Foreign Relations of the United States, 1955–1957, Near East: Jordan-Yemen, Volume XIII

272. Memorandum From the Secretary of State to the President¹

Washington, February 7, 1957.

SUBJECT

• Military and Economic Discussions with Saudi Arabians

In accordance with our understanding with King Saud, discussions were held February 2, 5, and 6, with the Minister of Defense, Minister of Finance, and Deputy Foreign Minister regarding the extension of the Dhahran Airfield Agreement and the urgent Saudi request for arms and economic assistance. Representatives of the Departments of State (Deputy Under Secretary Robert D. Murphy) and Defense and the International Cooperation Agency participated jointly in these discussions, and the positions arrived at represent their joint views, communicated to the Saudis.

In our discussions we have made it clear that our interest centers on the defense of the Dhahran air base and the Saudis ability to resist Communist aggression and to maintain internal security.

The attached statements briefly summarize the positions developed as a result of these discussions regarding military and economic assistance. No doubt these matters will be a major element in the mind of King Saud when he meets with you tomorrow.²

John Foster Dulles³

[Enclosure 1]

SUMMARY OF UNITED STATES POSITION REGARDING DHAHRAN AIRFIELD AND ON SAUDI ARABIAN REQUESTS FOR MILITARY ASSISTANCE⁴

I. Arms

A. The United States is willing to sell the arms required for the two divisions ground force program. The rough estimated cost is $110,000,000. Letters of offer of $41,000,000 have been released. Sales would be in accordance with the Reimbursable Assistance Agreement of June 18, 1951.

B. Of the total tank equipment for two divisions requested by Saudi Arabia, the United States suggests the immediate sale of only 18 M–47 tanks pending tests of these tanks under conditions in Saudi Arabia.

C. New equipment could only be provided through factory order. Therefore, in order to attempt to meet the time schedule suggested by Saudi Arabia, the United States will provide equipment thoroughly reconditioned according to United States combat-ready standards.

D. The United States proposes an Air Force and augmented Army training program. It is prepared to provide 8 T–33 aircraft and 10 propeller driven training aircraft on a grant basis for use in this program.

E. The United States is willing to sell coastal patrol craft, and to assist in the training of Saudi Arabian personnel in their use.

F. The United States is prepared to arrange credit for a portion of the arms to be sold, credit up to $41 million, twenty-four to thirty months term. Sympathetic consideration will be given to similar terms for the remainder of the estimated total of $110,000,000.

II. Military Grant Aid and Dhahran Air Terminal

A. The United States is prepared to assume the cost of:

1. The Air Force development training, and maintenance program as orally described to Saudi representatives by Department of Defense representatives.

2. An augmented Army training program, including the training of the Royal Guard.

3. The construction of an air terminal at Dhahran. The cost of the construction of this terminal is not to exceed $5,000,000.

B. The foregoing under A will represent a total United States Government expense over a five year period of not exceeding $50,000,000, subject to annual appropriations.

III. Conclusion

A. The United States is prepared to agree immediately to the foregoing and to a five year extension by an exchange of notes of the Dhahran Airfield Agreement to run from date of exchange of notes.

B. Technical details related to the foregoing will be resolved by further discussions in Saudi Arabia.

[Enclosure 2]

SUMMARY OF UNITED STATES POSITION ON SAUDI ARABIAN REQUESTS FOR ECONOMIC ASSISTANCE⁵

I. Mutual Security Program

A. The United States is willing to consider assisting in the financing of technical and engineering studies on projects of particular interest to the Saudi Arabian Government, where such studies are required to move toward construction. This, in effect, is an offer of technical assistance on the projects listed in the King’s memorandum to the President.

B. The United States is prepared in principle to offer grant economic assistance at a moderate level to specific projects such as the port of Dammam. In view of the limited amount of economic grant aid we contemplate, it is believed we should concentrate largely on the Dammam port as a project of major impact. Development and expansion of the port of Dammam will serve not only Saudi interest but will also assist American shipping and oil investments, as well as being important to operations of the Dhahran airfield. No specific monetary level was indicated to the Saudis, but we have in mind $20 million for the Dammam project.

II. Other Assistance

A. The United States is prepared to lend its good offices toward consideration of financing development projects through commercial institutions, the Export-Import Bank, and the International Bank for Reconstruction and Development. With respect to the latter institution, the United States is ready to assist toward implementation of the Saudi Arabian Government’s indicated decision to join the Bank.

B. The United States suggests that construction and improvement of railways should be financed through the Saudi Arabian Government’s resources or commercial borrowing. It is not suitable for United States grant economic assistance.

III. Conclusion

A. The United States is prepared to agree immediately to I. A. and B. above by an exchange of notes.

B. The United States suggests that technical details related to the foregoing be resolved by further discussions with the Richards Mission and United States representatives in Saudi Arabia.

1. Source: Department of State, Central Files, 711.56386A/2–757. Secret. A draft of the Dulles memorandum attached to the source text contains the following additional paragraph:

   “As you know, the Saudis have been insistent that the United States supply military equipment. They have refused Soviet offers. There is the possibility that if we decline, they will obtain Soviet arms via Egypt. They have given every indication of a firm determination to obtain arms.”

2. At 2:45 p.m. on February 7, during the course of a telephone conversation between Dulles and the President, the following exchange occurred:

   “Mr. Dulles said he has sent the President a memo as to the program they have reached with King Saud in accordance with some information they received & which he knows is available also to the President. The King did not seem very enthusiastic, but Mr. Dulles thinks they went pretty far. The President said he does not think the King is easily satisfied, but that his people on the other hand do seem happy.” (Eisenhower Library, Whitman File, Eisenhower Diaries, Memoranda of Telephone Conversations)

3. Printed from a copy that bears this stamped signature.
4. Secret. Drafted by Newsom, Bennett, and Murphy.
5. Secret. Drafted by Lathram, Bennett, and Murphy.