9. Memorandum of a Conversation, Department of State, Washington, February 27, 1958, 11:30 a.m.1

SUBJECT

  • Israel Application for an Export-Import Bank Loan; Israel Immigration Policies (Part 1 of 3)

PARTICIPANTS

  • Mr. Abba Eban, Ambassador of Israel
  • Mr. Yaacov Herzog, Minister, Embassy of Israel
  • The Secretary
  • NEAWilliam M. Rountree
  • NEDonald C. Bergus

Mr. Eban congratulated the Secretary on his 70th birthday. The Secretary expressed his thanks.

Mr. Eban said that since his telephone conversation with the Secretary,2 he had been in touch with the Bank and the loan agreement was now being formalized. The amount which the Bank was willing to invest in Israel’s water development projects at this time was less than the total necessary. Israel circles had doubted whether the amount which the Bank was offering would even be sufficient to complete a significant part of the program. Mr. Eban had urged his Israel colleagues to rely on the possibility of further Bank investment. The Secretary felt that it was well that Israel should get started on this development. He could, of course, make no assurances with regard to any future Israel applications. The Bank was an independent agency. From the viewpoint of the Department, however, a number of small [Page 24]amounts were perhaps more easily handled than one large amount. Mr. Eban said that the Israelis had told the Bank they would be back for more loans. The Israelis would like to feel that the projects would not be left halfway completed.

The Secretary said he would like to emphasize that one of the important elements which had made us feel that we were in a position to press the Bank had been Mr. Eban’s statements on Israel immigration policy: that as Israel developed its economic potential, it would be easier for Israel to do something for the Arab refugees and that Israel did not intend to stimulate immigration to absorb all the country’s economic growth.3 Mr. Eban commented that Israel wished to expand internally by building up its economy. External expansion by Israel would not help it economically but would create more problems.

  1. Source: Department of State, Central Files, 884A.10/2–2758. Secret. Drafted by Bergus. See also infra and Document 11.
  2. See footnote 3, Document 6.
  3. At this point in the source text, the following sentence is crossed through: “These statements had helped us.”