Foreign Relations of the United States, 1958–1960, Near East Region; Iraq; Iran; Arabian Peninsula, Volume XII

105. Memorandum of Conversation⁰

MCT MC 5

Washington, June 9, 1958, 3 p.m.

MACMILLAN TALKS

Washington, June 9–11, 1958

SUBJECT

• Situation in Iraq

PARTICIPANTS

• US
  • The President
  • The Secretary
  • Mr. Allen Dulles
  • Mr. Dillon
  • Mr. Reinhardt
  • Mr. Elbrick
  • Mr. Rountree
  • General Goodpaster
  • Mr. Dale
• UK
  • The Prime Minister
  • Ambassador Caccia
  • Sir Norman Brook
  • Sir Patrick Dean
  • Lord Hood
  • Mr. Willie Morris
  • Mr. Frederick Bishop

The Prime Minister opened the discussion of Iraq by stating that this country is also in great difficulty. They formed a union with Jordan¹ which from an Iraqi point of view is a liability and now they also want to include Kuwait. He believed that an acute crisis is building up. Mr. Rountree added that Nuri has told our Ambassador he must have money in substantial amounts to meet the Union’s budget deficit as well as obtain the inclusion of Kuwait in the Arab Union or he will resign. The Prime Minister stated that if the Arab Union should collapse it will be a terrific blow to our side. Mr. Rountree went on to say that Nuri wants about $37 million to cover the period from July 1, 1958 to May 31, 1959 which is budget support at the rate of $50 million a year. Since we gave Jordan $25 million last year this would mean an increase of $25 million in U.S. financial support. All told, he said that we would be contributing $43.7 million to Jordan this year in various forms.

The Prime Minister believed that there were two separate issues here: the money which he wants from the West and second, the inclusion of Kuwait in the Arab Union. He suggested that we ask our experts to produce a paper for consideration on the financial subject tomorrow since it is a complex matter.²

He noted that Nuri had been difficult for some time and was now attempting a Nasser-type operation against Kuwait. The ruler, he said, does not want to join the Arab Union and if Nuri attempts to force him it will play right into Nasser’s hands. Mr. Rountree explained that the ruler of Kuwait was in difficulties on this issue because a large majority of his subjects would favor joining the United Arab Republic in preference to the Arab Union. In reply to a question from the President, he added that although the original inhabitants of Kuwait were few, there had been many recent immigrants from other Arab countries including Egypt and Syria who agitated strongly for joining in with Egypt. Therefore, the ruler might consider that if he shows an inclination to join Iraq in the Arab Union he will become most unpopular with the population. As well, he is certainly aware that the Iraqis are greatly interested in tapping his financial resources.

The Prime Minister reiterated that it was a great shock to him to learn that Nuri has “out and out threatened” Kuwait. The Secretary said that Nuri’s personality has become a liability in recent times and that he put the most extravagant demands on us when he was here with the threat of resigning, which may be a kind of blackmail. Sir Patrick Dean expressed the opinion that the situation in Iraq was still negotiable, that Nuri wants money more than he does Kuwait which he can’t really expect to have by this week-end.

Mr. Dillon pointed out that although we have no FY 1958 money available for the purpose we could make a commitment to supply funds to Iraq through “1550” procedure.³

It was decided that a working group would be set up to consider means of keeping the Arab Union afloat which would report to the Secretary and Prime Minister tomorrow afternoon. The policy could then be confirmed with the President at dinner tomorrow night. Mr. Rountree said he would be getting in touch with Lord Hood to arrange a meeting for the first thing tomorrow morning.

0. Source: Department of State, Conference Files: Lot 63 D 123, CF 102. Secret; Eyes Only. Drafted by William N. Dale of EUR/BNA, cleared by Rountree and Reinhardt, and approved by the White House. The meeting was held at the White House.
1. The Arab Union, proclaimed on February 14, became effective on May 12 with the approval of a federal constitution. A federated cabinet headed by Nuri as Premier and Jordan’s Ibrahim Hashim as Deputy Premier was inducted on May 19.
2. On June 10, Rountree sent Dulles a memorandum describing U.S.-U.K. proposals to meet the Arab Union budgetary deficit, which included an estimate of the Iraqi budgetary deficit for the next 9 months. Rountree suggested that the United States and the United Kingdom agree in principle to meet the budgetary problem and to inform Nuri of that decision to prevent his resignation. Dulles agreed. (Department of State, Central Files, 886.10/6–1058)
3. Apparent reference to NSC Action No. 1550, May 3, 1955, in which the President stated that U.S. foreign aid commitments should not be promised without consideration of the following factors: compatibility with approved policy, the funds being appropriated or authorized by Congress or a determination made by the Executive to seek such authorization, the recipient country’s ability to support the contemplated aid program, and a consideration of the probable time-span for the assistance. (Ibid., S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)