Foreign Relations of the United States, 1964–1968, Volume XVIII, Arab-Israeli Dispute, 1964–1967

107. Telegram From the Department of State to the Consulate General in Dhahran¹

Washington, November 20, 1964, 5:11 p.m.

105. Chase Manhattan. Since ConGen will be responsible for reporting on forthcoming Bahrain Boycott Conference, and to ensure you informed, following background information transmitted:

Arab Central Boycott Office Damascus announced July 9 blacklisting Chase Manhattan for “violation principles of boycott and for being agent Israeli bonds.” Bank given six months to liquidate affairs in Arab countries. Department’s assistance sought and matter has been receiving continuing attention in highest levels Department to ensure boycott recommendation rescinded in Bahrain Conference. Various Arab ambassadors called in and informed we view matter with great concern and fear consequences in Congress and elsewhere should boycott not be rescinded. Our own ambassadors in Arab countries have made representations to governments to which they accredited taking same line.

Bank has only acted as fiscal agent for Israeli bonds held by investors in U.S., authenticating bonds and, together with other banks, disbursing principal and interest. Concerning Arab charges Chase extended loan to El Al, Chase discounted commercial paper arising out of sale of Boeing jets under Exim guaranties. Chase has endeavored satisfy Arab countries by furnishing affidavits and letters to individual Arab countries and by personal contacts. Chase received no formal notification from Boycott Office and has no communication with Central Boycott Office or boycott offices of any Arab country.

Most Arab countries appear oppose implementation boycott but unable take lead for variety reasons. We recognize lead must come from Cairo and have made representations to UARG. Prime Minister Ali Sabri informed Ambassador Battle November 17² UAR will “do all it could.” In response specific question, PM indicated UARG willing assume leadership in December meeting. Meeting was friendly and Ambassador felt every evidence help forthcoming. However, we still fearful matter may become bogged down in boycott bureaucracy and will continue efforts ensure favorable action in Bahrain.

We approaching British Mission Washington for suggestions help HMG might render Dhahran and Bahrain. Report of this will follow.

In continuing effort ensure Congen kept informed, other Arab posts being requested repeat messages concerning Chase your office.³

Ball

1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, FT 11–2 ISR–ARAB. Confidential; Priority. Drafted by Charles W. McCaskill of NE/E, cleared in draft by Officer in Charge of Arabian Peninsula Affairs George C. Moore, and approved by Davies.
2. Battle reported his discussion of the Chase boycott problem with Ali Sabri in telegram 1744 from Cairo, November 18. (Ibid.)
3. A memorandum from Read to McGeorge Bundy, January 8, 1965, states that the boycott threat to the Chase Manhattan Bank had been withdrawn. Ambassador Kamal informed the Department on January 4 that he had received a cable stating that the Chase boycott had been officially suspended for 6 months but that in fact the case was closed. (Ibid.)