Office of the Historian

202. Memorandum of a Conversation, Mid-Ocean Club, Bermuda, March 21, 1957, 10:30 a.m.1

USDel/MC/3
Tucker’s Town, Bermuda, March 21, 1957, 10:30 a.m.

PARTICIPANTS

  • United States
    • The President
    • Secretary Dulles
    • Ambassador Whitney
    • Senator George
    • Mr. Hagerty
    • General Goodpaster
    • Mr. Phleger
    • Mr. Elbrick
    • Mr. Rountree
    • Mr. Wilkins
    • Mr. Morris
    • Mr. Macomber
    • Mr. Walmsley
  • United Kingdom
    • The Rt. Hon. Harold Macmillan, Prime Minister
    • Rt. Hon. Selwyn Lloyd, Foreign Secretary
    • Rt. Hon. Sir Norman Brook, Secretary to Cabinet
    • Sir Frederick Hoyer-Millar, Permanent Under-Secretary, Foreign Office
    • Sir Harold Caccia, British Ambassador to U.S.
    • Mr. P. H. Dean, Deputy Under-Secretary, Foreign Office
    • Mr. Harold Beeley, Assistant Secretary, Foreign Office
    • D. S. Laskey, Personal Assistant to Foreign Secretary
    • Mr. O. P. Hope, Foreign Office, Press Director
    • C. O. I. Ramsden, Personal Assistant to P. M.
    • Mr. F. A. Bishop, Personal Assistant to P.M.
    • Mr. T. W. Garvey, Secretary of Delegation

[Here follows discussion of the Suez Canal crisis and the Arab-Israeli dispute; see volume XVII, pages 452–458.]

Flow of Oil through Pipelines:—The next item on the agenda, the Baghdad Pact, was postponed to a later session and consideration was initiated on the question of the flow of oil for Europe through pipelines.

The Prime Minister asked about the “umbrella plan” saying that he understood that the objectives had been agreed upon in a paper developed by the State Department and the UK Embassy in Washington2 on the use of the treaty instrument to cover a pipeline from Iran through Iraq and Turkey to be privately financed. The Prime Minister [Page 465] stated that the companies concerned are in consultation in London and the British Government, when the companies are ready, wish to raise with the United States the place and timing of consultations on this proposal. The Secretary stated that the object of the exercise would be to examine the possibility of a Constantinople Convention so to speak for pipelines which would protect the private financing and operation of such carriers. Should this prove successful it might be extended to existing pipelines. It was agreed that consultation should take place at the appropriate time between the governments and with the companies.

The Secretary referred to reports, emanating primarily from Israel and France, of a plan to construct a large pipeline through Israel to permit oil for Europe to bypass the Canal and asked the British what views they might have on the project (which is not to be confused with the 8 inch pipeline currently under construction in Israel for its own supply). It was agreed that the project is not feasible since in the eventuality (1) of an Arab-Palestine settlement, which though remote is the objective of both governments, it is not apt to be used; and (2) of no settlement the oil from Arab countries is most unlikely to be available, although it might for a short time arrive from Iran. It is therefore agreed that the better alternative, although not immediate, is the Iran-Iraq-Turkey circuit.

Concluding Remarks:—Selwyn Lloyd asked permission before adjournment to call attention to the great usefulness of the MEEC in maintaining the flow of oil during the present crisis to the European economies which had suffered less than anticipated and urged that the Committee be kept in being in the likelihood that the effects of the oil crisis would still be felt in Europe next winter. The President acknowledged the usefulness of the Committee but flagged the attention of the British to the risks the members of the MEEC felt they incur under US legislation of anti-trust action, and he mentioned in this connection the investigation underway of the recent price rise. The Secretary added that it should moreover be kept in mind that problems are developing not only for the companies but also in US relations with other producing countries caused by disruption of normal patterns of the oil market by alterations between customary and abnormal flow of oil to markets.

The meeting adjourned at 12:30.

  1. Source: Department of State, Conference Files: Lot 62 D 181, CF 861. Secret. Drafted by Walmsley. The Delegation at Bermuda transmitted a summary of this conversation to the Department of State in Secto 8, March 22.↩
  2. Document 198.↩