119. Memorandum by the Deputy Director of the Office of Near Eastern Affairs (Rockwell) and by Lewis Hoffacker of That Office1
MEASURES US HAS TAKEN AGAINST EGYPT
The United States withdrew, on July 19, 1956, its offer to contribute $54.6 million in the construction of the Aswan High Dam.
The United States has continued to delay shipment of a meteorological station (value: $12,500) and 30,000 rounds of 75 mm ammunition (value: $358,000), for which the Egyptian Government has deposited dollars under the US-Egyptian reimbursable military assistance agreement.
Following Nasser’s seizure of the Canal Company on July 26, 1956, the U.S. Government stopped practically all shipments of arms and aviation equipment to Egypt (except for several small shipments on behalf of U.S. commercial interests in Egypt). After November 2, 1956 (date of the General Assembly resolution) the United States has completely stopped all shipments of a military or semi-military nature.
Freezing of approximately $40 million worth of Egyptian assets in the United States was carried out by Treasury Department order on July 31, 1956. This freeze is being maintained despite strong Egyptian protests.
The Passport Office began suggesting in September 1956 that passport applicants contemplating travel in Egypt hold their plans in abeyance. In late October the present United States policy of not validating passports of United States citizens contemplating travel in four Middle East countries, including Egypt, was established. This has had a direct adverse effect on the Egyptian economy because of the substantial reduction of tourist travel.
The practice of reviewing licenses for the export of automotive equipment, communications equipment and related items destined for Egypt continues; in most cases such licenses have been withheld.
Technical and economic development assistance progress have been permitted to taper off. No new programming is underway.
No new training of Egyptian military personnel in the United States is being carried out. Action on requests for maps and military training films has been deferred.
[Page 214]During the period between the seizure of the Canal Company and the closure of the Canal, tolls paid to the Egyptian Canal Authority by masters of United States ships transiting the Canal were paid “under protest.”
Following the seizure of the Canal Company, commanders of war surplus depots abroad were instructed to assist in preventing shipments of military or quasi-military equipment to Egypt.
Action has been withheld on an application for Export-Import Bank assistance to an Egyptian manufacturer.
The United States Government has permitted the exchange of persons program with Egypt to slow down and has no plans to extend a new program in the near future.
No action has been taken on Egyptian requests for permission to purchase PL 480 wheat and other commodities amounting to approximately $58 million. The United States has not authorized a new CARE general program for Egypt. From January 1 to October 30, 1956, CARE and other voluntary foreign aid agencies distributed Title III PL 480 agricultural products in Egypt worth $35.5 million.
- Source: Department of State, Central Files, 611.74/2–1957. Secret. A marginal notation on the source text by Bernau reads: “Sec saw”.↩