Foreign Relations of the United States, 1951, The Near East and Africa, Volume V

784A.5 MSP/12–451: Telegram

The Ambassador in Israel (Davis) to the Department of State

secret
priority

Tel Aviv, December 4, 1951—7 p. m.

544. Re Embtel 538, December 3.¹ Horowitz and Avriel emphasized today very urgent need for funds to pay off recent Bank America $5 million loan reimbursable out grant-in-aid. They pointed out prompt retirement this loan soonest might make possible renewal all or part of loans originally totalling $25 million (15 million to Jewish natl fund and 10 on bond collection) but subsequently reduced to present figure of $13 million (8 million on JNF and 5 million on bonds). In view exceedingly tight Dec situation, such Bank Amer refinancing was described as very important and hope was expressed that funds under interim agreement wld be made available within next few days.

In view insistence by some Amer firms (see Embtel 502, Nov 21)² that they be accorded equal treatment in retirement of overdue dollar indebtedness, Emb raised question of possible repercussions under present plan of cleaning all of POL indebtedness while leaving other dollar accounts slip during Dec (see Embtel 530, Nov 30).³

Horowitz and Avriel stated that they were left no alternative during Dec that importance of oil made cleaning up these accounts imperative, but that they wld ask Kollek to get in touch with Amer Export and TWA particularly in order enlist their continued coop during critical month Dec. Major items overdue dollar indebtedness known to Emb are TWA approx $80,000, Amer Export $320,000, Kaiser Frazer $900,000 and Anderson Clayton over $220,000. Horowitz stated maturities wld fall off during January and Feb after the heavy accumulation during Dec.

Horowitz and Avriel desired info on when where and to what account, counterpart deposits were desired. Emphasized desire and readiness Israeli Govt comply promptly with US wishes this matter.

Davis

1. Telegram 538 from Tel Aviv, December 3, not printed (784A.5 MSP/12–351), referred to the draft text of the note to conclude an interim agreement for economic assistance to Israel under the Mutual Security Act and stated that the note appeared to meet the needs of the situation. The draft text had been transmitted in telegram 406 to Tel Aviv, December 1, not printed (784A.5 MSP/12–1051). The final version of the note as sent on December 7 is printed on p. 956. and is substantially the same as the draft in telegram 406.

   Telegram 538 further reported that the Israeli Minister of Finance had on December 2 stressed once more the urgency of Israel’s need for assistance, stating that the month of December promised to be the most critical month he had experienced since the establishment of the state in 1948. The Embassy accordingly recommended early signature of the note.

2. Not printed.
3. Not printed; it reported on the dollar income ($4 million), obligations ($26 million), and net dollar requirements ($22 million) of Israel for the month of November (884A.10/11–3051).