213. Telegram From the Secretary of State to the Department of State 1

Dulte 7. For Acting Secretary from Secretary. Have received message from Macmillan 2 expressing concern Suez tolls situation and seeking “any thoughts which you may feel able to share with us”. Have stated this matter being dealt with Washington and undesirable risk crossing wires. My general feeling is that we could bring about reasonable agreement by a negotiation which on one hand offered inducements in way of various relaxations of present pressures and other hand threatened to develop long-term alternatives to canal through northern pipeline, tankers and accelerated atomic development. However, am not clear as to how negotiation could most effectively be conducted and also wonder whether British prepared accept implications of Egyptian acceptance.

  1. Source: Department of State, Central Files, 974.7301/3–1257. Secret; Priority. Drafted by Dulles. Received at 7:18 a.m.
  2. Prime Minister Macmillan had asked the British Secretary of State for Commonwealth Relations, Lord Home, then in Canberra for the SEATO Council meeting, to inform Dulles as to current British thinking on the Suez Canal situation and to elicit Dulles’ views. Home’s letter to Dulles, dated March 12, 1957, is ibid., Presidential Correspondence: Lot 66 D 204: UK officials corres. with Secy Dulles/Herter 7/54 thru 3/57 Vol I incoming. It bears the handwritten notation: “This is the message referred to in Dulte 7, Mar 12.”

    In his letter, Home emphasized that Egypt should not obtain complete control over the dues when the Canal reopened, as it would destroy all incentive for Egypt to make concessions. Lord Home posed the question of what action should be taken if Egypt rejected the Four-Power interim proposals. After noting that a boycott would be difficult to organize and would probably inflict more harm on many countries in Europe and Asia than it would on Egypt, Home considered several other means of pressure, the success of which “would seem to depend primarily on the attitude adopted by the United States Government”. These included: continued blockage of Egyptian accounts, refusal to extend all forms of economic and financial aid until the Canal matter was properly resolved, and encouraging plans to build larger tankers and new pipelines while reducing the volume of shipping through the Canal.