Office of the Historian

874.00 TA/11–1253

No. 1243
Memorandum by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Byroade) to the Secretary of State1

secret
Washington, November 12, 1953.

Subject:

  • Economic Aid to Egypt
[Page 2161]

Discussion:

Attached are three messages on the above subject which should be read in order listed:

1.
Deptel 24732 posing the problem on timing of economic aid to Egypt and requesting views of Caffery and Aldrich. (Tab A)
2.
Embassy Cairo’s 543 recommending that such aid be extended. (Tab B)
3.
Embassy London’s 2030 expressing no definite opinion on extension of aid, but urging discussion with the UK in advance. (Tab C)

Recommendations:

1.
That you or the Under Secretary call in the British Ambassador and make the following points:
a.
We plan to initiate discussions with Egypt in the immediate future on economic aid.
b.
This action is needed to strengthen the U.S. position (and thereby the British) in Cairo. It will enable us to assist more effectively in overcoming the remaining obstacles to a base agreement. It is also necessary to offset the effect in the Near East of the release of $26 million to Israel.
c.
The amount involved has not been finally determined but will range from $20 to $27.5 million.
d.
We plan to make a public announcement at an appropriate time.
e.
There has been no change in our intention to withhold military aid pending the outcome of negotiations.
f.
There is no change in our views on the issues still outstanding in the Suez Base talks.
g.
We will be glad to consider any comments the UK may wish to make, but would appreciate receiving them as soon as possible since we feel this matter is very urgent.
2.
That you authorize me to seek agreement from FOA to allot $27.5 million for Egypt. This is the amount recommended by Ambassador Caffery. To counter in the Arab states the release to Israel, the amount allotted to Egypt should be greater than $26 million. Previously tentative agreement was reached between State and FOA that Egypt should receive $20 million from FY‘54 special economic aid funds, with the possibility that an additional $5 million would be available provided suitable projects can be developed.
3.
That at the appropriate time we work out with the Egyptians a public announcement to be released simultaneously here and in Cairo. In accordance with our desire to relate economic aid to specific projects we would endeavor to use such phraseology as “substantial amount” to describe the amount of aid planned, but if [Page 2162] pressed by the Egyptians would mention a figure of up to $27.5 million dependent upon the presentation of satisfactory projects.

Concurrences:

EUR feels strongly that the British should be consulted about the matter rather than merely informed that we have taken the decision to proceed forthwith. (Memorandum from Mr. Merchant attached hereto.) (Tab D)3

  1. This memorandum was drafted by Burdett.↩
  2. Printed as telegram 519 to Cairo, Document 1240.↩
  3. Infra.↩