The Chief of the Division of Near Eastern Affairs (Merriam) to Mr. Edward Ramsey of the Bureau of the Budget


My Dear Mr. Ramsey: Mr. Sanger, of this office, informs me that you would like an expression of opinion regarding the request of the Department of the Air Force that $1,500,000 be made available at once for the Dhahran Airbase. It is my understading that this money is to be used (a) to rehabilitate the electric light, airconditioning, plumbing, and sewage facilities of the base, (b) to erect a school for training of Saudi Arabian students, and (c) to construct two barracks for the use of United States enlisted personnel.

This is to inform you that the Department of State supports this request for the following reasons:—

When this Government was given permission to build the Dhahran Airbase the United States agreed to train Saudi Arabians in the maintenance and operation of this airfield, and such a training program is now in process at Dhahran. Unless the sewage, electric light, aircooling, and such facilities, which were originally installed with temporary wartime equipment, are rehabilitated, and the school built it will not be possible to complete this training program.
King Ibn Saud of Saudi Arabia has recently been under very great pressure from other Arab States, particularly Iraq and Transjordan, to cancel the American oil concession in his country, a concession from which the United States Navy is now drawing approximately 40 percent of its oil and from which it is expected that to a considerable extent the Marshall Plan will be oiled. King Ibn Saud has so far resisted this pressure. He is, however, now asking for certain assistance from the United States and for evidence of United States Government interest in Saudi Arabia. Rehabilitation of the rundown installations at Dhahran would be a concrete instance of United States Government interest in Saudi Arabia and one which would be helpful at this time in our negotiations with him.
The Government of Great Britain is endeavoring to work out an agreement with the Government of Saudi Arabia in regard to the maintenance and use of the strategic installations in Saudi Arabia, Although the United States welcomes British moves to stiffen the defenses of the Near East, nevertheless, the British proposal to King Ibn Saud will prove embarrassing to this government, unless we are in a position to show our own interest in the strategic facilities of Saudi Arabia. The Dhahran Airbase is the most important “strategic facility” in the area, and its rehabilitation along the lines mentioned above would be very helpful in strengthening our position in a country whose oil resources are of such vital importance to both our peacetime and wartime economies.

Sincerely yours,

Gordon P. Merriam