Office of the Historian

S/ISA Files: Lot 52–26: “Near East”: Circular telegram

The Secretary of State to Certain Diplomatic and Consular Offices 1

secret
Washington, May 26, 1951—4 p. m.

741. 1. Asst Secy McGhee closely fol Depcirtel 727 May 222 briefed reps Arab states and Israel May 24 re proposed program. Pres’s statement to Congress containing totals but not breakdowns made public May 24. Reps asked keep breakdowns confidential until figs emerged hearings. No ref made earmarking for Saudi Arabia.

2. Queried by Egypt Amb re justification 25–25 apportionment Arab states and Israel McGhee replied:

a.
Arab states wld benefit economically from most of refugee 50 million—consequently Arab share more nearly 75 million.
b.
Absorptive capacity and not population must be criterion economic aid: e.g. Population wise India could absorb unlimited aid.
c.
Certain Arab states well off financially due high export commodity prices and increased royalties: some states (Egypt, Iraq and Saudi Arabia) have elected not to take up all credits available to them in lending institutions.
d.
Worthwhile programs (e.g. Wadi Thar Thar) require years to plan US program for one year only: 25 million figure in conjunction refugee 50 million believed about right for existing Arab absorptive capacity.
e.
Israel has produced carefully documented projects in excess 25 million.
f.
U.S. grant economic aid can only be supplement indigenous development efforts taking into account other sources funds and resources.

3. McGhee reminded Arabs that US is final judge of how much it gives and where it gives: US is not forcing grant aid on any NE state. If NE state elects seek US grant aid its request will be considered in light all factors.

4. Re mil assistance cash reimbursable and grant McGhee emphasized US wld require assurances and safeguards arms not misemployed in intra area aggression contrary Tripartite Declaration. Arms supply wld be correlated with UK and France.

5. McGhee emphasized to Arab Chiefs of Mission that Dept relying on them make clear home Govts various Congressional stages through which program must pass. It is liable to attack from many groups. Program cld be thrown out of balance, nullified or completely destroyed by statements from Arab world labeling program with [Page 152] Communist-type clichés: “biased”, “imperialist”, “inadequate”, “unbalanced”, etc. If Pres’s program to assist Arab states and Israel impartially with their economic and defense problems and to settle refugee problems on sound basis is subjected undue criticism it is unlikely Congress will approve program. No balanced and impartial US program cld possibly meet all the desires of all the Arab states and Israel: if this attempt at such a program fails for lack of support in area prospects dark for anything comparable in foreseeable future.

6. Helpful if foregoing facts sit appreciated by responsible Govt officials and Arab leaders such as Azzam Pasha. UK and French colleagues might help propagate idea. (Dept wld be interested receive reports on attitude and activities ur UK and French colleagues re US program)3 Pro-program statements preferably public wld assist greatly. NE section Pres’s foreign aid statement offers good peg. Report prospects such public statements.

7. Israel rep polite re idea area approach but from other sources Dept understands drive for $150,000,000 grant aid Israel is being pressed vigorously in Congress and publicly.

Acheson
  1. Drafted by Jones, Kopper, and Wells Stabler, Officer in Charge, Egypt and Anglo-Egyptian Sudan Affairs. Approved by Elbert G. Mathews, Director, Office of South Asian Affairs, and cleared by Frederic G. Ranney of the Office of British Commonwealth and Northern European Affairs. Sent to all posts in the Arab states and to Tel Aviv, London, Paris, and Moscow.↩
  2. Ante, p. 141.↩
  3. See memorandum from Mr. Villard to Nitze, June 1, infra.↩