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

262. Memorandum of a Conversation, Department of State, Washington, September 25, 1956, 3:02 p.m.¹

Washington, September 25, 1956, 3:02 p.m.

SUBJECT

• Suez Canal

PARTICIPANTS

• The Secretary
• Ambassador Herve Alphand
• Mr. Charles Lucet, Minister, French Embassy
• Mr. Francois de Laboulaye, Counselor, French Embassy
• Mr. Phleger
• Mr. Wilcox
• Mr. Elbrick

The Ambassador said that while he had no instructions to do so he wished to raise two points which he thought required clarification. The first concerned the operation of the Canal Users’ Association. He had originally understood that payment of canal tolls to this Association would be compulsory on the part of the vessels of the user states; now, he was given to understand that the payment of tolls to the Association would only be voluntary. He felt that under these circumstances the purpose of the Association had been greatly “watered down”. He wished to inquire whether the United States has the authority and the intention to compel United States ship owners to make payments to SCUA. The Secretary thought that he had made our position clear on several occasions in London during the recent conference. He said that the United States does not have legal authority to require that U.S. flag vessels make payments to any designated person or entity but it does have the power to prevent payments to Egypt. This we can do under the Trading With the Enemy Act which, though it was designed for use in connection with the Korean war can be invoked for this purpose. He doubted that it could be made to extend to vessels of foreign registry even though owned by American companies or nationals. In the case of vessels flying the Panamanian and Liberian flags, for example, we might be confronted with a conflict of laws. In any event, he said, we cannot compel ship owners to make payments to SCUA.

The Secretary said that he had repeatedly urged the British and French to inform us whether they want us to take the required action in connection with the Users’ Association, knowing that the possible result will be to detour ships around Africa. He said that this would be very costly to the Western European countries and he wanted to be sure that the British and French are prepared to accept the economic consequences. He said that it is quite probable that action on our part will touch off an Egyptian reaction and that ships will no longer be able to transit the Canal. Our position is unequivocal; we are willing and able to go through with this action but it must be at British and French request. The Ambassador said that he had informed his Foreign Office of the Secretary’s views on this matter ten days ago but that he had had no reply. The Secretary repeated that we must have a clear answer to this question and that, with this in view, we are despatching memoranda to the British and French Governments at once.² He said that it should be understood that our action, in all probability, will not hurt Egypt but it will hurt the Western powers.

The Ambassador said that despite the fact that the United States does not have the power to require that payments be made to SCUA, the ship owners might still consider it wise to do so. The Secretary pointed out that some tankers are chartered by United States companies under foreign flags and the countries whose flags they fly may say that they—rather than the American companies— have the right to decide how payment will be made. Panama, for example, tends to side with Egypt in this crisis. Of the ships serving American companies U.S. flag vessels account for a relatively small part of the total tonnage (2.7 per cent in 1955) which transits the Canal. We cannot direct the routing of these vessels, but we can direct that no payments be made to Egypt and we can express the hope that the ships involved pay tolls to SCUA. If this action, in turn, means that the ships cannot go through the Canal they will then have to be routed elsewhere. The Secretary repeated that we would take this action only if the British and French wanted us to do so.

Ambassador Alphand then turned to the question of financing the increased costs which would result from the rerouting of ships and said that he had reported what the Secretary had told him about the possibility of utilizing Export-Import Bank funds for the time being to finance oil shipments from the United States. He said that this appeared to be in the nature of a temporary solution and he inquired concerning possible future Congressional action to meet this problem. The Secretary said that he could not predict the mood of Congress which has, in the recent past, shown some reluctance to give more aid to Western European countries and that he could make no commitment at this time.

The Ambassador said that he had been instructed to raise with the Secretary the question of the British and French approach to the Security Council on the Suez problem. He said that his Government fears that attempts will be made to amend the British-French proposal or to merge that proposal with the Egyptian proposal, and his Government would like assurances that the United States would oppose any such move. The Secretary said that in this matter of the British-French proposal to the United Nations we are “totally in the dark”. While there had been some discussion of the matter in London, there had been no decision when the Secretary departed from London on Friday evening. It was only upon his arrival in Washington on Saturday that he was informed of the British and French action. He thought that this was an “extraordinary” performance. We are without information as to the purpose of the British and French approach to the Security Council; we do not know under what Article of the Charter the matter is to be considered; and we have not been informed of the procedure which France and the United Kingdom intend to follow. Under the circumstances it is extremely difficult for the United States to cooperate in this matter. The Ambassador said that the decision had not been made by the French Government and that it was his understanding that they had merely followed the British lead. He said that it was apparent that the British were very fearful that the Russians would move if such action were not taken. He said that the French Government hoped that the United States would oppose the “Egyptian complaint”. The Secretary said that we cannot give piecemeal answers. The Cuban President of the Security Council had come to us for information regarding this matter and we were obliged to tell him that we knew nothing about it. This, as the Ambassador would understand, was embarrassing to the United States since the Cuban is apt to look to the United States from time to time for guidance.

The Ambassador said that he could only address himself to the question of procedures since he himself was not well informed as to substance. He asked whether the United States would be prepared to limit the participation in the Security Council debate on this subject to the Council members and Egypt. The Secretary replied in the negative, saying that it would be difficult to exclude Israel and perhaps others who will want to take part if Egypt participates. He repeated that we can’t be expected to settle this kind of problem unless we know the real purpose of the exercise. Alphand said that he had received a draft resolution prepared in Paris which was being presented to the British Foreign Office for consideration. This draft resolution would invite Egypt to negotiate with the 18 powers on the basis of their proposal which had previously been presented to Nasser in Cairo. He said that urgent tripartite conversations are necessary and that it would be a serious matter if the three powers are not organized before the Security Council meets tomorrow. The Secretary interjected that it is a serious matter that the three powers were not organized before this question was introduced into the Security Council. The Secretary said that in any event it seemed the damage had been done and he feared that the introduction of the matter into the Security Council might offer to some countries a basis for hesitating to proceed with the formation of SCUA. It is possible that some may hang back and wait for the Security Council to pronounce itself before taking any further action.

The Ambassador said that he thought we should have talks on this subject before tomorrow’s Security Council session and thought we should carry on these discussions in Washington this afternoon. The Secretary said that the British should take part in any such conversations and the Ambassador agreed.

1. Source: Department of State, Central Files, 974.7301/9–2556. Secret. Drafted by Elbrick. The time of the meeting is from Dulles’ Appointment Book, (Princeton University Library, Dulles Papers)
2. Transmitted to London in telegram 2248, also sent to Paris, Document 268.