434. Memorandum for the Record, by Thomas A. Cassilly of the Executive Secretariat1

Meeting with the Secretary 4:00 p.m., November 12, 1957



  • The Secretary
  • The Under Secretary
  • Mr. Rountree, NEA
  • Mr. Newsom, NE
  • Mr. Cassilly, S/S


Approved efforts to expedite an economic development program for Yemen.
Authorized an approach to the Standard Oil Co. of New Jersey to take over the concession of the Yemen Development Corp. and the coastal strip concession now held by inactive German interests.
Authorized instructions to Ambassador Wadsworth to discuss the Yemen Development Corp. with the Imam.
Concurred that the British should be advised on this matter.

. . . . . . .

Mr. Rountree pointed out that the situation in Yemen required immediate attention since the Soviets are reported to have 79 technicians, 10 aircraft, 30–40 tanks and self-propelled artillery in the country. The only U.S. interest so far has been the Yemen Development Corporation whose concession has now expired. The Yemeni Chargé here has been reluctant to cancel this concession because he is afraid this might provide a further opening for the Soviets. Only one U.S. firm, the Standard Oil Company of New Jersey, has shown any interest in taking up the concession, but they insist this would be only to preserve the U.S. position on the Arabian peninsula and not for commercial reasons. The Department must decide whether we should urge Standard Oil to take over this concession and also try to take over the coastal strip concession now held by inactive German interests.

[Page 770]

The Secretary asked whether the price for this concession might not skyrocket once the Yemen Development Company found out that Standard Oil was interested. The Under Secretary suggested that it might be better to let the old concession lapse and draw up a new one for Standard.

Mr. Rountree explained that pro-Soviet elements in the Imam’s court might prevent the granting of another American concession. The proposed U.S. aid program includes an aerial and geological survey which would be an inducement to any investor…. All this would help indicate to Standard Oil the seriousness of our interest in the area.

The Under Secretary asked whether the British should not be advised, and Mr. Rountree agreed that they should, especially since the London talks with Crown Prince Badr seem to be progressing satisfactorily.

Mr. Rountree mentioned that the recent ICA survey mission in Yemen had been very successful and had recommended a $5 million program including the two surveys already mentioned, roads, technical assistance in agriculture and air transport.

. . . . . . .

The Secretary mentioned that if oil were discovered, Congress might say that the Department had spent the taxpayers’ money for surveys that benefited a private company. Mr. Rountree pointed out that the Development Corporation had done everything possible to interest other firms but had not been successful. The Under Secretary also mentioned that Defense was very much interested in an aerial survey.

The Secretary asked how important Yemen really was in the scheme of things. Messrs. Rountree and Newsom pointed out that it dominated the southern entrance to the Red Sea and that the prospect of a pro-Soviet Yemen was appalling. The only way this could be prevented was by showing strong U.S. interest in the country.

The Secretary accordingly approved the three actions listed above.

  1. Source: Department of State, Central Files, 611.86H/11–1357. Secret.