Lr re anbie oo “a — ee iy & ao 2 : Israel. This proposal, in point of fact, had been studied for a long time in the State Department. Secretary Dulles then pointed out that the Israelis have recently applied to the Export-Import Bank fer a large loan designed for developmental purposes in Isreel. The Bank has advised the State Department that the Israeli loan request is a borderline case, and the Bank will be prepared to grant the loan if the State Department says that such a course of action is advisable. On the other hand, Secretary Dulles had told Ambassador Eban that the State Department thinks it unwise to help Israel to develop additional lands and resources if the newlyavailable land is to be devoted to helping new immigrants into Israel rather than helping refugees already there. If the Israelis would agree that such a loan would be used to assist the existing population, it would probably be in the interests of the United States to grant the loan. Ambassador Eban has stated that he would talk to Prime Minister Ben-Gurion about our views on this loan, but we expect a negative response from Ben-Gurion. In short, ‘the State Department would like to make this loan conditional on ‘the adoption by Israel of a new over-all immigration policy with perhaps some help to the Arab refugees. On the other hand, we doubt very much whether our hopes are a real possibility in an election year. In response to Secretary Dulles’ expression of pessimisn, the Vice President pointed out that if the Administration made a real issue of this matter, it would win in Congress in the long run. The Vice President expressed himself as opposed to granting the Export-Import Bank loan to Israel unless it were part and parcel of a new over-all immigration policy by Israel. Admiral Strauss asked if he might comment. He stated at the outset that he was not a Zionist and, on the contrary, he had opposed the creation of the state of Israel. He still made no contributions to the support of Israel, his contributions being confined to assisting the Arab refugees in Israel. Nevertheless, he believed that perhaps the Secretary of State wes under the misappre- hension that all Jews in the world were strongly behind the Israeli state. This was not so. The creation of Israel had managed to save the lives of two or three million Jews. Mr. Allen's point--that Jews desiring to emigrate to Israel came from countries where Jews were not persecuted for their religion--was not gqnite accurate. It overlooked the fact that in countries like Moroceo and Tunisia economic persecution of Jews stemmed directly from the fact that they were Jews. Thus, if we try to limit inmigration into Israel and to impede philanthropy in support of this immigration, we would not only lose the support of all Zionists, but we would also lose the broad support of all philanthropic people as well, unless we could find alternate havens of refuge for persecuted Jews. At the moment, Admiral Strauss said he could see no such alternate havens. ees f COE ‘ ind. yt ' "TOP SECRET

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