Foreign Relations of the United States, 1958–1960, Arab-Israeli Dispute; United Arab Republic; North Africa, Volume XIII

73. Telegram From the Embassy in Israel to the Department of State¹

Tel Aviv, April 17, 1959—4 p.m.

831. Embtel 796.² In response to my request last week for opportunity of informal exchange of views with Foreign Minister at her convenience, I was received by Mrs. Meir yesterday.

After tour d’horizon of recent area developments (reported separately)³ she said she had several specific topics she would like take up with me.

1. Cut in special aid. At outset she wished express GOI’s deep gratitude for generous aid it had been and was still receiving from US. This aid had contributed incalculably to Israeli development and she thought she could say with pride it had been well used. She said she accepted without question assurance that decision cut out grant-aid based on economic and not political grounds. Though flattering that US considered Israel so far along road to economic viability that it no longer needed grants, she wished point out that this type assistance, though relatively small in comparison total aid, had particular importance for Israel out of proportion to its magnitude because of its unusual character. Other types assistance tied to specific projects, but special aid was money which Israel could use freely and with flexibility to meet exceptional needs. Of course this aid, like other types, was channeled into fields of development. However, its maneuverability meant it could be used to generate economic activity of much greater size. According to her advisers it could be shown that grant of $7.5 million had in fact “generated economic and development activities in Israel totaling $30 to $40 million.” She expressed the hope this type of aid, “even if it came from some other source,” might be made available in FY 1961 program. In any event, GOI hopes total aid next year will be no less than present year.⁴

2. Jordan water development. Mrs. Meir asked if I had any information on present status Israeli request of some months ago⁵ for financial assistance in connection with Jordan water diversion, which she understood had been referred to US experts for study. She mentioned fact Israel had accepted Johnston plan but that its implementation had been blocked in other quarters. Now that work was being started in Jordan on Yarmuk diversion, GOI hoped US would concurrently assist Israel in its projected Jordan water diversion, which falls within approved Johnston plan. I said Embassy had no recent information this subject but I would transmit her request to Department.

3. PL 480 Title II. Mrs. Meir wished express GOI’s continued interest in drought relief under title II. She said she was distressed to learn from Israeli Embassy Washington that action on this request appears to have been delayed because application not made in proper form. According her information, it will now be necessary for request to be resubmitted in revised form. I pointed out that obviously Israel could not qualify for title II assistance under heading of famine. Other criteria for eligibility were within the competence of Washington agencies. We have been informed that Mr. E.D. White of ICA/W will be in Israel within week or two and will bring with him latest Washington thinking on subject.

4. Suez. Mrs. Meir expressed appreciation US interest and help in connection with recent Egyptian seizure of Israeli cargoes. She remarked Hammarskjold has had no success in eliciting commitment from Nasser and in fact can get no answers to his letters on subject. In absence French and British diplomatic representation in Egypt, she hoped US would be willing to pursue matter with Nasser. She felt Nasser should be made recognize general principle of free passage and that question should not be allowed bog down in such technicalities as ownership of cargoes or charter of vessels. Status quo since Sinai and until recently had been that all varieties of “mixed arrangements” had transited canal without question. Some ships under Israeli charter had carried cargoes to Israeli ownership, cargoes whose ownership already vested in purchaser and cargoes in which there was no Israeli interest. Ships not under Israeli charter but carrying Israeli cargo had also been permitted through. Nasser’s recent “piracy” was something new. In addition to UN resolutions requiring free passage, there was exchange of letters between Hammarskjold and Fawzi following nationalization of canal in which Fawzi guaranteed freedom of passage. Of course Israel had legal right to use canal for ships under its own flag but it had no intention of trying to do so. I asked Mrs. Meir if any Israeli cargoes or ships under Israeli charter were on way to canal at this time. She replied negatively but said there would be some soon, probably in May, and that we would be given advance notice of their schedules. Mrs. Meir added that Israel had kept fairly quiet about this matter and would continue to do so. However, if it appeared World Bank was about to give loan for widening and improving canal without some assurance Israeli cargoes could go through unmolested, Israel would raise its voice. She thought Israel might not be alone in this case as she could not believe world opinion would sanction World Bank loan which would in fact be “subsidizing discrimination and piracy”.

Comment: Because Mrs. Meir, in discussing four foregoing subjects, consulted typed memo on her desk, I believe she was running through topics intended as Eban’s instructions for his meeting with Acting Secretary Herter which press reports was scheduled for last Wednesday but which now postponed because Secretary Dulles resignation.⁶ Mrs. Meir evidently took opportunity my call to present same subjects through Embassy.

Both Embassy and USOM have been surprised that, despite flood of press stories about cut in grant-aid, no GOI official on any level had mentioned this subject even informally to US officials. Today Jerusalem Post reports my calls on Mrs. Meir under headlines “Meir, US Envoy Discuss Grant.” Article itself, by stating (correctly) that meeting was arranged at my request, gives erroneous impression question of aid was brought up at my initiative. Article further states “$7.5 million grant was part of US special assistance program to Israel which was cancelled at instance of Department of State on grounds Israel no longer requires direct aid. Instead, it was proposed grant be made in form development loans.” Article further states Mrs. Meir impressed upon me Israel’s need of direct grant “to cover a temporary deficit in her foreign currency budget.” Mrs. Meir did not use this phrase in her discussion with me, nor did she explain to my satisfaction what was meant by her statement that grant-aid could generate four times or more its value in economic activities.

USOM comments on Mrs. Meir’s version of need for and use of grant-aid will follow in separate message.⁷

Baxter

1. Source: Department of State, Central Files, 684A.00/4–1759. Confidential; Priority.
2. Telegram 796, April 9, reported that Baxter had an appointment with Foreign Minister Meir on April 16 for a general exchange of views on the current international situation. (Ibid., 684A.00/4–959)
3. Not found.
4. On April 15, and again privately on April 17, Herzog raised this question with Rountree along similar lines. Memoranda of these conversations are in Department of State, Central Files, 784A.5–MSP/4–1559 and 611.84A/4–1759.
5. See footnote 2, Document 66.
6. On Wednesday, April 15, Dulles submitted his resignation to President Eisenhower.
7. Not found.