890.6363/8–2847
The Acting Secretary of State to the Secretary of Commerce (Harriman)
My Dear Mr. Secretary: It is my understanding that action has been postponed on the request of the Trans-Arabian Pipeline Company for export licenses for 335,000 tons of steel to be shipped to the Eastern Mediterranean during the next two years for the construction of a 30-inch oil pipeline from Saudi Arabia to a terminus in Lebanon. It is the considered opinion of the Department of State that the national interest would best be served by the immediate construction of this pipeline.
The Middle East is today the only oil producing area in the world where there is a large reserve of productive capacity. It is necessary to make this productive capacity available at increasing rates if growing United States and world requirements are to be met. In order to transport the necessary amount of oil, large diameter pipelines in the Middle [Page 666] East must be constructed as well as all the tankers now projected for completion by 1950 in the United States and abroad.
As Middle East oil becomes increasingly available, the general economy of the Near and Middle East areas can be expected to rise and thus render them less vulnerable to outside pressures. Delay in the construction of the line might result in serious economic and political repercussions in the area,1 with an extremely adverse effect upon the United States’ position there. Furthermore, additional Middle East oil will be needed for the reconstruction of the European countries that are cooperating with the United States in the implementation of the Marshall Plan.
In view of the foregoing it is urged than [that] an export license be issued without delay for the materials necessary to construct the Trans-Arabian Pipeline.2
Faithfully yours,
- In a memorandum of September 24 to Mr. Lovett, Mr. Henderson reviewed the question of granting an export license to Tapline. He noted that “The entire Arab world is exercised over the trend of American policy on the Palestine question, and they regard the development of our Palestine policy with alarm. In view of the publicity which the projected pipeline has received in the Near East, a decision having the effect of preventing or delaying its construction would be regarded by the Arab States as being linked with our ‘unfriendly’ Palestine policy. A beneficent economic policy in the Near East is one of the few means we have of offsetting, in some degree, the effects of our Palestine policy.” (690F.119/9–2447)↩
- Mr.
Henderson’s memorandum of September 24 also stated that on September
17 and September 22 meetings were held at the Department of Commerce
at which representatives of about a dozen government agencies
expressed their views on the issuance of the license. Officers of
the Department attended both meetings and strongly supported
issuance on economic and political grounds. At the close of the
meeting on September 22, Assistant Secretary of Commerce David K. E.
Bruce, announced that the Department of Commerce would support the
granting of the license but that the matter would be referred to the
Cabinet for final decision.
The Department of Commerce announced on September 26 that it had approved issuance of a license authorizing Tapline to ship 20,000 tons of steel to Saudi Arabia for the fourth quarter of 1947 on the ground that the “strategical, political and economic interests of the United States made such action desirable.” (890F.6363/10–2747)
↩