Foreign Relations of the United States, 1952–1954, The Near and Middle East, Volume IX, Part 1

883A. 2553/12–2352: Telegram

No. 277
The Ambassador in Lebanon (Minor) to the Department of State¹

confidential

Beirut, December 23, 1952–6 p.m.

1219. Reported discussion within Council of Ministers re issuance decree to place before Parliament for decision the matter of invalidation Tapline agreement raising question minds foreign business interests re validity other similar agreements reached with previous government. MEDRECO representative today inquiring of principals what if any approach should be made to Lebanese Government seeking clarify status its refinery agreement which like Tapline agreement was based on exchange of letter with officials² in previous government.

Tapline President Swigart states no formal approach yet made to his company beyond Finance Minister’s inquiry Tapline Vice President Campbell around first November whether Tapline willing renegotiate which Tapline refused. Swigart stated Tapline informed by their Attorney Habib Abi Chahla that Prime Minister Chehab in his capacity as Minister Justice rendered a decision in writing to Finance Minister Hakim that Tapline exchange of letters constituting new agreement required Parliamentary ratification, but that subsequently Prime Minister withdrew this letter. Tapline Attorneys including Abi Chahla feel Tapline May 1952 agreement, since based on convention ratified by Parliament, did not require Parliamentary ratification. They interpret Prime Minister’s withdrawal his letter to Finance Minister as recognition this fact.

New government has continued receive Tapline payments basis terms May 1952 agreement. Swigart inquiring New York principals whether or not make payments under new or old agreements should Parliament invalidate May 1952 agreement. Meantime since Tapline not approached formally re entire matter beyond question November willingness re-negotiate sitting tight await developments.

Considerable news coverage being given government need renegotiate Tapline agreement and mention made consideration decree to set stage for re-negotiation. Swigart feels that if Parliament should invalidate May 1952 agreement government will probably whip up public opinion to point where pressure will require Tapline enter re-negotiating discussions.

See Embtel 1220 for Finance Minister Hakim’s views.³

Minor

1. Repeated to London and Damascus.
2. At this point the source text contained the word “British” but the word “officials” had been handwritten underneath. Previous exchanges of letters had been carried on with Iraqi officials.
3. Not printed; it reported Hakim told the economic officer the May 1952 agreement modified a convention ratified by Parliament, and therefore, it also had to be ratified. He stated that if Parliament rejected the May agreements the Government of Lebanon would return to the old agreements, and would probably have to refund excess payments made by Tapline under the May agreements. He admitted there was a close connection with the IPG-Syrian negotiations, and added that Jordan was also interested. (883A.2553/12–2352)