501.BB Palestine(E)/9–349
Memorandum by the Assistant Secretary of State for Near Eastern and African Affairs (McGhee) to the Assistant Secretary of State for Congressional Relations (Gross)
In your memorandum of August 26 you express concern regarding difficulty which might be encountered if we should be placed in the position of going to Congress next session to request further funds for refugee relief or economic development in the Near East without evidence that the Arabs and Israelis were making serious efforts of their own to meet their problems.
I wish to assure you that those of us who have been working on this problem have had this aspect very much in mind. Our original tactics in the Palestine Conciliation Commission were to insist that the refugee problem was a responsibility which had to be shared by both the Arabs and the Israelis and that economic assistance would only be forthcoming after a sufficient degree of political agreement had been reached and the parties had requested economic assistance on a cooperative basis. Unfortunately, despite the strenuous efforts of both Mark Ethridge and Paul Porter, progress in the PCC by the conciliation process was negligible, and it was their joint recommendation that an effort be made to break the impasse by an examination of the economic aspects of the problem through a Survey Mission in advance of substantial political agreement.
In so doing, however, it has always been clearly understood that agreement on certain basic issues in the political field will be an essential precedent to any economic assistance as a result of the recommendations [Page 1358] of the Survey. We have made no advance commitment to furnish such assistance. In other words, we hope the recommendations of the Survey Mission may solve enough of the economic aspects of the problem to make possible enough political agreement to get on with the economic program.
As you doubtless know, Gordon Clapp, Chairman of the Board of Directors of the Tennessee Valley Authority, has been appointed head of the Economic Survey Mission and will be leaving for the Near East within about a week. He and his group should complete at least a preliminary report by November 1 for consideration by the forthcoming General Assembly.