501.BB Palestine/10–2747
The Economic Adviser to the Jewish Agency for Palestine (Gass) to the Chief of the Division of Near Eastern Affairs (Merriam)
Dear Mr. Merriam: As I indicated in our discussion of Palestinian economic questions on October 14th, the Jewish Agency for Palestine is now engaged in crystallizing its views on various aspects of the proposed Palestine Economic Union. It was my understanding that a corresponding process is now going on also in the United States Government.
You may recall your suggestion that—as soon as our views on the various economic and financial questions were clarified—you would welcome their submission to the State Department, in written form, so that they might be examined by United States Government experts [Page 1214] with a view to an interchange of views and the development of a common approach, in so far as possible.
I am now in a position to send you the attached statement1 of our position on the monetary aspect of the Economic Union. We feel that this aspect is extremely important because it is so basic to the twin objectives of partition and economic Union; (a) the establishment of real economic sovereignty in each of the two States resulting from partition, with corresponding freedom of each to pursue its own economic development in accordance with its own judgment, and (b) the maintenance of Palestine as a single Economic Union for the free exchange of goods and services.
Naturally, at this stage, we have presented the monetary system which we believe [is] required to meet these twin objectives only in tentative outline. The more final and detailed articulation of the monetary system, in so far as it is a matter requiring international approval, will be a task for the undertaking of Economic Union, to be worked out during the next months and submitted for the approval of the United Nations, if the procedure suggested by the United Nations Special Committee on Palestine is followed.
The attached outline of a monetary system is a part of the submission on the question of the Economic Union which the Jewish Agency plans to make to the United Nations partition sub-committee in the next days. This memorandum, as amended, may then appear as an Annex to the Agency’s general discussion of the problems of Economic Union.
The economic officers of the Jewish Agency are prepared to discuss the questions dealt with by the attached memorandum at your convenience.2
Yours sincerely,