The Ambassador in Great Britain (Houghton) to the Secretary of State

No. 3334

Sir: I have the honor to refer to the Department’s instruction No. 1617, December 4, 1928 (File No. 867n.156/10), and to state that the construction of the proposed harbor works at Haifa, Palestine, was discussed with the appropriate official of the Foreign Office and a memorandum was left with the officer, a copy of which, in triplicate, is enclosed,59 according to the Department’s instructions.

[Page 68]

A note has now been received from the Foreign Office, a copy of which I also have the honor to enclose, setting forth the position of the harbor work at Haifa, and stating that no discrimination will be exercised in the allocation of the local contracts.

I have [etc.]

For the Ambassador:
Ray Atherton

Counselor of Embassy

The British Secretary of State for Foreign Affairs (Chamberlain) to the American Ambassador (Houghton)

No. E 505/57/65

Your Excellency: On January 3 Mr. Atherton left in this department a memorandum on the question of the proposed work for the construction of a new harbour at Haifa in Palestine.

Enquiries have since then been made as to the position, and I now have the honour to inform Your Excellency that the representations contained in that memorandum are based on a misapprehension. His Majesty’s Government in the United Kingdom have no intention, as appears to be assumed in the memorandum, of violating any of their obligations, either under the Palestine Mandate or under the Anglo-United States Palestine Mandate Convention of December 3, 1924.
It is true that some months ago it was the intention of the Government of Palestine to invite tenders from selected firms for the construction of the proposed new harbour at Haifa. His Majesty’s Government are not prepared to admit that in acquiescing in this procedure they would have been acting in conflict with any of their international obligations. But in fact no invitations to tender were issued as it became apparent, in December last, that factors had arisen which rendered it impracticable to proceed further with the proposed work by the method which had up till then been contemplated, and a definite decision to this effect was taken at the end of December.
Apart from certain major factors of uncertainty in connexion with the future of the proposed harbour at Haifa, serious difficulties have arisen in regard to the question of the employment of local labour. There has been a considerable amount of unemployment among Jews, who have settled in Palestine in consequence of the scheme for a National Home for the Jews, and the opportunity which the proposed harbour works will afford of providing work for Jewish labour is one that cannot be neglected. Owing to the different standards of life that prevail among Arabs and Jews respectively, special provisions as to wages etc., will have to be made [Page 69] if the above object is to be secured, and it would be difficult, if not impossible, to include such provisions in any contract which could be made with a firm contracting for the whole work.
Further unexpected difficulties have arisen in connexion with the quarrying of the stone for the proposed new breakwater. The most suitable quarry site capable of supplying stone of satisfactory quality in blocks of sufficient size is found to contain exceptionally important antiquarian remains, and therefore cannot, in view of the Palestine Antiquities Ordinance, be used for the purpose, until its antiquarian value has been more fully investigated. In any case it will be necessary to impose considerable restrictions on quarrying, which it would be difficult to embody in a contract without prejudice to the interests of the Palestine Government.
In the circumstances it has been decided that the system of tendering for the construction of the harbour work under a single contract must be abandoned, and that the work must be carried out departmentally, contracts being let out locally for the supply of materials or the execution of sections of the work as circumstances permit. No discrimination will be exercised in the allocation of these local contracts.

I have [etc.]

(For the Secretary of State)
H. J. Seymour
  1. Memorandum not printed.