884A.00 TA/10–2251
Memorandum of Conversation, by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee)1
Subject: Visit of Israel Minister and Mr. George Newell of the Manufacturers Trust.
| Participants: | The Honorable Theodore Kollek, Minister, Embassy of Israel |
| Mr. George Newell, Vice President, Manufacturers Trust, New York City | |
| NEA—Mr. McGhee | |
| NEA—Mr. Gardiner | |
| NE—Mr. Waldo |
Mr. Kollek introduced Mr. Newell and explained that he had brought him in order to discuss briefly with the Department problems arising out of Israel’s acute shortage of foreign exchange and the resultant efforts of the Israel Government to obtain immediately sufficient dollars to tide them over until funds were available on a large scale from other sources, such as the grant-aid program of the US.
Mr. Newell said that the Manufacturers Trust frequently loaned money to the various Jewish institutions, such as the United Jewish Appeal, United Palestine Appeal, the Keren Kayemeth,2 and the Jewish Agency; that these loans were short-term loans and that the security for them was generally collections already in progress. The Israel Government now wished to have a loan of approximately $10 million for the purpose of paying debts acquired since July 1, 1951. Mr. Newell said that he was interested in learning of the status of the Mutual Security Program and the possibilities that any money available thereunder would be used to pay commitments acquired by Israel before the passage of the Bill, between July 1, 1951 and the present.
I told Mr. Newell that the Mutual Security Program itself was now law and the Appropriations Bill would probably soon be signed by the President. So far as the administration of the money itself was concerned, it was about certain that the TCA under Mr. Bennett would administer the money for the Near East, including Israel. It would therefore be up to Mr. Bennett to make the policy decision whether the money could be used to pay past debts acquired by Israel. I pointed out, however, that the TCA would probably follow precedents already set by ECA and, as he was aware, the ECA had picked up the check for a number of countries on past purchases when it first had gone into business.
[Page 915]I was of course unable to give Mr. Newell any specific assurances that this would be the case, since it was the prerogative of Mr. Bennett to make the decision. Mr. Newell said that he was aware before coming to my office that he would be unable to obtain such a commitment but that he was interested in discussing generally the problem involved. After leaving my office Mr. Newell went to Mr. Gardiner’s office where there was further discussion, and Mr. Gardiner explained that the administration of the bill would be guided by the debate which took place in the Congressional committees and a reading of those hearings would disclose that the ECA pattern would be followed. Mr. Gardiner gave Mr. Newell copies of Congressional hearings as well as of the Mutual Security Act.
On the following day Mr. Kollek called Mr. Waldo and requested him to convey his thanks and appreciation to Mr. Gardiner and to me for the very helpful general discussion which we had had with Mr. Newell. Mr. Kollek said the discussion had sufficed to convince Mr. Newell to begin the negotiations for the loan to Israel.