Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1955, Volume XIV

459. Telegram From the Department of State to the Embassy in France¹

Washington,December 15, 1955—4:58 p.m.

Tedul 3. Re Aswan Dam. At Adams’ suggestion I forwarded copy of my Tedul 2² of this morning to President in Gettysburg. He called me by phone a few minutes ago, making the following points.

1. We cannot violate our basic procedures and customs of handling US Government funds by eliminating competition for the Aswan Dam contract, such as by awarding it to the consortium on a “negotiated” basis.

2. While we would be glad to see a US contractor included in the consortium, as proposed in Eden’s message to him of November 27,³ that does not in itself satisfy the requirement of competitive procedures.

3. He proposed that we draft a courteous but firm note from himself to Eden along the lines of (1) and (2) above so that there would be no misunderstanding of our position in the matter.⁴

I outlined to the President the normal procedures followed by the IBRD in calling for “invitational bids” from a few responsible contractors, which in this case would of course include the consortium, whether or not a US contractor was added to their partnership. The President expected that some US companies would have an opportunity to bid, although it was quite possible that the consortium, due to its familiarization with the project, would come in with the best bid. We could have no objection if this proved the case since competitive procedures would have been complied with.

He said he would appreciate your advice before actually despatching such a note to Eden in order to head off further opposition by the UK.⁵ Personally I think this action is desirable. While Makins gives every appearance of being fully cognizant of the problem, he is of course following Eden’s orders. As an alternative it has been suggested that if we were to advise Makins of the President’s position, this might do the trick, leaving the President’s message available if necessary.

Hoover

1. Source: Department of State, Central Files, 874.2614/12–1555. Secret; Eyes Only. Drafted and signed by Hoover.
2. Supra.
3. Document 429.
4. Hoover prepared the draft of a message from Eisenhower to Eden which encompassed the President’s recommendations and transmitted it to Dulles. (Tedul 4 to Paris, December 15; Department of State, Central Files, 874.2614/12–1555)
5. Dulles subsequently advised against having the President send the proposed message to Eden, since it would “bring current conduct of foreign affairs into direct Eden–Eisenhower channel. This would throw an intolerable burden upon the President.” Moreover,Dulles indicated “that UK assume that there would have to be competitive bidding on invitation.” (Dulte 2 from Paris, December 16,ibid., Conference Files: Lot 60 D 627,CF 639)