374. Memorandum of a Conversation, Department of State, Washington, September 22, 19591

SUBJECT

  • United States Assistance to Lebanon

PARTICIPANTS

  • Lebanese
    • His Excellency Rashid Karame, Prime Minister of Lebanon
    • His Excellency Nadim Dimechkie, Lebanese Ambassador
    • Mr. Simon Boulos, Alternate Member Lebanese Delegation to UNGA
  • United States
    • M—Robert Murphy
    • NEAG. Lewis Jones
    • NE/E—George Bennsky

After the usual courtesies and some minutes of general conversation, Prime Minister Karame set forth his case for further United States assistance to Lebanon. He said he wanted to bring to Mr. Murphy’s attention the fact that the people of Lebanon were very sensitive to the attitude of America toward them and their problems. Although it was true that Lebanon’s economy had recovered considerably from last year’s civil disturbances, all was not well in the country. Many villages did not have adequate water supplies, health centers, electricity, access roads, etc. His Government was doing what it could to develop Lebanon, but its resources were limited. He had thought that PL 480 might be the route by which the United States could assist. However, there were other ways in which the United States might help. He mentioned the United States grant aid made available to his Government just after its formation and suggested that we might continue such assistance. During his presentation, the Prime Minister also noted (1) the recent transit payments agreement with the IPC and the upcoming negotiations with TAPLINE in terms of new resources for his Government’s development program; and (2) President Eisenhower’s statements regarding the world-wide need for economic development.

Ambassador Dimechkie pointed up the President’s contingency fund as a possible source for grant assistance to Lebanon. He also took the position that Title II PL 480 aid could be justified on the grounds that Lebanon was faced with a balance of payments crisis. To justify this he cited the large trade gap. (This subject was not pursued to the point where it would have become clear that income for invisibles and capital account were more than balancing the trade deficit, thus resulting in a relatively sound foreign exchange position.)

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Mr. Murphy said that, given the Congressional cuts in the foreign aid program and world-wide demands on these funds, there was no chance of any grant economic aid being available for Lebanon this fiscal year. As for PL 480 assistance, Lebanon’s economic and financial situation made it very difficult to justify a program under the legislation and regulations governing either Title I or II.

Note: After the conversation was completed, Mr. Boulos approached Mr. Jones pointing out that this was the Prime Minister’s first visit to the Untied States, and it was important politically that he not go home empty-handed. The amount of United States assistance was less important than the fact that he obtained something. Any gesture by the United States would be considered by the Prime Minister as symbolic of our good will towards him and his Government. Mr. Jones replied that we might be able to consider something along these lines if Mr. Boulos and the Prime Minister could come up with a specific case which met United States legal requirements. Mr. Murphy, after being apprised of this talk by Mr. Jones, agreed that if a specific case could be developed it might be well to consider such a gesture.

  1. Source: Department of State, Central Files, 411.83A41/9–2259. Confidential. Drafted on September 25 by Bennsky and approved as accurate on October 1 by Murphy.