World Bank to Decide Today on $56,500,000 Loan to Egypt; Protests Mount

The directors of the International Bank for Reconstruction and Development–known as the World Bank–are meeting here tomorrow to decide on the question of the loan of $56,500,000 to the United Arab Republic to improve the Suez Canal. The belief exists that they intend to make the loan, despite the mounting number of appeals to reject it unless free passage through the Suez Canal is guaranteed to all nations, including Israel.

Appeals objecting to granting the loan were directed this week-end by a number of members of both Houses of Congress to the president of the World Bank, Eugene R. Black and to Secretary of State Christian Herter, as well as to Secretary of the Treasury Clinton Anderson, However, the State Department’s reply was that the World Bank was an “economic” rather than a “political” medium.

Senator Kenneth B. Keating, New York Republican, made a last minute appeal to the Administration to oppose the $56,500,000 loan to Egypt. He pointed out that it would be improper for the United States to approve the loan as long as Israeli shipping was subjected to discrimination at the Suez Canal. He asked the U. S. Government to advise the World Bank that because Egypt “flouts” United Nations resolutions by barring Israeli commerce from the Suez Canal, the loan application should be rejected.

(An appeal to the World Bank to turn down Egypt’s application for a loan unless free passage of Israeli ships and cargoes through the Suez Canal are assured was voiced in New York tonight also by Senator Jacob K. Javits, New York Republican, addressing a conference of fraternal organizations of the Jewish National Fund. “The Suez Canal improvement,” he said, “will do the Free World’s cause little good as long as the Canal is blockaded to Israeli shipping.”

Representative Seymour Halpern, in a last minute appeal to Secretary of State Herter and Treasury Secretary Anderson “not to surrender our moral position” urged that Senator Anderson, U.S. executive director of the World Bank, vote against the pending $56,500,000 loan. He wrote Secretary Herter that a U.S. vote for the loan at the World Bank, would be a “complete reversal” of the U.S. position on Suez transit as enunciated by President Eisenhower in 1957.

Representative Victor L. Anfuso, New York Democrat, described Egypt’s anti-Israel blockade of the Suez Canal as a “war-like action” and called on President Black to reject the loan application. Rep. Anfuso told Mr. Black that if the bank grants the loan it will be interpreted as “condoning Nasser’s aggressive action against Israel and approval of his policy of continued tension in the Middle East.”

In a letter to Rep. Leonard Farbstein, New York Democrat, the State Department spoke on the question of the bank making the loan to the United Arab Republic despite Nasser’s restrictions against Israeli commerce in the canal, John S. Hoghland, 2nd, Acting Assistant Secretary of State for Congressional Relations, signed the Department’s communication.

STATE DEPARTMENT REPLIES TO PROTESTS; STATES VIEW ON LOAN

Representative Farbstein, a member of the House Foreign Affairs Committee, was told he could be certain that the position of the U. S. representative to the World Bank “will be based upon careful consideration of all pertinent political and economic factors, including the question of freedom of transit through the canal.” But the Department then went on to make clear that the U.S. representative would be governed by Secretary of StateHerter’s December 10 press statement in which “he pointed out that the bank was essentially an economic medium and not a political one, and that the less its facilities were employed to apply diplomatic pressures the greater its usefulness would be.”

The State Department reassured Rep. Farbstein that “we continue to support actively the principle of freedom of transit through the Suez Canal for all countries.” The Department said “the continued afforts of UN Secretary General Hammarskjold to reach a solution of the transit problem are receiving our firm support. We continue to hope that these various efforts may lead to an early and satisfactory solution.” Rep. Farbstein had questioned the propriety of American support of the UAR loan application at a time when the Suez Canal bars Israel cargoes and shipping.

National Commander Bernard Abrams of the Jewish War Veterans today appealed by cablegram to President Eisenhower in a last minute bid to use his “good offices to prohibit the affront to morality and justice” in the grant of the World Bank Suez loan to the United Arab Republic.

The President was reminded that he pledged firm action when he spoke in 1957 on what American policy would be if Egypt barred Israeli commerce from the Suez Canal. He was told that an American vote favoring Egypt at the World Bank “will be interpreted as a complete reversal of the President’s position and will be a direct blow to the moral position assumed by our Government.”

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