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State Dept, Notifies Israel of U.S. Decision to Cut Economic Aid

The State Department has notified the Israel Government that the United States has decided to cut short the amount of economic aid Israel was led to expect during the current fiscal year. This was learned today and confirmed from official sources.

Israel was told it could count on aid this year amounting to a figure somewhere between $55,000,000 and $70,000,000. To date $52,000,000 has been granted and Israel has been informed that this is all she will get. Meanwhile, Israel was advised to expect less assistance in the new fiscal year beginning July 1.

An Israel request for $15,000,000 from current funds to buy urgently needed supplies was rejected, and Israel was informed that she has used up all funds that she can expect during the current fiscal year. Harold E. Stassen, Foreign Operation Administrator, acting on a State Department decision, informed Ambassador Abba Eban of this by letter.

Mr. Stassen said less economic help is forthcoming for Israel and that it should plan accordingly. It was noted by State Department sources that the Israel Government informed the Knesset on June 14 that $74,000,000 was expected from the United States during the current fiscal period. Mentioning this specifically, Mr. Stassen said no such sum could be expected by Israel in view of Administration plans to increase aid to the Arab states.

The Stassen letter was in answer to Israel’s request for the $15,000,000 Israel had reason to expect it was to receive as the remainder of undrawn aid. Israel was told that $52,500,000 has been granted and this is adequate in view of improvements the United States feels Israel has achieved in its economic life.

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