Israel Seeks $39, 000, 000 Loan from U.S. Washington to Sell Food

The Johnson Administration is considering favorable action on Israel’s request, made last October, for United States supply of $70, 000, 000 of wheat and other foods over the next two years, it was reliably reported here today. The last U. S. Israel food pact, under which the United States supplied $76, 000, 000 worth of surplus foods, expired June 30, 1965.

A similar U. S. agreement for provision of surplus foods to Egypt also expired last June 30. Two days ago, however, the U. S. A. and Egypt signed a new pact, calling for the shipment of $56, 000, 000 worth of wheat and other food to the Cairo Government in the next six months. Today, it was expected here that resumption of surplus food shipments to Israel may involve financial terms similar to those extended to Egypt. Under the new U. S. Egyptian pact, Cairo will pay in dollars for about a fourth of the American surplus foods and the rest in local currency.

Israel has also asked Washington for a $39, 000, 000 loan for development projects. That proposal, however, is not involved in the surplus food request.

Sen. Jacob K. Javits, New York Republican, issued a statement here today, calling the American agreement with Egypt “a poor bargain.” He declared that, by getting the $56, 000, 000 worth of U.S. foods, the Egyptian Government will be able “to spend a like amount on war materials purchased from the Soviets and partially financed through the sale of Egyptian cotton to the Russians.” He urged the Administration to end its “contradictory policy in the Middle East which, on the one hand, looks to promote peace in that area and, on the other hand, tends to heat up the arms race.”

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