241. Memorandum of a Conversation Between the Under Secretary of State (Hoover) and the British Ambassador (Caccia), Department of State, Washington, January 11, 19571
Ambassador Caccia inquired concerning procedures to be followed in connection with planning on the question of oil transport resulting from the Middle East crisis. He wondered how planning on the part of the companies would be coordinated with Government planning. Mr. Hoover said that he considered that planning on the part of both the Government and the companies should proceed simultaneously. On the Government side Mr. Flemming of the Office of Defense Mobilization would give the result of the Government’s study to the Middle East Emergency Committee for study and comments. The “raw material” would be passed on to the United Kingdom, following which we would expect a round-robin at the Governmental level to coordinate policies.
There was some discussion regarding possible construction of a pipeline through Turkey and of a construction program for large tankers. The Ambassador said that the United Kingdom’s approach to this whole problem differed in emphasis, to a certain degree, from that of the United States. He said that the British Government could never again permit a situation to arise which might jeopardize all of British industry; that the United Kingdom could no longer rely [Page 652] entirely on one sole source of oil supply. He pointed to certain difficulties in connection with a large tanker construction program, saying that if such a program is embarked upon there will need to be an expansion and enlargement of port facilities. The companies operating the tankers would of course expect the Government to carry out such port development. Mr. Hoover said there had been some question as to the optimum size of tankers and it seemed that 45,000 tons was the most appropriate size for such vessels. In the case of 45,000 ton tankers no changes in port facilities would be required but discharge time would of course be increased. With reference to the Canal itself, we have reports from certain oil companies to the effect that the proposal for enlarging the Canal is greatly over-emphasized and that the Canal has never really been used to capacity.
The Under Secretary said that interested companies are pressing for the conclusion of a treaty with respect to the proposed pipeline through Turkey. He said that it might be desirable to conclude a treaty regarding oil transport by such a pipeline but he felt that we could not go as far as to propose a treaty which would guarantee continued exploitation of oil resources. He felt that such a treaty would have a very difficult time getting through the Senate which would be reluctant to approve an agreement limiting any country’s ability to utilize its own resources to its best advantage. If such a pipeline is the subject of a treaty it should be considered as a public utility for use, on a regulated basis, by all oil suppliers.
The Ambassador said that he was somewhat anxious about the forthcoming visit of King Saud of Saudi Arabia. He recalled that there are various unsettled matters between the United Kingdom and Saudi Arabia such as Buraimi and he hoped that King Saud would not gain the impression during his visit to the United States that he had U.S. support on all these matters. The Ambassador said that he had no instructions on this matter but he thought it desirable to raise it at this time. The Under Secretary said that we very much hoped that we could get the Buraimi talks started again when things cooled off in the Middle East and he reminded the Ambassador that the Saudis were more willing to discuss this matter at one time than was the United Kingdom. The Ambassador noted that the Iraqi and the Saudi Arabians seemed to be getting together again and he wondered, in connection with the settlement of boundary disputes, whether the United States could not give a formal guarantee of the territorial integrity of these states once the boundaries are fixed by agreement. When it was pointed out to the Ambassador that we might have some difficulty from a Constitutional point of view, he said that he had in mind a statement of some kind which would [Page 653] “view with the greatest concern” any attempt to alter these boundaries by force.
The Under Secretary said that we would do our best to try to restore peaceful relations between the United Kingdom and Saudi Arabia and he hoped after a cooling off period that the two might gradually come together again. He inquired concerning accounts of recent disturbances between the Aden Protectorate and Yemen. The Ambassador said that he had no official accounts of what had happened but that he understood the incidents had occurred on the United Kingdom side of the border.
The Ambassador then referred to the problem of reopening the Canal and procedures to be followed in setting up an administration of the Canal. He referred to the fact that Eugene Black of the International Bank had expressed the opinion that the $15 million provided for the clearing of the Canal would not be sufficient and that it might require some $30 or $40 million in all. He said that the question of the payment and division of Canal tolls was of the utmost importance and he wondered if it might not be wise for the International Bank to handle the whole operation. He said that he had talked to Mr. Phleger about this matter and that Phleger had said that Hammarskjold should be encouraged to work out this problem in negotiation with the Egyptians and the users of the Canal.
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199. Confidential. Drafted by Elbrick.↩