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

379. Telegram From the Department of State to the Embassy in Lebanon¹

Washington, January 13, 1967, 6 p.m.

118193. 1. On January 12 Foreign Minister Hakim had general discussions on current situation in Near East with Secretary (at lunch) and Acting Assistant Secretary Handley. Without specifying magnitude, he also presented Lebanon’s request for PL–480 and CCC credit assistance to Assistant Secretary Solomon.

2. Mr. Solomon expressed regret GOL had not taken up USG March 1966 offers² which represented considerable effort for USG, given GOL’s strong financial position. He explained USG would be in better position discuss government-to-government CCC deal when more was known about future of $21 million in CCC credits guaranteed by Intra.³

3. Hakim said GOL’s intention was to protect Intra’s creditors to maximum extent possible but that it could not give any creditors consideration more favorable than that given others. He said preliminary auditors report on Intra would be ready in about one month and its substance could be conveyed to Ambassador Porter. He said that it would be two to three months before issuance final report on basis of which informed judgement could be made on whether Intra to be refloated or liquidated. He emphasized GOL request should be considered separately from Intra problem, that GOL had not been party to Intra transactions and in fact at time his last visit in November 1965 had recommended CCC wheat authorization should not all be for account private Lebanese traders. He said he hoped CCC arrangement could be worked out with GOL, especially because Lebanon closest of all Arab states to U.S. policies and ideals.

4. Mr. Solomon said possibilities would be reviewed within USG to see what could be done under circumstances.

5. Memoranda of conversations with Messrs. Handley and Solomon follow.⁴

Rusk

1. Source: National Archives and Records Administration, RG 59, Central Files 1967– 69, POL 7 LEB. Confidential; Priority. Drafted by Gamon and John T Morgan of E/OMA and approved by Davies.
2. The offer, set forth in an aide-memoire with three attachments given to President Helou on March 8, 1966, was made up of (1) long-term credits under Title IV of P.L. 480 for the purchase of up to 40,000 metric tons of wheat valued at $2.6 million annually, (2) Commodity Credit Corporation export credits for purchases of wheat and flour, and (3) up to $20 million in possible long-term loans by the Export-Import Bank. (Ibid., AID (US) 15–11 LEB) Telegram 451 from Beirut, July 18, reported that the Lebanese Government accepted the P.L. 480 proposal but requested a larger program at a lower interest rate and accepted the CCC offer in principle but wanted a waiver of the requirement of a bank guarantee. (Ibid., AID (US) LEB) Telegram 30913 to Beirut, August 18, stated that during the preceding 4 months, the U.S. wheat supply situation had become critical and that only 20,000 metric tons of wheat could be programmed under a Title IV P.L. 480 agreement with Lebanon. (Ibid., AID (US) 15–11 LEB)
3. Documentation relating to the October 1966 Intra Bank failure is ibid., FN 6 LEB.
4. A memorandum of the conversation with Solomon and a memorandum of a January 13 conversation between Hakim and Under Secretary Rostow are ibid., AID (US) LEB. A memorandum of the conversation with Handley is ibid., POL 2 NEAR E.