Office of the Historian

202. Memorandum From Robert W. Komer of the National Security Council Staff to President Johnson1

Washington, April 7, 1965.

The UAR’s request is for a CCC credit sale of 200,000 tons of corn, which would cost it an estimated $10–12 million depending on market prices.

1.
This isn’t aid. It is a private dollar sale whereby a private US exporter can buy from CCC for resale to the UAR after he gets a US private bank guarantee (just in case the UAR doesn’t pay). The interest rate is 4–5% plus 1–1/2% for the guarantee.
2.
The terms are near commercial. In fact, we allow only a year to pay on corn, in order to permit US exporters to compete with European [Page 432] sellers. France just sold the UAR wheat on 3-year terms. Agriculture regards CCC sales as meeting normal marketing requirements; i.e. as commercial sales not aid.
3.
Nor is this much of a carrot for Nasser. We made two CCC credit offers last year which the UAR never took up. So one problem is that such a gesture might be too piddling to accomplish much.
4.
There is no Agriculture press release, though Agriculture doesn’t hide these matters and they could be picked up. If there is a query we could put out the above legitimate story, which our AID and State people think ought to carry weight with the Congress. In fact Macomber tried the CCC gambit on L. H. Fountain yesterday and got a favorable reaction.

We are living on pins and needles lest Nasser blow the whistle on US arms sales to Jordan and Israel. Even a minor gesture like the above could do a lot to keep alive Nasser’s hope that he can still do business with the US. Once he decides he can’t, we’re in for a blow. The real test will come over the remaining $37 million in Title I PL 480.

R. W. Komer

Note the attached.2 If the UAR will keep quiet about US arms sales to Israel and Jordan, it is worth ten CCC sales to us. And it’s much more important than the Congo, where we’re winning despite the UAR.3

RWK
  1. Source: Johnson Library, National Security File, Country File, United Arab Republic, Vol. IV. Secret. A note in Johnson’s handwriting reads as follows: “BOB—See that MacArthur, O’Brien, Ball & Company check with all appropriate chr [chairmen] & leaders before we move. Then give me results at once. L.”↩
  2. Telegram 3518 from Cairo, April 7, attached, reported a conversation between Presidency adviser Hassan Sabri Al-Khouli and an Embassy officer. Al-Khouli stated emotionally, “Don’t you realize that the Palestine question is more important to us than Vietnam, Yemen and Congo all put together is to you? You [are] having your way in Palestine. You have pressured us to accept your selling arms to Israel.” He also declared: “Now it looks as though you want to use your food to pressure us on the Congo in addition to Palestine.” Battle noted that this was the clearest indication yet of UAR acquiescence in U.S. arms sales to Israel.↩
  3. Komer added this paragraph by hand.↩