102. Memorandum of a Conversation, U.S. Embassy, London, August 20, 1956, 12:15 p.m.1

USDel/MC/52

PARTICIPANTS

  • The United States
    • The Secretary
    • Mr. Bohlen
  • USSR
    • Mr. Shepilov
    • Mr. Troyanovski
[Page 238]

SUBJECT

  • US and USSR views on the Suez problem

Mr. Shepilov expressed his appreciation for Mr. Dulles’ kindness in sending him a preliminary draft of his proposed resolution2 which he had received on Saturday.

The Secretary said he hoped that this draft would obtain Soviet agreement.

Mr. Shepilov replied no, he could not say that.

The Secretary said speaking seriously he did not think the differences should be too great.

Mr. Shepilov replied that unfortunately the differences were serious. He wished to recall the statement in Mr. Dulles’ original speech3 concerning the necessity of finding a solution which would be acceptable to all. After their conversation on Saturday4 he had thought it might be possible to find an acceptable compromise and that instead of the more rigid and one-sided formula of international operation with Egyptian participation, there might be substituted the formula of Egyptian operation with foreign participation. Unfortunately he felt that Mr. Dulles’ draft was disappointing in that it did not provide a basis for a compromise. The main reason was that while containing certain general references to Egyptian sovereignty, a question along with that of the right of nationalization which had been accepted by all, it made plain who would operate the Canal. On this point Mr. Dulles’ draft provides for an international board to operate and maintain and develop the Canal and the Egyptian Government was called upon to grant this board all facilities. This meant that Egypt would not run the Canal and other members of the board apart from Egypt would have chief responsibility assigning to Egypt a secondary role. While he could not be sure he felt that this would not be acceptable to the Egyptian people and would be regarded as an attempt on an unequal basis to impose a colonial form. He continued that from their previous conversation he had been encouraged by the Secretary’s views that a bridge might be built between their positions on the Suez Canal question which might have wider implications. He wished to ask Mr. Dulles if this was his final position and what was the reason for its rigidity.

(At this point Mr. Dulles excused himself for a few minutes to speak on the telephone with Mr. Selwyn Lloyd.)

The Secretary said that the United States had a problem in regard to the Canal which was somewhat different from that of the [Page 239]Soviet Union and also from that of the Western European countries. We had a practical rather than a political problem in so far as the future operation of the Canal was concerned. Many private people throughout the world would be affected in their willingness to invest money in industry, in transferring from coal to oil by their confidence in the future operation of the Canal. They would not invest in these enterprises unless they were confident that the Canal would be run efficiently and fairly; it made no difference what he thought but what was important is how these thousands of private investors would think. He had to attempt to judge their reactions but if he made a mistake it would have an adverse effect on the economic life of many countries.

It was his opinion, confirmed by the governments familiar with the problem, that an operation which in fact gave the Egyptian Government control in perpetuity over the Canal would not give that necessary confidence; that Egyptian political control over the selection of technicians, pilots, those charged with dredging the Canal would not be regarded as providing adequate insurance of efficient operation and other means to live would have to be found. He continued that there were many ways of expressing this factor as the Minister himself had said on Saturday revolving around the formula of foreign management with Egyptian participation or Egyptian management with foreign participation. He had no pride in the way this aspect was expressed in the draft and he would be prepared to meet Egyptian sensitivities in expression and to that extent his position was flexible. He said in absence of direct contact it was difficult to speculate on what would or would not be acceptable to Egypt when we have no way, due to Egypt’s absence from this Conference, of obtaining an authoritative opinion. He assumed Mr. Shepilov had no mandate to speak for Egypt (Mr. Shepilov promptly signified he had no such mandate) but that if he had he would be happy to discuss with him concrete measures. In the absence of Egypt there was no way of finding out the Egyptian attitude and it was therefore better not to speculate on what might or might not be acceptable to them but rather to set forth in straight forward fashion our own views and then later to have negotiations begin with Egypt during which account could be taken of the Egyptian views and possibly consideration of a new formula.

Mr. Shepilov said that he felt that there was also the question of public opinion and that the formula set forth in Mr. Dulles’ draft looked like the application of the principle of a state within a state. It was true that without Egypt it was difficult to settle a question in which Egypt was so directly concerned, but since they should take cognizance of world public opinion in the nature of the approach and avoid any appearance of inequality or laying down in advance [Page 240]as did this draft a formula which envisaged international control in the form of a concession, which could only be regarded as inimical to Egyptian sovereignty.

The Secretary pointed out that the US had a number of arrangements with other countries, and for example the St. Lawrence, involved an element of Canadian control but we did not feel that we [it] reflected on our sovereignty or dignity.

Mr. Shepilov said it was impossible to reflect on US dignity since it was a great power. Egypt on the other hand had only recently thrown off colonial rule.

The Secretary mentioned that we had done the same 150 years ago. He stated that we were not willing to subscribe to a paper which seemed to abandon the principle that the technical operation of the Canal be within the purview of non-Egyptian personnel. There could be latitude in the form of expression but in substance the issue was one of responsibility for operation and we felt that the composition of the board should not bring politics into its operation. There was just not enough confidence in Egypt or its future to give it sole responsibility. If Egypt should demand that the situation would be very serious. He said he felt the first thing was to find out what our views at this Conference were and then consider means for conveying these views to Egypt and obtaining an authoritative response. As to appearances, he on behalf of the US was prepared to go on taking cognizance of Egyptian feelings. He understood these feelings were stronger than in countries who had never or at least not recently been colonies. He then inquired if Mr. Shepilov agreed that they should try here as soon as possible to get some expression of views from this Conference which would then permit them to move on to the next stage of negotiations with Egypt.

Mr. Shepilov agreed that this should be the purpose of the Conference.

The Secretary then inquired whether Mr. Shepilov intended to submit any proposal today.

Mr. Shepilov said not today and he expected to listen and not even to speak unless it became necessary. In reply to the Secretary’s question, Mr. Shepilov said he had heard that India might have something to present.

  1. Source: Department of State, Conference Files; Lot 62 D 181, CF 746. Secret. Prepared by the U.S. Delegation, but the source text does not indicate a drafting officer.
  2. Presumably that contained in Secto 20, Document 95.
  3. Reference is to the statement made by Secretary Dulles before the second plenary session on August 16; see footnote 2, Document 89.
  4. See Document 93.