Foreign Relations of the United States, 1946, The Near East and Africa, Volume VII

867N.01/4–1646

Memorandum of Conversation, by the Assistant Chief of the Division of Near Eastern Affairs (Satterthwaite)

[Washington,] April 16, 1946.

Participants:	Under Secretary
	Mr. Robert [R.] Nathan12
	Mr. Gilbert13
	Mr. Satterthwaite, NE

Mr. Nathan and Mr. Gilbert called again on the Under Secretary at 12:30 today. Mr. Acheson opened the conversation by saying that their project had been given much thought and study. He and Mr. Clayton¹⁴ had discussed it at length with Mr. Vinson¹⁵ and the latter had reached the conclusion that the best method of handling it would be to have an amendment introduced providing the Eximbank with additional funds not only for the Jordan Valley Project but for other projects in the Middle Eastern area as well.

To introduce an amendment providing funds for this specific project alone, Mr. Acheson added, would be contrary to the accepted policy of leaving the actual administration of loans to the Bank’s directors. A single project of this type would, moreover, run into both domestic and international complications, whereas if the amount they proposed were doubled and the amendment were drafted in general terms to provide for expenditures on constructive projects in that area such as the proposed Jordan Valley Authority, these objections might be overcome in part at least.

Another factor to be considered, Mr. Acheson said, was that the site of the proposed project is at present under British Mandate and that no international authority has yet been created to carry it out. In these circumstances for Congress to appropriate funds for this project would be analogous to the British appropriating funds for some project in Puerto Rico without first consulting us.

Mr. Nathan inquired whether the Department intended to sponsor the project. To this Mr. Acheson indicated that neither the Administration nor the Department are directly sponsoring it and that it would be unwise for them to do so, as he understands it to be the President’s underlying philosophy that the Eximbank should carry on relatively small operations, but that major emphasis should be placed on the International Bank, the International Fund and the British loan.

Mr. Gilbert said that they had in fact considered taking up their proposal with the International Bank. As it is not yet operating, however, they felt that too great a delay would be involved.

Mr. Nathan expressed his strong feeling that the Jordan Valley Project could make a constructive contribution to the serious problem of Arab-Jewish relations. He suggested that it might even be welcomed by the British, since he felt that there was bound to be trouble after the Committee of Inquiry issued its report. He asked how soon the report would be finished. Mr. Acheson said he didn’t know but rather imagined that the Committee would be breaking all records for such committees if it succeeded in finishing its report before the deadline, in this case May 7. He also pointed out in this connection that the Department had rigidly followed the rule that it would not issue instructions or suggestions of any kind to the Committee, since it was appointed by the President, but would rather limit itself to facilitating the Committee’s work.

In response to Mr. Nathan’s inquiry whether Mr. Acheson had discussed this matter as yet with the Secretary, Mr. Acheson replied that he had not done so and that it had been handled so far by Mr. Vinson, Mr. Clayton and himself. Mr. Nathan remarked that he thought it important that Mr. Byrnes should be informed. Mr. Acheson stated that in view of this he would be glad to talk it over with the Secretary this afternoon if possible and that he would telephone Mr. Nathan of the result.

12. Deputy Director of the Office of War Mobilization and Reconversion in 1945.

13. Possibly Richard V. Gilbert, Economic Adviser to the Administrator of the Office of Price Administration until he resigned in February 1946.

    In a conversation with Mr. Acheson on April 3, Mr. Nathan had sought Department support for Congressional authorization of an increase of $250,000,000 in the lending authority of the Export-Import Bank, to be earmarked for a Jordan Valley hydro-electrification project. Mr. Acheson pointed out the difficulty of undertaking a project in Palestine alone because American motives would be misconstrued and attributed to the pressure of Jewish groups. He stated that a sort of Tigris-Euphrates Valley Authority and a Nile Valley Authority as well as projects in Iran and Saudi Arabia should also be considered in a general plan. (867N.6463/4–346)

14. William L. Clayton, Assistant Secretary of State for Economic Affairs.
15. Fred M. Vinson, Secretary of the Treasury.