Foreign Relations of the United States, 1949, The Near East, South Asia, and Africa, Volume VI

501.BB Palestine(E)/9–849

Memorandum of Conversation, by Mr. Edward B. McEnerney of the Division of Near Eastern Affairs

confidential

[Washington,] September 8, 1949.

Subject: Economic Survey Mission, Licensing of Munitions Exports for Near East.

Participants:	Mr. El Kouny, First Secretary of the Egyptian Embassy
	Mrs. Hope, NE
	Mr. Clark, NE
	Mr. McEnerney, NE

[Here follows discussion of various aspects of the Economic Survey Mission.]

Mr. El Kouny said he wondered whether the group would take cognizance of political considerations as well as economic considerations in the course of its work. He said it had all along been the understanding of the Egyptian government that the group would take political matters within its purview. Mrs. Hope said it was not expected that the group would consider political matters which fell under the authority of the conciliation commission itself. She explained that the Mission would confine itself solely to economic questions and that it was in no sense a policy-making organ. It was expected that Mr. Clapp’s recommendations would be based solely upon his technical observations.

Mr. El Kouny said he was interested in learning whether or not there had been any change in the United States attitude toward the shipment of munitions to the Near East. Mr. Clark said that a revision of our policy had been expressed in Senator Austin’s comments on August 4¹ before the Security Council. As a result of this change, the Egyptian government might now submit to the United States Government any requests which it might desire to make for export licenses on munitions. Such requests would be given consideration in accordance with their individual merits. Availability of military equipment would depend in part upon the needs of the Military Aid Program countries and the conditions of supply prevailing in the United States.

Mr. Clark inquired whether the Egyptian government has taken any further steps to relax the controls which it had imposed on shipping through the Suez Canal and Mr. El Kouny said that all of these controls had been relaxed. Mr. Clark said that he was very happy to know this inasmuch as the United States Government had made its views known to the Egyptian government that the restrictions which had been imposed on shipping were not warranted or in harmony with the Suez Canal convention. Mr. El Kouny said that he felt Egypt had been justified and that they had done what any government in the same position at that time would have done. He felt that the terms of the Canal Convention could not require Egypt to permit the passage through Egyptian waters of munitions destined for an enemy nation. He said that if Egypt were ever again confronted with the same situation she would take the same action. Mr. Clark said that it was encouraging to know that the controls had been removed.

Mrs. Hope showed Mr. El Kouny a copy of Senator Austin’s speech of August 4. He said he was confused by that portion of the speech which suggested that the United States licensing policy would be governed by a desire to avoid the development of an arms race in the Near East. He said this seemed to place special limitations upon the granting of licenses to Near Eastern countries. Mrs. Hope said that the United States position, as set forth by Senator Austin, was based on the assumption that the Near Eastern armistice would hold, and on a desire to pursue a course which would be consistent with the maintenance of peace in the Near East. Mr. El Kouny said that Egypt would not be applying to the United States for the types of equipment required for internal security. Material of that sort could be procured from other markets, but Egypt would wish to buy from the United States matériel with which to maintain the security of the Egyptian nation in its international relations. Mr. Clark said that questions of the sort which Mr. El Kouny had raised could only be settled through the actual operation of the United States licensing procedure when applications were received for export of arms to Near Eastern countries. Mrs. Hope added that she felt that the whole picture would be clarified in Mr. El Kouny’s mind when he had had an opportunity to read Senator Austin’s statement in full.

Mr. El Kouny thanked Mrs. Hope and Mr. Clark for the clarification which they had given him on both the embargo question and the question of the Economic Survey Mission’s work, and he reiterated the strong desire of the Egyptian government to cooperate to the fullest extent with Mr. Clapp’s group.²

1. See editorial note, p. 1283.
2. The Department sent a copy of this memorandum of conversation to Cairo on October 5. Ambassador Caffery informed the Department, on November 1, that “It is trusted that El Kouny Bey did not create the impression that controls had been removed as they have not. They have, to a degree, been relaxed and there are far fewer cases arising than at any time since their imposition. Manifests are still regularly scrutinized and the fact that cargo seizures have been practically nil for the past month merely indicates that no offensive cargo has been discovered on the manifests. Added precautions of shippers and steamship companies alike are probably responsible for this.

   “It is hoped that no intimation be given American shippers or shipping companies that the war-time shipping regulations imposed by the Egyptians have been removed.” (airgram 1162 from Cairo, 501.BB Palestine(E)/11–149)