357.AC/1–550: Telegram

The Secretary of State to the Embassy in the United Kingdom


52. Re Embtel 5147 [5149].1 Urtel disappointing to us and Dept fearful failure entire program unless UK will reconsider its position in light fol considerations. We do not wish imply any feeling that Wright2 made even tentative commitment re UK contribution in talks here, but wish start afresh in approach to UK on subj. Fully appreciate manifold calls of similar nature on UK and burdens they represent on UK recovery program. However feel reasonable balance requirement to meet budget Relief and Works Agency for Pal Refugees—hereafter PRA3—against UK stake in polit and commercial matters in area. In presenting case again to FonOff pls review fol points.

In view attitude Cong and public gravely doubt possibility obtain more than 50% share from US. We are preparing legis with this sum in mind and cannot increase our request beyond $27,000,000. This was percentage contributed to UNRPR.
UK suggestion in reftel wld yield total sum of only $47,300,000 against requirement of $54,900,000; i.e. US $27,000,000 plus equivalent $20,300,000 represented by £7,250,000.
In testimony before Cong comites we shall be asked intentions other countries to contribute to program. Indication by Dept that UK will limit contributions to £2,250,000 may well be disastrous; proposal that UK will match others up to their limit will make it highly probable that US Congress insist on matching formula. In that case 50% matching formula wld yield maximum $40,600,000, i.e., US $20,300,000 matching UK and other govts $20,300,000 grant.
We will find it difficult arrange 100% US grant program if UK program partially loans. In view possibility UK will recoup Jordan £1,000,000 loan from profits of Palestine currency board due Jordanians, we will be hard put to justify this as properly Brit contribution. This £1,000,000 might better be considered Jordan contribution, over and above $6,000,000 considered by ESM to be reasonable share cost of Arab States. In that case, Brit proposal wld result in actual contribution of only £1,250,000.
We propose to use in exec sessions as argument in favor of program relation US contribution to profits and taxes oil cos. and importance Arab States involved in program to oil supply even if oil originates in countries not directly concerned PRA activities. Similar considerations by UK shld lead to conclusion larger contribution well worth while as insurance premium to assure continued flow oil supplies.
PRA program involves expenditure on relief of about 40% on works about 60%. Ref para 2 Embtel it seems unreasonable that any one contributor shld insist on earmarking part its contributions for especial purposes such as resettlement. Preferable that Director and Advisory Comm be given discretion in apportionment of funds. We will cooperate during operation of program to assure maximum of useful works, minimum of direct relief.
In view polit difficulties in PRA area believe that UK well advised to support PRA for ensuing 18 months on 25% basis even if this results deferral investments in Iraq and Egypt development plans which we understand are competing with PRA for available UK resources. Pls investigate facts in the matter fully and in your discretion do your best persuade FonOff and Treas take this view.

Believe that it may be helpful to Emb to ascertain views Desmond Morton former Deputy Chairman ESM4 who may be useful in converting other officials to back ESM.

  1. Dated December 29, 1949, Foreign Relations, 1949, vol. vi, p. 1563.
  2. Michael R. Wright, Superintending Under-Secretary of State for Foreign Affairs in the British Foreign Office, with jurisdiction over the Eastern Department. For documentation on his talks with American officials late in 1949, see ibid., pp. 50 ff.
  3. The full name of this organization was the “United Nations Relief and Works Agency for Palestine Refugees in the Near East” (UNRWA). The name of the Agency was often rendered informally as the “Palestine Refugee Agency” (PRA) for the convenience of brevity. UNRWA was to be assisted and advised by an Advisory Commission consisting of representatives of the United States, the United Kingdom, France, and Turkey. By late January, discussions were held by American and United Nations officials concerning the appointment of an UNRWA Director. The Department of State, on February 1, informed the United States Mission at the United Nations that the PRA Director should “if possible” be drawn from a country other than the four members of the Advisory Commission and instructed the Mission to suggest to Secretary-General of the United Nations Lie that he make no further approaches on the matter to Americans (telegram 48 to New York, 357.AC/1–3150).
  4. For documentation on the activities of the United Nations Economic Survey Mission for the Middle East, see Foreign Relations, 1949, vol. vi, pp. 594 ff.