Memorandum by the Director of the Office of Near Eastern and African Affairs (Henderson) to the Secretary of State

You may be interested in learning that yesterday evening Mr. Duce, Vice President of the Arabian American Oil Company, told me that he had just received a telegram from Mr. Davies, another Vice President, who is at present in Saudi Arabia, to the effect that for the first time Ibn Saud indicated that he may be compelled, in certain circumstances, to apply sanctions against the American oil concessions.

Mr. Duce said that he could not explain the situation over the phone but that he would come to Washington or send someone to Washington to discuss the matter within the next few days. He said that it is his understanding that Ibn Saud had made it clear that if he took sanctions it would not be because of his desire to do so but because the pressure upon him of Arab public opinion was so great that he could no longer resist it.

Although I do not know what the circumstances might be which would cause these sanctions to be applied, I obtained the impression that the making of changes in our arms policy so as to permit the shipment of arms to the Jewish State would create such circumstances.1

L[oy] W. H[enderson]
  1. Jidda, in telegram 336, June 9, advised the Department of the deep concern held by local Aramco officials over the possibility that the Saudi Arabian Government would “adopt any sanctions proposed by Arab League against American interests ME even though these may be contrary SAG economic interests.” (890F.6363/6–948)