171. Telegram From the Department of State to the Embassy in Libya1

769. Deptel 738,2 London’s 5835.3 Pending more far-reaching NSC review our basic policy towards Libya in situation created by reduction UK subsidy after March 31, 1958, you may speak to Libyans along following lines. Department will leave to your discretion [Page 486] whether there is advantage your taking initiative with Libyans or whether it preferable await Libyan approach to you. In making this decision you will wish bear in mind which procedure you believe is most likely contribute Libya’s pro-Western orientation and ultimately result minimum financial demands on us. We also wish leave your discretion phraseology following general line, provided all points substantively covered:

“In recent conversations, the UK has explained to the US the changes in its strategic thinking and economic and financial adjustment which it is contemplating as the result of its world-wide commitments. The UK has pointed out that under present circumstances it has reluctantly reached the decision to reduce its present level of assistance to Libya as part of this overall review. While the US regrets the British decision in this regard, it appreciates the necessity for British efforts to strengthen their overall strategic economic and financial position. At the same time, the US recognizes that the British decision confronts the Libyan Government with a potentially difficult situation. Consonant with the spirit of mutual interest which has characterized the US-Libyan relationship in recent years, the US is prepared to review with the Libyan Government the economic and financial situation created by the impending UK action. In this connection, the US welcomes the continued willingness of the UK to continue to extend assistance to Libya and is confident that the GOL will similarly perceive the advantage of a continuation of this contribution from a friendly source which has afforded it so much assistance in the past. As the Libyan Government is aware, the US is also bearing very heavy responsibilities abroad and therefore welcomes contributions from other like-minded countries of the free world to the important task of assisting the under-developed areas. With respect to the role which the US might play in assisting Libya, the GOL is aware that the US Government is dependent upon annual appropriations from the Congress to implement its foreign aid programs. Accordingly, on the basis of the financial and economic review which would be undertaken, the US would consider Libya’s needs for assistance, subject to the availability of Congressional appropriation of funds, and taking into account the contribution of the British Government.”

Embassy London may inform FonOff substance this telegram.

  1. Source: Department of State, Central Files, 611.73/5–457. Confidential; Priority. Repeated to London. Drafted by Palmer.
  2. See footnote 3, Document 169.
  3. Telegram 5835, April 26, briefly discussed a meeting between Lloyd and Ambassador Muntasser on April 25. (Department of State, Central Files, 741.56373/4–2657)