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

883A.2553/12–1853: Telegram

No. 319
The Ambassador in Lebanon (Hare) to the Department of State¹

confidential

Beirut, December 18, 1953.

531. Prime Minister Yafi asked me call this morning and raised question of renegotiation of unratified IPC agreement (Embtel 518, December 11).² Said he had previously taken up with British and French and also intended doing so with Dutch because of various national interests involved. Following is summary of Yafi’s presentation:

1) He wished confine his remarks to IPC and not speak now of Tapline, with which relations had been generally better. Believed also that, if satisfactory agreement could be reached with IPC, should not be difficult come to understanding with Tapline.

2) He realized there had been much intemperate and irresponsible discussion of pipeline question in press and in Chamber of Deputies; wished make clear that this was not impelling force but rather that 1952 agreement had been concluded by people who had not taken the public interest adequately into account. The agreement was consequently one which the present government could not and would not put before the Chamber of Deputies for ratification.

3) Governments succeeding that of Sami Solh had violently opposed the 1952 agreement. Present government also opposes but wishes make clear desire cooperate and not intimidate. If some reasonable compromise is to be reached, IPC would find present government reasonable and Yafi would personally undertake to obtain legislative acceptance.

4) Matter has been talked over generally with the Syrians, with whom Lebanese intend making common cause.

5) GOL has no specific plan to put forward at this time. Personally, Yafi is dubious about the 50–50 idea which George Hakim so strongly championed but there might be something to be said for a plan which would take into consideration the reduced purchasing power of receipts since the agreement of 1931 was signed. In any event, some new and defensible basis for payment should be found.

6) If GOL is to combat communism, it must do something to alleviate the lot of the needy, which now is both serious and dangerous. Lebanon does not need money to balance its regular budget but it does need money for social betterment; this also is in the interest of its Western friends.

7) Yafi hoped these views would be transmitted to the US Government in the expectation that it would counsel the American participants in IPC to adopt a more understanding attitude. The GOL had spoken to IPC in friendly terms; the latter should, however, understand that the GOL was serious and would not tolerate further refusal to discuss.

I observed that this was first time this matter had been raised with me and I would not undertake to discuss in detail. However, I would venture observe that, although true that 1952 agreement had not been ratified, the fact remained that it had been reached after due discussion and had been signed by the then government. I knew of nothing which had happened in the meantime to change the basic situation on which agreement had been reached. Also, although I appreciated the desirable purposes which the government wished to serve by increasing its revenue, it seemed clear to me that an agreement of this kind was essentially a business transaction and it would therefore be inappropriate to approach the company on the basis of need unrelated to the service being rendered. Furthermore, the government’s request must remain somewhat nebulous in the absence of any specific recommendations or proposals. However, I appreciated the friendly way in which the Prime Minister had raised the question and would report to my government as requested by him.

Just prior to my talk with Yafi, I met with British and French Ambassadors who indicated that Yafi had approached them along same lines as reported above. British Ambassador added that, although he had not given Yafi any comfort aside from saying he would report to his government, he personally felt, and had recommended to London, that serious considerations should be given to encouraging IPC to renew negotiations since he felt that continuance of present situation was intolerable and that, aside from IPC itself, British interests generally were being adversely affected. He mentioned thought which had been given to finding some new and logical basis for pipeline payments and said he felt the road to solution was in that direction. Also he definitely felt that the present government would be more amenable to reasonable dealing than any other which might be expected to replace it. The French Ambassador expressed himself in almost identical terms except for making the point that, in his opinion, an unhealthy situation was developing between the oil rich countries of the Near East and their proletarian and oil-less neighbors; there should be some degree of sharing in oil profits.

I shall submit my comments on foregoing in a following message.³

Hare

1. This telegram was sent by pouch.
2. Not printed; it reported the Government of Lebanon had been corresponding with Tapline and IPC, requesting new negotiations of the May 1952 agreements and asking the companies to get in touch with the Minister of Finance. Neither company planned to contact him. (883A.2553/12–1153)
3. Telegram 542 from Beirut, Document 324.