646. Telegram From the Mission at the United Nations to the Department of State1

524. For Hoover from Lodge. Fawzi (Egypt) asked to see me this afternoon. He expressed concern over implications of U.S. assistance now underway for Britain and France when there had been no similar show of interest in economic plight of Egypt. Fawzi said good will that had been created for U.S. in Egypt and Middle East by our recent actions was something which he very much hoped to preserve and build upon. While fully understanding need to assist Britain, France and Western Europe, whom he said he also wanted to see remain strong, there was bound to be unfavorable reaction in Egypt in view of failure U.S. or UN show any concern over conditions in Egypt. Fact was that however understandable to us and to him, we were now giving aid to the aggressors and giving no attention to the plight of country aggressed upon. Egypt had suffered severe damage in Port Said, in Alexandria, and to the Canal, and her airfields had been put out of commission. Egyptian economy was pretty well flattened out. Fawzi said he was not suggesting an aid program or anything that specific, but only that we should show concern and not allow our newly won position to be impaired by apparent lack of it.

In my letter of December 3 to Secretary,2 I said: “It is generally agreed that some substantial program of economic assistance will be needed to rebuild the Middle East and advance our prestige in that area. There are clear signs that bilateral programs would not be welcome in certain countries of that area, whereas a multilateral UN program with U.S. participation would be very well received. There is the danger that in the absence of such UN action Soviet bilateral programs may attempt to fill the gap. For these reasons I feel that there must be a meeting of minds—and a decision—on this subject very soon.”

I feel that careful consideration should be given to Fawzi’s point and renew my recommendation above. I do not recommend this merely because it would be politically delicate for Egypt to accept aid from U.S., but chiefly because of the effect upon UK, Israel and other Arabs of a straight U.S.-Egypt aid agreement. What is necessary in the circumstances is a multilateral aid program under the aegis of the UN with appropriate controls through the IBRD.

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The best way for this to be put into effect would be for the President to recommend it in his State of the Union speech and to authorize me to announce here that he will do so. This would help greatly in furthering negotiations on a Palestine settlement. With an aid program underway, it would encourage progress in negotiations if only because failure to negotiate might lessen the chances of continuing aid.

Fawzi said that he expected call on Acting Secretary Hoover Wednesday or Thursday of this week when he would raise problem at that time. I recommend strongly he not be given negative answer.

Lodge
  1. Source: Department of State, Central Files, 684A.86/12–1056. Confidential; Priority. Received at 9:52 p.m.
  2. Dated December 4. (Ibid., 340/12–456) For text, see vol. IX, p. 399.