Office of the Historian

632. Memorandum From the Regional Director of the Office of European Operations, International Cooperation Administration (Seager), to the Deputy Director for Operations, International Cooperation Administration (FitzGerald)1

Washington, December 3, 1956.

SUBJECT

  • Israel Programs

With a view to clarifying the status of our economic aid programs to Israel, we are setting forth a detailed description of the procedures currently being followed. These procedures have been formulated on the basis of our understanding of the policies and desires of the Director of this agency and the Department of State. We propose to continue these procedures until we are advised to the contrary.

There is to be no formal suspension of aid to Israel but every effort is to be made to slow down the implementation of our program until further policy guidance is received from the Department of State. In other words, we are to “drag our feet” but this [Page 1237] should be done as inconspicuously as possible. More specifically, the procedures set forth below are to be followed.

1.
There will, for the present, be no FY57 program approval.2 Processing of the proposed program should, however, proceed normally to permit its prompt approval by the Director, if and when a policy decision is made that there is to be an FY57 program along past lines.
2.
With respect to FY56 or prior year funds:
(a)
No new procurement authorizations, project agreements or other obligating documents will be issued or entered into; on the other hand, no procurement authorizations already issued will be suspended, except that when extensions or amendments are requested, each case will be examined on an individual basis by the Regional Office and in consultation with the appropriate technical divisions and the Dept. of State.
(b)
No new PIO’s will be issued by USOM/Israel, letters of commitment will however, be issued by ICA/W against PIO’s dated prior to October 29, 1956. PIO renewals or amendments will be examined on a case by case basis in consultation with the Dept. of State and the appropriate technical divisions.
(c)
Local Currency Programs–No new local currency projects will be approved, and no additional counterpart funds will be released pending further notice.
(d)
Procurement undertaken by the Israel Supply Mission will not be interfered with; GSA has, however, been instructed to suspend further procurement on outstanding PIO/C’s.
(e)
No shipments of goods or equipment will be stopped.
(f)
No letters of commitment will be cancelled.
(g)
No further participants will be called forward from Israel either for training in the U.S. or in third countries. Those trainees already in the U.S. or in third countries will continue their training until completed or until completed or until further notice.
(h)
No new assignments or detail of technicians or employees will be made to USOM/Israel without the concurrence of the Regional Director.
(i)
Contractors—ICA relations with contractors supplying technical services are currently under study. No new contractual obligations are to be entered, including those to whom letters of commitment have been issued, if this can be done without hardships to contractors involved.
(j)
Supplies will continue to be made to voluntary agencies which provide relief to either Arabs in the Gaza strip or persons residing elsewhere, only after clearance with the Dept. of State on a case by case basis.

The above information is intended only as guidelines to appropriate officers of ICA/W and will not be discussed with non-U.S. Government and particularly not with representatives of the Israeli Embassy. In the event that the latter question officers of ICA/W [Page 1238] concerning the present status of the aid program to Israel, it is proposed to tell them in substance that:

As can be expected in view of the present situation, we are reexamining all our aid programs in the Near East. Delays must therefore be expected.

Current plans for the Near East are in suspense. The President has indicated a willingness to provide major support for a permanent solution of the problem, and we want to make certain that our aid contributes toward that solution.3

  1. Source: Washington National Records Center, ICA Director’s File: FRC 61 A 32: Box 309, Israel. Secret. Cleared with Shaw, Bergus, and Oliver L. Troxel. A marginal notation on the source text by Hollister reads: “12/7/56 Noted”.↩
  2. D.A. and T.C. [Footnote in the source text.]↩
  3. Initials at the bottom of the source text appear to be those of FitzGerald.↩