6. Memorandum by the Secretary of State’s Special Assistant (Greene)1
The Secretary, pursuant to the recommendation in this paper, called Mr. Waugh this morning2 and said he thought it would be a good idea to go ahead with the $24,200,000 project if Mr. Waugh found it acceptable economically and financially.
Mr. Waugh said they would go ahead on the $24.2 million. He said they would not like the small amount. The Secretary said they were lucky to get that. Mr. Waugh said he thought he would tell them so.
Mr. Waugh said also that he thought the Development Loan Fund was not operating on sound principles, that we were encouraging applications in sums vastly in excess of what could be granted, and the turn-downs would create a vast amount of ill will. He said they are operating contrary to the principle which the Secretary had in the past enjoined upon him which was not to encourage expectations which could not be realized. He said he wanted to talk to the Secretary about that situation.
The Secretary then telephoned Ambassador Eban 3 and told him that he had spoken with Mr. Waugh about getting started along the lines reflected in the Ambassador’s conversations with Mr. Herter. The Secretary suggested to the Ambassador that he be in touch with Mr. Waugh, which Mr. Eban said he would do.4
- Source: Department of State, Central Files, 884A.10/2–458. Secret.↩
- A memorandum of Dulles’ telephone conversation with Waugh at 10:40 a.m. is in the Eisenhower Library, Dulles Papers.↩
- A memorandum of Dulles’ telephone conversation with Eban at 10:47 a.m. is ibid. ↩
- Eban called on Waugh on February 5 and 6 to discuss the Export-Import Bank loan. In a letter to Waugh, February 7, he summarized the discussion at the two meetings and detailed how the $24.2 million would be used. A copy of his letter is attached to a memorandum from Dillon to the Acting Secretary of State, February 12. (Department of State, Central Files, 884A.10/2–1258)↩
- Secret. Drafted by Herter and cleared by Dillon.↩
- A memorandum of this conversation is in Department of State, Central Files, 884A.10/1–2158.↩
- None of the tabs is attached to the source text. Presumably Tab A is the memorandum of conversation referred to in footnote 6 above; a copy of Tab B is in Department of State, Central Files, 884A.10/1–2158; a copy of Tab C is ibid., NEA Files: Lot 60 D 580, Israel—Export-Import Bank Loan.↩