887.2553/3–2951: Telegram

The Ambassador in Iraq (Crocker) to the Department of State 1


573. Emb highly gratified at initiative reflected by Asst Secy State McGhee in Amman’s tel 26 to Dept 164,2 looking toward high level conversations with UK in effort clarify future oil concessions ME. We have closely studied conclusions and recommendations to which we give gen approval.

Basic motivation US approach to UK is of course to seek cooperation in restoring ME stability which has been dangerously and almost wantonly undermined by anachronistic policies pursued by AIOC leadership supported by portions of Brit Govt and not effectively checked or controlled by Brit FonOff which was thus derelict in its essential duty, namely, intervening to prevent occurrence of unfortunate situation which has now arisen, both in Iran and potentially in Iraq.

[Page 293]

If we appear to have labored this point (Embtel 541)3 somewhat both at and since Istanbul, it is to justify US intervention (especially with ref to Iran) in that superficially wld appear to be a strictly Brit family affair. Fact is in light of cold war joint US–UK policy for stability ME has been sabotaged by UK to extent described foregoing para.

Projected approach to AK [UK] may be expected produce desired results and if understanding reached we believe situation, especially in Iraq will be salvaged. However, essential that public reaction ME countries be kept constantly in mind. Thus simple formula principle is excellent. Necessary to follow upon suggested declaration both from public relations angle and to assure prompt implementation of declaration by companies. It wld be fatal to make declaration otherwise.

Evidence that extreme care necessary in both wording and fol thru on declaration. The fol point out some items of especial delicacy.

Conclusion number 4 Amman tel will, of course, be well accepted Iraq. However, there are many obvious complications in application. Moreover, this might well be most vulnerable principle from free enterprise point of view and traditional Amer policy against cartels. Thus it may be attacked at home and by Soviets. Nevertheless, it is basically desirable from angle of justice in eyes of ME countries appraise particular question re desirability mentioning neutral commission in declaration because implies lack of faith in companies working out problem with ME countries. Govt sponsorship recd appear bad public relations.

Provision refinery capacity each country wld tend satisfy national aspirations. This is true in Iraq where IBRD now considering feasibility refinery for loan. Oil companies wld gain popularity by clearly indicating they wld cooperate and assist establishment. Such cooperation essential to success refinery project in Iraq.

Conclusion No. 5 excellent. However, must consider possible public reaction. Cld be attacked ground foreign imperialistic dictation. Nevertheless, believe every reasonable effort short of incurring possible imperialistic charge shld be made to bring on sound development projects. In Iraq, present development board affords likely medium.

Because importance exchange views, quick meeting McGhee and Ambs this area wld be advisable prior London talks.

  1. Repeated to Tehran, Jidda, London, Damascus, Beirut, Amman, and Cairo for McGhee.
  2. Dated March 26, p. 289.
  3. March 17, not printed. It reported the Embassy was concerned about oil developments in Iran and Iraq and believed high-level consultation between London and Washington should take place without delay. (887.2553/3–1751)