146. Telegram From the Embassy in Egypt to the Department of State 1
1724. Reference Embtels 1665 and 1666, February 23.2 Trevelyan has had further talk with Gamal Salem regarding revision aides-mémoire and has cabled following report to London:
[Page 268]Begin Verbatim Text.
The Vice President asked me to see him this morning and confirmed as correct my record of his comments, except one point (see para 3 (a) of my telegram 348).3 They had decided that they would not start any of the work except preparation of the site until agreement had been reached with the Sudan Government on the legal points. It was not, however, correct to say that they would not require payment of the grants in aid until then. The Vice-President seemed to fear that if the initial grants from the two governments were not appropriated and paid now, the Egyptian Government might in the event lose them or the subsequent grants contemplated. He put it as follows. The Bank had promised to lend them money subject to the Egyptian Government having the foreign exchange necessary. The two governments as a gesture of good will had agreed to provide the foreign exchange initially necessary. If they earmarked the money now the good will gesture would have a good political effect. If they merely said that the grants would be given at some future time after the Sudan question had been resolved, then people would think that it was a trick and Egypt would never get the money. He emphasized that the rumors that he was against cooperation with the West on the High Dam and would like to deal with the Commies on it were quite untrue.
2. The Vice-President said that the Egyptian Government would like to have the grants-in-aid “when the governments were ready to pay them.” The governments could pay them either to the Egyptian Government in accordance with intergovernmental exchanges of letters (paragraph 2 (a) of mytel 348) or directly to the Bank in accordance with an exchange of letters between the two governments and the Bank (paragraph 2 (b) of mytel quoted above). He preferred the latter solution of payment to the Bank. I asked him whether they would agree that if the money were not required for some years, the interest should accrue to the governments. He replied that as soon as the money had been paid, he considered that it should be invested for the benefit of the Egyptian Government. I made no comment and said that at this stage I was only concerned to obtain the Egyptian Government’s views. End text.
- Source: Department of State, Central Files, 874.2614/3–156. Confidential. Received at 7:08 p.m.↩
- Documents 121 and 122.↩
- Printed as telegram 1665, Document 121.↩