31. Telegram From the Embassy in Egypt to the Department of State1

176. Nasser called for me come see him in first hour that I returned to office. He said he extremely eager see me so that there might be better understanding of his position in view of apparent excitement and concern over his action reference Suez Canal.

He stated he had taken action after Western turn-down because it was only safe course he could see before him in order to fulfill his pledge to Egyptian people that High Dam would be constructed. He reminded me that he had long ago given me his preferred priority list as regards High Dam. 1st choice was through World Bank and United States and UK, 2nd was with Western consortium, 3rd with Russian help and 4th Egypt attempting project by herself. He reminded me that he had also told me many times of Soviet offer which had in past been officially made twice although he and Soviets had never discussed details. He had not rejected Russian offer as he thought that would be “silly” without knowledge of what future developments might be. Last week he had received another confirmation of Russian offer. In spite of that he had decided not to discuss at this time any details of Russian assistance of any type. Any such discussion would take place during his trip to Moscow.

As far as High Dam concerned however Egypt had made decision to adopt course 4 and try to do it themselves. (I questioned him closely on this and obtained clear impression that his present thinking is that any assistance from Russia would be for other projects and as for present at least he thinking keeping Russians out of Dam project). He said he did not know the Russians from actual experience very well as yet and he did not know what would come after their loans. Stated he really had no definite plans at this time as to what type Russian economic assistance he might accept.

He said he had read in certain newspapers that nationalization of Suez Canal probably had been worked out with Russians. He wanted me to know at earliest possible moment that this was not true and that they did not have any advance information of his action.

Nasser said British and French reaction had been stronger than he had imagined. Said problems divided themselves into two categories. 1st was question between Company and Egyptian Government. [Page 56]His main point was that Company was Egyptian and he perfectly within his rights to nationalize it provided there be just compensation. This was his plan and he stated Egypt could afford compensation. 2nd aspect was question of use of Canal emanating for the most part from Convention of 1888. He had said repeatedly that Canal would remain open and be efficiently operated and wanted me to report this as official statement from him.

Told Nasser that I thought he had again made very serious mistake. In my opinion problem far exceeded the inevitable arguments, legal and otherwise, that would obviously grow out of act of nationalization. Leaving legal arguments aside (which I not qualified discuss) real problem undoubtedly was concern of Western world that Canal would remain as an efficient waterway open to international use. He must realize this quite a different problem than question Britain’s right to nationalize her own steel industry (to which he had referred).

He might as well face fact Egypt was looked upon by many with lack of trust and of confidence that things would work out as he promised. He had proven himself to be man of quick action and he should be able understand that there would be concern that at some future time, as an act of retaliation, he might interfere with traffic other nations. He countered by saying that he himself had already committed Egypt on this point in the 1954 agreement with Br and had stated in his recent declarations his intentions in this regard. Told him nevertheless this obviously the most important aspect of situation and problem was his and I could at this time at least offer no advice.

Told him I not yet informed as to attitude of US Government on any of these questions. Lectured him however on the inadvisability of a repeated series of moves which gave impression Egypt was ready and willing to challenge practically entire world. He might attempt to justify such acts as a measure of Egypt’s true independence but he could not ignore, as he seemed prone to do, the international implications of some of his moves. He said he knew he was fighting with his back to the wall and he was ready for almost anything. He however plans no further moves and is wondering what big Western powers may do. He had yesterday overruled suggestions put to him for counteraction in the question of freezing assets. He however considered he had taken a step fully within his rights and would do anything he would have to do to resist to Egypt’s capability any move against their sovereignty or right to take the action he had taken.

[Page 57]

I referred in connection with this discussion to his unjust and inaccurate statements as regards the US as instructed in Deptel 190.2 He at first told me to make protest to Fawzi. I replied that I was not making written protest and that I wished orally point out to him the implications of a number of his quotations. He discovered some errors in translation of copy of his speeches which I using but on whole discussion was unsatisfactory as he quite bitter about his negotiations on both High Dam and military equipment. He resents deeply public references to state of Egypt’s economy which he felt placed him in a position of having to take case to Egyptian people. I told him his choice of words and manner of presentation of facts had undoubtedly made seizure more serious in Western world.

It developed from conversation this action was not as hurried as we have thought. He informed me that he had told Hussein that he would take this act if West backed out on offer. Hussein had attempted dissuade him but he had told him to “keep your nerves and it will turn out all right”. Hussein had attempted convince him that aid from West still possible but he had told Hussein that he felt there was really no chance. I gather therefore that Hussein’s return to Washington to make final effort was as much a personal desire on his part to salvage situation as it was instructions by Nasser to make such attempt.

Told Nasser I would report what he had said but unable carry discussion further at this time. In order that he might personally understand US action on High Dam I read to him (with only minor omission to protect Hussein) entire memorandum of conversation between Secretary and Hussein on July 193 hoping this excellent presentation would remove somewhat sting he still feels from our public announcement. He listened intently and I believe felt a little better.

Nasser gave impression in discussion that he rather hoped US at least (not being directly involved in Company) would not be critical of his action when it was understood that he had made move as alternative to accepting Russian assistance on Dam. Knowing that he is accused of being pro Soviet and anti Western believe he may think that we should look upon move as proof of his desire remain truly independent from outside influence, which would include Russia. There was however no specific discussion along foregoing lines and I gave no indication of accepting his logic.

We have no specific recommendations at this time. I would be grateful however if we could be kept fully informed during this rather delicate period both from viewpoint of Embassy responsibility [Page 58]in event trouble and as we might be able to furnish possible reactions here to various alternative courses of action Department may be considering.

  1. Source: Department of State, Central Files, 974.7301/7–3056. Secret; Priority. Received at 9:17 p.m. Repeated Priority to London, Moscow, and Paris.
  2. See footnote 2, Document 16.
  3. See vol. XV, p. 867.