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

883A.2553/12–2253: Telegram

No. 324
The Ambassador in Lebanon (Hare) to the Department of State¹

confidential

Beirut, December 22, 1953.

542. Following are Embassy’s comments on request of Prime Minister Yafi that USG urge American participants in IPC to accept renegotiation (Embtel 531, December 18):²

(1) Although there may be a certain degree of sincerity in request of Yafi and in agitation by others, primary motivation believed to be desire to exploit issue for local political or personal reasons. For example, in case of Prime Minister Yafi, it is former; in case of former Prime Minister Salaam, it is latter.

(2) Along with foregoing, there is no gainsaying fact that Lebanese, despite their inherent business sense, have allowed themselves to succumb to fallacious doctrine that the world, especially as epitomized in oil companies, owes them a living regardless of their own efforts at self-help or of value received by the companies.

(3) However, Embassy feels, as apparently do British and French Ambassadors, that present system of payments is defective in sense that it has no definable base of computation and is therefore difficult to defend irrespective of amount of revenue provided. Embassy understands that IPC management and participating companies also tend share this view and it is recalled that detailed studies of subject were submitted by former Petroleum Attaché here.

(4) Embassy also is inclined agree with British Ambassador that present government would probably be as amenable to reason as any which might be expected to replace it but it seems doubtful if, in view weakness of present regime, it could be expected to survive a normal period of negotiation.

(5) Foregoing leads to conclusion that, although present approach is partly a tactical move by present government in attempt to improve its tottering position, and although there is obvious fallacy in effort to relate increased oil revenue with alleged plans for raising living standard, basic situation is not satisfactory and should be reviewed in due course. Question is how to do so without giving impression of yielding to improper pressure. Answer must rest with IPC where British interest predominant, but believe we should at least tell American participants of approach by Prime Minister and how situation looks to us. Wish emphasize, however, that Embassy would not recommend opening negotiations at present time which would merely result in increased payments without a change of computing procedure. To do so would merely be interpreted as evidence of weakness and would set the stage for repeat performances. Possible compromise might be to insist on ratification of 1952 agreement as interim measure on understanding that negotiations for revised procedure would be undertaken and actively pursued. This could have advantage of saving face of both sides while assuring GOL of increased revenues, including back payments, until negotiations (which would probably be protracted) completed.

(6) Bearing of foregoing on Tapline is of course obvious and Embassy assumes Tapline interests would be fully considered in connection with any discussions with American participants in IPC.

Hare

1. This telegram was sent by pouch.
2. Document 319.