890F.51/5–1745
Memorandum of Conversation, by the Assistant Secretary of State (Acheson)
| Participants: | Senators Barkley, George and Walsh4 |
| Under Secretary of Navy Bard | |
| Colonel Brownell5 | |
| Mr. Acheson |
Mr. Bard, Colonel Brownell and Mr. Acheson met with the three Senators by appointment this afternoon. Mr. Acheson stated the problem in summary as follows: He showed the Senators a map of the United States with the Middle Eastern oil-bearing areas superimposed upon it and gave them a brief résumé of the amounts of oil involved in the various areas and the national interests in that oil. The Senators agreed that the United States had a vital interest in Saudi Arabia, both in order to prevent internal disturbance and foreign intervention and in order to protect American national interests in the oil reserves of that country. He then briefly stated the King’s [Page 896] financial position, showing them a chart of estimated recent expenditures and the estimated deficits. He pointed out the consequences which might follow upon failure to care for these deficits. The Army and Navy representatives supported this position strongly. The Senators agreed that something was required.
Mr. Acheson then stated the four broad methods of approach, that is, by secured loan, by unsecured loan, by gift and by purchase of oil in the ground. He stated to them the result of our conference with the House leaders.6
The Senators were unanimous in agreeing that a gift to the King would not have Congressional support and that an unsecured loan might meet with Congressional difficulty. The conference then became somewhat involved in details of the various plans. Colonel Brownell stressed the importance of Congressional direction as to the plan to be followed. After some discussion Senator Barkley summed up the conclusions by stating that the three Senators were unanimous in their opinion that some action was required and in their assurances of support. He stated their agreement that this should be done with as little legislation as seemed necessary and certainly without legislation which specified the particular area under discussion. Senator George stated his preference for a plan which would be based upon a purchase of oil since he regarded that as the simplest to understand and explain. He was quite willing, however, to consider other plans or a combination of plans. It was concluded that the representatives of State, War and Navy should work out in more detail alternative plans, one based upon a loan through the Export-Import Bank, and possibly in conjunction with a collateral contract between the Navy and the oil company and possibly the Export-Import Bank. The other plan should be based upon a purchase of oil in the ground. Both plans shall be as specific as possible and include the legislation and the appropriation required.
In a short discussion after the conference Mr. Bard thought that it was important at once to arrange a conference with the President so that we might have President Truman’s approval of the broad project, as we had had President Roosevelt’s. Mr. Bard will make this appointment for as early a date as possible and notify Colonel Brownell and Mr. Acheson.
- Alben W. Barkley of Kentucky, Senate Majority Leader; Walter F. George of Georgia, Chairman of the Senate Committee on Finance; and David I. Walsh of Massachusetts, Chairman of the Senate Committee on Naval Affairs.↩
- George A. Brownell, Executive Officer to the Assistant Secretary of War for Air (Lovett).↩
- See memorandum of March 8 by the Assistant Secretary of State, p. 861.↩