177. Telegram From the Department of State to the Embassy in Libya1
309. Following are highlights discussion FonMin Lloyd and members British Embassy with Secretary and Department representatives re Libya October 15 based on uncleared memo conversation:2
Secretary hoped British would not cut down financial and military responsibilities Libya to extent previously reported. Lloyd made clear UK financial position made cuts in both fields inevitable and did not see how British could go beyond one and one quarter million pounds annual financial aid for five years beginning in 1958. He expressed disappointment over US inability, evidenced Tripoli and here, to envisage definite commitment to Libyans re equipping army and re taking up slack resulting from British financial aid cut in 1958. He emphasized danger Libyans turning to Egypt. He also urged in strongest terms US and UK approach Libyans jointly on both problems to avoid being played against each other.
In addition to commitment already made re equipping 1000 men Secretary and Palmer recalled our willingness tell Libyans US would assume army training responsibilities and said we would be willing discuss equipment needs with Libyans soon as British cutback made known to them though we could not presently give specific figures. It was agreed joint US-UK approach on military matters might be feasible.
Re economic aid we carefully explained problems constitutional procedure which made impossible specific long-term US commitments [Page 502] such as British could give even though US realized budget support was life and death matter for non-viable Libyan economy. This made it most difficult US participate effectively in joint démarches to Libyans. Best we could do was follow up on British announcement to Libyans by immediately offering discuss with GOL their economic requirements.
Secretary indicated serious problem of scale and precedent in proposing to Congress aid program of twenty million and over for country such as Libya if we undertook to take up slack created by British cutback.
After considerable discussion it was agreed we would try arrange joint US-UK approach to Libyans on military question. Re economic matters we indicated we had no objection trying work out initial joint approach on basis finally suggested by Lloyd: i.e., neither US nor UK would at outset name specific figures to Libyans for future financial aid but would both propose period of about three months during which we would conduct tripartite examination Libyan needs. This would make clear Libyans we both disposed help them on coordinated basis and would give Lloyd time to attempt secure allocation larger British funds for Libyan aid. However Lloyd did not appear sanguine over results this attempt.
Instructions will follow soonest.3