104. Telegram From the Delegation at the Suez Canal Conference to the Department of State1

Secto 25. Suez Conference: Fifth Session August 20—Summary.

Session, 3:30 to 5, included one hour ten minutes Krishna Menon, who tabled Indian draft of principles and proposals2 followed by Secretary Dulles who during 15 minutes gave speech formally introducing United States proposed declaration (Secto 24).3

Texts Indian draft and Secretary’s speech being telegraphed separately.

Menon’s speech, delivered from notes, rambling and repetitive. Canal very important to Indian economy and she approaches problem [Page 243]with full sense of all the realities including economic. Present situation critical and alternatives “very grim indeed”. India regrets absence Egypt without whom no final solutions possible. Conference has met amidst great tensions, suspicion, and fear, particularly in Arab world. Egypt’s nationalization Canal wholly within her sovereign rights has created much alarm and military movements. India fears that unless peaceful settlement there will be conflict extending far beyond Suez area. Conference must confine itself to two main questions: First, how can proper functioning Canal be assured; second, how can fear be allayed.

Company not an international organization but a concessionaire from Egyptian Government. Moreover Company should not be confused with Canal itself, which does have an international character. Role of Company is to operate and it hasn’t done this too well. It was Egyptian state that enabled Company to function and latter has always been under Egyptian law.

Nevertheless, signatories of 1888 do have rights outside and beyond Company. Fact that nationalization carried out by Egypt in manner disturbing some people should not obscure Egypt’s sovereign right nationalize. Anyone concerned should seek arbitration in UN or ICJ.

Menon then enumerated what he called the five major problems: First, freedom navigation, which ensured by 1888. Second, security of ships transiting Canal, which can only be provided by Egyptian Government. Third, tolls. Menon acknowledged Nasser’s Aswan proposition created alarm and said there should be no “mulcting of the international community” but added India understood Egypt wouldn’t impose unreasonable tolls. Fourth, Company personnel, there should be provision in international agreement against discrimination. Fifth, efficiency of operation and improvements, answer is these have been effected by old Company (apparent inference new Egyptian Company will continue them).

Old Company would have ended in any case 1968 and meanwhile everyone including old Company knows no Egyptian Government would have been willing extend concession.

As to original tripartite proposals, the internationalization proposed is merely of the Company, i.e., a new Company is proposed. Effect would be to repeal Egypt’s nationalization. New agency could not guarantee 1888 rights any better than old. Only party that can do so is Egypt. Egypt agreed as far back as 1856 to guarantee free navigation. There should be no trouble fixing tolls “by agreement” (not specified by and with whom). No doubt Egypt will honor her obligations meantime and improve Canal.

As to UN, there is nothing in Charter which gives UN any authority whatever to impose itself here. Might consider a specialized [Page 244]UN agency but this could be achieved only by imposing on Egyptian sovereignty.

Egypt on record as far back as 1880 as opposed to institution of an international authority to operate Canal. This illustrated when Khedive told de Lesseps Egypt could not admit to principle of selling Canal to European powers or suffering international authority in Egypt.

Not purpose present Conference examine problem world’s waterways but would recall Western Powers opposed their being internationalized.

Remedy is to “refurbish” 1888 “so as to remove all doubt from these matters”. He recited Article 8 of 1888 which has been “dormant” but which could be initiated. Will Egypt honor 1888 obligations? Yes, Egypt has said so.

Let’s reexamine 1888 and include assurances on the above problems regarding freedom navigation, security transit, tolls, personnel, operations and improvements. 1888 would be registered with UN and any breach would be a violation UN charter. Whole world can assist in operation Canal if there’s less crisis atmosphere. Can user interest be related new Company? Can’t answer this because Egypt isn’t represented London conference. How can new Company be put under international management? Can’t do it except by imposing on Egyptian sovereignty. So let’s hope Egypt will subscribe to principles 1888.

At this point Menon tabled Indian paper text of which transmitted immediately following telegram. Added that its principles are common ground and that its proposals would have sanction of international law and UN. India does not suggest a second conference but doesn’t exclude it.

Eastern nations alarmed and don’t say others aren’t. India convinced a compromise settlement is possible. If Canal was closed India would lose. Finally, “I plead with you to adopt the part of conciliation—not dictation”.

Conference adjourned until Tuesday afternoon.

For your information. Pakistan Delegate proposed adjournment after consultation many Western and friendly Asian countries in order provide time for coordination position Turkey, Iran, Pakistan, Ceylon, Indonesia and Ethiopia. First three of these Asian countries appear taking strong initiative to [under] Turk leadership to provide basis upon which all of them could support Secretary’s proposal. Their idea is to introduce certain amendments which would be agreed in advance with US, UK, France, which would not change substance, but only form of document. If this possible they believe added “Asian flavor” would render the statement easier for certain borderline countries particularly Ceylon and Indonesia to go along. [Page 245]Consultations among them and between them and US Delegation taking place this evening and tomorrow.

Dulles
  1. Source: Department of State, Central Files, 974.7301/8–2056. Official Use Only; Priority. Drafted by Foster. Received at 7:16 p.m.
  2. The Embassy in London transmitted the Indian draft principles and proposals to the Department of State in Secto 26, August 20, not printed. (Ibid.) The text is printed in The Suez Canal Problem, July 26–September 22, 1956, pp. 288–289.
  3. Dated August 20, not printed. (Department of State, Central Files, 974.7301/8–2056) Secto 24 transmitted the proposed declaration introduced by Dulles at the fifth plenary session. (The Suez Canal Problem, July 26–September 22, 1956, pp. 289–290) This text is the same as in Secto 20, Document 95, except for minor stylistic changes; the addition of the phrase “including its rights to just, fair compensation for the use of the Canal”, to the last paragraph of the preamble following the phrase, “respect the sovereign rights of Egypt”; and the deletion of the words “equitable and fair” in paragraph 2.