90. Telegram From the Delegation at the Suez Canal Conference to the Department of State1

Secto 15. Secretary met this morning with Menzies, Pineau, Eden and Lloyd2 to discuss general tactics. Understood that Pineau will speak this afternoon’s plenary session. Shepilov also indicated to Eden that he would wish speak today. Consensus was that general debate should if possible be completed Saturday, understood that Menzies would endeavor to be last speaker so that he can draw general summary and be in position respond particularly to speeches by USSR, India, Indonesia and Ceylon. Lloyd plans principal speech for UK in course Saturday session.

Secretary said he had been giving considerable thought to type of declaration or resolution which should be submitted to Conference.3 He wanted to have ample time to discuss paper. He was thinking of declaration in terms so couched as to get maximum number of subscribers, consistent with basic principles for settlement included in his August 16 speech. He wondered whether best procedure might then be to seek the designation of committee which would be charged with negotiations with Egypt pursuant to general [Page 217]declaration, suspending present Conference to give committee time to negotiate.

Consensus appeared favor this general procedure. Arrangements made for staff level and then high-level US–UK–France–Australian meeting tomorrow to go over draft declaration which Secretary undertook provide. Pineau suggested that declaration should not be too weak. He said that immediately after general debate Secretary might table paper Saturday evening in order provide opportunity delegates to study it over weekend and discuss it Monday. Secretary questioned advisability US taking sole responsibility for tabling “tough text” which inevitably would be watered-down. This would place US in awkward position since any subsequent modification would appear represent defeat. Moreover he had been talking with several delegates (this morning with Iranian and Pakistani)4 who were anxious to be helpful but who had domestic political preoccupations which must be met without sacrificing basic principles. He did not want to ride “rough-shod” over their objections to a strong line. Papers should take reasonably into account their views in order to rally as much support as possible from the outset and avoid subsequent softening process.

Menzies observed that it is frequently dangerous to endeavor too much of a definition, but that inclusion in proposal of certain points of definition might improve prospects for general acceptance. He had in mind questions of who would arrange for payment to Suez Canal Company and who would arrange financing future development of Suez Canal. Answer to these questions, he said might turn attitude of several countries like Pakistan and India to support proposal. If international body could assume responsibility, advantages to Egypt would appear very great and it obviously in Egypt’s interest to accept. He strongly favored this approach in lieu any indication of harsh proposition to be forced upon Egypt.

Secretary thought question of payments to Suez Canal Company and investments in development Canal itself were primarily matters for negotiation by committee with GOE and Canal Company. He felt however that international board should have responsibility for both matters. Menzies agreed and felt this would offer advantages to GOE that government could not refuse. Plan should make it clear that international board would be non-profit and that arrangements would be made by international board for compensation to Company and future of Canal.

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Secretary observed that financing future development of Canal, including parallel Canal, might be quite feasible if Canal users could have confidence in its operation. He thought oil companies and other users might be prepared put up considerable capital to be amortized out of proceeds. On other hand if responsibility for operation should continue rest with Egypt countries would in common prudence seek alternatives to Canal which eventually would be by-passed for most part and become wasting asset.

Responding Lloyd’s comment that offer should not be too attractive so that it would appear that Egypt had greatly benefited by her rash action, Eden observed that no one would think that if international control were injected. Secretary agreed saying that acceptance international control by Nasser would represent major political defeat for him.

Pineau observed that in addition other important questions, was that of who would be responsible for policing of Canal under arrangements now being thought about. He said that treaty might have clause to effect that any interruption in transit of Canal would be considered act of aggression as defined in UN Charter, and thus provide basis for protection.

Dulles
  1. Source: Department of State, Central Files, 974.7301/8–1756. Secret; Priority. Drafted by Rountree. Received at 5:55 p.m.
  2. According to the schedule for August 17, prepared by the U.S. Delegation, the Secretary’s calls on Eden, Pineau and Menzies, and Lloyd began at 12:15 p.m. The chronology, prepared by the U.S. Delegation for that date, indicated Secto 15 is the only account of these conversations. (Ibid., Conference Files: Lot 62 D 181, CF 753)
  3. Draft proposals were discussed at meetings of the British-French-American working group on August 14 and 16. For accounts of the discussion, see memorandum by First Secretary of the Embassy in London Evan Wilson, August 14 (ibid., Central Files, 974.7301/8–1556) and USDel/MC/17, August 16 (ibid., Conference Files: Lot 62 D 181, CF 745).
  4. The conversation between Dulles and Pakistani Foreign Minister Choudhury began at 10:30 a.m., and the one with Iranian Foreign Minister Ardalan at 11:30 a.m., both on August 17. Memoranda of these conversations, prepared by the U.S. Delegation, are ibid., CF 753.