94. Memorandum of a Conversation Between the Counselor of the British Embassy (Bailey) and the Deputy Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree), Department of State, Washington, February 14, 19561
SUBJECT
- High Aswan Dam and Aid to Iran
Mr. Bailey reported that his Government has asked whether the Embassy has been able to find out how Nasser plans to get the two Governments together on an acceptable aide-mémoire2 and whether the money which the U.S. and UK have submitted to financing of the High Dam will be made available before an agreement, is reached with the Government of Sudan on the Nile Waters. Mr. Bailey [Page 171] thought that since Nasser now says he will not start on the project until an agreement has been reached with the Sudan on the Nile Waters, a new element has been injected into the understanding; also he was of the opinion that as part of reaching an agreement on the Nile Waters, Egypt will have to reach a satisfactory understanding with the Government of Sudan on the establishment of a Sudanese currency. At the present time Egyptian currency is circulating in the Sudan; the Government of Egypt must agree with Sudan on the redemption of this currency.
Mr. Rountree stated that he had not before thought there was any direct relationship between the establishment of a Sudanese currency and the High Dam. He recognized, however, that in Sudanese thinking this might be an element in the negotiations; that Sudan was desirous of establishing its own currency; and in obtaining a membership in the IMF and in the IBRD. He thought that this might provide part of the quid pro quo in Egypt’s negotiations with the Sudan and might facilitate an understanding on the Nile Waters.
Mr. Bailey mentioned in passing that a question was expected in the House of Lords tomorrow on the possibility of flooding of Sudanese territory and whether an understanding existed between the Government of Sudan and the Government of Egypt on indemnification for damages resulting from this flooding. Mr. Bailey read the proposed reply and there was a brief discussion thereof.3
With reference to a reported French offer to assist on the High Dam,4 Mr. Bailey stated that his Government thought it would be useful to keep the French current on developments with respect to this project and that we should perhaps not only talk with the French but also with the Germans. Mr. Rountree concurred in this move but thought that now would probably not be the time to undertake such talks. He recounted an interview Mr. Black reported between himself and Nasser just prior to the issuance of the press release on their recent talks.5 Nasser had stated that he could not accept the proposal that reference be made in his letter to the two aide-mémoires since they were not acceptable to him. He stated that he planned to take up these aide-mémoires with the U.S. and British Governments as soon as the conversations with Mr. Black had been completed. Mr. Black pointed out that, of course, the Bank’s proposal [Page 172] was contingent upon Egypt’s acceptance of these aide-mémoires and that he felt that the Governments had gone about as far as they could be expected to go in providing assurance to the Egyptian Government of their support. Mr. Black pointed out that in the absence of the acceptability of the aide-mémoires, he could not agree to report to the press that agreement had been reached. However, he could justify stating that substantial agreement had been reached. After brief explanation as to what Mr. Black meant by substantial, Nasser stated that this would not be acceptable to him. Subsequently, however, as Mr. Black rose to leave, he asked Nasser what he should tell newsmen who were waiting outside. At this point Nasser is reported to have stated that he would take “substantial”.
Mr. Rountree stated that in talking with Ambassador Hussein last evening,6 the subject of the aide-mémoire came up and at that time he told the Ambassador that if Nasser had in mind a change in wording of the aide-mémoire, possibly we would be able to accommodate him. However, if he was seeking a substantive change as to our contribution during the second phase of construction, this could not be accommodated. The aide-mémoire represents the best and ultimate offer of the U.S. Ambassador Hussein was reported to have urged that the question be kept open stating that some middle ground could be found to reconcile differences between the two Governments.
Mr. Rountree said that we expect the question of these aide-mémoires to be raised shortly with the U.S. and British Ambassadors in Cairo. While the acceptability of these instruments is in question, conversations should not be held with the Germans and the French. However, when agreement is reached, it might be appropriate to provide them with a progress report on the negotiations.
[Here follows discussion of the Buraimi dispute and United States economic aid to Iran.]
- Source: Department of State, Central Files, 874.2614/2–1456. Confidential. Drafted by Shaw on February 16.↩
- See Document 91.↩
- Morris of the British Embassy had informed Wilkins that Lord Vansittart, a former Under Secretary of State in the British Foreign Office, was planning to ask the question, and that the British Government planned to reply that “it understood 1) the Sudan required Egyptian-Sudanese agreement regarding division of the Nile; 2) use by each of its waters as it wished, and 3) responsibility for the livelihood of homeless Sudanese by Egypt.” (Memorandum of conversation by Wilkins, February 14; Department of State, Central Files, 645W.74322/2–1455)↩
- See Documents 50 and 77.↩
- See Document 91.↩
- No record of this conversation has been found in Department of State files.↩