588. Telegram From the Embassy in the United Kingdom to the Department of State1
2791. From Ambassador to Acting Secretary. For President and Secretary. In accordance with arrangement referred to in mytel 27822 Macmillan spent hour and a half with me at Embassy residence late yesterday afternoon.
Macmillan said that it was evident that British Government may be faced within next few days with the terrible dilemma of either (a) withdrawing from Egypt, having accomplished nothing but to have brought about the entry into Egypt of a completely inadequate token force of troops representing the UN, whose only function is to police [Page 1151] the border between Israel and Egypt, without having secured the free operation of the Canal or even being in a position to clear it, or (b) renewing hostilities in Egypt and taking over the entire Canal in order to remove the obstructions which have been placed there by Nasser and to insure its free operation and to avoid the complete economic collapse of Europe within the next few months. The danger of course in the minds of the British Cabinet of adopting the first alternative is that loss of prestige and humiliation would be so great that the govt must fall, while the second alternative would obviously involve the risk of bringing in the Russians and resulting in a third world war.
Macmillan said that faced with this desperate choice some members of the Cabinet would undoubtedly be willing to take the risk of the second alternative and go down fighting, but he said that he and Salisbury believed that if through a message from the President to Eden or in some other manner British Government could be assured that the United States Government intends to pursue a policy of obtaining through action of the United Nations the immediate clearance of obstructions from the Canal and its operation by an international agency in accordance with the principles developed at the first London conference on Suez a majority of the Cabinet would choose the first of these alternatives and would not only withdraw the British forces but also bring pressure on the French to withdraw their forces from Egypt at once. It would not be contemplated that the assurances to which I have just referred would be in the form of any agreement nor would they be made public.
I believe that the situation which is causing Macmillan and Salisbury to think along the lines I have just indicated is the realization of the desperate financial position in which they will find themselves at the end of the year unless by that time they are working in the closest possible cooperation with the US in both the economic and political fields. Macmillan indicated yesterday that the month of November may show a loss of 200 or 300 millions of dollar balances and he is of course faced at the end of the year with the payment of something like $180 million of the annual payment on the British debt to the US and Canada. If in order to meet these payments he has not been able to draw on the Monetary Fund and borrow on his securities from the Federal Reserve Bank as outlined in reference telegram he fears that there may be a real panic regarding sterling. Perhaps the above is only another way of saying that the British Cabinet is beginning to realize what a terrible mistake has been made and appreciate the fact that the only thing which can save them is the immediate and intimate cooperation with the US through the agency of the United Nations. Whether or not the government would fall under these conditions is anyone’s guess, [Page 1152] but I believe that leaders such as Macmillan and Salisbury feel that if they can make their colleagues understand that the ultimate support of the US has not been lost the government still could count on the votes of a sufficient number of Conservative back benchers to insure a majority for the government in favor of withdrawal from Egypt in state to [spire of] the fact that no satisfactory arrangement had yet been entered into with Nasser regarding the Canal. To put it in its simplest form I would say that the British Cabinet is prepared to withdraw from Egypt now and leave to the UN the settlement of the problems involved in the relations between Israel and the Arab world and the problems relating to the operation of the Canal provided that the tremendous moral influence and power of the President will be continuously brought to bear on the UN to insure through the UN the ultimate solution of these terrible problems in accordance with justice and international law.
It is interesting to note that in his talk with me last Friday3 Macmillan in discussing the possibility of his seeing Secretary [omission in the source text] the immediate future said to me that perhaps he, Macmillan, could go to Washington as “Eden’s deputy” as Eden himself might not be well enough to come. He said that Eden was very tired and should have a rest before he engaged in a conference as important as a top level Tripartite Conference would be at the present time. I cannot help wondering whether this might not be a hint that some sort of movement is on foot in the Cabinet to replace Eden. I have no reason other than the conversations which I am now reporting to reach any such conclusion, but I feel that perhaps I should raise the question.
It is perhaps interesting to note also in connection with the above that, as Secretary knows, both Macmillan and Salisbury have been among the most bellicose members of the Cabinet during entire Suez crisis.
Should appreciate if Secretary would transmit to Humphrey financial information contained this message.
- Source: Department of State, Central Files, 974.7301/11–1956. Top Secret; Niact; Presidential Handling. Received at 9:12 a.m. A copy is in the Eisenhower Library, Whitman File, Dulles–Herter Series.↩
- Document 583.↩
- November 16.↩