44. Telegram From the Embassy in the United Kingdom to the Department of State1

Secto 8. Paris eyes only Ambassador. I have had useful talks with Eden, Pineau, Lloyd and Macmillan which will be covered [Page 103]separately. There follows account of formal tripartite meeting2 held five p.m. London time August first at FonOff with Lloyd presiding.

Payment of transit tolls. Pineau stated French Govt had taken decision to pay tolls in escrow to bank in neutral country and that if Egypt refused accept such payment to divert French shipping around Cape. French delegate reported that today’s meeting International Chamber of Shipping had agreed unanimously to recommend that all tolls be paid in escrow in neutral country. I commented that we were not disposed to agree but instead thought payments should be made under protest.3 Lloyd said it would be unfortunate if only one of three powers ordered diversion of shipping. No definite conclusions reached and matter will be discussed again tomorrow.

Foreign nationals employed by Suez Canal Company. Lloyd and Pineau reported that Suez Canal Company wished to order its employees in Egypt to give immediate notice and prepare to leave between now and August fifteenth. Company proposed to say governments concerned approved its action and to promise employees leave with full pay for one to three years depending upon seniority. Pineau read telegram received from Company’s chief agent in Cairo stating employees not prepared work for new Company and preparing to leave with families. Agent asserted that if British and foreign pilots ceased work, others would probably follow suit and it would then become impossible to handle large volume of ships. Pineau thought employees who would be facing prison should be advised of government’s support for their action. Lloyd had misgivings regarding Company’s proposed action. I pointed out problem insignificant for US since only two Americans employed by Company but that it would be great mistake for breakdown in operation of Canal to appear to occur as result of action by Western governments. Pineau said French Govt could not disapprove Company’s proposed action but might refrain from any specific approval stating only that if French nationals wished to leave Egypt, they would receive support. I said French nationals clearly had right of choice; that any coercion would be improper and would provide good case [Page 104]for government action. I pointed out our whole position based on concept Suez Canal is public utility of concern to entire world and not catspaw of any one nation. If breakdown of operation resulted from action by one of three governments, it would incur same blame as Egypt. No final decision reached and matter will be discussed tomorrow.

Communiqué. Lloyd said he hoped we could agree to issue communiqué soon covering disapproval of Nasser’s action, support for principle of some type of international arrangement for operation of Canal, and indication conference would be held but not necessarily specifying participants. He wished to avoid appearance of inactivity.

I read draft submitted Embtel Secto 5,4 both Lloyd and Pineau indicated general approval subject to careful study. Lloyd thought international control should be mentioned more specifically.

Conference. Lloyd said UK would be reluctant to include USSR in Conference but was prepared to accept US views regarding composition of Conference if US would work for early Conference and adoption resolution providing for international operation Canal.

UK then suggested following countries as participants: all signatories of 1888 Conference except Germany and Austria which would be omitted to avoid disagreements over successor powers; five leading countries on basis flag tonnage transiting Canal—Norway, Germany, Denmark, Sweden, and US (each had tonnage in excess of two million tons); other countries with vital trade interests in Canal—Australia, New Zealand, India, Pakistan, Ceylon, Japan. Pineau agreed to list and I stated it appeared acceptable.

I said that we attached considerable importance to having invitations issued by three signatories of Convention of 1888, using article 8 for purpose. If this was agreed to, US would associate itself with inviting countries. British legal advisor presented history of article 8 alleging article long considered “dead letter”. Lloyd urged that US/UK/France issue invitations. I promised answer tomorrow.

Lloyd also pressed for London as site stating that because crises could occur suddenly it necessary to be in close touch with governments. I agreed consider matter.

With respect to timing I suggested latter part of August, stating I would be elsewhere engaged for four days beginning August 17. Pineau and Lloyd both thought that postponement of such duration would be difficult to explain publicly and would risk initiative by USSR perhaps in conjunction with Egypt. Lloyd urged August 13 as starting date. No definite conclusions reached.

[Page 105]

I stressed that we attached high importance to prior tripartite agreement on objectives of conference. Britain said that their legal advisor preparing plan which we agreed to discuss later in evening.

I did not advance idea at meeting, but our preliminary thought is that conference should seek agreement on some treaty arrangement succeeding and incorporating principles of Convention of 1888. Treaty would be open to accession by interested powers and would provide for internationalization of Company nationalized by Egypt. Adequate rights would be granted by Egypt to permit efficient operation of Canal as international public utility. We envisage international board of directors to take possession of assets of previous Company. Stockholders would be paid for shares held. Egypt would be assured of adequate financial return on basis her territorial interest. Proposal would be presented as “heads of agreement” avoiding specific details which might be subject to attack, and consisting instead of series of broad principles designed to appear eminently fair to all concerned. Egyptian adherence to treaty would be sought. Proposal would be difficult for Egypt to reject and would place Western powers in good public relations position. We would not advance above as US plan but would endeavor to induce UK and France to incorporate ideas in their plan.

Dulles
  1. Source: Department of State, Central Files, 396.1–LO/8–256. Top Secret; Niact; Limit Distribution. Received at 10:04 p.m., August 1. Repeated to Paris. The outgoing copy of the telegram, ibid., Conference Files: Lot 62 D 181, indicates Burdett as the drafting officer.
  2. Other accounts of this, the sixth tripartite meeting, one in British Foreign Office, “Record of the 6th Meeting Held in the Council Chamber, Foreign Office, on Wednesday, August 1, 1956 at 5:00 p.m.” and “London Tripartite Conversations,” pp. 6878. (Both ibid., CF 724) According to the latter document, the following attended the meeting: Dulles, Murphy, Phleger, McCardle, Aldrich, Dillon, and Burdett for the United States; Lloyd, Caccia, Ross, and Vallat for the United Kingdom; Pineau, Chauvel, and Daridan for France.
  3. In Secto 9, August 2, the Embassy in London informed the Department: “Secretary stated at tripartite meeting August 1 that he thought all U.S. government controlled ships transitting Suez Canal which subject to tolls should pay Egyptian authority only under protest, and if payment under protest not accepted and transit blocked, then they might pay under coercion to be noted in ship’s log.” (Ibid., Central Files, 396.1–LO/8–256)
  4. See footnote 3, Document 49.