Israel Starts Payments on American Export-import Bank Loan

The Government of Israel today made the first payment on principal on loans totalling $135,000,000 which it received from the United States Export-Import Bank.

The amount of the principal repayment was $1,458,341. At the same time, a semi-annual interest payment of $1,494,722.47 was made. A check for the combined amount, totalling $2,953,063.47, was formally handed by Ambassador Abba Eban to Herbert E. Gaston, chairman of the bank, at the bank’s offices.

Two separate loans were made by the Export-Import Bank to the Government of Israel. The first, in the amount of $100,000,000 was granted in January, 1949, and the second in the amount of $35,000,000, in December, 1950. The loans are to be repaid in 12 years and carry an interest rate of three and one-half per cent. The funds are being utilized by the Israel Government for approved projects in the developments of agriculture, communications, industrial projects, transportation, expansion of the port of Haifa, and telecommunication equipment.

The largest part of these loans, including the entire amount of the second loan. was allocated for agricultural development in connection with the reclamation of desolate land, irrigation, the purchase of machinery and other agricultural equipment. The total amount from these loans devoted to agriculture was $70,000,000.

Testifying before a sub-committee of the House of Representatives on appropriations, Mr. Gaston declared in connection with these loans that Israel was “administering their projects very successfully and very wisely.” He added that the loans were being used “for the creation of a really modern western type of civilization in the most back ward region of the world.”