364. Telegram From the Embassy in Israel to the Department of State1
426. Geneva for Lawson and Russell. Was informed last night by two sources within GOI that Cabinet at its meeting October 23 made definite decision expanded arms procurement program subject only to reservation Finance Minister Eshkol “money had to be found”.One source said that program totaled $50 million with heavy concentration French Mystere IV jets and French AMX tanks. When I inquired re prospective reaction French Government these orders, source replied French Minister Defense was most cooperative but Quai D’Orsay “might prove sticky”.
Comment: I believe this report to be substantially correct, particularly as it is consistent with highly restricted information obtained from entirely different source and transmitted MAI 822 to Department Army by USARMA.2 Financial problem execution program this magnitude obviously difficult one, particularly foreign exchange aspects. While Israel could in part meet financial problem by cutbacks consumption, short-term borrowings and utilization of reserves, execution complete program would depend US economic aid factors set forth Embtel 417.3
- Source: Department of State, Central Files, 784A.56/10–2855. Top Secret. Received at 11:27 a.m. Repeated to Geneva, Paris, and London.↩
- No copy of this message has been found in Department of State files.↩
- The Embassy informed the Department in telegram 417, October 27, that since “US economic aid funds provide the primary foreign exchange for imports food, petroleum and industrial raw materials, thus releasing large portion Israel’s own foreign exchange earnings armament procurement abroad,” the Embassy believed that, in light of the reported Israeli Cabinet decision to accelerate arms procurement abroad, it was “reasonable to assume larger proportion Israel’s future exchange earnings will go armaments.” (Department of State, Central Files, 784A.5–MSP/10–2755)↩