711.56373/9–252: Telegram

The Consul at Benghazi (More) to the Department of State1

secret priority

34. From Villard. September 1. Bearing out my predictions over last several months Libyan Govt has now officially informed us of its dissatisfaction with terms of base rights agreement as concerns (a) duration of agreement and (b) amount of compensation for economic aid.

Subject was brought to my attention today in form of personal letter signed by PriMin and delivered at my residence in Cyrene by Suleiman Jerbi, Director General of FonOff. Letter was dated August 29 but Suleiman explained there has been slight delay in delivery. Since I have no facilities for Arabic translation in Cyrene, I am summarizing below its contents as described orally by Suleiman. Full text will be transmitted from Benghazi after translation.2

Opening paras refer to Libya’s previous expressions of gratitude for US help and spirit of friendship in which agreement was signed. Request is made in this personal communication for review of terms of agreement.
It had been intended to submit agreement to last session of Parliament but heat had terminated legislative activities before this could be done. However, members of Parliament had been consulted in advance on terms of agreement and all of them had criticized govt on two points above mentioned. PriMin supported this view and considers the contract poor business for Libya. If regarded with “commercial eye” Libya is giving up approx pounds 700,000 yearly in revenue through immunities enjoyed by US Govt in Tripolitania, as shown by accompanying annexes, while receiving only some pounds 300,000 from US in return.
Reference is made to exchange of notes on econ aid for Libyan people, but if it is considered that Libya is giving more than it receives, then there is no real contribution to welfare of Libyan people.
Point IV assistance is general in its application and is not limited to countries granting military facilities.
Libyan Govt will submit agreement to Parliament opening in November at Tripoli. But before doing so it appeals to spirit of friendship and sympathy displayed by US for Libya and young nations generally, and desires that I take up matter with Washington explain Libyan position in light of above so that amount and duration of agreement may be reviewed.
PriMin trusts I will use good offices to support Libyan point of view, that Washington will appreciate Libya is giving twice what it is receiving as well as delicate position in which Libyan Govt finds itself, and that Washington may help overcome these difficulties.

Annexes accompanying letter are in English and give detailed breakdown on estimated revenue lost by Libyan Govt as result of immunities enjoyed by US on basis of “what would have to be paid by a commercial organization of similar magnitude by way of taxes, fees and rentals, etc.” This is undoubtedly work of British financial adviser Pitt-Hardacre and his aides. It is too long to be telegraphed and will be airmailed for Dept’s info, analysis and comment.3

I told Suleiman Jerbi I would comply with PriMin’s request and transmit communication to Dept but that I could give him no hope or encouragement that any alteration could be considered in terms of agreement. I said US would never have made such large expenditures as at Wheelus for less than 20 years and that from my personal knowledge of situation $1 million was maximum figure obtainable. I asked hypothetical question if Libya desired both shorter term and more compensation, say 20 years4 and 2 millions annually, would not result be the same and in this case which did Libya really prefer? Suleiman said he could not answer question. He gave as his personal opinion, however, that additional compensation was more important than duration of agreement. When I asked why Libya needed more money than [Page 547]it was already getting and what it would propose to do with such additional compensation, Suleiman replied that ultimate object was to be freed of dependence on Brit. Meanwhile if funds could not all be spent at once, they could be held and applied in later years when time was ripe. Point IV assistance could not be counted on, as it might end at anytime in future.

I propose to answer PriMin’s letter using arguments with which Dept has already supplied me,5 by stating that matter has been referred to Washington and that more formal reply may be expected later on. Also, I am transmitting copy of letter and annexes to C.O. Wheelus Field and Middle East District Engineers, USA, for such comment as they may wish to make.

I have been trying without success for last 10 days to obtain an appointment with the King and am convinced that I have been deliberately put off until PriMin’s letter could be delivered. Although my request for interview was made directly to Royal Diwan, I was informed yesterday it was being handled by PriMin. He in turn stated appointment would have to wait until after current feast days were concluded possibly September 4. While my representations to King have thus been in large measure forestalled, I intend nevertheless to discuss subject of base agreement when I see him.

  1. This telegram was repeated to Tripoli and London.
  2. The text was transmitted in telegram 137 from Tripoli, Sept. 3. (711.56373/9–352)
  3. Despatch 38 from Tripoli, Sept. 8. (711.56373/9–852)
  4. Presumably, this figure is a typographical error and should read 10 years.
  5. According to Benghazi telegram 24, Aug. 22, the Minister had learned the Libyan Government intended shortly to present the United States with a request for $2 million a year as compensation in connection with the base agreement. He believed the request would be due more to British influence than Libyan initiative, but said he would try to see the King and discuss the general question of ratification of the base agreement. Telegram 15 to Benghazi, Aug. 26, directed the Minister to adhere to a firm position on the question of additional compensation for the Libyans and make it clear to them that the U.S. expected ratification on the present basis. It suggested that he might discreetly raise the problem with British advisers to the Libyans and express the hope that they would exercise a restraining influence on Libya. Documentation is in Department of State file 711.56373.