223. Memorandum From the Counselor of the Department of State (MacArthur) to the Under Secretary of State (Hoover)1

SUBJECT

  • Middle East Oil Studies

With reference to our meeting with the Secretary before his departure today and pursuant to your request that I give you a memorandum on what might be said to Mr. Dillon Anderson on this subject,2 I suggest that you convey the following to him:

As Mr. Dillon Anderson knows, because of the very tense situation in the Middle East, a series of studies have been undertaken in connection with the Middle East Oil situation and notably what we would do if certain contingencies arose involving the stoppage of the Levant pipe lines and/or the closing or blocking of the Suez Canal. There was an initial paper produced on a crash basis on March 30 by the Oil and Gas Division of the Department of the Interior evaluating the effects on free-world petroleum economy under certain assumed conditions in the Middle East Area.3 Subsequently, a further and more extensive “preliminary paper” was produced under the date of May 3 by the Economic Intelligence Committee’s ad hoc working group on Middle East oil.4 This was essentially an evaluation of the impact of certain situations arising but did not go into details as to what steps might be taken to meet one of several contingencies. There is at present a study which is being conducted at the Secretary’s request by an ad hoc group chaired by Mr. H.A. Stewart, Director of the Oil and Gas Division of the Department of the Interior, which will produce a paper on what practical steps might be required to meet some of the contingencies which have been outlined above. Mr. Stewart’s ad hoc [Page 607] working group which is carrying on this study on a most secret basis consists of representatives of Defense, State, and Interior and will obtain some information from a few members of the industry who have been cleared for “secret”. The study will probably take about three weeks more to complete. The Secretary has requested that until this study is completed and evaluated and we have had a chance to look at it, no additional studies be fed into the NSC Planning Board. However, when we have this study, we will consult with Mr. Dillon Anderson, to whom we will send a copy of the study, as to what we should do next in terms of work by the NSC Planning Group or the ad hoc working group.

There are two other papers bearing on oil of which we have sent copies to Mr. Anderson today: one is a British memorandum delivered to us by the British Embassy, entitled “Middle East Oil Communications” which bears the date of April 17, 1956;5 the second paper is a memorandum which we are giving to the British commenting on certain of the assumptions in the British paper.6 It will be made clear to the British that our memorandum involves preliminary and technical comments on certain of the assumptions in the British paper and is in no sense a commitment of any kind.7

D MacA
  1. Source: Department of State, Central Files, 880.2553/5–2556. Top Secret.
  2. In a meeting on May 25 on Middle East matters with Hoover, MacArthur, Rountree, Kirk, and Fraser Wilkins, Dulles requested that Anderson be told that a Defense-State-Interior Working Group was currently preparing a paper on measures the United States might have to take to assure a continued flow of oil to Western Europe in the event that the use of the oil pipelines to the east coast of the Mediterranean or the Suez Canal, or both, were denied to the West. Dulles also said Anderson should be told that they felt that any similar study of the oil situation by the Planning Board should await completion of this paper, which was expected in about 3 weeks. (Memorandum for the record, May 25, approved by MacArthur; Department of State, State–JCS Meetings: Lot 61 D 417) Dulles left after the meeting for Duck Island, his vacation home, and did not return to Washington until June 5.
  3. Attachment to Document 214.
  4. For approved text of this paper dated May 8, see Document 219.
  5. Not printed. (Department of State, State-JCS Meetings: Lot 61 D 417)
  6. This memorandum was not found in the Department of State files, but Stewart discussed the assumptions in the British paper in his letter of June 6 to MacArthur, infra.
  7. Following Hoover’s request relayed in a note from Fisher Howe of May 29, MacArthur called Anderson on May 29 to explain the situation as outlined in this memorandum. (Department of State, Central Files, 880.2553/5–2556) In a memorandum for the record, May 29, MacArthur wrote Anderson appreciated his call and agreed they should await the outcome of Stewart’s study. (Ibid., State–JCS Meetings: Lot 61 D 417) In a letter to MacArthur of May 29, Anderson wrote that Dulles had explained to him the previous week that the purpose of this material was to plan possible courses of action. Dulles also indicated, he felt that “the full development of the factual situation, as well as the estimates as to the probable results of several possible developments, might disclose a need for basic policy review toward the area in question.” (Ibid., Central Files, 880.2553/5–2956)