Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, January 1–July 26, 1956, Volume XV

323. Memorandum From the Acting Secretary of State to the President¹

Washington, May 3, 1956.

SUBJECT

• Status of the U.S. Offer on the High Aswan Dam

This problem of progress on the Aswan Dam negotiations is intimately tied up with the question of our overall Near East policy which you will recall the Secretary took up with you on the basis of his memorandum to you of March 28, 1956.² I should perhaps discuss this element with you personally.

Meanwhile, the following is the present status of the project: The United States, together with the British Government, made an offer to the Government of Egypt on December 16, 1955 of support for the first phase of construction of the High Dam. This offer was the result of conversations with the Egyptian Minister of Finance and was closely integrated with possible assistance which would come from the International Bank for Reconstruction and Development for the second phase. Mr. Black visited Cairo in January and reached substantial agreement regarding financing of the second phase.

The Egyptians have made counter proposals to the U.S.–U.K. offer which basically alter the premise on which the original U.S.–U.K. offer was made. The counter proposals include: 1) firmer assurances for U.S. aid for the whole project rather than part of it; 2) abandonment of the first phase as a separate part and inclusion in the whole project; and 3) Egyptian decision to seek Sudanese agreement before commencing any construction. Previously the Egyptians did not consider Sudanese agreement would be required for the first phase.

Discussions have been taking place between the U.S. and the U.K. in Washington regarding the new Egyptian proposals. Once agreement is reached with the U.K., discussions will be held with the IBRD. The Egyptians and the Sudanese are understood to have had some preliminary talks. No progress has as yet been reported.

The Secretary plans to discuss this subject with the British Foreign Secretary while he is attending the NATO meeting in Paris.

Herbert Hoover, Jr.

1. Source: Eisenhower Library, Whitman File, International File. Secret. The date is from the Department of State record copy. A note attached to that copy indicates this memorandum was prepared for the NATO side talks.
2. Document 223.