36. Memorandum of Discussion at the 374th Meeting of the National Security Council0

[Here follows a paragraph listing the participants at the meeting.]

1. Significant World Developments Affecting U.S. Security

The Director of Central Intelligence said the Parliament of Lebanon had held a meeting and elected General Chehab as President of Lebanon. Two ballots were required. On the first, Chehab did not receive the required two-thirds majority; on the second, which did not require a two-thirds majority, he received the votes of 48 of the 56 Deputies present. Ten Deputies had been absent, including the Prime Minister, who had been out of his head since the attempt to assassinate him, and would probably resign soon.

The President asked whether the Prime Minister had been shellshocked during the attack on him. Mr. Dulles replied that the Prime Minister had not been physically harmed, but that he had received a terrific mental shock.

Continuing, Mr. Dulles said the election of General Chehab was probably the most favorable result under the complicated circumstances existing in Lebanon, particularly since the opposition had voted for Chehab. However, the election had not settled all the affairs of Lebanon. Chehab had not shown much decisiveness in the last few days. This might be due to a natural indecisiveness in the face of a crisis; or it might have been a deliberately clever play of the cards, designed to secure greater support in the election. Some time back, Chehab had been Nasser’s candidate. Accordingly, we could expect closer ties between Lebanon and the UAR. Chehab might not hold office long. As a result of [Page 125] his election, the immediate crisis would probably subside, fighting would cease in most of the country, and Lebanon would get back on its feet economically.

Mr. Dulles then noted that the situation in Jordan remained acute. It was hard to see how the regime could survive if and when U.K. forces retired from the country. The withdrawal of U.K. troops would probably be the signal for the collapse of the King, who does not enjoy sufficient popular or Army support to remain in power when not held up by U.K. forces.

Turning to Saudi Arabia, Mr. Dulles reported that King Saud has lost more power recently, and that Prince Faisal is the only effective force in the country. Saud has been willing to give the United States more support, but has been unable to do so. Faisal will probably bend to the wind blowing from Egypt, but will endeavor to maintain the dynasty on the throne.

[7 lines of source text not declassified]. Mr. Dulles added that UAR support of Iraq was continuing, and that more and more countries were recognizing the new regime in Iraq.

The Sheik of Kuwait, Mr. Dulles reported, had returned from his interview with Nasser in Damascus in a defeatist mood. He was alleged to have said “One cannot avoid Kismet.” The Sheik had long felt unable to buck the UAR, but was endeavoring to preserve the oil revenues. The United Kingdom felt that the security forces in Kuwait were loyal and adequate, but Mr. Dulles had some doubts about their loyalty. Israel remains militarily alert, but has taken no new steps toward mobilization.

In the Sudan, said Mr. Dulles [2 lines of source text not declassified]. The situation remains critical, and it is impossible to estimate the chances for success [less than 1 line of source text not declassified].

[Here follows discussion of unrelated matters.]

2. Issues Arising Out of the Situation in the Near East (NSC 5801/1;1 SNIE 30–2–58;2 NSC Action No. 1951;3 Memo for NSC from Executive Secretary, same subject, dated July 29, 19584)

Mr. Gray presented the list of policy issues arising out of the present situation in the Near East. (A copy of Mr. Gray’s briefing note is filed in the minutes of the meeting, and another is attached to this memorandum.)5 After reading the five issues which the NSC Planning Board recommended [Page 126] for Council discussion, Mr. Gray said it seemed appropriate, before taking up the discussion of the specific issues, to hear from the Secretary of State on developments at the recent Baghdad Pact meeting which are relevant to these issues.

Secretary Dulles said that the meeting in London of the so-called Baghdad Pact countries began informally on Sunday6 and lasted through Tuesday. The three Asian-Moslem members of the Pact—Turkey, Iran and Pakistan—were represented by their Prime Ministers, who had been in a state of considerable gloom as a result of the coup in Iraq. It soon became apparent that the United States would have to make some gesture which could be used effectively by these Prime Ministers in their own countries. By Monday, it was quite apparent that our statement of attitude toward the Pact, which we had prepared in advance, was inadequate. Turkey, Iran and Pakistan wanted a paper formulated which could be signed by the United States and the United Kingdom as well as by them. Heretofore the members of the Pact had one paper, and the United States had another paper (the Eisenhower Doctrine); and even though our paper was stronger, the fact that it was separate bothered the members of the Pact. After the Monday morning meeting developed this desire for a five-country declaration which would wipe out the feeling of separateness, the Secretary said he drafted a declaration and spoke to the President about it on the telephone.7 The declaration was based on Article I of the Baghdad Pact, and stated that the signatories agreed to help each other preserve security. The declaration is linked to the Middle East Resolution and the MSA. The actual undertaking contained in this declaration falls short of the undertaking in the Middle East Resolution, but the essential thing is that all five powers signed the same declaration. The ceremony of signing on an equal basis apparently satisfied the representatives of Turkey, Iran and Pakistan, who went back home feeling that they had gained something which would help to compensate for the loss of Iraq. The parity of approach to security in the Baghdad Pact area, which was heretofore lacking, has now been supplied.

Secretary Dulles thought that the United States would have to step up economic and military assistance in the Baghdad Pact area, which is under greatly increased pressure. Turkey, Iran and Pakistan fear that they now lie between two hostile areas—the USSR to the north and the Arabs to the south. Secretary Dulles reported that he had been surprised by the feeling of the Prime Ministers of Turkey, Iran and Pakistan, that the United States should recognize Iraq; and was particularly surprised [Page 127] in the case of Turkey, because he knew that Turkey had thought of taking strong action against Iraq. These three countries would probably recognize Iraq before the close of the day. Such recognition was not predicated on any optimism regarding the new government of Iraq. Turkey, Iran and Pakistan thought that Iraq would turn out to be dominated by Nasser and the USSR, but that there was nothing to be gained by refusing recognition. If Iraq was to be recognized eventually, it was better to accord recognition quickly rather than seem to give in under pressure later.

The British have some slight hope of leading the new Iraqi government toward a moderate position, partly because all is not well between Iraq and Egypt. Egypt wants some of the oil revenues of Iraq. The Iraqis do not want to abandon their development plan financed by oil revenues in order to split these revenues with Nasser. If the West did not have access to alternate sources for the supply of petroleum, the Iraqis might raise the price of oil and give some of the extra revenue to Egypt.

Mr. Gray then resumed his briefing on the Planning Board paper. When Mr. Gray mentioned acceptance of the right of self-determination by the Arab peoples as a possible U.S. course of action in connection with the first issue—accommodation with radical pan-Arab nationalism—the President interrupted to ask whether the right of self-determination was identical with radical pan-Arab nationalism. Mr. Gray replied that the type of nationalism now existing in the Near East was both radical and pan-Arab, according to intelligence estimates. The President said nationalism in the area was of course radical, but was it necessarily pan-Arab? He thought it might be possible for a Near Eastern country to be nationalistic but not pan-Arab; that is, not want a union of all Arabs in the area. For example, Iraq was nationalistic, but was not hastening to join Egypt. Mr. Gray said he was inclined to agree with the remarks of the President, but believed the Planning Board felt that Arab nationalism today was both radical and pan-Arab.

Mr. Allen Dulles said that at present, nationalism in the Near East presented itself in a pan-Arab framework, but that the pan-Arab element might not endure. Many Arab countries give lipservice to close relations with Nasser, but when it comes to dividing up oil revenues or the waters of the Nile, it is a different story. We must always remember that Iraq is geographically an independent territory separated from Egypt by a sea of sand. However, the mobs in the streets in the Near East today are shouting for one big Arab state.

After stating the first issue and the arguments for and against a U.S. accommodation with radical pan-Arab nationalism, Mr. Gray called upon the Secretary of State.

Secretary Dulles said he did not see any possibility at present of competing successfully with the Soviet Union for the favor of Nasser. [Page 128] Khrushchev had taken Nasser up to the mountain top and shown him a great prospect: (1) the possibility of substituting for existing governments in the area revolutionary governments federated with or subservient to Nasser, a result to be brought about by indirect aggression, mobs and assassination; (2) the truncation of Israel so as to give Egypt access to the Arab countries to the east; (3) nationalization of the oil of the area so that the Arabs would be able to dictate terms to Western Europe and obtain vastly increased revenues. Secretary Dulles thought we could not compete with Khrushchev in offers to Nasser. We could not, in honor and self-interest, support Nasser in his efforts to overthrow legitimate governments in the area. We could not advocate the nationalization of oil which would enable Nasser to blackmail Western Europe and threaten the solvency of the United Kingdom, which depends not only on getting the oil but on getting it on favorable terms. U.S. support of Nasser would mean a grave break with the United Kingdom. We could not, to the extent desired by the Arabs, support the truncation of Israel, which could not be brought about short of war. In such a war, many countries, including France, would support Israel. We could, of course, offer to provide assistance to Nasser, who would doubtless accept our help. But he would not agree to give up his ambitions in return for our economic assistance; he would accept our help and go right on pursuing his ambitions.

Secretary Dulles felt that the vogue of Nasserism in the area did not reflect an authentic pan-Arabism, but instead reflected the fact that Nasser seems to be the first successful leader of the Arab world in a thousand years. He has become the hero of the masses because he has enjoyed an unbroken series of successes, due largely to our support. In the past, U.S. support has not prevented Nasser from pursuing his ambitions. Nasser’s unbroken series of successes include getting the British out of the Suez bases, taking over the Suez Canal Company, taking over Syria, getting the United Kingdom, France and Israel to suspend hostilities against Egypt, and having the government of Iraq overthrown. In connection with the British-French-Israeli attack on Egypt, Secretary Dulles noted that Egypt had been saved because the United States had upheld the principles of the Charter and in March of 1957 had almost single-handedly persuaded the Israelis to withdraw by making a statement about sanctions. Our actions had enabled Nasser to emerge as a great hero, who seemingly took on the great powers and came out with a victory.

Secretary Dulles characterized Nasser’s ambitions as insatiable. U.S. assistance would only make him feel that he was in a better position to consummate his ambitions. However, this did not mean that the United States should engage on frontal opposition to everything Nasser tries to do. For example, we recognized the UAR even though we did [Page 129] not like the take-over of Syria, and we are not discouraging recognition of the new Iraqi government. On the other hand, we have intervened in Lebanon and checked Nasser’s ambitions, which has provoked Egypt and the USSR to heap great abuse on the United States. If we can take other actions which will break the chain of Nasser’s successes, the myth of Nasser’s invincibility may disappear; but there is no policy of accommodation which does not contain elements contrary to the interests of the United States. If the West were pushed out of the Near East, the Soviet Union would eventually take over the area.

Mr. Gray asked whether the Secretary of State considered that recognition of the new government of Iraq was accommodation. Secretary Dulles said recognition would not be accommodation.

Continuing, Secretary Dulles said that Arab nationalism was like an overflowing stream—you cannot stand in front of it and oppose it frontally, but you must try to keep it in bounds. We must try to prevent lasting damage to our interests in the Near East until events deflate the great Nasser hero myth.

Secretary Dulles then compared Nasser to Hitler, saying that the careers of the two were very similar except that Nasser, fortunately, does not himself control great military power. Although Nasser is not as dangerous as Hitler was, he relies on the same hero myth, and we must try to deflate that myth.

Secretary Dulles then pointed out that the United States is not opposed to greater unity in the Arab world. However, the Arabs really did not want unity. The only unifying force in the Arab world was hatred of Israel.

Mr. Gray said the Planning Board had tried to avoid taking a position on the issue of accommodation with radical Arab nationalism. He asked whether there was any support for accommodation.

Mr. Gray then turned to the fourth issue of the Planning Board paper: Should the United States be prepared to support, or if necessary assist, the British in using force to retain control of Kuwait and the Persian Gulf? The Secretary of State doubted whether the U.S. Government was in possession of enough hard facts to form an intelligent judgment on this question. It was easy to look at a map and say we had to hold Kuwait and the Persian Gulf oil area; but upon closer examination of the subject a great many intricate problems arose. For example, would it really be possible to assure a continued flow of oil under conditions of military occupation? What would the attitude of the local population be? About 2500 people, or one-tenth of the population of Kuwait, lived in the oil area, and the activities of these people were necessary to the production of oil. When this problem first arose, Selwyn Lloyd had been in favor of the use of force if necessary. But further analysis had cooled the British [Page 130] ardor. The problem was still under careful study in the United Kingdom. Secretary Dulles felt the issue should be resolved not only on the basis of the broad principle, but on the basis of whether in fact military control would work. The U.S. Government might conclude that it would be undesirable for U.K. or U.S. forces to occupy the Persian Gulf oil area.

The Secretary of the Treasury said he shared Secretary Dulles’ view on accommodation. The problem for the United States was to dissociate Nasser from Arab nationalism and show him up as an ambitious person seeking to take over foreign governments and become a dictator in other countries. Many countries in the Near East were worried because some of their highly-placed officials were of Egyptian origin and many of the teachers in their schools were Egyptian. However, Secretary Anderson said that as he read the intelligence estimates, the middle level in many Near Eastern countries was becoming disillusioned about Nasser. He thought, for example, that Syria was beginning to regard itself as subservient to Nasser. The difficulty was that the people who feel this way fear that the mob will respond to Nasser’s appeal.

Secretary Anderson went on to say that he had considered a number of possible U.S. courses of action in the Near East. One possibility would be an offer by the World Bank for the creation of an Arab Development Fund financed initially by the Bank members and subsequently by an export tax on oil. Countries dealing with the Bank had shown some hesitation because they feared they would not get terms as favorable as those they received from the United States. The Sheik of Kuwait wanted to invest in the Bank, but the British were opposed. Recent deals with Iran had put the 50–50 oil formula in jeopardy, and sooner or later the oil companies would be called upon to say what they could give up in addition to 50–50. An Arab Development Fund would be the kind of organization Egypt would have to go along with, but an organization which Egypt could not control. It would result in a sharing of Near Eastern wealth, but under other than Nasser’s auspices.

Secretary Anderson said we should also think of proposing things other countries can show off. For example, he had suggested to Dr. Killian that we might build a plant for extracting fresh water from salt water in Tunisia, even though such a plant would be uneconomical. Moreover, we might try to step up oil production in Iran, which has sufficient oil to supply most of Western Europe’s needs. The Arabs might be less aggressive if they knew that alternate sources of oil were open to the West.

Secretary Dulles doubted whether Iran could supply all of Western Europe’s needs. The President asked how much oil was being taken out of the Near East. Secretary Anderson said about 3 million barrels per day. Secretary Dulles said that less than one-fourth of this amount came from Iran. Secretary Anderson, however, thought Western efforts to [Page 131] step up Iranian oil production would have a great psychological impact on the Arabs. He noted parenthetically that the amount of money required to produce and refine oil was minor in comparison with the amount needed to transport oil to the market and sell it.

Secretary Anderson then reported that he had talked with Mr. Allen Dulles about strengthening the Port of Djibouti as a means of supporting the Sudan and Ethiopia and giving Ethiopia an adequate port. This port could be made a shipping point and repair center midway between the Persian Gulf and Europe, under French auspices.

Moreover, said Secretary Anderson, we should make an effort to develop the differences between the Arabs and the Soviet Union, particularly as regards religion. In this connection, he noted that U.S. provision of food for the Mecca pilgrims had a great effect on the Near East.

In conclusion, Secretary Anderson said that the courses of action he had outlined represented the kind of thing we must do in order to demolish the Nasser myth.

The President said perhaps some Arabs don’t want Nasser to rule the Arab world, but what about the illiterate who gets all his information from Radio Cairo? Secretary Anderson said these people had adopted Nasser as their hero. He wished to add one more comment. We often speak of the importance of Near Eastern oil, but in his view nothing in the area was as important to the individual as water.

The Vice President thought that all the suggestions made by Secretary Anderson should be considered. However, these suggestions were long-range in their impact and lacked emotional appeal. Economic development may be a long-run counter to Communism, but it is not as important in the immediate Near Eastern situation as emotional issues. For example, Iraq had the best economic show of any country in the Near East, but the Iraqi government fell because of emotional political issues. We must realize that in the face of pan-Arab nationalism we are burdened by three emotional liabilities—Israel, Algeria and oil—that make it impossible for us to out-bid the Soviets. Emotional issues such as refugees overshadow the economic problem. While we should work on long-run economic solutions as suggested by Secretary Anderson, we must realize that emotional political issues will determine whether governments stand or fall, and accordingly any satisfactory solution must take account of emotion.

The Vice President then questioned whether the Bourguiba speech was a wise one. He thought we may have to encourage our friends not to align themselves too openly with the West; we may have to support independent national neutralism.

The President said we talk a great deal about the need of the West to buy oil, but we should begin to think of the need of the Near East to sell [Page 132] oil. Perhaps we should turn the psychological factor around; perhaps the Arabs would react if their pocket-book nerve were touched. We should encourage the Arabs to begin thinking that they must sell oil.

Secretary Dulles, addressing Mr. Allen, said we should be cautious about playing up Bourguiba’s speech too much. One of President Chamoun’s difficulties was that he went too far in embracing the Eisenhower Doctrine. The President remarked that we proceeded cautiously in Iraq, and look what happened. Secretary Dulles said the overthrow of the Iraqi government was due partly to the British mistake in bringing Iraq into the Baghdad Pact. Nuri Said could only hold his influence in Iraq by trying to get us to be anti-Israel in our policy.

The Vice President said the waters of the Nile offered tremendous possibilities for putting pressure on Egypt. He also felt that we should devise a fresh approach to the problem of refugees.

Mr. Allen Dulles said that within the next two or three weeks we must do something to bolster up the Sudanese government, which controls the headwaters of the Nile. The President asked what we could do. Mr. Dulles said the expenditure of money was part of the answer [less than 1 line of source text not declassified]. Secretary Anderson said Nasser’s idea in connection with the Aswan Dam had been to make sufficient water available downstream. Any negotiations between the West and the Sudan on utilization of the upper waters of the Nile might have an effective psychological impact on Egypt. Secretary Dulles said any such negotiations might also be provocative.

Mr. Allen said he wished to re-emphasize the points the Vice President had made as to the importance of emotional issues in the Near East. For example, Bourguiba would probably stand or fall depending on developments in Algeria. Reverting to a point made by Secretary Dulles, Mr. Allen felt there was one unifying force in the Arab world which was as strong as hatred of Israel—the desire to end the last vestiges of Western colonialism. We would have an easier time in the Near East if we could convince the Arabs that we were sympathetic to independence and would not support the return of imperialism.

The President remarked that one of the possible courses of action mentioned by Mr. Gray—acceptance of the right of the Arab peoples to determine their form of government—gave the State Department flexibility in the area. We could support Nasser when this was not contrary to our interests. In particular, we could support self-determination by the Arabs as far as the internal governments of the various countries were concerned. Since we are about to get thrown out of the area, we might as well believe in Arab nationalism.

Secretary Dulles said our best hope in the Near East was in not doing something [Page 133] vis-à-vis Nasser or the Arabs, but in doing something vis-à-vis the attitude of the Soviet Union. If the Soviet Union feels that Nasser’s ambitions might lead to general war, it will pause and exert a restraining influence on Nasser. In Secretary Dulles’ view, the presence of U.S. and U.K. forces in Lebanon and Jordan had caused consternation in the Kremlin, as indicative of the fact that we are prepared to take strong action in the area. Many foreigners had said that our willingness to take such action was our trump card. If the USSR could be persuaded that Nasser’s policies will encounter opposition which may lead to war, it will draw back because it does not want war now. At any Summit meeting we should seek to drive home the proposition that the Soviet-Nasser policies might lead to war. This course of action is based on the premise that we have a relatively superior power position vis-à-vis the USSR at the present time.

The President thought the Soviets might have a counter argument; they might say they will stop their activities in the Near East provided we don’t give any more assistance to Iran, Pakistan or Turkey.

Mr. Allen Dulles said one reason Nasser went to Moscow recently was to insist that the Soviet Union not intervene in the Near East. Nasser does not want pan-Arab nationalism tainted with Communism. In other words, said the President, Nasser doesn’t want political assistance. The President agreed with Secretary Dulles’ remarks in general, but pointed out that the Soviet Union could make tremendous propaganda throughout the Moslem world out of the situation in the Near East. Secretary Dulles said the Soviet Union might slow down if it thinks we will not flinch from war. Secretary Anderson agreed with the view of Secretary Dulles that we could not truncate Israel to please Arab nationalism, a solution which would have to be imposed by force. He added that if all the Arabs wanted was access to each other, they could have obtained this access by various proposals made in the past, such as bridges across the Gulf of Aqaba or a guaranteed access corridor across Israel.

Turning to refugees, Secretary Anderson said he did not believe Nasser would ever voluntarily agree to the refugees going anywhere, because they were a most important element in his propaganda. Before the refugee problem could be settled, some country must be willing to take the refugees, a scheme must be worked out to make land available, and the whole project must be financed.

The Vice President felt that we should make a dramatic offer on refugees at any Summit meeting. Such an offer would have a great propaganda effect.

The Secretary of Defense said he agreed with the view that it was necessary to separate Nasser from Arab nationalism. Nasser has to feed on red meat—that is, on continuing victories. Accordingly, it made sense for the United States and the United Kingdom to intervene in the Near East and interrupt Nasser’s timetable. The opportunistic nature of [Page 134] Nasser’s exploitation of Arab nationalism should be publicized. We must find a way to get our story on the air in the area in which Radio Cairo is heard, and we must try to get the people to distrust Nasser. Secretary McElroy said he agreed with Secretary Dulles that there should be a specific detailed analysis of the consequences of using force to hold the Persian Gulf oil areas. However, we might find that we need to hold these areas in the near future, before courses of action such as those suggested by Secretary Anderson had time to affect the situation. If the Persian Gulf area were threatened, we ought to find a way to have the local governments invite the United States and the United Kingdom to intervene, and if we receive such an invitation we should send our forces in.

General Twining said that CINCNEIM (Rear) in London was engaged in military planning in collaboration with the United Kingdom for the whole Mediterranean area. These planners could do everything necessary except make commitments. The planning was being done not by a combined staff, but by a working group. General Twining said he wished to make clear that the planning was being done because he had heard complaints that insufficient planning was in progress.

The President, recalling that Iraq had once wanted Kuwait to join the Iraq-Jordan union, asked whether approaches to Kuwait by the Shah of Iran might not be successful in helping to hold Kuwait. Moreover, said the President, why should we not build up the Shah of Iran as a rival to Nasser? Mr. Allen Dulles remarked that, unfortunately, the Shah of Iran was anti-British. The President said the United Kingdom might conclude that it was expedient now to deal through Iran. Mr. Dulles said the population of Kuwait was looking toward Egypt. The President felt it might be possible for Iran to get the population of Kuwait to look toward Iran. Mr. Allen noted that there was great rivalry in the Persian Gulf area between the Iranians and the Arabs, and Mr. Dulles added that Iran and Kuwait were competing in the oil market.

The National Security Council:8

Discussed certain of the policy issues arising out of the situation in the Near East, on the basis of the list prepared by the NSC Planning Board in accordance with NSC Action No. 1951–b and transmitted by the reference memorandum of July 29, 1958.

[Here follows discussion of agenda item 3.]

Marion W. Boggs
NSC Secretariat
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Drafted by Boggs on August 1.
  2. Document 5.
  3. Document 27.
  4. See footnote 2, Document 31.
  5. Lay’s memorandum of July 29 transmitted Document 35 to the NSC.
  6. Attached but not printed. Gray’s briefing note summarized the Planning Board paper of July 29.
  7. July 27.
  8. No other record of this telephone conversation has been found.
  9. The following paragraph constitutes NSC Action No. 1955, approved by the President on August 4. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)