170. Memorandum of Discussion at the 321st Meeting of the National Security Council, Washington, May 2, 19571

Present at the 321st Council meeting were the President of the United States, presiding; the Vice President of the United States; the Acting Secretary of State; the Secretary of Defense; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Acting Secretary of the Interior (for Item 1); the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (participating in Item 2); the Acting Federal Civil Defense Administrator (for Item 2); the Director, National Science Foundation [Page 482] (for Item 1); the Director, International Cooperation Administration; General Twining for the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; The Assistant to the President; the Special Assistant to the President for National Security Affairs; Frederick M. Dearborn, White House Consultant; Clarence B. Randall, Special Assistant to the President; the White House Staff Secretary; the Executive Secretary, NSC; the Deputy Executive Secretary, NSC; the Secretary of the Air Force; and the Deputy Director, U.S. Information Agency.

[Here follows discussion of items 1 and 2.]

3. U.S. Policy Toward Libya (NSC Actions Nos. 801–d–(1),2 818–b–(2),3 827–a–(1)4 and 1550;5 Memos for NSC from Executive Secretary, same subject, dated April 126 and 26, 1957;7 Memo for NSC from Executive Secretary, subject: “Report to the President on the Vice President’s Visit to Africa”, dated April 22, 19578)

In the course of his briefing, Mr. Cutler reminded the Council that the Planning Board had already been charged with the preparation of a policy statement on Libya for Council consideration. This [Page 483] policy statement was expected to be ready by the end of the month. Meanwhile, however, the State Department had become convinced that Council action was necessary on one specific aspect of U.S. policy toward Libya. Inasmuch as the British had indicated to us that they proposed, by March 1958, to reduce drastically the annual subsidy which they had provided to Libya, the State Department wished to inform the Libyan Government promptly that it was our intention to sit down and review with the Libyans their current and prospective economic and financial situation. Such a move was necessary, according to the State Department, to forestall the possibility that the Libyans might turn to the USSR or Egypt in order to secure the assistance which the British were no longer prepared to provide. Mr. Cutler also noted that in FY 1957 the United States had programmed assistance to Libya in the amount of $24.5 million. While some of this assistance was of a “one shot”, non-recurring character, Mr. Cutler estimated that the level of our future assistance to Libya (irrespective of the impact of the proposed British move) would run between $16 and $19 million annually. Finally, Mr. Cutler pointed out that the Joint Chiefs of Staff concurred in the State Department’s proposal and in the State Department’s proposed telegram to the U.S. Ambassador in Libya,9 and he also referred to the recommendations of the Vice President in the report to the President on his African trip, recommending a policy of U.S. assistance to Libya. (A copy of Mr. Cutler’s briefing note is filed in the Minutes of the meeting.)10

At the conclusion of Mr. Cutler’s briefing, the President inquired as to the level of assistance which the British had up to now been providing to Libya. Mr. Cutler replied that the proposed British action, to be taken in March 1958, would deprive the Libyans of $8 million annually in the shape of a British subsidy. He then called on the Acting Secretary of State for his comments.

Secretary Herter replied that the State Department proposal should be looked upon merely as a “holding operation”, so that the Libyans would not feel they had been left flat when the British withdrew the bulk of their subsidy and a considerable number of their troops. He pointed out the fact that the Libyan economy was simply not viable without outside help. Indeed, about the only hopeful prospect on the Libyan horizon was the possibility that oil might be struck in that country. Secretary Herter indicated that the State Department proposal did not involve any commitment or any mention of a specific level of U.S. assistance to Libya in the course of the forthcoming review of Libya’s economic situation.

[Page 484]

The President commented that in view of its strategic location, its proximity to Egypt, and the evident weakness of its economy, Libya would have to be helped. The United States would be “in an awful fix” if we ever lost Libya.

Mr. Brundage pointed out that we were already providing annually to the Libyan Government twice the amount of assistance that the British have been giving them. Secretary Herter commented that it was not necessary that the level of U.S. aid stay at $24.5 million, the level of FY 1957. The level might go below this sum, because some of the assistance provided Libya in FY 1957 was “one shot” assistance which would not recur in subsequent years.

Secretary Wilson called for a study covering several years back as to what both the British and ourselves had been doing by way of assistance to Libya. Such a study might indicate that some of the assistance we are now giving Libya would take the place of the assistance that the British no longer felt able to provide. The President replied to Secretary Wilson that, as he understood it, the present State Department proposal only amounted to telling the Libyans that we did not propose to desert them. There was nothing more specific than this. Secretary Wilson said that he was only concerned that we should avoid building up the expectations of the Libyans and then earn their ill will by not seeming to fulfill these expectations. The President said that this was a U.S. policy which he favored everywhere in the world, and not only in Libya.

Mr. Hollister explained that his anxiety derived from the possibility that if we were not very careful the Libyans would be expecting us not only to do everything for them that we are now doing, but to add to this everything which the British have been doing for them and will not do after March 1958.

The Vice President commented that it was his experience, in talking with Libyan officials, that they do not regard wheat and other surplus agricultural products supplied to them by the United States, as “aid”. This was true in other countries, which all tended to regard surplus commodities as something apart from aid. Nevertheless, the problem was that we did need Libya from the point of view of our strategic interests. Accordingly, unless the Libyans were lucky enough to strike oil, the United States would simply have to foot the bill. It was plain enough that Libya had no other resources.

. . . . . . .

The President stated his agreement with the State Department proposal, but added that the words of caution which had been spoken in the National Security Council with respect to a program to assist Libya should be remembered and taken to heart.

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The National Security Council:11

Discussed the memorandum on the subject by the Deputy Under Secretary of State, together with the attachments thereto (transmitted by the reference memorandum of April 26, 1957); in the light of the memorandum on the subject by the Secretary of Defense and the attached memorandum to the Secretary from the Joint Chiefs of Staff (transmitted by the reference memorandum of April 12, 1957), and of the Report to the President on the Vice President’s Visit to Africa (transmitted by the reference memorandum of April 22, 1957).
Concurred in the proposed instructions contained in Tab A to the enclosure to the reference memorandum of April 26, 1957.12
Agreed that, in view of the current level of U.S. assistance to Libya ($24.5 million programmed for Fiscal Year 1957), the United States in reviewing the economic and financial situation with the Libyan Government should not imply that the United States would necessarily provide additional assistance in the amount by which the United Kingdom is reducing its annual subsidy.

Note: The actions in b and c above, as approved by the President, subsequently transmitted to the Secretary of State for implementation.

[Here follows discussion of items 4–8.]

S. Everett Gleason
  1. Source: Eisenhower Library, Whitman File, NSC Discussions. Top Secret; Eyes Only. Drafted by Gleason on May 2.
  2. For text of NSC Action No. 801, taken at the June 1, 1953, meeting of the National Security Council, see Foreign Relations, 1952–1954, vol. ix, Part 1, p. 386.
  3. NSC Action No. 818–b noted the President’s desire that he be notified when the payment to Libya of rent for the airbase had been made. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95)
  4. NSC Action No. 827, taken June 25, 1953, noted that the Ambassador in Libya was prepared to pay the Libyan Government, upon its request, $1 million in rent for the airbase. (Ibid.)
  5. NSC Action No. 1550, taken May 8, 1956, stated that no promise or commitment of foreign assistance was to be made or implied unless it had been specifically determined that the payment accorded with approved policy, Congress had appropriated or authorized such funding or the President had resolved to seek same, the ability of the host country to support contemplated programs had been judged, and the time-span of the assistance had been taken into account. (Ibid.)
  6. The April 12 memorandum by Lay for the NSC transmitted a memorandum for the Secretary of Defense from the JCS dated April 2, 1957. In light of the increasing effort of the Communists and Egyptians to penetrate Libya, the JCS concluded it was necessary to ensure a strong U.S. military position there particularly because of the uncertain status of the Moroccan bases. The British decision to reduce their annual subsidy by $7.5 million was viewed as complicating matters. The JCS called for an approved statement of policy in regard to Libya. (Ibid.: Lot 63 D 351, NSC 5716 Series)
  7. On April 26, Lay conveyed a memorandum by Murphy with attachments for the consideration of the NSC at its May 2 meeting. Murphy stressed the impact of the British decision to cut economic and military assistance to Libya and emphasized that Libya would require external aid from a friendly Western source to counter Egyptian and Soviet efforts to exploit the situation. He maintained that in unfriendly hands, Libya would “open the gateway to all of North Africa and the NATO flank.” Thus steps were being initiated to ensure that Libya would receive essential assistance. (Ibid.)
  8. Document 19. The report, dated April 5, was circulated to the NSC on April 22.
  9. Reference is to telegram 769, infra.
  10. Not printed.
  11. Paragraphs a–d and the Note constitute NSC Action No. 1707.
  12. Reference is to telegram 738 to Tripoli; see footnote 3, supra.