79. Memorandum of a Conversation, Washington, August 12, 1956, noon–1:25 p.m.1


The following were present:

  • The President
  • The Vice President
  • The Secretary of State
  • The Chairman of the Joint Chiefs of Staff
  • Asst. Sec. of Defense Gordon Gray
  • Dr. Arthur Flemming
  • Honorable Allen Dulles
  • Mr. Herman Phleger
  • Senator Lyndon Johnson
  • Senator Earle C. Clements
  • Senator Walter F. George
  • Senator Theodore Francis Green
  • Senator Richard B. Russell
  • Speaker Sam Rayburn
  • Rep. Carl Albert
  • Rep. Thomas E. Morgan
  • Rep. A.S.J. Carnahan
  • Mr. Dillon Anderson
  • Gen. Persons
  • Mr. Jack Martin
  • Mr. Harlow
  • Mr. Murray Snyder
  • Mr. Chesney
  • Senator Wm. F. Knowland
  • Senator Styles Bridges
  • Senator Eugene D. Millikin
  • Senator Leverett Saltonstall
  • Senator Alexander Wiley
  • Senator H. Alexander Smith
  • Rep. Joseph W. Martin, Jr.
  • Rep. Charles Halleck
  • Rep. Leslie C. Arends
  • Rep. Leo Allen
  • Rep. Robert B. Chiperfield
  • Rep. John M. Vorys
  • Rep. Dewey Short

After expressing thanks to the group for interrupting their activities to attend this meeting, the President said that things were not going so well as to give “unbounded hope” for a peaceful solution. He noted the latest advice that Egypt probably would not attend the London Conference.2 He then stressed the importance of [Page 189] oil and indicated that Dr. Flemming would develop this subject more fully.

The President expressed his hope that one Senator from each Party would accompany Sec. Dulles to London since the outcome may be in treaty form, and it would also be well to have the Senators there so that the Secretary might draw on them for advice. He anticipated no secret agreements.

Sec. Dulles reviewed recent events involving the Suez, made reference to the Treaty of 1888, and characterized Nasser’s act as far more than a domestic nationalization issue. He cited Nasser’s public statements about the need for money for the Aswan Dam and the elimination of Western imperialism. He referred to a desire on the part of Nasser to unite the Arab world and if possible the Moslem world, and to use Mid-East oil and the Suez Canal as weapons against the West.

Sec. Dulles stated that the immediate reaction of France and England was to use force and that those countries had sent us messages on their readiness to use force, and requesting US support. As a result, the Secretary said, he went to London and stated the opinion that the immediate use of force would alienate world opinion since France and England had not yet made their case. He had expressed to the French and British the view there that the United States would regard immediate resort to force as a violation of French and British undertakings in regard to the United Nations and other such efforts for world peace, all of which would be wrecked if they moved violently at this time. Sec. Dulles thought that such action by the French and British then would have alienated the United States and would have given the Soviet unbounded opportunities in the diplomatic sphere. He had therefore proposed the calling of a conference for the purpose of establishing international assurances—within the limits of legitimate Egyptian interests—that the Canal would be properly operated. He then explained the basis for the twenty-four invitations, and he reported that twenty-two nations had accepted or indicated their intention to accept. He believed that Greece and Egypt would not accept.

The Secretary believed that the conference would provide a forum which would determine whether or not it is possible to obtain a solution in accord with the 1888 Treaty and taking into account legitimate Egyptian interests. He believed such a solution possible but not easy to be achieved. He believed that the British and French will resort to force if such a solution cannot be obtained. He thought the United States could not be unsympathetic to the British and French views in the light of Nasser’s ambitions. He warned that fulfillment of Nasser’s ambitions would result in reducing Western [Page 190] Europe literally to a state of dependency and Europe as a whole would become insignificant. He explained this in terms of availability of oil and in terms of the far-reaching interests of the French and British in Africa. He said that Britain and France cannot let Nasser have a strangle-hold on the Canal.

Sen. Knowland asked whether Egypt had signed the 1888 Treaty. Sec. Dulles explained why Turkey had signed and added that Egypt in its 1954 Treaty recognized the binding nature of the 1888 agreement.

Sec. Dulles said that the United States will have to play an important, perhaps decisive role in seeking a fair solution—perhaps to the extent of indicating that if there is no fair solution we will in our future conduct place much importance on who was responsible for the failure of the conference.

Sen. Russell asked if it was contemplated having an international authority to own the Canal. The Secretary said international ownership was not contemplated and added that it was primarily a matter of overseeing those who operate the Canal and the methods of operation. He stressed the view that Egypt should not be solely responsible; that nevertheless there remained a serious question as to whether the British and French would accept this type of solution. Sen. Lyndon Johnson pursued the matter by asking if it would not be a conceivable solution to have some international authority acquire title. The Secretary replied that he did not think it feasible or necessary to acquire title. He drew the analogy of public utilities and regulatory commissions, and he believed such an arrangement would be easier to effect than attempting to take title away from Egypt. The Secretary went on to add that he was not saying it was theoretically impossible to have operation of the Canal by Egypt compatible with the 1888 Treaty but he did feel that such an operation could not reasonably be expected in the light of Nasser’s professions. He explained that by manipulations in the administration of any set of rules the Egyptians could use the Canal for unacceptable national and political purposes.

(Sen. Knowland began a question, then broke it off.)

Sec. Dulles added that in the long run it is almost intolerable to Western Europe to feel that it cannot rely on access to the oil of the Middle East and that this is almost a life and death issue for Britain and France. He pointed out that two-thirds of the vital oil supplies to Western Europe travel through the Canal while one-third goes through pipelines; that the two transit methods being cut off together and at the same time posed an intolerable threat to Europe that oil might be cut off entirely. He thought that the views of those two countries can be reduced to reasonable proportions and that an [Page 191] international authority of small dependable countries can be established, but this will not be easy since national prestige is at stake.

Sen. Knowland asked what the relationship of such action would be to the Panama Canal in light of our treaty with Britain and potential Russian propaganda. Sec. Dulles pointed out important differences, such as the fact that Panama has never been fully internationalized, that Britain only has a treaty right to equal tolls, that we alone built the Canal and that all operating rights are ours. More important, he thought, was the consideration that the United States was not threatening the free use of the Canal by others, and he said there might well be reason for action to internationalize the Panama Canal if the United States threatened to halt use by others. He pointed out that such facilities do develop international characteristics through usage and growing dependence on them of the trade of nations, irrespective of title and initial control. He referred again to Nasser’s bullying tactics. Sen. Green ascertained that Nasser’s statements were made in the immediate Suez situation rather than at some indefinite time in the past.

Sen. Russell questioned the grounds for thinking Nasser might agree to a fair solution when it seemed he would not even attend the conference. Sec. Dulles, after a pause, commented on his feeling that others such as India, Ceylon and Pakistan can exert sufficient pressure on Nasser. Sen. Russell noted that Nasser seemed determined to dominate the situation. The President cited the importance of the Western market for oil, and Western control of marketing outlets on which income from production depends. He adverted to the damage Arab nations would suffer if their income should be cut off. He thought Nasser would begin to lose his prestige if he were responsible for cutting off oil income of other countries. The Secretary added that there is some evidence (not open) that some of the Arab countries think Nasser is going too fast. He said that the Arab States realize that alternative supplies can be developed, though at the cost of some austerity in Europe.

Rep. Vorys asked about other economic measures that might be taken since Egypt belongs to the Sterling Bloc. The President noted that no heavy British payments to Egypt fall due until next January. The President went on to quote from Nasser’s speech and to stress the heavy investment the United States has made in strengthening Western Europe, a big stake for us beyond the immediate considerations involving oil.

Rep. Halleck cited the big problem that would arise if the British and French “move in” as respects the UN Charter and our relationship to it. The President replied in terms of the many complexities that would be involved at that point. He re-emphasized the need for exploring every peaceful means for settlement and [Page 192] world awareness of the effort. Mr. Halleck asked if the matter could properly be put before the United Nations. Sec. Dulles said it could be brought before the Security Council but that Britain and France have veto power. He said the General Assembly could be called into emergency session but that it could only make recommendations which would involve long, inconclusive debate and lead to acquiescences amounting to a de facto recognition of what Nasser has done.

Sen. Green thought the London Conference might give consideration to laying down general principles for all waterways. Sec. Dulles thought it undesirable to interject other waterways since it would tend to drop the Suez matter out of sight. Sen. Green thought a beginning might well be made. Sec. Dulles doubted that the United States would want to interject the Panama Canal. Sen. Green said that if everybody took that position no progress would ever be made. Sec. Dulles replied that many treaties are involved and he asked if Sen. Green really meant to scrap all the pertinent treaties. Sen. Green commented that times and conditions have changed much.

Sen. Knowland asked if it were not really a question of an overt act, such as closing the Canal. He also asked what the case might be if Nasser promised to adhere to the 1888 Treaty and prevented any overt act violating the Treaty. In that case, he thought, Nasser might take to the United Nations any threat of forceful action by Britain and France The President recalled Nasser’s aggressive statements which seemed much like Hitler’s in “Mein Kampf”, a book no one believed. The President agreed that many embarrassing questions could be posed but that the main thing was the economy of Europe.

Sen. Smith asked whether any change of leadership in Egypt might bring in a person even worse than Nasser. Sec. Dulles replied that Nasser was the worst we have had so far. The Secretary referred again to Nasser’s book and his “Hitler-ite” personality. He emphasized again our stake in Western Europe. Sen. Smith noted divisions within the Arab world that had been apparent at the United Nations. Sec. Dulles elaborated on Iraq’s position but concluded that Iraq cannot make an open stand against Nasser.

Rep. Short commented about Nasser playing the old Hitler game. Sen. Bridges interjected that Nasser had to be stopped before he really got started. Sec. Dulles recalled all our efforts to work with him until we finally became convinced that he is an extremely dangerous fanatic. He expressed the view that if Nasser gets by with this action, the British and French are probably right in their appraisal of the consequences.

Dr. Flemming reported the work done with the committee of American oil companies engaged in overseas operations. At our request the committee prepared a plan of action for pooling resources, [Page 193] and this plan has been cleared by the Attorney General and the FTC. Dr. Flemming said he approved the plan last Friday night.

Dr. Flemming noted that an emergency Middle East Oil Committee is being set up to check on the statistics currently available. He stressed that all of the statistics he would present were not so firm as he desired.

Dr. Flemming said that 1.5 million barrels per day went through the Suez, of which 1.2 million went to Britain and Western Europe. Should the Suez be closed, Gulf Coast and Caribbean production could be increased fairly soon by 800,000 to 900,000 barrels per day to meet US and European requirements. Similarly, should the pipelines be lost but the Canal remain open, an increase here of 400,000 to 500,000 barrels per day would meet the situation. Finally, should both the pipelines and the Canal be lost, the situation might be met by rationing oil in Britain and Western Europe (saving 20%) and by increasing production here by 1.3 million barrels per day. The Committee will develop a program designed to deal with this.

Sen. Bridges asked about the destination of the 2.3 million barrels shipped daily through the pipelines and Canal. Dr. Flemming indicated that 300,000 came to the United States and 1.9 million to Britain and Western Europe. A question by Sen. Bridges as to the amount of this used by the American fleet and NATO remained unanswered.

Dr. Flemming stressed the “dollar drain” of an additional $400 million or $500 million per year that would result should the Canal be closed. Should both the pipeline and the Canal be closed, the additional dollar drain would be perhaps $600 million or $700 million.

Sen. Knowland asked whether oil would be shipped from the Middle East around Cape Horn. Dr. Flemming indicated that the figures he previously gave assumed some to be shipped around the Cape. Rep. Vorys asked how soon the million barrel per day increase could be accomplished. Dr. Flemming replied “in a very short period”, and inventories can be drawn upon in the interval. Sen. Saltonstall asked if an acute tanker shortage would not appear very soon. Dr. Flemming said that at first look there seemed to be sufficient tankers to accomplish the programs outlined. He believed firmer figures will be available in a week.

Sen. Russell thought this whole subject of an oil program might be an over-simplification of the problem, for the real question would hang upon the United States having to support the European countries financially. The President agreed that this is a serious problem and added that we were talking in the first instance about sheer existence.

[Page 194]

Speaker Rayburn asked if Nasser had definitely said he will close the Canal. The President and the Secretary of State replied that he had not. The Secretary added that the French and British view is that his words cannot be trusted. Speaker Rayburn inquired if an income was the only real objective of Nasser’s action. Sec. Dulles said that a treaty can assure him the income. Sen. Smith asked who would determine the level of tolls. The Secretary said that in the final analysis an international tribunal might determine. Mr. Vorys asked about the collection of tolls during this period of controversy, and Sec. Dulles explained the approaches of the United States, Britain and France with regard to “payment under protest” or “payment under coercion”. He added that the Egyptians seemed to be trying to appear thoroughly reasonable in this respect. Mr. Vorys asked how great is the income from the Canal. The President replied that Egypt gets $17 million per year and that another $31 million profit is had by the Company and used for set-asides, etc. The Vice President thought the question was a larger one than the money involved.

Sen. Saltonstall saw a need for clarifying the relationship of the matter to the United Nations and pointed to the danger that if the UN failed in this matter its prestige and acceptance would be greatly undermined. Sec. Dulles reported on his talk with the Secretary General who seemed greatly concerned about the UN role. It appears that the British and French haven’t given the UN quite enough attention. He thought that any international board that might be created might be related to the UN but he felt that answers were lacking with respect to possible developments should no peaceful solution be obtained. He commented that other nations are not so intent on going to the UN when that body does not seem to offer any practicable solution.

Sen. Wiley noted British and French troop movements and asked where we go should those countries attempt to take over by force. Sec. Dulles replied that the two countries had promised to avoid use of force pending the conference and that we have at least ten days’ time to work for a solution. Sen. Wiley then asked if the Soviets were stirring up the situation in order to get control of Middle East oil. The President replied that there shouldn’t be much doubt but what the Soviet will fish in troubled waters. Sen. Wiley repeated his question on US actions should the British, French or Egyptians resort to force. Sec. Dulles replied he could not today say what the US reaction would be, that much depended on developments of an evolving situation. He restated his earlier comments on the US attitude toward those responsible for obstructing a settlement.

[Page 195]

Speaker Rayburn questioned the Secretary’s earlier comment about Egypt having a legal right to take the action taken. Sec. Dulles believed his earlier comment somewhat different from what Speaker Rayburn had repeated, and went on to say that he meant that the Canal is located on Egyptian soil. He added that Nasser’s actions do, however, violate the earlier Treaty. Speaker Rayburn noted that traffic is now flowing through the Suez and he asked as to what the situation would have to develop for the British and French to say that they must “act”. Sec. Dulles replied that the French and British maintain the situation has already occurred but that they are holding back because of the conference. He reported their belief that Nasser is a wild man brandishing an axe and that they do not have to wait for the blow to fall. Speaker Rayburn asked the Secretary’s estimate of the result should the British and French act. The Secretary thought it would start a long and involved affair whose end was difficult to see, particularly in light of the difficulties Britain previously had in Suez even with many troops there. He referred to the bad situation in Libya also. Speaker Rayburn asked whether the Secretary thought the situation had gotten beyond the point of reason. Sec. Dulles thought not.

Sen. Johnson asked if we had not had enough experience with this type of situation to realize that we can’t deal with this Colonel, and shouldn’t we face up to it and say so to our allies. He went on to the effect that they expect us to help and we seem to be sympathetic to their case, hence should we not face up to it. Sec. Dulles commented that he did not believe they had yet made their case. With regard to what aid might be expected, he reported the belief of the French and British that they can handle the situation so long as the Soviet does not enter. Personally, he believed they might be a bit over optimistic. Sen. Bridges asked if it were not clear that if we allow Nasser to get away with this, we would encourage others to act likewise. Sen. Bridges said he agreed with Lyndon, that we can’t look the other way, can’t put our tail between our legs, can’t run away. Sen. Johnson said he had given much thought to this subject and there seemed only two alternatives: (1) to use all peaceful means to solve the problem (hence he had suggested exploring the possibility of an international authority to acquire title); (2) the only other course would be to tell our allies that we are their ally and to support them. He felt in this case that we can’t underwrite them financially forever and that we should tell them they have our moral support and that they should go on in. The President told Lyndon he seemed perfectly right in one respect, that we can’t accept an inconclusive outcome leaving Nasser in control; that on the other hand we can’t resign ourselves to underwriting the European economy permanently.

[Page 196]

Rep. Vorys asked about any specific plan for the use of force. Sec. Dulles believed the British and French intended to reoccupy the former base and station troops along the Canal. Adm. Radford commented that the initial plan would be to restore the World War II situation, using four to six divisions. The President noted how such an action would get to be a long and tedious one, allowing the other fellow to hit and run. Sen. Knowland noted that this plan involved an assumption that the action could be limited to that amount. Adm. Radford identified the plan as an initial one and noted that the British and French do not expect too much opposition from Egypt alone. Sen. Saltonstall recalled the favorable public attitude toward dropping the Aswan project. He believed Nasser should not be allowed to play both ends against the middle. He thought it might therefore be desirable to take the same firm approach now as was done in regard to the Aswan Dam. The President wanted everyone to understand clearly that we do not intend to stand by helplessly and let this one man get away with what he is trying to do. He stated that the reason the presentation at this meeting was not projected further into the future was that we do not know now what future developments will be. He again reassured the group that the US will look to its interests.

Speaker Rayburn commented that English thinking on the subject seems muddy. The President reviewed some of the indications of English thinking at the beginning of the crisis and wound up by noting Mr. Gaitskell’s attitude and the opinion expressed in the London Economist just out.3

Sen. Russell noted that Nasser had already backed up somewhat. Sec. Dulles read a note just handed him stating that Nasser had announced he would call a conference to handle the matter.

The President remarked on the confidential nature of the material presented, particularly in regard to statistics and the attitudes of the allies. A few minutes later he repeated this caution with particular regard to the military plan.

[Here follows discussion concerning the press release to be issued after the meeting; for text, see Department of State Bulletin, August 20, 1956, page 314, or The Suez Canal Problem, July 26–September 22, 1956, page 52.]

  1. Source: Eisenhower Library, Whitman File, Legislative Meetings. Top Secret. Drafted by Minnich.
  2. That same day during a press conference which began at 5 p.m. Nasser delivered a statement in which he affirmed that the “proposed conference has no right whatsoever to discuss any matter falling within the jurisdiction of Egypt or relating to its sovereignty over any part of its territory. The invitation to it cannot, therefore, be accepted by Egypt.” The complete text of Nasser’s statement was transmitted in despatch 127 from Cairo, August 13. (Department of State, Central Files, 974.7301/8–156) It is printed in The Suez Canal Problem, July 26–September 22, 1956, pp. 47–52. Reports from the Embassy in Cairo are in Department of State, Central File 974.7301.
  3. Reference is presumably to the August 11 issue of the London Economist.