Reference: Teletype WA-1171 of May 12 (attached).?

You asked me to let you have a memorandum after looking into the question of whether the United States authorities may have been misleading us in what they have told us about their policy on this subject. In particular, you drew attention to Mr. Elliott's⁵⁷ comments that the State Department would not object to the export to Israel of:

(a) 12 90-mm. anti-aircraft guns;

(b) M-4 tank and M-10 gun carrier spare parts;

(c) .50 calibre ammunition in an unspecified quantity.

2. I appreciate that, on the surface, there is an appearance that the quantities involved, especially of the machine gun ammunition, are excessive, and that the United States Government has abandoned its policy as spelled out in the Tripartite Declaration of May 25, 1950, of limiting shipments to those required to maintain Israel's armaments at levels adequate for internal security and self-defence needs. However, after reviewing the file I have concluded that shipments of the armaments listed above would not constitute sufficient evidence to warrant an assumption that the United States authorities have modified their policy without warning us, or that they have misled us.

3. It might be helpful if I were to set out below the relevant developments of the past few months which, I think, will be found to support my foregoing conclusion.

4. No applications to export arms to Israel were refused by this Department for political reasons during 1952. However, in January 1953 the situation on the Jordan-Israel border deteriorated to such an extent that the United Kingdom Government intervened in an attempt to reduce the mounting tension in the area. About that time we were asked by the Canadian Commercial Corporation to approve a shipment of 500 tons of RDX/TNT to Israel, and, later, another order of $110,160 worth of anti-tank ammunition. You approved the second order on February 19. Shortly afterwards, Mr. Eban of the Israeli Embassy in Washington wrote to you and called on our Delegation to the United Nations in New York, seeking support for an order for 12 jet aircraft, 40 anti-aircraft guns, and 40 25-pounder guns (they now have only 100), complete with ammunition for two years. Mr. Eban argued that the recent acquisition of a large number of jet aircraft (120 either purchased or on order) by the Arab States had upset the balance of armaments in the Near East and had made it necessary for Israel to increase its level of "defensive" armaments.

5. We had in the meantime consulted the State Department and the Commonwealth Relations Office about the shipment of 500 tons of RDX/TNT. By teletype WA-465 of February 20? we were told that the State and Defense Departments both disapproved of any shipments to Israel of RDX/TNT over 50 to 100 tons. We were also told that the Defense Department, which generally seems to hold less liberal views than the State Department on these matters, considered that Israel's armed forces were the best equipped and the most effective fighting units in the Middle East. They had, therefore, steadfastly refused to agree to the export of significant amounts of military equipment to Israel. Nevertheless, it was revealed, a review of the United States policy was in progress (this has not yet been concluded) and a possible relaxation was foreshadowed which might result in increased military and technical assistance to Israel.

6. The views of the Commonwealth Relations Office on the proposed shipment of RDX/TNT were similar to those of the United States authorities. From telegram No. 372 of February 25? we learned that, in their opinion, the Arab States would look upon a shipment of 500 tons as being a threat to their security. As it happened, the order was reduced to 200 tons, but even so the United States and United Kingdom authorities objected to it.

7. In a memorandum dated March 10? the Acting Minister was asked to consider that order, as well as one for $950,000 worth of 25-pounder ammunition. On my recommendation he agreed to the export of the RDX/TNT, partly in order to avoid cancellation charges totalling $50,000 having to be absorbed by the CIL. A decision on the 25-pounder ammunition was deferred pending clarification of the United States Government's policy.

8. Upon your return from New York you were informed of what had happened by a memorandum dated March 21.? You also agreed to defer a decision on about $36,000 worth of propellant powder, but you indicated that the matter should be reviewed when the United States had clarified its policy.

9. We asked the State Department, accordingly, what their views were concerning the two orders on which decisions had been deferred. In their interim reply (reported in WA-719 of March 21?) they emphasized what they had already told our Embassy previously, namely, that the State and Defense Departments were only approving shipments of arms necessary to maintain the existing level of Israel's defensive armament. Earlier in March, however, Israel had approached the United States Government formally with a view to purchasing, on a reimburseable basis, a long list of armaments and ammunition. Of all those, the only ones considered by the State Department were maintenance parts for military vehicles (M-4 tanks and M-10 gun carriers already owned by the Israeli Government) and a number of 90 mm. anti-aircraft guns of limited trajectory, all under the so-called "existing levels" principle.

10. In our reply, EX-517 of March 25,? we said we were somewhat concerned. at the apparent fluidity of United States policy, and pointed out that if it were unpredictable or indefinite, our difficulties would be increased. We asked for an assurance that, if the United States policy were to be changed, we would be advised promptly.

11. On March 27 our Embassy again raised these matters with the State Department, where the term "apparent fluidity" was contested. It was felt by the State Department officials that their Government's policy had been firm and consistent for the past 2 years and, moreover, that they had applied a much more restrictive interpretation to the term "defensive levels" than had the United Kingdom. We were given the assurance we sought, that we would receive early warning of any change in United States policy that might be contemplated.

12. On that basis matters have since rested. On May 4 we wrote to the Canadian Commercial Corporation saying we were unable to estimate when this Department would be in a position to agree to the submission of quotations on 25-pounder ammunition (the $950,000 order).

13. While my review led me to conclude that we have not been misled by the United States authorities, I should mention that Mr. Dulles will undoubtedly wish to re-examine his Department's policy upon returning from his trip to the Middle East. Moreover, it is possible that if conditions on the frontier between Israel and Jordan improve, the United States Government may review its present policy in the light of any progress that may be made towards a solution of the political difficulties in the area and the establishment of a Middle Eastern Defence Organization.

14. There is one further point which I should like to bring out. It is that it would have been difficult: for the United States authorities to have misled us about their past policy in any case, because ever since early 1950 we have been freely exchanging with them, on a bi-monthly basis, information on all exports of arms to the Middle East. You may be interested to see the latest American list of arms shipments to that area. It was sent to us from the Embassy in Washington under cover of their letter No. 1003 of May 14. This information is normally circulated to the Chairman, Chiefs of Staff, the Joint Intelligence Bureau, the Department of Trade and Commerce, the Permanent Delegation in New York, and to Canada House.⁵⁸

C.S.A. R[ITCHIE]