883.10/1–751: Telegram

The Minister in Syria ( Cannon ) to the Department of State 2


314. Prime Minister3 yesterday informed me he is about to put forward application for major loan from Export Import Bank. In conversation which then ensued he told me of serious difficulties in Parliament and even within own party in determining fundamental attitude and program of action in present critical world situation. He said whole range of problems has been brought to head by message from UN delegation forewarning government that Syria may suddenly be required to take important policy position for vote on resolution declaring Chinese Communists aggressor.4

Qudsi said that in series of secret meetings with political leaders and with Parliament Foreign Affairs Committee to review international situation he and his supporters were hard put to it to defend a policy sympathetic to democracies and were obliged to admit Syria’s exposed situation today, her relative weakness if relying on own efforts, and uncertain prospects of practical and effective support from the West if situation deteriorates. Government’s present program and projects would be adequate in less critical times but he is now being reproached for not facing up to crisis of world affairs. All leaders are agreed that drastic steps must be taken to build up public confidence, to invigorate defense organs, and above all to strengthen the economy. He said government was thinking of something like 100 million dollars. Under programs practicable with such credits Syria could pull [Page 1074] herself together and steadily move forward with real contribution to stability and prosperity in ME.

He did not develop his ideas, if indeed they have as yet been formulated, on what projects would be undertaken and over period of time and what might be relationship to IBRD loan or whether decision had been reached as to the firmness of Syria’s alignment with policies of democracies parallel with loan application. This was clearly his preliminary statement, to be amplified in further conversation tomorrow when, along with Norman Burns who is returning to Damascus for that purpose, I had in any case expected to see him on Point IV.5

Before seeing Qudsi I had called on Minister Finance explaining cold realities of Export Import Bank operations and had left with him formidable outline of requirements for even 10 million dollar proposition we then knew to be contemplated. I told Qudsi of this and suggested that he study these practical requirements before presenting any formal proposal.6

As general observation I noted Qudsi has intelligent and perceptive understanding of policy underlying credits to Greece, Turkey and Iran and he did not unduly press parallels. He made only passing reference to loans to Israeli (see Legtel 306 January 4).7 He clearly wants Syrian application to appear to stand on own merits and not as counterbalance to aid to Israel. While giving him credit for this restraint we do not for a moment forget that Israeli question is close to surface in all this ferment and US policy must be shaped accordingly.

  1. Repeated to Paris, London, Cairo, Amman, Ankara, Baghdad, Beirut, Jerusalem, Jidda, Tel Aviv, and Moscow.
  2. Nazim al-Qudsi.
  3. For documentation on the interest of the United States in securing a resolution in the United Nations General Assembly describing the Chinese Communists as aggressors in Korea, see vol. vii, pp. 1 ff.
  4. A program of U.S. technical assistance to underdeveloped areas of the world, advanced by President Truman as the fourth foreign policy point of his inaugural address, January 20, 1949. For documentation on the program, see vol. i, pp. 1641 ff.
  5. The reservations referred to here concerning Syria’s interest in an Export-Import Bank loan were supported in telegram 266 to Damascus, February 2, which instructed Cannon to inform Qudsi that such a loan application at the present time would complicate the current consideration of Syria’s application for a loan from the International Bank for Reconstruction and Development (883.10/2–251).
  6. Not printed.