Foreign Relations of the United States, 1949, The Near East, South Asia, and Africa, Volume VI

501.BB Palestine/5–1649

Memorandum by the Coordinator on Palestine Refugee Matters (McGhee) to the Secretary of State

secret

[Washington,] May 18, 1949.

Subject: Palestine Refugee Problem

1. Ethridge in Palun 151 of May 16 “For the Secretary” urgently requests decision re US financial backing of Palestine refugee program along lines submitted in your Memorandum for the President. Ethridge feels that he has almost arrived at the point where commitments can be obtained from both Israel and the Arab states to take refugees in the numbers required for satisfactory solution of the problem, if they can be assured of outside help.

2. It would greatly facilitate an agreement on this program if Ethridge could have word of the President’s decision before his departure from Geneva, now scheduled for May 24. He has conducted most of the basic negotiations with the Israelis and Arabs personally in private meetings and is in best position to get agreement.

3. If you could mention this to Clark Clifford at lunch today perhaps he could facilitate a decision by the President prior to your meeting with the President tomorrow or the Cabinet meeting Friday, without your having to raise the issue with the President again.¹

1. In a memorandum of May 19 to the Director of the Office of Financial and Development Policy (Knapp), Wilfred Malenbaum, Chief of the Division of Investment and Economic Development, stated: “I gather the President, who has been shown the attached [telegram 741, May 16, from Bern, p. 1013] by Acheson, is about ready to buy Ethridge’s formula. (He is still awaiting reaction from Treasury and the Budget Bureau on our final cost estimates, although I gather that their answer may modify the magnitudes but not alter the basic decision to proceed.) I am worried about the formula Ethridge proposes because of our old fear that it may become too much of a U.S. program. At the minimum, any cable authorizing Ethridge to proceed should make clear the political dangers in other areas of publicity that can in any way be interpreted as a special U.S. assistance program for the Middle East. … We are talking with the International Bank and the Eximbank to see how great are their specific interests in projects which might be considered part of this program.” (501.BB Palestine/5–1949)