London Embassy Files: Lot 59 F 59: 500 Israel
Memorandum by the Chief of the British Commonwealth and Middle East Division of the Office of International Finance (Polk) to George M. Bennsky, Jr.1
Progress of Israeli Bond Sales in the United States
For your information, here is the gist of my remarks on the above subject at the N.E. staff meeting of June 27, 1951.,
Restricted On June 21, Mr. Theodore Kollek, Israeli Minister to the United States, informed the Treasury in a telephone conversation that the Israeli Government still expected to realize a total of about $80 million in cash in 1951 from bond sales. As of that date, total commitments for purchases were $65 million, although information on this figure ran a day or so late. As for cash, however, they had about $21 million at the last report. It might take two or three weeks, or even two or three months, for the outstanding pledges to be liquidated.
End restricted—Begin of confidential On June 22, in a telephone conversation with Mr. Polk, Chief of the British Commonwealth and Middle East Division, Office of International Finance, U.S. Treasury, an officer of the Chase National Bank, New York City, which is the bank in which funds received from bond sales ultimately are deposited, stated that as of that date, about $19 million had been received in cash. He also stated that Israeli representatives had indicated that about $50 to $60 million in pledges had been received. (These figures are noticeably quite close to those given by Mr. Kollek.) The Chase officer indicated further that the bond sales had not been nearly as successful as the Israelis had hoped. Their hopes had been that $300 million in cash would be received in 1951 and $100 million in cash in each of the two succeeding years.
In a conversation between Mr. Delaney, of OIF, and Mr. Theodore Racoosin, a U.W. [U.S.?] Citizen active in New York City activities of the United Jewish Appeal, Mr. Racoosin indicated that he, among others, had opposed the bond issue from the beginning, thinking it was a mistake. Among the considerations had been that it might be difficult or impossible for Israel to repay the purchasers of the bonds in view of the country’s outstanding $135 million debt to the Export–Import Bank. One of the factors apparently motivating the bond issue was said to be the steady decline in private contributions to Israel between 1948 and 1950. The Israelis hoped to reverse this declining trend in their exchange receipts through the mechanism of [Page 739] the bond issue. Mr. Racoosin thought that his original feeling that the bond issue was a mistake had been borne out by the disappointing results of the issue, which had produced much less than had been anticipated.
As far as private contributions through the United Jewish Appeal are concerned, Mr. Racoosin said that they are running at a higher level in 1951 than as of the same date in 1950. Mr. Racoosin, who is an accountant, is leaving for Israel this week to study accounting practices there. End confidential.
- In the Treasury Department. The drafting line attributes authorship to Mr. Bennsky.↩