336. Letter From the Acting Secretary of State to the Secretary of Defense (McElroy)1

Dear Neil : We have been concerned for some time with the problem of insuring continued Libyan acquiescence in the operation of Wheelus Air Force Base at Tripoli. As you may know, there has been considerable private and governmental agitation in Libya for a revision of the terms of the Libyan-American base agreement. The essence of the Libyans’ demands, as presented by them in a memorandum on March 18, is that our annual special purpose payment, which comes from Air Force funds pursuant to arrangements concluded in 1954,2 be increased from $4 million to $45 million, that we recognize the principle that this money is being paid as rent for the use of the air base and that we give a long-term commitment to pay this new amount annually for the duration of the base agreement, i.e., until 1971, instead of allowing the payments to be reduced to $1 million annually after 1960 as originally agreed.

We have been able to avoid addressing ourselves specifically to these demands for the present by offering the Libyans greater flexibility in the use of funds already obligated for our fiscal 1959 Mutual Security Program3 and by undertaking to permit them unrestricted use of the fiscal 1960 special purpose payment of $4 million. However, it has become clear to us that we must give serious consideration to the Libyan demands and that we must provide a forthcoming answer to them. It is also apparent that we must do this quickly if we are to retain the use of Wheelus under the present, favorable conditions which we enjoy there. Our reasons for this belief are as follows:


In spite of the obvious economic benefits which the presence of the air base confers on Libya, the Libyans consider the air base both a nuisance and a threat to their security. Wheelus averages about one activity, i.e., a landing or take-off, every minute during daylight hours. Most of the planes involved are jet fighters which approach and takeoff at a very low level over surrounding populated areas. The consequent noise plus the ever-present threat of accidents is a constant source of irritation to the Libyans. More importantly, they believe, [less than 1 line of source text not declassified] that because of the presence of Wheelus, Tripoli would be one of the first targets of a nuclear warhead [Page 732] in the event of hostilities between the United States and the U.S.S.R. The successive commanding officers at Wheelus have shown themselves seriously concerned with the resulting community relations problem and have displayed both imagination and energy in attempting to alleviate it, but it is clear that public relations activity, however useful, cannot really change the character of Wheelus in Libyan minds.

Finally, the Libyans are concerned with the infringement of their sovereignty which they believe is involved in the base agreement. [2 lines of source text not declassified] We are extremely fortunate in being able to operate Wheelus with almost complete freedom from Libyan interference or obstruction. With the awakening of Arab nationalism in Libya, we do not believe this situation can continue indefinitely. There is a definite risk that Libyan demands will be expanded to include restrictions on our use of Wheelus unless we are able to make an offer regarding future payments acceptable to them.

As you may have heard, an important oil strike has recently been made in Cyrenaica by Esso. Although the extent and magnitude of the oil field which this strike revealed have not yet been determined, according to competent professional opinion it is only a matter of time before Libya becomes an oil-producing state with annual revenues far in excess of the aid funds now provided annually. The Libyans do not yet appear to be aware of the importance of this strike but soon will be. We expect their attitude toward the base agreement to become increasingly intransigent when this awareness dawns and they foresee financial independence. It probably will take several years before these petroleum deposits are fully exploited, but the convenience of Libya’s location, the accessibility of the deposits, and anticipated Libyan pressure on the oil companies all point to rapid exploitation. Under these circumstances, it is essential that we move quickly, if we are to assure continued operation of Wheelus under existing conditions, before the Libyans feel that prospective oil revenues will permit them to harass our base operations with financial impunity. We are convinced that the only sound course open to us now is to respond as favorably as possible to the Libyan demands in an effort to obtain from them some commitment for continued use of the air base before they become fully aware of their oil potential. While there is no assurance that this will guarantee our indefinite use of Wheelus, we do not see a workable alternative.

I think you will agree that this is a matter of paramount importance and urgency to the Department of Defense and the Air Force and that we should concert our efforts as soon as possible to reach agreement on a response to the Libyans. We believe the first step in this process should be a determination by the Department of Defense as to [Page 733] how much longer it will require the Wheelus facilities and what measures it is prepared to take to meet the situation created by the Libyan demands.

Sincerely yours,

Douglas Dillon 4
  1. Source: Department of State, Central Files, 711.56373/5–2259. Secret. Drafted by Parker on May 14 and concurred in by Satterthwaite.
  2. A summary of the Libyan memorandum was sent to the Department of State in telegram 460 from Benghazi, March 19. (Ibid., 711.56373/3–1959)
  3. For text of this agreement, effected by an exchange of notes at Benghazi and entered into force on May 21, see 10 UST 2017.
  4. Printed from a copy that bears this stamped signature.