874.2311/1–1653: Telegram

No. 1080
The Secretary of State to the Embassy in Egypt1


1434. Further reference Deptels 1388 and 1412 and re Embtel 1650.2

President in accordance Sect 513(b) Mutual Security Act 1952 has now formally determined Egypt eligible economic assistance in amount 10 million dollars without regard conditions eligibility specified 511(a) Mutual Security Act 1951. By letters to chairman Congressional Committees designated Sect 513(b) President has recorded this determination.

You are consequently authorized inform GOE formally that USG has approved grant assistance in amount 10 million dollars for purchase of wheat with provision that GOE make deposit of counterpart commensurate in value. You should not refer to action under 513(b). Draft program agreement follows probably Monday, covering general nature use counterpart.3

Re publicity, Department believes joint release re proposed assistance by GOE and USG desirable at early date to be mutually agreed. Draft release will follow by cable for your consideration.4 Release will probably not mention use Sect 513(b), and will of [Page 1965] course avoid reference to confidential reasons for action stated in letters from President to Congressional Committees. Sect 513(b) is being used for first time, but this fact should preferably not be made known since it affects other countries.

FYI. Brit have expressed concern to Byroade re economic assistance program prior initiation defense negots. While we cannot of course agree with principle that immed econ assistance be tied in with “package” approach, we wld not wish US offer coincide with or be immed subsequent to unreasonable or extreme Egypt position on Sudan agreement. We therefore leave timing of approach to Naguib on this matter to your discretion knowing you wld take above into account and wld in any event do all possible exert influence on Egyptians in manner to prevent breakdown Sudan negots,5

  1. Repeated to London as telegram 4762, to Baghdad as 724, to Tel Aviv as 691, to Amman as 546, to Beirut as 1288, to Jidda as 433, to Damascus as 417, and to Paris as 3927.
  2. See footnote 2, Document 1078.
  3. Not printed. The Department transmitted a copy of the draft program agreement in telegram 1479. (874.2311/1–2253)
  4. Not printed. The Department sent a copy of the draft press release in telegram 1455. (874.2311/1–1953)
  5. In telegram 3962 from London, Jan. 19, not printed, Ambassador Gifford reported that he had informed the Foreign Office that the President had found Egypt eligible for economic assistance in the amount of $10 million, but that the timing of the approach to Naguib had been left to Caffery’s discretion to obviate the possibility that the offer would coincide or would follow an unreasonable Egyptian position on the Sudan. British officials found this latter point reassuring, and said that Eden hoped that this offer would obviate the necessity of granting $10 million in interim arms assistance. (874.2311/1–1953)

    In light of this telegram from London and telegram 1434, Ambassador Caffery took action, reported in telegram 1687, Jan. 20, not printed, that he had told the Egyptians informally that the wheat grant had only been approved in principle. (874.2311/1–2053)