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

454. Memorandum of a Conversation, Department of State, Washington, July 13, 1956, 4:05 p.m.¹

Washington, July 13, 1956, 4:05 p.m.

SUBJECT

• Aswan Dam

PARTICIPANTS

• Sir Roger Makins, British Ambassador
• Mr. R.W. Bailey, Counselor, British Embassy
• The Secretary
• NEA—George V. Allen
• C—Douglas MacArthur
• NE—William C. Burdett

Sir Roger Makins stated he understood that we had been considering making no further moves with respect to the Aswan Dam at this time, while the UK has been thinking of a plan for the unified development of the Nile Valley. A new situation has been created by the prospective return of the Egyptian Ambassador to Washington, presumably with a message that Nasser wished to proceed with the Dam. The British had heard from Cairo that the Egyptians were prepared to simplify very much their counter proposals. These developments seem to place the U.S. and U.K. in an awkward position since we had made a firm proposition. What line should we take now?

The Secretary agreed that we were in an awkward predicament and said that we had been giving a lot of thought to the matter but had not yet come to a final conclusion. He had mentioned the Dam to the President today² and wanted to talk to the President further before reaching a final conclusion.³ We were moving in the direction of wondering whether we could go ahead with the project on the present scale. There was the question of money from Congress. We might still get a rider on the appropriations bill.⁴ Sentiment was increasing against the conspicuous “neutrals”. The Administration was fighting strongly to prevent such riders for they were not sound constitutional practice. In any event the authorizing legislation restricted the funds which might be expended on a grant basis. It would be very difficult to amass $50 million for Egypt. We would be obliged to steal from everyone else. Also, we were having increasing doubts regarding the benefits which would inure to the West. For a few days we would receive big favorable newspaper headlines, but over the long haul, for 12 or 15 years, it was a different matter. The Egyptian people would have to put up with considerable austerity. We would be placed in the position of attempting to exercise control over aspects of Egyptian foreign policy; for example, expenditures on military equipment. Egypt cannot at the same time have the Dam and indulge in foreign ventures. Gene Black was beginning to worry more than before. In sum, the project appeared to be too big a thing for Egypt to swing in the present state of affairs. Our policy towards Egypt was unsettled. There was the problem of Israel and of Nasser’s ambitions elsewhere. For all of the above reasons we were increasingly dubious. We recognized that if we said no it would involve quite serious risks. In desperation Nasser might invite the USSR to build the Dam on its own terms. The Dam was a big factor in his political position at home.

Mr. Allen commented that until March Nasser had maintained the line that work must commence immediately upon the Dam. Then he suddenly switched and was now saying that it must be preceded by an agreement with the Sudan. This change caused not a ripple internally, apparently.

The Secretary posed the question of how the matter should be handled if we determined not to proceed. Should we tell Nasser bluntly, evade the issue, or drag the matter along by holding out hope for assistance at a future date? We had reached no clear decision but expected to have a position by the middle of next week. Our present inclination was to tell Nasser what the situation is. We could hold out the hope that we might assist him later with less grandiose projects. We would not like to see Nasser go to Moscow with a bid of ours in his pocket. If we withdraw our offer beforehand, the Russians may overplay their hand and ask so much that it would react against them in the Arab world.

Sir Roger Makins said that the U.K. largely concurred in the diagnosis given by the Secretary and also had its doubts regarding how the matter should be handled. The British were thinking of going beyond the U.S. idea of a riparian conference to that of a regional development program. The Secretary replied that we also had been considering this approach and recalled the previous exchange of views with the British on it. He asked about the current situation in the Sudan. Sir Roger said that it was most confused; the British were not sure that one of the two groups in the new Government, the Umma, was not in Egyptian pay. The position of the Government was not strong. Mr. Allen commented that our Ambassador to the Sudan considered the present Government not worse than its predecessor and perhaps better.

1. Source: Department of State, Central Files, 874.2614/7–1356. Secret. Drafted by Burdett. The time of the meeting is from Secretary Dulles’ Appointment Book. (Princeton University Library, Dulles Papers)
2. See Document 452.
3. See Document 473.
4. Reference is to the Mutual Security Appropriation Act of 1957, which President Eisenhower signed into law on July 31.