786A.5 MSP/8–1952

No. 1441
Memorandum of Conversation, by Robert Sturgill of the Office of Near Eastern Affairs

top secret

Subject:

  • Grant Aid for Saudi Arabia

Participants:

  • Raymond A. Hare—US Ambassador to Saudi Arabia
  • S/MSA—Mr. Bryan
  • NEA—Mr. Daspit
  • NE—Mr. Sturgill

Summary:

Ambassador Hare2 opened the conversation with a review of past and present considerations with regard to the problem of grant aid for Saudi Arabia. In alluding to his instructions to discuss grant aid with the SAG during the DAF negotiations May–June 1951, he said that no promise was made to the SAG but that it was made clear that the US Government was thinking strongly about such assistance for the general area and for Saudi Arabia in particular, and there was a clear implication of favorable action if legislatively possible. He said that reference during the negotiations to the possibility of grant aid was an important factor in obtaining the DAF agreement. At that time, he pointed out, the United States Air Force wanted DAF very badly. In answer to an inquiry from Mr. Bryan, the Ambassador added, however, that he could not say categorically whether the DAF agreement could have been obtained without mentioning grant aid to the Saudis.

Since conclusion of the 1951 negotiations, the Ambassador continued, the Saudis have mentioned grant aid to him several times, the most recent reference having come during the MAAG negotiations in July. However, Saudi allusions to grant aid were made only behind the scenes and not openly during the negotiations; but they were made in such a way as to leave no doubt that the SAG was expecting the USG to offer such assistance.

The Ambassador described the present situation somewhat as follows. Tactically, by use of proper timing, grant aid for Saudi Arabia could be tied to the present rather than the past. He said he had talked the problem over with General Day prior to coming to Washington and they had agreed that if authority could be obtained [Page 2420]to raise the subject of grant aid, they would have another “ace” during the forthcoming additional rights negotiations. Such an “ace”, he said, could be used to facilitate obtaining additional rights at DAF and to enhance the position of the MAAG chief, who could “guide. application of the assistance to a specially selected portion of the program. The Ambassador said, however, that he would rather not tie grant aid directly to the additional rights negotiations. He also pointed out that if any grant aid were given to the other Arab states or to Israel, Saudi Arabia must get it at the same time or sooner and in appropriately large quantitative terms.

In response to a question from Mr. Bryan, Ambassador Hare said there was no situation in any other country in the NE area comparable with that of the US Air Force in Saudi Arabia. He pointed out that the Saudi Arabian Government gave the use of DAF to the US Air Force and got nothing in return; while in Libya, which is the closest comparable situation, the US Air Force is paying a one million dollar annual rental fee for the use of a base there. He said that in obtaining these terms at DAF we reversed the current of everything that was being done in the area at the time. The Saudi Arabian Government wants the United States in Saudi Arabia, he said, but it should be remembered that we are still negotiating against the current: witness Iran and Egypt.

The Ambassador thought that ultimately the situation came down to an evaluation of what the United States wanted in Saudi Arabia and how badly it was wanted. Mr. Daspit remarked in this connection that Defense had never defined just what US strategic interests are in that area. However, within the last week the Department has sent a letter to Defense asking them to clarify their strategic interest and to tell State what really would be needed for defense of the area.3 The Ambassador said that was something he would like to know. If the concept for the area is positive, he asked, what part does Saudi Arabia play therein; if the concept is negative, does Saudi Arabia still play some special role?

It was emphasized again by the Ambassador that the question of grant aid bears on three things: (1) Dhahran Air Field, (2) military assistance, including MAAG, and (3) the future of the United States in Saudi Arabia—in other words what do we want there? Mr. Bryan expressed the opinion that the Director of Mutual Security would want to know the type of equipment which would be purchased with grant aid funds. The Ambassador said he had told the SAG under instructions that grant aid would be supplementary to cash reimbursable assistance but that he had recently heard [Page 2421]contrary opinion expressed and, as far as he could see, there would be no objection to using grant aid to pay for some of the equipment already recommended by the JCS for purchase under MDAP. However, what the SAG really appeared to want help with, the Ambassador said, was construction of the military base at El Kharj; they did not want military equipment. Mr. Bryan replied that he was not sure the Mutual Security Act provided for the purchase of construction items. But he said that the Department, in arguing for grant aid for Saudi Arabia, might take the line that the US should free the Saudi Arabian foreign exchange for purchase of construction items by paying for small arms equipment. Mr. Daspit suggested that perhaps a solution to the whole grant aid problem would be the payment of a rental fee for DAF similar to the fee paid to Libya. Mr. Bryan thought this worthy of consideration and said that such a suggestion might serve as a vehicle to get Defense to give a stronger endorsement of grant aid for Saudi Arabia. Mr. Bryan thought, too, that the Department could go back to Defense and say that it would be a calculated risk to negotiate for the additional facilities without authority to offer grant aid, but that we would be willing to go ahead on this basis if Defense had nothing further to say on the matter. Mr. Bryan was emphatic in saying that NEA’s current file, requesting a Presidential finding, would not be acceptable to the Director of Mutual Security. Not only would it be difficult to sell to DMS, he said, but also it would be difficult to sell to the White House.

  1. This memorandum of conversation was prepared between Aug. 20 and Aug. 22.
  2. Ambassador Hare had returned to the United States for a series of consultations on Saudi Arabia.
  3. For the text of the letter from the Deputy Under Secretary of State to the Secretary of Defense, dated Aug. 15, see Document 83.