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Decrease in U.S. Aid to Israel Indicated; Increase to Arabs Planned

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American economic assistance to Israel will this year be decreased while aid to the Arab countries will be increased, it was learned here today following the publication yesterday of previously-secret testimony given high State Department officials at hearings held by the House Foreign Affairs Committee on the Mutual Security Program.

The exact figures were withheld for security reasons by the two officials–Arthur Z. Gardiner, political and economic adviser in the State Department’s Bureau of Near Eastern Affairs, and Assistant Secretary of State Henry A. Byroade–told the committee that American aid to Israel has exceeded that previously given the Arab states because the Israelis needed urgent relief supplies while developing projects in the Arab world were not yet ready.

Asked by a member of the committee whether the Arabs have “due cause” to fear Israel, Mr. Gardiner said: “I think that if you listen to certain influential Israeli leaders, you have every cause for alarm.” Both he and Mr. Byroade strongly advocated the United States sending arms to Iraq in order to make the Iraq Army a “stabilizing force” in the Middle East.

Mr. Gardiner told the committee that the effect of United States arms shipments to Iraq “and the furnishing of the advice that goes with them” could be similar in the long run to the stabilizing effect of British officers in the Arab Legion of Jordan. Mr. Byroade said that key men of the State Department, just returned from Iraq, had found there “a new feeling of friendship toward the United States.”

ISRAEL’S INCOME FROM UJA, BONDS, GERMAN REPARATIONS CITED

Mr. Gardiner reported that the total United States contributions to the Arab states; including contributions to the Arab refugee program through the United Nations, amounted to $212,000,000. On the Israeli side, he said, the record was as follows:

“The technical assistance figure is $6,000,000. Grant-economic aid totals $209,000,000, and the credit from the Export-Import Bank totaled $135,000,000. That gives a total of governmental assistance, direct, of $360,000,000. Now, to that one would add, perhaps, about $120,000,000 of bonds subscribed by the local community, Israel Independence bonds, and on top of that, the contribution through the United Jewish Appeal, which, I think, a fair average would be, say $50,000,000 a year, for the six years, $300,000,000.”

The State Department official noted that such contributions were deductible for purposes of income tax. In addition, he said Israel had received about $100,000,000 out of $714,000,000 in reparations Germany has agreed to pay her.

Mr. Byroade blamed Israel for the incidents at Kibya and Nahhalin, saying these evoked Arab hostility not only toward Israel but also against the United States because America ammunition was found. He accused Israel Government spokesmen of exaggeration regarding American arms arrangements with Iraq. The Jordan Arab Legion was lauded by Mr. Byroade as a “factor of stability” in the region.

Mr. Gardiner told the committee that the effect of United States arms shipments to Iraq “and the furnishing of the advice that goes with them” could be similar in the long run to the stabilizing effect of British officers in the Arab Legion of Jordan. Mr. Byroade said that key men of the State Department, just returned from Iraq, had found there “a new feeling of friendship toward the United States.”

U. S. WILL NOT SUPPORT ISRAEL INDEFINITELY, OFFICIAL SAYS

“I wouldn’t say that we must look forward indefinitely to support for Israel from United States Government funds,” he said. “With their reparations now being received from Germany, if they keep going at the present rate, we foresee a decrease in assistance needed from this country every year, and we can see pretty well the end of this situation over a period of years.”

German reparations, build-up of exports, and solution of Israel’s debt-refunding position will enable Israel to put more money into development, Mr. Byroade said. “We regard those as favorable signs and we hope we can keep reducing the level of aid to Israel,” he stated.

Mr. Gardiner outlined the following steps the State Department “would like” to see Israel take: 1. Compensate the Arab refugees; 2. Unfreeze still further the frozen bank accounts of the Arabs; 3. Reach terms with the United Nations regarding the division of the waters of the Jordan River; 4. Consider still further the possibilities of repatriation of the Arab refugees; 5. Adopt a more conciliatory attitude toward the Arabs, and 6. Reassure the Arabs that they (Israelis) have no further intentions to expand the State of Israel.

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