter awaits General Chamberlin’s¹⁰ recommendations.

The British Military Mission has been operating since November 1944 for the purpose of training and organizing the Greek Army. The expenses of the Mission are borne entirely by the British and Mr. Bevin has given his assurance that the Mission will remain until its task is finished. The Chief of the Military Mission, General Rawlins, is a member in an advisory capacity of the Greek Supreme Military Council. We feel that this Mission is performing a very useful work in spite of the fact that, according to an unofficial advice, we believe its strength has diminished considerably from the original figure of approximately a thousand men and officers, and in spite of the fact that British prestige and authority have been considerably eclipsed by the inauguration of the U.S. Aid Program. We think it important that the Greek Army not be subjected to further changes in organization and system and that therefore the British be encouraged to continue.

An agreement regularizing these relationships is currently under consideration in Athens and the British have requested our views on a proposed joint directive to serve as guidance in the drafting of this agreement. The American Embassy in Athens and AMAG consider present informal arrangements adequate and believe that the proposed agreement and directive imply wider U.S. responsibilities than we are now prepared to accept. No final decision will be taken by the United States on this matter or other Greek matters of a military nature until General Chamberlin’s recommendations have been received.

7) Ethiopia:

The only formal military mission functioning in Ethiopia at the present time is the British military mission, which is training the Imperial Army. At the beginning of August, there were indications that the mission might be materially reduced in size, in connection with overall British plans to reduce British forces in the Middle East. However, the decision to reduce the size of the mission has now been indefinitely postponed, probably because of the uneasy situation among the tribesmen in the South of Ethiopia, against whom the Imperial Army is now engaged in operations.

Although they are not members of military missions in the proper sense of the term, a number of Swedes have been employed by the Ethiopian Government to train the Imperial Guard and the Imperial Air Force. In addition, British officers have been retained to train the Ethiopian police.

The United States Government has not furnished any arms or munitions to Ethiopia since the cessation of lend-lease. However, several indications have been received from the Ethiopian Government of a desire to obtain such equipment in the United States, including an inquiry regarding full equipment for a motorized division, which was summarily dropped when an estimate of cost was furnished. Recently, a list of equipment which the Ethiopian Government desired to secure for the purpose of maintaining internal law and order was submitted to the Department, and the purchase was approved by the Arms Policy Committee on a non-priority basis.

Following this Government’s approval of the sale of these arms and munitions to Ethiopia, it was reported by Ethiopian sources that the Soviet Government had offered to make a gift of certain quantities of arms, munitions and other material of war, including heavy equipment, to the Ethiopian Government. The Department is now studying the possibility of indicating to the Ethiopian Government that any sale of U.S. arms to it would be conditional on the refusal of the Soviet offer.

c. Arms Policy:

Because of the special circumstances arising out of the British position in the Middle East and unsettled political conditions, with particular reference to Palestine and the Saudi-Hashemite feud, it has been the general policy of the United States to refrain from authorizing the export of arms to countries in the Middle East beyond such material as might properly be required for the preservation of internal security.¹¹ The only exceptions to this have been countries under threat of Soviet or Soviet-inspired aggression. It is suggested that this policy should be reviewed in the light of such recommendations as may be made regarding the over-all strategic requirements of the area.

d. Central African Road:

The uncertainties of the British position in the Eastern Mediterranean have led the British to cast about for alternate sites for military bases in the Middle East. Some twelve months ago, reports were received in the Department that Kenya Colony was among possible locations which were being considered. While it is believed that from a strategic point of view Kenya is too far from the Mediterranean and the Suez Canal Zone to be a satisfactory operational base, it has many advantages as a supporting base. Kenya is a Crown Colony and is, therefore, reasonably secure from political complications such as nationalist disturbances. For this reason, it would be fairly safe for the British Government to base future long-range plans on the use of Kenya Colony. Kenya has areas of undeveloped land, with a variety of terrain types, which would be ideal for training and maneuvers. Also, the climate is very satisfactory. Mombasa, which was used to a limited extent as a naval base during the last war, has a good harbor which could be expanded. Its greatest drawback is, perhaps, communications. If the Mediterranean route could not be kept open, in the event of another war, it would be necessary to supply a base in Kenya largely by sea around the Cape of Good Hope. The British Government, however, is giving consideration to plans for creating road, rail, air, and communication links across Central Africa from Nigeria, on the West Coast to Kenya on the East Coast. The present status of these plans is not known. British troops and material, however, have recently been moved to Kenya from India. Conversations are reported to have been held between British and French representatives to discuss proposals for connecting Kenya Colony by air lines, railroads, and highways with the British and French territories on the West Coast of Africa. One possible route would be from Lagos, in Nigeria, across the French Cameroons, French Equatorial Africa, the Anglo-Egyptian Sudan, and Uganda, to Mombasa, in Kenya Colony. If French cooperation is obtained, the route might be extended to Dakar, in French West Africa, where it is believed that France is planning to enlarge its air and naval facilities.

2. political questions

[Here follows a table of contents.]

a. Problems Involving a Threat to the Peace

1) Greece:

The threat to the peace arising out of the assistance being given Greek rebels by Albania, Bulgaria, and Yugoslavia is obvious. The gravest danger here is that a so-called “Free Greek Government” may be established¹² on a sufficient scale to permit the three northern countries, and possibly the Soviet Union and its other satellites, to recognize it and support it in a full-scale civil war. If the United Nations is unable to prevent this, the result could easily be something much more serious even than the Spanish Civil War of 1936–1939. The attached letters, dated July 11, 1947¹³ [Annex A2] and July 12, 1947,^13a [Annex A3] addressed to the Chief of the American Mission for Aid to Greece, indicate the nature and scope of the assistance which we are currently rendering in order to maintain the independence and integrity of Greece.

2) Turkey:

In Turkey there is a real, but temporarily quiescent, threat to the peace arising out of the efforts of the Soviet Union to obtain a dominant position in the Straits and to annex portions of eastern Turkey. The last Soviet move in this direction was made in the late Summer of 1946, but it may be expected that further efforts will be made whenever the USSR considers the moment propitious.

3) Iran:

Iran is under recurrent Soviet pressure¹⁴ which may at any moment develop into a threat to the peace of utmost gravity. At the moment, this pressure is directed toward obtaining ratification of an agreement whereby the USSR would in effect obtain an oil concession covering the greater part of the Iranian provinces adjacent to the Soviet Union. The Russian Ambassador in Tehran has threatened that if this agreement is rejected by the Iranian Parliament, the USSR will consider Iran as a “blood enemy”. Soviet action to implement this threat may include the fomentation of guerrilla activities directed against the Iranian Government along the lines of the Greek rebel operations. Dissatisfied tribes and other minorities would probably be utilized. A. coup d’état against the ruling dynasty is not altogether improbable.

The Joint Chiefs of Staff consider that Iran is an area of major strategic interest to the United States and that this interest would be adversely affected by Soviet domination of any part or all of Iran. [Annex A4] (Questions Projected by the Department, Sep. 26, 1946¹⁵ and Joint Chiefs of Staff Answers dated Oct. 12, 1946¹⁶). The Department feels that the granting of any kind of oil concession to the Soviet Union would seriously endanger the future independence and integrity of Iran. [Annex A5] (Deptel 487 to Tehran, August 18, 1947¹⁷). Should Soviet interference in the internal affairs of Iran lead the Iranian Government to reactivate its case before the Council, the Department is prepared to continue its future support of Iranian independence. [Annex A6] (Deptel 434 to Tehran July 29, 1947¹⁸).

4) Afghanistan:

A lesser development which might prove to be a threat to the peace is the current dispute between Iran and Afghanistan over the waters of the Helmand River.^18a The Iranians claim that the Afghans are diverting water from the River, thus leaving the farms of one section of eastern Iran without the necessary water for irrigation. Although this dispute should be susceptible of adjustment, the excitable attitude adopted by the Iranian Government might make it more serious than the facts and issues would warrant.

We were recently informed that the Iranian Government had instructed its Delegation to bring this matter before the United Nations. Our influence has been used with apparent success to dissuade the Iranians from this action and we recently instructed our missions at Tehran and Kabul to suggest that this matter be referred to their representatives in Washington for informal discussion with a view to evolving constructive recommendations for a reasonable settlement. We offered to be of any possible assistance in furthering such a solution.

Afghanistan has also become involved in certain difficulty with Pakistan over the future status of the Pathan population in the Northwest Frontier area. The Afghans have maintained that they have no aspirations for hegemony over these people but maintain that they should be given a free choice regarding their future status. We have indicated to both sides our hope that this matter can be settled in a spirit of good neighborliness.

5) Palestine:

Palestine also presents a grave security problem as the trend develops toward extremism on both the Arab and Jewish sides.¹⁹ This matter is discussed further under a following heading.

6) French North Africa:

French North Africa is important to the security of the US primarily because of its strategic geographical position, flanking US routes to Eastern Mediterranean oil as well as Great Britain’s Mediterranean lifeline. A North Africa friendly to the United States and the Western Powers would, in the event of military action in the Middle East, contribute greatly to the security of the militarily important eastern Mediterranean area.

The security of the area is at the present time maintained by France.” France’s position there, however, is not firm. The aspirations of the Nationalists for independence and the machinations of the Communists, combined with the inability of France to conceive and implement a policy designed to solve the major political problems there, cast considerable doubt on the security of French North Africa in the future. If France herself comes under Communist control, it is highly probable that French North Africa will also. If the countries of French North Africa gain independence abruptly, there is grave danger that they would soon come under at least indirect Communist control, unless the US intervened directly and drastically to prevent it.

The only apparent solution to the problem is for the Government of a non-Communist France to come to an agreement on a modus vivendi between the peoples of France and North Africa. Without doubt this agreement will have to be based on a realistic appreciation of the fact that, in the not too distant future, the countries of North Africa will be largely independent.

Comment:

A review of all of these matters with the British would be advisable in order to make certain that our efforts are properly concerted in preventing these difficulties from becoming more serious. Thought should also be given to action which would be taken in the event that any of these problems should get out of hand.

b. The Communist Problem:

[Here follows a discussion of the Communist problem in Greece, Turkey, Iran, Syria and Lebanon, Iraq, Egypt, Saudi Arabia, Palestine, Ethiopia, and French North Africa, concluding with the comment that “This general subject should be discussed with the British with a view to exchanging factual information both now and in the future and also to recommending appropriate action. In such discussion, particular emphasis should be laid on the possibility of establishing closer and more effective contact with organized labor in the countries of the Middle East through the appointment of experienced labor attachés, having especial regard for the selection of the right kind of American and British representatives to undertake this important work.”]

c. Internal Political Situations:

While it is our normal inclination to avoid becoming involved in the internal affairs of other countries, experience has shown that in certain situations such circumspection may be to the detriment of ourselves and our friends. The following developments are reviewed in this light and some at least will presumably come up for discussion with the British.

Greece:

The inability of Greek political leaders to establish a stable and efficient government in Greece has greatly retarded the economic, social and political rehabilitation of the country. In consequence, it has opened the way to the Communists and their affiliated organizations in their determined attempt to destroy internal order and take control. Fortunately, the latest change in Cabinet has brought into office a moderate Prime Minister who shows evidence of intending to combine justice and moderation with firmness. If the present coalition can endure, there is good reason to hope for a substantial improvement, but it rests on shaky foundations and will require the most careful watching.

Our policy has been to work steadily for a broad cabinet including as many as possible of the parties represented in the Parliament, but excluding both the Communists and their sympathizers on the one hand and the small group of violently reactionary rightists on the other. We have, however, generally avoided making specific suggestions to the Greeks regarding personalities or groups to be included or excluded. We propose to continue on this line, emphasizing the need for national unity and the submergence of individual political ambitions and party rivalries. (Deptel 69 to Athens, January 21, 1947. [Annex A7])²⁰

Turkey:

Political conditions in Turkey are stable and marked by a definite trend toward more complete democracy. It appears unlikely that any special action by the U.S. or Britain will be called for in this sphere.

Iran:

Iranian politics operate on the principle of leadership as opposed to party programs. The present Prime Minister, Qavam es-Sultaneh, is the dominant political leader of Iran, controlling approximately three-fourths of the Parliamentary representation. That control is based upon Qavam’s power during the recent elections, at which time he headed the only organized political party in Iran and supervised the election of his hand-picked candidates, plus the fact that his program of economic and social reform has certain appeal to the independent political elements within Iran.

The Shah, by virtue of the prestige of his position and his leadership of the Iranian Army, controls the political disposition of a sizeable segment of the population as represented by approximately one-fourth of the Majlis members. Out of concern for his personal position as well as the uncertainties in Qavam’s attitude toward the Soviet Union in the past, the Shah has a personal animosity toward any strong civilian authority, particularly when such authority elicits the support of powerful, dissident tribal leaders.

While all political elements are generally opposed to Soviet influence within Iran, particularly since the passing of the Tudeh Party from power, Iranian politicos tend to retain their traditional policy of playing a balance of power game between the two foreign powers currently most interested in Iran. In the view of this Government, the U.S. does not propose to succeed to the British role of dominance in the South, in balance to Soviet influence in Northern Iran, and takes every opportunity to encourage independent Iranian action in the interest of the country. We have recently made known our attitude toward the desirability of re-styling internal political defenses within Iran [Annex A8] (Deptel 584 to Tehran, September 26, 1947.²¹)

Arabian Peninsula:

The United States has not in the past, is not now, and is not likely in the foreseeable future to take part in internal politics in the countries of the Arabian Peninsula. It is expected that Prince Saud will succeed his father peacefully in Saudi Arabia, and that Prince Ahmed will succeed the Imam in Yemen. Even if these transitions should not take place peacefully, the United States would be reluctant to interfere except in extreme circumstances.

Ethiopia:

In view of the geographical location of Ethiopia vis-à-vis Aden, the strategically important Red Sea area and contiguous British territories, it is in the interest of both the British and American Governments that the Government of Ethiopia should be sufficiently strong to enable it to maintain internal law and order. At the present time, the authority of the government diminishes the further the distance from the capital. Some of the more remote districts are semiautonomous feudal units, with local chieftains either in open or tacit defiance of the authority of the central government. It is obvious that such a situation makes the task of the central government difficult and creates a potentially dangerous situation in a vital area. [Annex A9²²] Although the present Government has made important strides in unifying the country, there is still much room for improvement. The U.S. and U.K. should be prepared to render all appropriate assistance to the Emperor in his efforts to centralize the administration of the country and to institute programs of reform and development which would have the effect of increasing the prestige and authority of the Crown.

Afghanistan:

The situation in Afghanistan is somewhat analogous to that of Ethiopia in that it has a narrowly based central government under constant pressure from tribal elements. The internal situation there at present however does not appear to be a cause of especial concern.

Other Middle Eastern Countries:

The internal situations in Egypt, Iraq, Syria, and Lebanon do not call for comment at present.

French North Africa:

The political situation in French North Africa,²³ although not yet desperate, is serious; and if it continues to deteriorate at the same pace as during the last twelve to fifteen months, there is a definite possibility that what is now a political problem will turn into a danger to peace.

The Nationalist movement in North Africa is gaining in strength and determination. In general, the North African Nationalists are demanding independence from France. Their aspirations are receiving encouragement from the Arab League, which has, however, restricted its activities so far to moral support. The Communist Parties of Morocco, Tunisia, and Algeria have been employing their propaganda apparatus and other techniques in support of the Nationalists’ demands, although presently advocating “autonomy within the French Union.” Whether the Communists will favor complete independence from France, autonomy within the French Union, or complete union between the “progressive” elements in both France and North Africa will depend upon the internal political situation in France, the current degree of power of the French Communist Party, and, of course, overriding orders from Moscow which sometimes demand a policy in the dependent areas not designed to further the best interests of the Communist party in the mother country. So far the Moroccan and Tunisian Nationalist parties have refused to associate themselves with the Communists despite the entreaties and tactics of the latter.

France does not seem to have evolved a long-range colonial policy designed successfully to meet the changed political situation in her Empire. If such a policy exists, its implementation is being alarmingly delayed. The French have been inconsistent and misdirected in their use both of force and concessions vis-à-vis their dependent peoples, and, as a result of all of these factors, France would appear to be in a very poor position to solve the political problems facing her in North Africa without some assistance.

The State Department has now undertaken a plan of faction which it is felt may be of considerable assistance in improving the internal situation in French North Africa. [Annex A10²⁴] Politically, this plan envisages a high-level, confidential, land oral approach to the French Government with a view to urging the French to offer to the peoples of Morocco and Tunisia constructive, concrete, and long-range proposals guaranteeing gradual but sure evolution toward something comparable to dominion status. The French will be assured that if they take such steps we will be willing to support their program vis-à-vis the Arabs. If our proposition is accepted and acted upon in a manner satisfactory to us, we can then approach the Moslems of North Africa and point out how such an evolution under the aegis of a benevolent France is to their advantage. In view of the fundamental differences in the political, economic and racial problems of Algeria, we may have to support the Algerian Statute, which has recently been voted by the French Assembly, until such time as it has had a chance to prove itself; but at the same time we can urge the French to expedite further social and educational programs throughout Algeria.

d. Special British Treaty Relationships:

Kuwait, Bahrein, … and the Sheikhdoms of the Trucial Coast have chosen to place the conduct of their foreign relations in the hands of the British, and are known as British protected States. Political and economic changes in the Persian Gulf over the last fifteen years have made this situation obsolete. In view of the fact that the British are pulling out of India while at the same time American interests are predominant in Saudi Arabia and Bahrein, and rapidly growing in importance in Kuwait, it is reasonable for us to inquire of the steps the British are planning to take to recognize the new situation in the Persian Gulf, as well as in south Arabia.

Iraq:

It would be to the interest of all concerned to abrogate the Anglo-Iraqi exchange of notes of June 30, 1939, which binds the Iraqi Government to engage only British subjects when in need of the services of foreign officials except for posts for which suitable British subjects are not available.

Egypt:

The military clauses in the 1936 Treaty regarding missions, training of Egyptians abroad and purchases of supplies are a limiting factor in the development of any military cooperation along these lines which we might wish to extend to Egypt. We regard the clauses as binding on Egypt until revised or abrogated and although we do not, of course, look on them as legally binding on us, it is our policy, as a matter of courtesy to the UK, to refrain from supporting Egyptian violations of them by acceding to Egypt’s requests inconsistent with them without UK concurrence. As in the case of the waiver of the British diplomatic precedence clause, prior to the raising of our Legation to an Embassy,²⁵ the British would undoubtedly not insist on a strict observance of these military clauses if the Egyptian case is disposed of in the Security Council. It should be noted that the proposed draft revision of the Treaty (Bevin–Sidky) omits these clauses as well as those providing for a perpetual military alliance even after 1956.

Furthermore, until the 1936 Treaty is revised, and in the event of a war between the US and a third power in which the UK might be neutral, it might be very difficult for us to arrange to establish bases in Egypt. It should be recalled that our military operations in Egypt during the last war were made possible by the British under the provisions of the Treaty of Alliance with Egypt. Article 5 of the 1936 Treaty reads as follows: “Each of the high contracting parties undertakes not to adopt in relation to foreign countries an attitude which is inconsistent with the Alliance, nor to include political treaties inconsistent with the provisions of the present treaty.”

Attention is also called to para. 11 of the Annex to Article 8 which provides as follows: “Unless the two Governments agree to the contrary, the Egyptian Government will prohibit the passage of aircraft over the territories situated on either side of the Suez Canal and within 20 kilometres of it, except for the purpose of passage from east to west or vice versa by means of a corridor 10 kilometres wide at Kantara. This prohibition will not, however, apply to the forces of the High Contracting Parties or to genuinely Egyptian air organizations or to air organizations genuinely belonging to any part of the British Commonwealth of Nations operating under the authority of the Egyptian Government.”

e. British Middle East Office:

The British Middle East Office, an outgrowth of the Middle East Supply Center in which the U.S. participated during the war,²⁶ now makes available economic experts to Middle Eastern countries desiring them and performs various coordinating functions. Apparently little use has been made of the services of this institution.

We do not believe that passive assistance of this character to the Middle Eastern countries will adequately meet their needs. Moreover, the B.M.E.O. inherits, to some extent, the unpopularity in the Middle East of the old MESC. In our view, the lethargy of the governments of this area necessitates a more active form of assistance than that envisaged by the B.M.E.O. For this reason, and because an overtly coordinated proffer of Anglo-American assistance of this type would be looked upon with suspicion by Middle Eastern governments, we do not favor U.S. participation in this organization.

f. Cultural and Informational Activity:

Although this subject does not fall within the specified scope of the conversations, it is suggested that mention of it might properly be made as one of the instruments at our disposition of which full advantage should be taken in seeking to obtain common objectives. Unfortunately there has sometimes been a tendency for American and British cultural and informational agencies to be more competitive than cooperative. While a certain amount of healthy rivalry may not be amiss, and while complete identity of approach would doubtless be tactically unwise, it is believed that closer behind-the-scenes consultation and planning would be beneficial.

g. The Turkish Straits:

[Here follows one paragraph reviewing Soviet pressure on Turkey in connection with the Straits in 1946.]

Since last fall the question of the Straits has remained dormant, but there is no reason to believe that the USSR has relinquished its determination to obtain a share in the control of the Straits. It is our belief that the Russians are interested in this not so much because of the importance of the Straits themselves, since it would be possible for the Soviets to close the Straits by the use of aircraft based in their own territory or on that of Bulgaria or Rumania, but because a foothold in the Straits region would open the way for the USSR to achieve complete domination or Turkey and subsequently of the rest of the Near East.

It would be desirable to confirm our assumption that the British attitude toward the Straits question remains substantially the same as our own.

h. The Palestine Question:

Current Aspects:

As stated by the US representative in the special committee of the UNGA on October 11, we consider that “in the final analysis the problem of making any solution work rests with the people of Palestine.” In the absence of agreement upon a basis for settlement by the parties primarily at interest, we consider that the GA has an important role to play in recommending a solution which “should not only be just, but also workable and of a nature to command the approval of world opinion.”

It is presumed that the UK is in substantial accord with our attitude, as expressed above.

More specifically, we have stated that we support “the basic principles of the unanimous recommendations (of UNSCOP) and the majority plan which provides for partition and immigration,” but we consider that certain amendments and modifications should be made in the plan in order to give effect to the principles on which it is based.

The problem of implementation is obviously one which will have to be carefully considered by the GA.

Presumably the UK will not feel called upon to express its views on the majority plan or any other plan until it receives the recommendations of the GA.

As further stated by the US representative on October 11, “responsibility for the government of Palestine now rests with the Mandatory Power”. It is difficult to see how the UK could divest itself of responsibility for governing Palestine until arrangements of some kind are made to relieve UK of its existing responsibility.

[Here follows a discussion of the general aspects of the Palestine question.]

i. The Arab League:

Basically, we regard the Arab League as a sound conception, although we do not regard it as having any official status and deal with it through its individual members rather than as an institution qualified to represent the states adhering to it. It satisfies the natural and legitimate desire of the Arab states for an organization which will develop and give practical expression to their common views and needs, and which can perform a useful service in settling some problems arising between the various Arab states themselves.

[Here follow three paragraphs stating that the United States had supported the latter aspect of the League’s activities, pointing out the undoubted tendency by the Secretary General of the League to utilize his position to support Egyptian aspirations by speaking in the name of the League, and indicating the Department’s feeling that the Arab League should concentrate further on economic matters.]

In brief, we feel that the Arab League serves a useful function, and that, in such ways as are open to us, we should encourage its development along constructive lines.

We shall undoubtedly wish to discuss with the British the role which the League might play in any coordinated Anglo-American policy toward the Middle East.

j. Transjordan:

King Abdullah has made it plain that he greatly desires US recognition of the independence of Transjordan.²⁸ We have refrained from recognizing the independence of Transjordan in view of the great pressure which was brought to bear upon the Department to make energetic representations to the British Government in regard to the latter’s recognition of Transjordan as an independent state. It was felt that recognition of Transjordan by the US would result in such violent criticism of the Department that its work on the main Palestine issue would be seriously impaired.

We have consistently supported Transjordan’s application for membership in UN. When that is accomplished, recognition of Transjordan by the US would be logical and more easily justifiable. If the admission of Transjordan to UN should be long delayed, we could probably proceed to recognition whenever a Palestine settlement is reached which is of a nature to make it clear that the Zionists cannot hope to realize their aspirations in Transjordan.

k. Greater Syria:

The Greater Syria issue appears to be satisfactorily composed for the present, through British action in exercising a restraining influence on King Abdullah of Transjordan. We believe the British statement declaring British neutrality in this matter was helpful, even if it did not completely satisfy the countries opposed to Abdullah’s plans.

In response to an appeal from King Ibn Saud, we set forth our attitude on this question in the manner shown in the appended telegram.²⁹ [Annex A11]

In a fundamental sense, we are not opposed to the amalgamation of some of the small Near Eastern States, so long as this is accomplished in accordance with UN principals. Amalgamation would have obvious economic advantages. On the other hand, it would subject Lebanon and Saudi Arabia to severe political strains.

l. The Egyptian Question:

The outstanding event in Egypt’s foreign affairs has been its appeal to the Security Council regarding the revision of the 1936 Anglo-Egyptian Treaty of Alliance and the status of the Sudan. Protracted negotiations between the two countries broke down over the question of the future status of the Anglo-Egyptian Sudan. The British were willing to acknowledge Egypt’s titular sovereignty over the Sudan but insisted that the status quo be maintained until the Sudanese were sufficiently advanced to opt for their own political status. The Egyptians expressed willingness to work toward granting the Sudanese autonomy but would not agree to their ultimate right to vote for complete independence with consequent separation from Egypt.

The Egyptian Prime Minister asked the Security Council to direct immediate evacuation of all British forces from Egypt and the Sudan and to direct termination of the administrative regime in the Sudan³⁰ which Egyptians maintain is used to encourage a separatist movement. He maintained that the question of the administration and future status of the Sudan is a matter for the people of the Nile Valley to decide.

The British representative in his first statement asserted that the Egyptian Government had shown no grounds for Security Council action since there was no danger to international peace and security and because the matters of which Egypt complained were covered in valid treaties still in force. He emphasized that the above-mentioned British attitude toward the future of the Sudanese would not be abandoned. In later statements he denied that the present British policy in Egypt and the Sudan was a continuation of nineteenth century imperialism, pointing out the great progress made in the Sudan under the condominium and insisting that the small Egyptian participation was not so much the result of British pressure but rather to Egypt’s failure to supply adequate personnel at appropriate administrative levels. He pointed out that during the negotiations for the revision of the 1936 Treaty, agreement had been reached on the date of withdrawal of British troops from Egypt, and he referred to British willingness to resume negotiations.

The U.S. supported a resolution proposed by Brazil recommending that the parties resume direct negotiations, and that in the event of failure they select any other peaceful means of their own choice to settle the dispute; also, that the Security Council be informed of the progress of such efforts.

Resolutions recommending resumption of negotiations were also introduced by the Colombian and Chinese representatives but these, like the Brazilian resolution, failed to pass and there is at present a complete deadlock, although the Security Council remains seized of the dispute. The Russian and Polish representatives have abstained and will continue to abstain from voting on any resolution which does not clearly direct the immediate evacuation of British troops from Egypt. They reserve their opinions on the Sudan issue. The Egyptians and their chief supporters will be dissatisfied with any resolution which does not express or imply confidence that the British will announce their intention to evacuate troops at an early date prior to a resumption of negotiations for a settlement of other matters in dispute in connection with the treaty revision. Four or five of the representatives, including the U.S., believe that the Egyptians have not sufficiently proved that the dispute is a threat to international peace and security and that, therefore, Article 37 of the Charter should not be invoked. They have avoided a discussion of the substantive merits of the case. Although technically the case might have been thrown out on the grounds of “no jurisdiction” it was permitted to be placed on the agenda and thoroughly discussed in an endeavor to help the parties reach a fair solution. The British oppose any resolution which implies censure or criticism of them for considering the treaty valid until revised, abrogated or terminated, and although willing to have the question of the treaty’s validity referred to the ICJ (a proposal violently opposed by the Egyptians) and to resume negotiations, the British object to having one of the matters under dispute (evacuation) mentioned even in the preamble of a resolution without a balancing clause alluding to the existence of a valid treaty and to the other items in dispute, all of which, the British consider, should be negotiated simultaneously. Both parties have expressed a desire that the matter before the Security Council remain “status in quo” until possibly the end of the current General Assembly session. Although we are interested in increasing the prestige of the Security Council and would be willing to propose a resolution at an appropriate time if we thought it could receive the necessary 7 affirmative votes (which is extremely doubtful) for the present we are not planning to take any initiative in the matter.

Very little discussion took place in the Security Council on the Sudan issue which was the chief obstacle in the 1946 negotiations for treaty revision. According to the draft revision agreement was reached on the date of withdrawal of British troops (September 1, 1949) and on the establishment of a Joint Board of Defense. Articles 2 and 3 read as follows:

[Here follow the texts of Articles 2 and 3 and of the draft Sudan Protocol.]

The Egyptians’ interpretation is that although they are willing to assist the Sudanese in obtaining autonomy, they cannot agree, as mentioned above, to permit the Sudanese to opt for their future political status which might result in complete independence and consequent secession from Egypt. In fact, the extreme Egyptian thesis is that both the 1899 Condominium agreement and the 1936 Treaty are no longer valid, that the Sudan is an integral part of Egypt and that only the inhabitants “of the Nile Valley” should have any say as to its political status. They want the present administration of the Condominium abolished.

Irrespective of the extremely involved history of the Sudan, both prior to and after 1899; in spite of frequent allegations of the British as to the early maladministration of the Sudan by the Egyptians; in spite of Egyptian accusations of maladministration by the British under the Condominium; and notwithstanding inaccurate statements by the Egyptians that the Sudanese and Egyptians are one and the same, racially and culturally, and that virtually all Sudanese wish to remain under the Egyptian Crown, we support the British thesis that the future welfare of the Sudanese is of primary consideration and that at some time in the future, they should have the right to opt for their political status. Although we recognize the validity of the Condominium Agreement, reaffirmed and extended in the 1936 Treaty, we sympathize with Egyptian desires for a larger participation in the administration of the Condominium and for normal cultural and economic cooperation. We feel, however, that much study should be given to the best methods of implementing such increased participation in order not to disrupt the efforts of the present administration to develop a responsible group of Sudanese civil servants and institutions of local self-government.

Egypt’s desire for protection of its southern boundary and its fears resulting from British preponderance in the Sudan are legitimate and should be given adequate recognition in any settlement of the whole problem. Egypt’s vital interest in the control of the waters of the Nile, accurately described by the Egyptians as their “life blood,” is fully recognized. This question is a comprehensive one and although of primary interest to Egypt and the Sudan, it also concerns Ethiopia, Eritrea, Uganda, Tanganyika, Kenya, and the Belgian Congo.

[Here follow two paragraphs on the Anglo-Egyptian dispute over the Sudan, setting forth the view that it was “obvious that any future of the Sudan should necessarily provide for protection to Egypt of its water supply.”]

The Sudan problem is extremely complicated. The juridical situation has been aptly termed “a nightmare.” Many pertinent and essential facts regarding existing conditions, known probably only by the present administrators, have not been taken into consideration in top-level discussions of the problem. The main difficulty arises from the lack of ability to assess the preparedness of the Sudanese for independence or even for self-government. The 2,500,000 inhabitants of the Southern Sudan are chiefly pagan negroids, immeasurably less civilized than the Northern Sudanese. Very small numbers even in the Northern Sudan are as yet capable of grasping the elementary principles necessary for responsible government.

From the strategic angle, this question has not been raised in the past in such a way as to require the formulation of our views. We know, however, that Mr. Bevin’s present thinking is along the line of insisting strongly on an important British base in the Sudan, and it is expected that this question will come up in the course of the discussions with the British, who presumably will have given it careful thought. If so, it is suggested that we should reserve our position until we have had the opportunity of hearing such plans as the British have evolved.

m. Disposition of the Italian Colonies:

The problem is to determine what final disposal of Italy’s former territorial possessions in Africa, namely, Libya (comprising Tripolitania and Cyrenaica), Eritrea, and Italian Somaliland, would be in the joint interests of the U.S. and U.K. in view of the present situation in the Mediterranean.

Article 23 of the Italian Peace Treaty states that the Governments of the U.K., U.S., U.S.S.R., and France shall jointly determine the final disposal of the former Italian Colonies within one year from the coming into force of the Peace Treaty (i.e., by September 15, 1948) in the manner laid down in Annex XI of the Treaty. The Deputies of the Foreign Ministers are meeting in London at present to discuss procedural matters in connection with the implementation of Article 23 and Annex XI of the Treaty, including the instructions to be given to the commission of investigation to be sent to the colonies, and to decide on the future program generally.

At the meetings of the Foreign Ministers in 1945 and 1946, the U.S. advocated the principle of collective trusteeship as the best method of developing these territories toward self-government. In the present international situation, however, and particularly in view of the situation in the Mediterranean area, NEA thinking with respect to each of these is as follows:

1) Libya: That Libya should be placed under the international trusteeship system, with the Government of the United Kingdom as the administering authority, under terms of trusteeship which would provide for the people of Libya to become self-governing at the expiration of a period of ten years from the date of the establishment of such trusteeship, at which time Tripolitania and Cyrenaica would be permitted individually to elect whether they desire to (a) become separate independent states, (b) remain united as an independent Libya, or (c) become federated with other states or territories.

2) Eritrea: That Eritrea should be ceded in full sovereignty to Ethiopia, except for the area in the northwestern part of Eritrea inhabited by Moslem-Sudanese, which should be incorporated into the Anglo-Egyptian Sudan.

3) Italian Somaliland: That Italian Somaliland, together with British Somaliland, should be placed under the international trusteeship system, with the Government of the United Kingdom as the administering authority, under terms of trusteeship which would provide for eventual self-government but which would not fix the period of time within which the area would become self-governing.

Discussion of this problem is contained in the appended memoranda, dated July 8, 1947, and October 1, 1947.³¹ [Annexes A11a and A12]

EUR concurs with NEA in so far as a British trusteeship for Cyrenaica is concerned, but reserves its position with respect to the disposition of the other Italian colonies.

[Here follows section entitled “British and American Payments to the Iranian State Railways”.]

3. politico-economic questions

[Here follows a table of contents.]

Improvement of Living Standards in the Middle East Through Development of Resources and Industrialization

Living standards of the masses in the Middle East are generally very low. The aftermath of war-time activity in the area has caused increased discontent and unrest. The economic stimulation resulting from the purchases by large Allied forces during the war has ceased. Profits made during that period are in many cases frozen in inconvertible sterling. The gap between rich and poor has been increased. In some parts of the area, notably in Egypt, the situation is being aggravated by the pressure of increasing population upon limited resources of cultivable land.

Such conditions are due to a complex of causes. These are not all, nor immediately, remediable. Nevertheless a general increase in the economic prosperity of the peoples of the Middle East, as broadly distributed as possible through the masses of the population, is most desirable if not essential. It is needed as a basis for internal stability and security of the area, and to reduce the danger of revolutionary developments and communist penetration.

Two general lines of endeavor are indicated. Since the Middle East is largely agricultural, expansion of the area of cultivable land and improvement in its utilization afford the most likely avenues of economic development. Geographical factors make such developments possible.

At the same time development on certain appropriate lines of industrialization is desirable, including development of manufacturing and transport facilities. Increasing pressure of population, resulting from high birth rate, and augmented, as health standards improve, by low death rates, point to prospects of increasing population which cannot all be accommodated on the additional land which may become cultivable through development projects. Increasing proportions of the population must therefore find opportunities to earn their living in industrial pursuits. However, the pattern of industrial development cannot arbitrarily be imposed, nor copy the pattern of highly industralized western countries. It must develop according to the local requirements and possibilities of the area.

Over the long range the principal contribution which Anglo-American cooperation may lend to the economic welfare of the Middle East is through assistance in the development of the natural resources, particularly the land, and of the transportation facilities, and suitable industrialization possibilities.

But the task is neither simple nor easy. Effective development requires far more than the provision of capital and technical assistance to construct particular projects, however well-conceived. Complex adjustments will be required to fit such developments into the pattern of life of the area, as well as to adjust the pattern to the developments. In particular, laws governing land tenure will generally require reform; and careful attention to public health requirements will be necessary. In general, it is likely that commercial and financial institutions and practices, and the procedures for collection and expenditure of public revenues, will require considerable development. Above all, however, these problems must be recognized as the internal problems of the countries of the Middle East. The solutions, to be effective, must be their solutions, adapted to their way of life, thought and culture. The assistance, technical and otherwise, which the United States and the United Kingdom may offer must follow methods agreeable to and accepted by the Governments and peoples of the area.

Current trends in the development of the oil resources in the area are illuminating. They provide the basis for a considerable influx of private capital into undeveloped areas of the Middle East. Through royalties, fees, and wages, and expenditures made in producing oil, a large flow of new income expendable abroad comes into the hands of the local peoples and Governments. Problems of judicious and beneficial handling of this new large flow of wealth are becoming apparent, whether as problems affecting oil company relationships with the local authorities, or in the evident need for new or modernized financial institutions and procedures of public finance.

Among the many development projects currently proceeding, proposed or envisioned in the area, the two of most outstanding interest at this time are (1) a proposal for a vast irrigation scheme on the Tigris and Euphrates Rivers in Iraq, which would serve to double or treble the population required in the area; and (2) the Lake Tana Dam project which is a part of a major scheme for control of the Nile and expansion of cultivable land in Egypt and the Sudan. These two projects are separately outlined below, and are followed by outlines of present and proposed industralization or development projects in the various countries of the area.

[Here follows discussion of these subjects:

Iraq Irrigation Scheme: A low state of agricultural development prevails in Iraq and the major area for economic improvement lies in the development of agricultural resources and methods before substantial industrial development. The Iraqi Government was to be encouraged to make an associated effort to improve national health, establish social security, construct roads and buildings, institute agricultural reform, and undertake settlement of tribes;

The Tana Dam Project: An Element in Nile Control: This series of proposed projects aimed to regulate seasonal fluctuations in the level of the Nile and to open new areas for irrigation by increasing water flow;

Egypt: The increasing industralization of Egypt, particularly in the production of electric power, fertilizers, textiles and chemicals, was necessary to employ its expanding population and to permit an improved standard of living;

Palestine: The proposed development of the Jordan River Valley for irrigation and power and the diversion of sea water from the Mediterranean for hydro-electric power were singled out to benefit the people of Palestine regardless of race or religion. These projects were to be financed, preferably, by the International Bank and by private capital; and

Syria and the Lebanon: These governments were to be encouraged to formulate sound programs of national development, particularly the Aleppo water project, the irrigation of the Jezirah region and flood control of the Euphrates. These projects were to be financed, preferably, by the International Bank and by private capital. It was thought possible, however, to provide an Export-Import Bank loan to develop the Beirut airport.]

Arabia

The average standard of living is extremely low throughout the Arabian Peninsula. The population is largely agricultural, but for the most part resources are not properly utilized and agricultural methods are primitive. It is essential that steps be taken along the following lines: (a), further development of natural resources, such as oil, natural gas, gold, etc., to produce surplus revenues; (b) application of these surplus revenues to such projects as building of dams, drilling of wells, financing agricultural schools and experimental farms; (c) great improvement in transportation, in order to facilitate movements of produce to market and for export; and (d) export of greater quantities of Yemen coffee and Hofuf dates, every effort being made to see to it that the farmers, workers and middlemen get a good share of the profits, rather than having all the wealth accrue to the rich merchants and nobles. The British can be of assistance in helping to raise the standard of living of the people of the Arabian Peninsula by removing restrictions to trade which have grown up around their control of certain strategic areas, such as Aden and Bahrein, particularly in connection with the sterling bloc.

[Here follow discussions of Saudi Arabia where industrial development had taken place in the past fifteen years and where it was reasonable to presume that further industries would be developed to supply the country’s basic needs, and of Yemen where it was expected that primitive industrial establishments would develop.]

Other Arabian States

Kuwait, Qatar, the Trucial Coast, Muscat and Oman are so primitive that any industrial development in these areas, other than the development of oil, will have to wait for some time.

It was long the British policy to keep the people flanking the sea route to India in a state of primitive economy. The United States has rather the opposite point of view, however, and is anxious to develop the agriculture, industry, and trade of an area like the Arabian Peninsula. This is based on the theory that the more developed an area becomes the more it can produce, the more it will buy from the United States and other countries of the world, thereby increasing the sum total of world trade, and prosperity. This American policy of pushing the economic development of the Arabian Peninsula may run counter to British thinking. It should be possible, however, to show the British that our policy is to their interest in the long run.

[Here follow discussions on these subjects:

Ethiopia whose development plans were said to be severely limited by shortages of dollars and technicians. The Department expressed itself as long sympathetic to the solution of both problems;

Turkey, which was said to need “sounder integration of the nation’s economic potentialities, with emphasis on the basic necessities upon which a sound national economy must rest, rather than on spectacular undertakings in imitation of the most modern achievements of the more mature Western economies.” Singled out as a fundamental to national economic advancement was an efficient road system. Turkish need for “expert guidance in the planning and execution of economic projects” was also pointed out;

Iran whose most important and immediately feasible projects were said to be in the agricultural field where production would be enormously increased through improved farming, better stock breeding, introduction of new crops, and increasing the area of cultivated land by irrigation; and

Afghanistan where the Department expressed its great interest in the success of the Morrison-Knudsen Corporation, an American firm, in construction of roads, bridges, dams, hydroelectric plants and irrigation works under contract with the Afghan Government.]

The Dollar Sterling Problem

“The Dollar-Sterling Problem in the Middle East” is an appropriate label for an aggregation of problems whose chief feature is shortage of dollars, inconvertibility of sterling assets, or both. In essence these problems constitute a large part of the impact on the Middle East of the world’s war-time dislocations, and post-war readjustment difficulties. No complete solution to these problems is to be looked for until Britain has recovered from its financial difficulties, European economic reconstruction has been achieved, and the related problem of the balance of payments of the United States ameliorated.

Current action toward these Middle Eastern problems can largely be only ameliorative. Nevertheless the scope for amelioration is substantial, and provides opportunity for close Anglo-American cooperation.

The character of these problems is clarified by a review, in broad outline, of the developments which have mainly brought them about. Already long before the war a dollar shortage had been manifested. This was in the sense that larger purchases from the US were desired, and presumably would have been made, if local currencies could more readily have been converted into dollars.

This basic problem of the American balance of payments has been seriously augmented by the war, in the Middle East as elsewhere. During the war imports from the United States provided in large measure the only available source for import requirements (aside from such substitutions as local production could provide). European industry was out of the picture, and British production was practically limited to British domestic and military requirements. As a result American commerce “captured the markets” of much of the Middle East, (to use a common but misleading phrase). Meanwhile in various Middle Eastern countries, particularly in Egypt, British purchases for the military services resulted in substantial accumulation of sterling credits which could not be expended because of a lack of goods to purchase.

Now there exists substantial demand for imports of many varieties. These include materials for construction and development, and articles and supplies for current consumption. This demand arises out of need for meeting expenditures deferred during the war; out of accumulations of war-time earnings, and perhaps out of certain stimulations to living standards which those earnings brought about.

But the demand meets a shortage of supply. The United States continues to be the principal, sometimes the only source of supply for many items of industrial and other import requirements. In the United States, this foreign demand must compete very generally with heavy domestic demand which the production is often unable to satisfy. Until European production has made great strides in revival, Europe’s industries cannot resume their function in supplying Middle Eastern and other foreign markets. Although the British export drive has achieved remarkable size, it is insufficient to meet the urgent requirements of the United Kingdom; its proceeds are as yet insufficient to pay for Britain’s current import requirements of food and raw materials. British exports must go so far as possible where they can earn the currencies needed to pay for British import requirements. They cannot yet go far to liquidate Britain’s sterling debts in the Middle East or elsewhere.

In the meantime the physical aspects of this problem of world-wide reconstruction and production are masked by the prevailing phenomenon of dollar shortage and inconvertible sterling. The fact that dollars are limited and hard to get, and that only limited amounts of sterling can be used or converted to dollars for use in making current payments, conceals the underlying fact of production shortage.

Fundamentally therefore the dollar-sterling problem of the Middle East is a facet of the world-wide problem of economic reconstruction, recovery, and readjustment. The frozen sterling credits in the hands of Middle Eastern Governments and peoples, and their difficulties in obtaining dollars in the amounts they would like, is a part of the impact upon them of the problems of recovery from war. Therefore no immediate over-all solution is conceivable. The whole problem has to be worked out.

Nevertheless, there is substantial scope for temporary alleviations and technical improvements which may result in appreciable relief, and which may also contribute to the longer-range solution if technically sound and properly administered. These measures of alleviation include action along the following lines:

1. Increase in United States imports where supplies are available, as for instance increases in our imports of long staple cotton from Egypt by raising the import quota administered by the United States Tariff Commission.

2. Technical and financial measures including improved foreign exchange control, to prevent escape of hard currency earnings and illegitimate capital movements through black markets.

3. Acquisition of more direct control over the dollar earnings from exports to the United States. For instance, the Yemen might recover directly a proportion of the dollars paid for its exports of coffee to the United States through Aden. Likewise, Iraq might improve dollar revenues from indirect exports of wool to the United States through Syria or from date exportations through the British date monopoly. Nevertheless in considering such possibilities, it must be borne in mind that these do not necessarily give rise to hew supplies of dollars; in so far as they constitute a diversion of dollars from British or other recipients they augment the dollar difficulties of the latter.

4. To the extent it may be found appropriate in specific cases, alleviation may be achieved through international financing. Possibilities include recourse to the International Monetary Fund, to the International Bank, and to the Export-Import Bank, wherever the circumstances are such as to make such financing feasible and acceptable.

5. Finally, there is the possibility of devising ways and means to encourage the resumption of private financing, particularly to tap United States resources of private capital export. Until great advance has been made in reestablishing the conditions of political stability and international security necessary for such outflow of private capital from the United States, no great results are to be expected. Nevertheless it is not too early to consider the possible projects and the ways and means by which this flow might at least be persuaded to begin.

The character of the dollar sterling problem in certain Middle Eastern countries, where this problem is particularly acute, and in certain other countries where it is not equally acute but takes a different form, is outlined in the following sections.

[Here follows a discussion of the dollar sterling problems of Egypt, Iraq, Turkey, Syria and the Lebanon, French North Africa, Saudi Arabia, Yemen, and Afghanistan.]

Technical and Economic Aid to Middle Eastern Countries

By various means the United States and the United Kingdom have been and are rendering technical and economic, including financial, assistance to the countries of the Middle East to aid them in handling local problems. This assistance has taken many different forms. In some cases it is rendered by the Governments, in others by private interests. A survey of the principal items of such aid indicates its nature. This survey excludes the special programs of United States aid to Greece and Turkey.

An important means of providing American technical assistance to Middle Eastern areas will become available if and when legislation is enacted by the Congress which will enable the Department to supply American technical personnel in response to requests from Middle Eastern Governments, on the same basis that such technical assistance is given to the American Republics.

[Here follows a discussion of technical and economic aid by the United States to Turkey, Ethiopia, Egypt, Saudi Arabia, and Iran during and after World War II, including lend-lease aid, surplus property credits, loans of silver, Export-Import Bank loans, technical missions, and the like. Included also is an account of British aid to Ethiopia.]

Petroleum in the Middle East

The major American economic interest in the Middle East relates to the development and exploitation of petroleum resources. In addition there are some questions involving petroleum transportation and marketing.

The major petroleum developments of the area are in Iran, Saudi Arabia, Iraq and other Arab States on the Persian Gulf. Exploration for petroleum resources is active however, in other Middle Eastern areas, including Egypt, Palestine and Ethiopia, and to a moderate extent in Libya, Turkey and Afghanistan. In Iran of course, the Anglo-Iranian Oil Company is the outstanding producer; the question of a concession to the USSR in the north is a serious and delicate matter. Oil marketing questions in the area involve principally Egypt and are primarily an aspect of the problem of dollar shortage and inconvertible sterling. Oil transportation problems concern principally the construction of pipelines from Saudi Arabian and other Persian Gulf sources to the Mediterranean.

The importance of oil production to the economic life of the primitive pastoral states of the Arabian Peninsula can not be overestimated. Although private companies are being relied upon to see to the development of this oil, it is important to the United States and United Kingdom that the companies handle their labor relations in a modern manner, and if at all possible that the enormous royalties to be derived from these oil concessions be used in a way that is most beneficial to the peoples of the countries where the oil is found. It is important that the Americans refrain from engaging in other activities that assume proportions of dominating the local economics, and that that they plan to release acreage under concession which they have no reasonable anticipation of developing.

Pipelines

It is essential that Kuwaiti and Saudi Arabian oil be brought to the Mediterranean as cheaply and easily as possible. The Trans-Arabian Pipeline Company, a subsidiary of Aramco has been formed and has obtained the right of way for a pipeline to run from Dhahran through Transjordan and Syria to Sidon in Lebanon. Kuwait oil will be tapped into a new pipeline which is being built from Abadan. The facilities of IPC are being enlarged.

The chief immediate problem relating to the construction of the pipelines is the supply of steel pipe, due to competing domestic requirements in the US. With our strong support, however, an export allocation for an initial 20,000 tons of pipe during the first quarter for the Aramco project from Saudi Arabia to the Mediterranean has been issued, so that construction can be initiated.

It is understood than an application is being sponsored informally by the Standard Oil Company of New Jersey to the Export-Import Bank for a loan to cover the construction of the Middle East pipeline to transport oil from Kuwait and/or Iran to the Mediterranean.

Saudi Arabia

The Arabian American Oil Company, a 100% American owned corporation, is now holding the Arabian concession which covers oil in most of the probable oil bearing areas in that country. Approximately 1200 Americans live at Dhahran where the general offices are located, at Ras Tanura on the Persian Gulf where there is an oil refinery and a loading pier, and at Abqaiq, the largest oil field in the area. Approximately $150,000,000 has been expended by Standard of California and the Texas Company, the original owners of Aramco, and has gone into pipelines, wells, refinery and housing and other accommodations for the workers and officials of the Company. Standard of New Jersey and Socony Vacuum are negotiating for a substantial interest in Aramco. Around 265,000 barrels of oil a day are being produced at the present time. A pipeline has just been started from Dhahran to Sidon on the Mediterranean. On its completion production will be stepped up to more than 400,000 barrels a day. Present royalties are running at the rate of $19,000,000 a year and it is expected that they may reach $50,000,000 at the end of ten years. About 7,000 Arabs are employed directly by the oil company.

It is essential that the development of this enormous natural resource be allowed to continue and that the United States and other friendly nations have access to it. For this to occur, it will be necessary to keep the goodwill of the King and other important Saudi Arabs and to prove to them that American business initiative is developing the oil of Saudi Arabia in the best possible way for the Government and people of that country. If the present trend of developments is not upset by political happenings in Palestine, or by Russian infiltration from the north, and if the royalties are used constructively to advance the interest of the country as well, then the future of the Saudi Arabian oil concession is very great.

Bahrein

The Texas Company and Standard of California also own Bahrein Petroleum Ltd., which is exploiting the resources of Bahrein Island, much more limited than those of Saudi Arabia. Here American business initiative and British skill are working together in a way to provide the natives of the island with order, medicine, education and a rising standard of living. The concession agreement, under which a certain amount of the royalties are set aside to be used by the British on improvements, should be studied in connection with drawing up contracts for oil development in other parts of the Peninsula.

Kuwait

The Gulf Oil Company has a half interest in Kuwait Oil Company, Ltd. Although the British have long objected to the exploitation of this field, the demand for oil has now become so great that it can be expected Kuwait will soon become a major producer. Like Bahrein, Qatar and the Trucial Coast, the Government of Kuwait has placed the handling of its foreign affairs in the hands of the British, a factor which complicates the economic as well as the political picture in those areas. No concession has as yet been granted for the Kuwaiti half of the Kuwait Neutral Zone. Besides the Iraq Petroleum Company, the Royal Dutch Shell Company and several American oil companies are actively negotiating for this potentially rich concession.

Qatar

The sparsely habited promontory of Qatar, the six petty Shaikhdoms which make up the Trucial Coast, and Oman & Muscat are under concession to Petroleum Development Company Ltd., a subsidiary of Iraq Petroleum, in which Socony Vacuum and Standard of New Jersey each have 11.75% interests. Development work has at last been started in Qatar, and it would be desirable to induce Petroleum Development Company, Ltd., either to start work in their other areas or else to relinquish its concession.

Yemen

There is reason to believe that there is some oil in Yemen, although the area has been little prospected. No concessions as yet have been granted there. Superior Oil and the American Independent group are both interested in a concession. It seems probable that within the near future, American oil interests will be prospecting in Yemen.

Iraq

Development of petroleum resources of Iraq has been active for a longer period than in other Arab States. The Iraq Petroleum Company was organized as an international consortium based on shares in oil and is owned 23.75% each by Anglo-Iranian Oil Company, Anglo-Saxon Petroleum Company,^31a Compagnie Francais de Petroles, Near East Development Corporation and 5% by Mr. C. S. Gulbenkian. While production of petroleum and its exportation through pipelines to Beirut and Haifa have been in active operation for some years, it is believed that the petroleum resources of Iraq should be developed on a broader scale than heretofore with a view to augmenting the means for economic development of Iraq and safeguarding its interests. For the purpose of assuring the producing country equitable benefits and reasonable compensation for the contribution of its natural resources, it is felt that the Iraq Petroleum Company should market low-cost indigenous products in Iraq at prices computed in relation to local costs of production, refining, and marketing; that labor should be fairly and reasonably compensated, that maximum employment should be effected of local native skills, that training programs should be instituted and that other measures should be initiated which would strengthen the local economy and raise the otherwise relatively impoverished standard of living.

[Here follows a discussion of prospects for major oil development in Egypt, where possibilities were considered extremely remote, and in the Levant States, where they were regarded as limited.]

Palestine

Drilling is now being conducted by a subsidiary of Iraq Petroleum Company in Southern Palestine. Thus far Palestine’s oil resources are unproven.

A pipeline from the oilfields in Northern Iraq terminates at Haifa where there is a refinery. The latter has suffered damage on several occasions as a result of the political troubles in Palestine.

Ethiopia

The Sinclair Oil Company has a concession for the development of Ethiopia’s oil resources. The Company is now rapidly moving equipment and personnel into Ethiopia, preparatory to commencing active drilling operations in the Ogaden Province in the near future. This operation raises several points involving British and US cooperation:

1. The maintenance of law and order in the Ogaden district in the event that the British withdraw in the near future.

2. Pipeline rights in neighboring British territories in the event that the Company finds oil.

3. Ethiopia as a possible alternate source for oil in the event of trouble in the Middle East.

Libya

The Standard Oil Company of New Jersey (Egypt) has undertaken to do geological survey work in Cyrenaica. Late in July 1947, however, the British Military Administration authorities in Libya requested that this activity cease. The action of the military authorities is believed to be based on a ruling of the British Ministry of Fuel and Power that prospecting for oil is prohibited.

[Here follows a paragraph on the prospects for discovering oil in Libya, which were considered to be fair.]

Turkey

There is no commercial production of petroleum in Turkey at the present time. [Here follows remainder of paragraph on oil exploratory activities by the Turkish Government.]

Iran

I. British and US Attitude Toward Iranian Oil Concessions to the USSR.

While the US and the UK agree that any Soviet oil concession in Iran would doubtless lead in the direction of Soviet domination of Iran, there are certain divergencies of view between the two Governments as to how best to meet the current Soviet demand for an oil concession in Iran. The official position of the United States is that Iran should make its own decision and we will support them in their choice. The United Kingdom on the other hand have indicated the view that Iran would do well, should the Majlis desire to refuse the Soviet oil concession, to mollify the Soviet Union in some way by leaving the door open to further negotiations.

While Mr. Bevin has stated that he desires that the United Kingdom keep in step with the United States in this matter, and while the Foreign Office and State Department officials seem to share the same views, it is probable that Mr. Bevin is responding to pressures of the Labour Party and British oil interests in directing that a mild British stand be taken in this case. The United States and the United Kingdom are at one in their resolve to support action in any justifiable charges of Soviet interference in the internal affairs of Iran.

[Here follows Section II entitled “Future Oil Concessions in Iran.”]

Afghanistan

An Afghan concession to an American company (Inland Exploration Company Seaboard Oil) for development of known oil deposits was allowed to lapse with the onset of World War II. Since the war, repeated Afghan efforts to interest American developers have been unsuccessful. In 1946 the Afghans proposed to exploit their oil themselves but with American technical advice and equipment. Later this plan was suspended in view of Soviet sensitiveness. The Afghans have recently revived plans for oil and mineral development with an offer to grant concessions on a basis of up to 50% outside (American) investment.

[Here follows a discussion of various aspects of the Afghan petroleum situation.]

Development of U.S. Aviation in the Middle East

In general, no very serious problems affect the development of United States aviation policy in the Middle East. On the whole the development of intergovernmental aviation relations, agreements, etc., and the development of the United States overseas aviation network are proceeding satisfactorily in the area.

A principal exception with respect to intergovernmental relations may perhaps be seen in the circumstance that it is not considered judicious to press the Middle Eastern Governments, which are members of the Arab League, for action in regard to air conventions, etc., at the present time when their general attitude toward the United States is affected by the Palestine problem.

With respect to the aviation network, there are some individual circumstances to which attention should be called. These are indicated below under country headings.

[Here follows a review of aviation matters in various Middle Eastern countries, including a discussion of the Saudi Arabian Airline and Iranair, both of which were operated by Transcontinental & Western Air, Inc., under technical assistance contracts, and of other local airlines in Egypt, Iraq, Syria and Lebanon, Greece, Iran, Ethiopia, and Libya.]

American Economic Interests in the Middle East

Except for the large and important American interests participating in the development of Middle Eastern oil resources, American economic interests in the area are not particularly outstanding. Trade relations are of some importance. Although the Middle East generally (excluding India in the present connection) does not account for a major share of U.S. import and export trade, the trade is far from negligible. The Middle East is the source of some fairly important specialty requirements for U.S. import trade such as dates, figs, coffee (specialty grades), long-staple cotton and oriental rugs. The expansion of these imports would provide a most useful source of increased dollar exchange for the area.

This question of dollar exchange is fundamentally part and parcel of the very large and intricate problem of the U.S. dollar balance of payments in international relations, as a whole. This problem appears in the Near East particularly in the form of a dollar-sterling exchange problem (see discussion of this subject under The Dollar Sterling Problem). For instance the Yemen might acquire desired dollar exchange by direct trade to the U.S. instead of through Aden. Unless, however, this were effected in connection with an increase in U.S. imports of Yemen coffee the result would be to intensify somewhat the difficulty of the British sterling-dollar problem. Nevertheless in principle there is advantage to be seen in the development of direct trade relations whenever U.S. trade with the area concerned is of sufficient size and value to warrant.

The principal aspects of U.S. economic interest in the area are discussed below by individual countries.

[Here follows a review of United States economic interests in Saudi Arabia, Yemen, Bahrein, Kuwait, the Trucial Coast, Iraq, Egypt, Syria and Lebanon, and Iran.]

British Economic Interests in the Middle East

If endeavor is made to assess the influences which seem likely to bear upon any decisions by the British Government as to the extent to which they will endeavor to maintain a position of influence in the Middle East, consideration naturally must be given to British economic interests in the area. Their outstanding interest is of course in the Anglo-Iranian Oil Company operations in southern Iran. The size of this operation and its importance in the supply of British petroleum requirements is such as to make it difficult to believe that any British Government would willingly leave its interests there (or in the nearby oil producing areas on the Persian Gulf) unprotected.

In addition to petroleum interests, however, the United Kingdom has many other economic interests of miscellaneous nature in the area. These include, banking, insurance, aviation, shipping, construction, and mining interests, all of which can be considered as serving to some extent to anchor British interests in the area. How strong these anchors are it is of course impossible to estimate. British service in banking, insurance, shipping, ship agencies, etc., are predominant over all the entire Arab area with the exception of Lebanon and Syria. As the historic conditions which favored British financial, commercial and other developments in the area change, the influence of these interests as anchors may be considerably altered.

The principal interests of this nature are outlined country by country in the following paragraphs.

[Here follows an account of British economic interests in Iran, Greece, Turkey, Iraq, Saudi Arabia, Yemen, other Arab States on the Persian Gulf, Syria, Lebanon, and Egypt. Although British economic activities in Saudi Arabia were small compared to American enterprise there, they made valuable contributions to the Saudi economy and “it is desirable that the British remain economically active in the country and even expand their participation, so long as this is not on the basis of an economic sphere of influence.” In connection with the Persian Gulf States of Kuwait, Qatar, the Trucial Coast, Oman and the Hadhramaut, “British influence has been largely a ‘dead hand.’ The world demand for oil, plus American representation in the oil companies involved, is beginning to bring about activity in Kuwait and Qatar. We hope that competition from American capital and enterprise will stir the British into greater economic activity in these outlying areas.” Noted also was the British tendency to keep Yemeni trade “bottled up behind Aden. This situation should be corrected, perhaps by the development of a Yemeni port on the Red Sea.”]

Organized Anglo-American Cooperation To Handle Economic Problems of the Middle East

Some of the British officials in London who have been studying the question of Anglo-American cooperation in the Middle East, according to reports from the American Embassy in London, have favored the establishment of some formal Anglo-American organization in the area through which cooperation in economic matters would operate. Recent reports indicate that the views of others who favor informal cooperation are at present in the ascendant.

It is possible however that the idea of formally organized cooperation has not been entirely abandoned and may again be brought forward. Presumably any such proposal would be patterned along the lines of the British Middle East Office in Cairo “with its staff of agricultural, labor, health and statistical advisers whose services are at the disposal of any of the Middle Eastern countries who wish to consult them”. (Quoted from Mr. Bevin’s memorandum to the Secretary of State of March 1947).³²

Organized cooperation with the British in the area had a precedent in the Middle East Supply Center (MESC), which was created during the war period for the primary purposes of conserving British and American shipping and supplies and at the same time assuring that the peoples of the area were provided with basic essentials. The control functions were supplemented by important advisory and technical services designed to improve the economies of the several Middle Eastern countries and to contribute to their self-sufficiency. While the MESC’s operations as a wartime agency were highly successful, it is true that most if not all of the countries looked upon the organization as restrictive, and evidenced little appreciation for the development work that was done. It is primarily for this reason that British proposals for continuation of the advisory services were rejected by the United States.

There are a number of objections to creation of an official central Anglo-American organization for economic cooperation in the Middle East. It would be difficult to agree to the creation of such an Anglo-American agency while at the same time sustaining our objection to the creation of an Economic Commission for the Middle East under United Nations auspices, as proposed in the resolution recently introduced by Egypt in General Assembly. The creation of an Anglo-American institution of this nature would probably be received with little enthusiasm, even perhaps with resentment by the countries of the area, to whom it might very well appear to be [an] effort to impose Anglo-American ideas and purposes upon them. Moreover, the idea of establishing a central United States agency in a single Middle Eastern location such as Cairo, to deal with economic problems for the whole area, has been considered in the Department and rejected in favor of economic coordination in Washington and direct relations with the various United States Missions in the area.³³

It is believed that British and American economic objectives in the area can best be served through continuation and development of free and informal collaboration between the representatives of the two Governments rather than through any formal organization.

Proposed Establishment of an Economic Committee for the Near East by the United Nations Organization

The establishment under United Nations auspices of the Economic Committee for Europe (ECE) and of the Economic Committee for the Far East (ECAFE) has lead to proposals that there be established a corresponding Economic Committee for the Middle East (ECME). Within the last few days this has crystallized in a resolution introduced in the General Assembly by Egypt. This resolution invites the ECOSOC to study the establishment of an Economic Commission for the Middle East (See Annex 17 for text of resolution³⁴).

Advance notice of Egyptian intention to introduce such resolution was given to the American Embassy in Cairo early in September 1947. The Department was accordingly able to formulate its position on the subject. This position, which has not been communicated to any other Governments, is set forth in a “Position Paper of September 25, 1947”³⁵ (Annex 18).

Briefly our position is to discourage the establishment of such a Commission at this time and to recommend referral of specific proposals for such establishment to the Economic and Social Council for consideration, preferably without prior discussion in or recommendation by the General Assembly as to the merits of the proposal.

The reasons for our position are in summary as follows: that there are no reconstruction problems in the area comparable to those of the other areas; that the economies of the countries involved are not complementary to each other; that previous attempts for creation of joint economic machinery in the area have failed because of lack of economic justification (a proposed Near [Middle?] Eastern Agricultural Body (MEAB) was never developed, and the Economic Committee of the Arab League has not been very active); and that no great support for the proposed Commission is expected unless the question becomes one of prestige.

In addition, the United States position takes account of serious political difficulties involved, including: the encouragement of the USSR to take a hand in the area through membership on such a Commission; the consequent embarrassment of Turkey; the uncertain development of the Palestine situation; a possible French claim to membership which would be likely to produce friction with Syria and Lebanon; lack of clarity as to the Iranian position; and the problem of Indian membership, India being also a member of the Economic Committee for the Far East.

1. For documentation on the interest of the United States in the negotiations between the United Kingdom and Egypt for revision of this treaty, see pp. 761 ff.
2. Not sprinted; but see footnote 2, p. 802.
3. This is a reference to the first of 20 annexes attached to this paper. References to the annexes 2 to 12 are in the margin of the record copy. The editor indicates their presence by bracketed notations in appropriate portions of the text.
4. Letters from the Secretary of the Navy and the Secretary of the Army, not printed.
5. See footnote 2, p. 806.
6. For documentation on the refusal by the United States in 1946 to comply with a Syrian request for a military mission, see Foreign Relations, 1946, vol. vii, pp. 782 ff. Telegram 161, May 8, 1947, from Damascus, suggested the Department give further consideration to Syrian requests for a military mission. In reply, in telegram 111, May 16, the Department stated that while it “would be willing reconsider question military mission to Syria in light of factors outlined Legtel 161, existing legislation affecting despatch such missions could not appropriately be used. Permanent enabling legislation has been recommended to Congress but early passage not assured. Pending Congressional action Dept not in position to give further consideration to matter [and] consequently Syrian Govt should not be encouraged to renew request.” (890D.20 Mission/5–847)
8. For information on the granting of this credit, see bracketed note, p. 916.
9. For documentation on the Greek-Turkish aid program, see pp. 1 ff.
10. Maj. Gen. Stephen J. Chamberlin, Director of Intelligence, General Staff, United States Army; for his report of October 20 on the Greek situation, see p. 375.
11. In telegram 230, October 17, the Department instructed Damascus to inform the Syrian Government that the United States was not in a position to supply Syria with military equipment for an army of 25,000 men because of current requirements by the Department of the Army. The Department added: “For your confidential info in addition foregoing limitations there are obvious reasons arising from Palestine situation which preclude our lending assistance this character Syria at this time.” (890D.24/9–1847)
12. For the formation of the “First Provisional Democratic Government of Free Greece,” see telegram 2224, December 24, 1947, from Athens, p. 462.
13. Ante, p. 219.
14. Ante, p. 226.
14. For documentation on this subject, see pp. 890 ff.
15. See Major General Hilldring’s memorandum to the State–War–Navy Coordinating Committee, Foreign Relations, 1946, vol. vii, p. 515.
16. Incorporated in the State–War–Navy Coordinating Committee’s memorandum to Major General Hilldring, ibid., p. 529.
17. Post, p. 934.
18. Post, p. 924.
19. For information on this subject, see bracketed note, p. 760.
19. For documentation on the participation by the United States in the Arab-Zionist controversy concerning the future Status of Palestine, see pp. 909 ff.
20. Ante, p. 9.
21. Post, p. 960.
22. Undated memorandum entitled “The Ethiopian Situation,” not printed.
23. For documentation on this subject, see pp. 669 ff.
24. This annex consists of three undated memoranda entitled “Tunisia and Morocco,” “Algeria,” and “North African Wheat Production,” none printed.
25. For documentation on this subject, see Foreign Relations, 1946, vol. vii, pp. 78 ff.
26. For documentation on the termination of the Middle East Supply Center, see Foreign Relations, 1945, vol. viii, pp. 85 ff.
28. For documentation on this subject, see Foreign Relations, 1946, vol. vii, pp. 794 ff.
29. No. 203, July 26, to Jidda, p. 752.
30. The Prime Minister’s letter was addressed to the Secretary-General of the United Nations on July 8; see Editorial Note. p. 780.
31. It is anticipated that these memoranda will be published in volume iii .
32. A component of the Royal Dutch-Shell Oil Company.
32. See p. 503.
33. For documentation on this subject, see Foreign Relations, 1945, vol. viii, pp. 33 ff.
34. Annex 17 gives the resolution as incorporated in telegram 969, October 9, from New York, not printed.
35. Not printed.