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14 July 1952




Held at Headquarters, New York,
on Tuesday, 1 July 1952, at 3 p.m.

Review of business standing before the Commission
Consideration of Aide-memoire from the Government of Israel on the question of block accounts



Members:Mr. ORDONNEAUFrance
Mr. BARCOUnited States of America
Secretariat:Mr. CHAIActing Principal Secretary


The CHAIRMAN reminded the Commission that it would be necessary to adopt some system in connexion with the rotation of the chairmanship of the Commission. He considered that it would be unnecessary in such a small body to have any rules of procedure. Recalling the communication of the Chairman of the Commission of 28 April 1952 to the interested Governments, he stated that two replies bad been received from Yemen and from Jordan.

Mr. CHAI (Acting Principal Secretary) informed the members of the Commission that he had recently received a telephone call from the deputy representative of Israel, who had stated that he had been instructed by his Government to draw attention to the use of the word “Palestine” in the seventh paragraph of the Commission’s last progress report. Mr. Lourie had regretted the use of the term, stating that there was no such place on the map. Mr. Chai had taken note of the matter and had undertaken to inform the Commission of it.

Mr. BARCO (United States of America) thought that the question of chairmanship might be left until the following meeting in view of possible changes in the representation on the Commission. He thought that his delegation would be prepared to agree to any practical arrangement acceptable to the other members of the Commission. The point brought up by the representative of Israel in connexion with the use of the word “Palestine” was a minor point which could he considered disposed of since it had been brought to the attention of the Commission.

The CHAIRMAN agreed that the last point was disposed having the Commission take note of it. He pointed out that the Commission must reserve its right to use the term in the future since there were areas of Palestine which did not come within the territory occupied by Israel.

The Commission took note of the communication from the representative Israel and agreed that no further action was required besides a notification of the Israel representative by the Acting Principal Secretary that the Commission had taken note of his representation. It also took note of a list of non-governmental communications circulated by the Secretariat.


The CHAIRMAN invited the members of the Commission to state their views the scope of the aide-memoire from the Government of Israel and on the question of the future action to be taken by the Commission in relation to it. Speaking as representative of Turkey, he considered it important that the Commission determine what it wanted to do in the near future. Though the amounts involved were not very great, and clarifications by the Government of Israel would been necessary, the aide-memoire represented a step forward, and results on that question during the summer might open the way for more fruitful action or other points later on. He thought that it would first be desirable to secure in the necessary clarifications from the representative of Israel.

Mr. ORDONNEAU (France) welcomed the aide-memoire which constituted one of the first successful results of the Commission’s work. Expressing gratitude for Mr. Palmer’s efforts, he stated that no opportunity to exploit the possibilities offered should be lost. Mr. Palmer’s return might be the governing factor for determining the date on which further clarifications could he secured from Israel.

Mr. BARCO (United States of America) also agreed that the next stage was to secure clarifications from Israel. He expected Mr. Palmer to return to New York on or about the 8th of July. The Commission might then wish to discuss the procedure to be followed, though the representative of Israel could be informed that the Commission wished to meet with him during the following week or the week after that. In the light of the present circumstances and past experience in dealing with the matter of blocked accounts, he thought it important for the Commission to know what its basic assumptions were in dealing with the Israel delegation. He thought that the Government of Israel by its aide-memoire had agreed to release the blocked accounts unconditionally. On the basis of that assumption, the Commission would be justified in assuming that the only questions remaining were those of time, amounts, methods of turning the accounts over to the owners and the medium of exchange. On the last point the Commission could also assume that the medium would be the Palestine pound or its equivalent. His Government felt it important that the Commission should have in mind a definite method of disbursement prior to discussing the question with the Israel delegation, without precluding the adoption of any better method that Israel might propose.

He thought the best method would be that of simple banking operation involving an agreement between the Israel Treasury and the holding banks that would enable transfers to the owners of the accounts by established banking procedures. Anything more complicated would involve charges on the accounts which would diminish the good effect of the release.

The CHAIRMAN thought that it was agreed the Commission had taken note that Israel agreed to unconditional release of the blocked accounts in the sense that it did not expect any quid pro quo for that release. Dealing with the points enumerated by the United States representative, he suggested that the Commission might first take up the question of amounts. He recalled that the Secretariat had said that there was no big difference between the views of the two sides or the entire amounts involved in the blocked accounts. The question of time arose in two ways: first the question of when the accounts would be released, and second a passage in the aide-memoire hinting that payment would be made on installment basis. He thought the Commission would prefer to have the transfer completed as soon as possible. As regards the medium of exchange, one or two passages in the aide-memoire implied that Israel expected to make payment in some form of foreign exchange. The question then was to determine what currency would be involved. On the matter of method, the valuable explanation in the Secretariat’s memorandum on the subject indicated that banks operating both in Arab countries and in Israel would enable the transfer to take place as a normal banking operation with the permission of the Treasury of Israel.

Mr. ORDONNEAU (France) agreed with the Chairman and Mr. Barco. The simplest procedure was to have parallel unblocking of accounts, which presumably were mostly in Palestinian currency. The question therefore was whether Israel would authorize transfer of the accounts to the territories involved.

Mr. BARCO (United States of America) said that it was clear that Israel was not prepared to and could not transfer all the accounts at once, and that that would have to take place on an installment basis. The Commission must ascertain, however, that the total amount of all accounts would be unblocked. He assumed that the Commission agreed that all accounts should be unblocked though it would not necessarily be possible to make them all available immediately. It would, therefore want to find out what proportion of the total amount could be made available within a certain time.

Mr. ORDONNEAU (France) agreed that the Commission wanted to obtain the unblocking of the whole amount. There was no problem for Israel in that connexion, though there would be some difficulty concerting the transfer to other countries. In that respect, the Commission would have to try to obtain the best solution possible, which would depend more on the economic situation than on the good will of the Government of Israel.

The CHAIRMAN thought that the operation could take place as a whole or could consist of two distinct stages. In the first case, the Government of Israel might state that a certain amount was released and in the statement informing the banks of the release, the latter could be told that they are free to transfer that amount. Alternatively, all the accounts could be released as a first stage with the second stage being publication of the installment basis on which the released funds would be transferred.

Mr. BARCO (United States of America) saw definite psychological advantages in the second alternative mentioned by the Chairman. Moreover, that solution had certain binding aspects from the legal point of view. The working out of the percentage to be transferred in each case would then be of importance, and the Commission might inquire whether United Nations experts could be made available to assist in determining the amounts to be transferred from each account if the initial installment was on a percentage basis.

Mr. ORDONNEAU (France) agreed that the second alternative would have considerable psychological effect, as the blocked accounts would then be placed in a situation similar to that of many countries, and not true of Arab countries alone.

Mr. LADAS (Secretariat) noted that most of the accounts were in the form of Palestine pounds which were originally blocked by the United Kingdom in 1948. The problem was to transfer the Palestine pounds into the currencies of the countries where the holders of the accounts happened to be.

The CHAIRMAN said that the practical result to be achieved was to get the Palestine pounds to the refugees in usable form. The Palestine pounds were merely the point of departure, since the accounts had been deposited in that currency.

Mr. BARCO (United States of America) said that as he understood the matter, the Government of Israel had used the money backing the blocked accounts, which at present had nothing behind them, and was prepared to pay the equivalent of what it had used. It obviously could not do that all at once.

The CHAIRMAN concluded that the first step would be to clarify the intentions of the Government of Israel. The Commission would then wish to meet again to consider the matter. The question at issue at present was the nature, rather than the solution, of the problem.

Mr. BARCO (United States of America) agreed that that was the procedure which would have to be followed. However, he wished to emphasize that the matter should be approached in a way which would indicate the Commission’s assumption that the Government of Israel had committed itself to certain things and that only the machinery for accomplishing them remained to be decided. He suggested that the Chairman might say on behalf of the Commission that the latter had received the aide-memoire with great interest and pleasure, that it assumed that Israel had committed itself to the unblocking of the accounts and was interested in how the Government of Israel proposed to carry out that operation.

The CHAIRMAN agreed with the views expressed by Mr. Barco.

Following discussion on the action to be taken on a letter dated 27 June from the Syrian delegation, the Commission agreed that the reply should take the form of a simple acknowledgment stating that the communication had been circulated to the members of the Commission. It also took note or a letter dated 24 June addressed to the Secretary-General of the United Nations from the Executive Committee of the General Palestinian Refugee Congress in Lebanon,

The meeting rose at 4:30 p.m.

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