Foreign Relations of the United States, 1955–1957, Suez Crisis, July 26–December 31, 1956, Volume XVI

133. Telegram From the Embassy in the United Kingdom to the Department of State ¹

London , August 25, 1956—1 p.m.

1078. Suez from Henderson. As aftermath discussion between Secretary, Lloyd and Pineau reported USDel/MC/82² meeting held August 24 in UK Treasury³ discuss economic sanctions in event Egypt refuses meet with Suez committee and situation becomes critical. British representatives included Treasury, FonOff, both MinTransport and MinFuel and Power.⁴ French represented by Wormser, Marjolin and FinAtt.⁵

British wished exchange views on question economic sanctions and possible effects on Egypt and probable consequences applying sanctions as basis for paper to be presented Ministers next week.

Sanctions discussed under four headings.

1) Denial Canal dues to Egypt.

2) Wider blocking Egyptian accounts.

3) Control exports to Egypt.

4) Refusal purchase Egyptian cotton.

Five questions specifically directed US.

1) What can be said concerning US preparedness help finance increased requirements for dollar oil [sic] if Canal traffic stopped as result denying Canal tolls.

2) Are there technical or legal obstacles to US instructing or advising owners not pay Canal tolls into unblocked account Egyptian Government?

3) If UK refuses license sterling payments for crude oil delivered Shell refinery in Egypt would US companies refrain from supplying crude?

4) Are there technical or legal difficulties in way US controlling exports to Egypt?

5) What does US export to Egypt?

Believe have sufficient information deal with most aspects questions raised but would appreciate any additional views or advice on general question application sanctions prior next meeting now scheduled August 28.

Barbour

1. Source: Department of State, Central Files, 974.7301/8–2556. Secret; Priority. Received at 9:36 a.m.
2. Document 123.
3. Minutes of this meeting, prepared by the Delegation in London, are in Department of State, Conference Files: Lot 62 D 181, CF 765. A separate memorandum of this same conversation, evidently prepared by the British Foreign Office, is ibid., CF 747a. The minutes and memorandum indicate that the meeting began at 10:30 a.m., August 24.
4. Minister of Transport and Civil Aviation Harold Watkinson and Minister of Fuel and Power Aubrey Jones.
5. Olivier B. Wormser, Assistant Director–General for Economic and Financial Affairs in the French Foreign Ministry; Robert Marjolin, Technical Counselor to the Cabinet of the French Foreign Minister; and presumably Paul Leroy Beaulieu, Financial Attaché in the French Embassy in London.