Office of the Historian

784A.13/6–2052

No. 449
Memorandum of Conversation, by the Officer in Charge of Palestine–Israel–Jordan Affairs (Waller)

confidential
[Washington,] June 20, 1952.

Subject:

  • Visit of Israel Foreign Minister Moshe Sharett
[Page 949]

Participants:

  • Mr. Moshe Sharett, Israel Foreign Minister
  • Ambassador of Israel, Abba Eban
  • NEA—Mr. Byroade
  • NE—Mr. Hart
  • NE—Mr. Dorsey
  • NE—Mr. Waller

The Israel Foreign Minister, Mr. Sharett, and the Israel Ambassador, Mr. Eban, called at their request on Mr. Byroade this afternoon at 4 o’clock. After exchanging greetings and touching on several minor matters, the Foreign Minister related to Mr. Byroade the story of Israel’s financial difficulties. The story was almost identical with the information provided by Ambassador Eban to Mr. Byroade June 17 (see memorandum of conversation dated June 17).

Mr. Byroade replied that he was very much interested and concerned about the problem, which was one of greatest concern to him when he was recently in Israel. His study of the matter so far has led him to the conclusion we do not really know the facts. Mr. Sharett said the Israel Government is prepared to open its books. Mr. Byroade replied that Mr. Mikesell’s work must be expedited in order to get an early answer on which to base a decision. Ambassador Eban said Mr. Mikesell and the Israel Embassy’s treasury representative were together yesterday and that perhaps Mr. Mikesell could make an interim recommendation before going to Israel. Mr. Byroade doubted that Mr. Mikesell would be in a position to express an opinion before leaving for Israel. Mr. Sharett then said that treasury experts from Israel could be brought over to help. Mr. Byroade again expressed doubt that any report could be made until after Mr. Mikesell’s arrival in Israel. Mr. Sharett then emphasized the urgency of the matter—which Mr. Byroade said he understood.

Mr. Byroade continued by saying that, speaking frankly, the US seems always to find itself in the position of being called on to help Israel out of financial difficulties without having the full facts of the situation. He reminded Mr. Sharett that in the two months he (Mr. Byroade) has been in office as Assistant Secretary, the Department has been asked twice to assist Israel financially on an urgent basis. He personally would like to get Israel’s financial affairs on a basis which would provide a breathing space. He then asked the Foreign Minister if he had any suggestions. Mr. Sharett turned to Ambassador Eban and reminded the Ambassador that the Embassy has now received from Jerusalem a detailed account of the situation, and the Ambassador then said that the information could be made available. Mr. Sharett, addressing Mr. Byroade, said that he [Page 950] hoped the Department would recommend the instrumentality to be used and if it should be decided that the operation should be put through the Export-Import Bank he hoped the Department would make an appropriate recommendation to the Bank. Mr. Byroade said that the matter must be arranged in such a way that it does not appear to the world that the US is always bailing Israel out.