Acting Secretary of State Denies Marshall Blocked $100,000,000 Loan to Israel
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Acting Secretary of State Denies Marshall Blocked $100,000,000 Loan to Israel

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Acting Secretary of State Robert A. Lovett today emphatically discredited a press report that Secretary of State George C. Marshall had blocked the consideration of a $100,000,000 Export-Import Bank loan to Israel.

Secretary Lovett told a press conference that “there is nothing in it” when asked to “shed some light” on a report in a New York newspaper indicating that the Israeli Government’s application for such a loan had been “shelved” by the Export-Import Bank because of the “violent opposition of Secretary Marshall.” The Secretary is an ex officio member of the board of the Export-Import Bank and there-fore in a position to wield a certain amount of influence in decisions involving loans to foreign countries.

Secretary Lovett said one of the Bank’s four directors had assured him by phone this morning that in talking with the reporter yesterday he had in no way inferred that the State Department was concerned with the Bank’s decision to shelve the loan. He did say, Secretary Lovett stated, that the Bank was holding up consideration of the full credit because of the present disturbed conditions in Palestine.

Meanwhile, it was authoritatively learned that Bank officials had changed from a discussion of the full credit of $100,000,000 to a discussion of the possible financing of specific projects for Israel. Consideration of loans in relation to specific projects is considered standard practice in government banking circles as well as in private banking circles, it was pointed out.

Herbert E. Gaston, vice-chairman of the board of directors of the Bank, told the Jewish Telegraphic Agency later that he felt the report in the New York paper was a “quite badly distorted” version of the conversation concerning the matter which he had with the reporter yesterday by long distance phone from New York. He said bank officials and representatives of the Israeli mission here had some time ago discussed the conversion of the negotiations revolving around an over-all credit to a discussion of individual projects.

“What we actually told them,” Gaston said, “was that when conditions are more stable we can consider a specific project.” He indicated that Bank procedure was to consider only one project at a time. The Bank’s position at this time, he indicated, in no way closes the door to discussions with Israel in the future with regard to possible Export-Import Bank assistance on individual projects.

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