On July 26, 1950, the President signed Public Law 621, “An Act to Amend the Mutual Defense Assistance Act of 1949.”
Congress had amended Section 408 (e) of the 1949 act to allow the President to transfer military equipment, materials, or services, at no cost to the United States, to other countries whose defense was important to the security of the United States. The section of the act relevant to Saudi Arabia’s request for military equipment authorized transfers to a country not eligible to join with the United States in a collective defense and regional arrangement, but whose ability to defend itself or to participate in the defense of the area of which it was a part was considered important to the security of the United States. Prior to receiving any equipment or services, the recipient country was required to sign a contract to assure the United States against any loss on the transfer. (64 Stat. 373)
Representatives of the Department of State met with Defense Department officials on three different occasions (August 18, September 12, and September 18) to discuss provisions the Defense Department wanted included in a proposed long-term Dhahran Airbase agreement and ways to implement cash reimbursable assistance for Saudi Arabia. Memoranda of those conversations are in Department of State files 711.56386A/8–1850, 786A.5/9–1250, and 786A.5/9–1850, respectively.
A declaration that Saudi Arabia was eligible under the amended Mutual Defense Assistance Act was necessary before it could obtain military aid from the United States on a reimbursable basis. On September 16, 1950, John O. Bell, the Acting Deputy Director for Mutual Defense Assistance, asked for the opinion of the Defense Department on Saudi Arabia’s eligibility for aid. In a memorandum, dated September 27, Major General Lyman L. Lemnitzer replied that [Page 1183] Saudi Arabia was eligible because it was clear that the ability of Saudi Arabia to defend itself was important to the security of the United States. Documentation is in Department of State file 786A.5.