Foreign Relations of the United States, 1952–1954, The Near and Middle East, Volume IX, Part 2

774.5 MSP/8–3054: Telegram

No. 1359
The Ambassador in Egypt (Caffery) to the Department of State

secret
priority

Cairo, August 30, 1954—2 p.m.

271. In light Egyptian rejection military assistance and limitations imposed by Section 503 (b) (1) Mutual Security Act 1954,¹ I consider utmost importance US attitude re economic assistance be framed produce maximum political impact here as well as maintain and accelerate latent pro-West orientation present Egyptian Government.

Department doubtless appreciates that rejection military aid will inevitably be interpreted in Egypt in manner unfavorable to US. Furthermore, continued US efforts to encourage Iraqi participation area defense arrangements outside Arab League framework will be interpreted as challenge to Egyptian leadership in area.² Grant of substantial development assistance would, however, appreciably mitigate these adverse reactions.

Consequently, I request authority inform Egyptian Government in course forthcoming economic negotiations US prepared provide up to 40 million dollars during FY 55 provided adequately justified projects submitted.

Caffery

1. The Mutual Security Act of 1954 was signed into law as Public Law 665 on Aug. 26, 1954. (68 Stat. 832)
2. For documentation regarding U.S. efforts to encourage Iraq’s participation in area defense arrangements, see Documents 1376 ff.