380. Report Prepared in the Executive Secretariat of the Department of State1
SUMMARY OF DEVELOPMENTS IN SUEZ SITUATION
[Here follows a summary of the Fawzi–Hare conversation reported in telegram 1166, Document 377.]
Black’s Conversations with Egyptian Leaders
IBRD President Eugene Black has recounted to Under Secretary Hoover the details of his conversations with Egyptian Foreign Minister Fawzi in New York on October 11, and on October 13 with Fawzi and other Egyptian leaders including Ali Sabri, Nasser’s political adviser, and Badawi, Chairman of the Egyptian Canal Authority.2 Both meetings were at Fawzi’s request. Black said he told Fawzi, and subsequently the others, that Egypt’s nationalization of the Canal Company had undermined the confidence of the world community in Egypt. Consequently, it would be difficult, if not impossible, for Egypt to obtain funds from international sources for the development of the Canal. It seemed essential, therefore, that Egypt conclude an agreement with all of the countries and interests concerned with the Canal which would lead to restoration of such confidence. If an agreement were not reached, Black said, the USSR would be the only country to which Egypt could turn, and Egypt would become hopelessly entangled if it were to depend upon the USSR for financial assistance in developing the Canal or in maintaining its economy.
In a discussion of the question of the compensation which would eventually be paid to the old Suez Canal Company, and in response to Fawzi’s question, Black said he would be glad to take part in discussions between Egyptian and Company representatives and even to arbitrate if desired. With regard to financing such compensation, Black said he thought the Bank might be helpful, but only after an overall agreement had been reached by all parties [Page 787] to the present dispute and on condition that the Bank was invited to participate by all who might be affected.
[Here follows an unconfirmed report that the Soviet Union had offered financial aid to help Egypt develop and maintain the Suez Canal transit situation.]
(Summary closed Noon, October 26, 1956)
- Source: Eisenhower Library, International File, Whitman File. Top Secret; Eyes Only for Designated Recipient.↩
- More detailed accounts of these conversations are in a memorandum of conversation by Wilkins, October 12, and a memorandum from Hoover to Rountree, October 23, neither printed. (Department of State, Central Files, 974.7301/10–1256 and 974.7301/10–2356, respectively)↩