Office of the Historian

246. Paper Agreed Upon at the Conference at Bermuda1

Bermuda, March 23, 1957.

4. REPORT BY WORKING COMMITTEE ON THE SUEZ CANAL2

The suggestions conveyed to Mr. Hammarskjold in the State Department’s telegram of March 20 to the American Ambassador in Cairo form a reasonable basis for an interim arrangement.3

2.
It would be premature to formulate a fall-back position at this stage. The aim should be to obtain acceptance of this proposal, or failing that to provoke an Egyptian counter-proposal.
3.
In their messages to Mr. Hammarskjold and Colonel Nasser, the United States Government have exercised as much pressure as is possible at this moment.
4.
It would however be helpful if the Foreign Secretary would reinforce the action of the United States Government by sending a message to Mr. Hammarskjold in Cairo. A draft is submitted.4
5.
It would not be useful to bring in S.C.U.A. immediately or to attempt to conduct negotiations with Egypt through S.C.U.A. On the other hand S.C.U.A. should be informed of the latest developments as soon as this can be done without embarrassing Mr. Hammarskjold,
6.
If an interim arrangement is obtained, the other members of S.C.U.A. should be invited to co-operate in securing the payment of dues through the agency of S.C.U.A.
7.
Consideration was also given to the problems arising from the fact that ships would be passing through the Canal before an interim arrangement could be put into effect. It was suggested that, so far as the United States, the United Kingdom and France were concerned, it would be desirable to consider the possibility of paying the dues to Egypt while at the same time setting aside equivalent sums in the blocked accounts.
8.
If the attempt to secure an interim settlement failed, consideration should be given to various measures including: [Page 465]
(i)
withholding of all forms of economic assistance from Egypt;
(ii)
payment of dues through S.C.U.A.;
(iii)
a proposal that the United Nations should ask the International Court for an advisory opinion on the passage of Israeli ships through the Canal;
(iv)
pressing of negotiations for a permanent settlement.

Annex

TELEGRAM OF MARCH 21 TO THE AMERICAN AMBASSADOR IN CAIRO5

The Secretary has informed Mr. Selwyn Lloyd of the substance of the message you were asked to convey to Mr. Hammarskjold on March 20, concerning the interim arrangements for the Suez Canal in the context of the Egyptian Memorandum.

2.
Mr. Selwyn Lloyd is in entire agreement with the terms of this message, and requests you to inform Mr. Hammarskjold accordingly. He wishes to emphasize the importance he attaches to a prompt and fair interim arrangement. He hopes Mr. Hammarskjold will be able to obtain from the Egyptian Government either acceptance in substance of the Four Power proposal or a conciliatory counter-proposal which effectively guarantees the interests of the users. He attaches particular importance to a reaffirmation by the Egyptian Government of their acceptance of the Security Council’s Resolution of October 13. He further hopes that Mr. Hammarskjold will be able to obtain confirmation that the Egyptians envisage a system on the lines set out in his letter of October 24 to Dr. Fawzi.
3.
Mr. Selwyn Lloyd would like you to give his best wishes to the Secretary-General and to say that we are all relying on him to help us to take this important step forward.
4.
In conveying the foregoing orally to Mr. Hammarskjold you should bear in mind the importance of secrecy. The fact that Mr. Selwyn Lloyd has communicated with Mr. Hammarskjold from Bermuda on this question is not to be made known to the Government of Egypt.
  1. Source: Department of State, Conference Files: Lot 62 D 181, CF 868. Secret. Transmitted to the Department of State in Secto 7 from Bermuda, March 21; ibid., Central Files, 611.41/3–2157.↩

  2. The following remarks were made concerning this paper during the 10:30 a.m. meeting on March 23:

    “The Secretary and Selwyn Lloyd agreed on minor changes of phraseology of the papers on guarantees for pipelines and the Suez. The Secretary remarked, in explanation of the concept of blocking payment of tolls, that if we had to accept passage through the Canal under protest and the payment of tolls to Egypt, we could place a second block on funds which were now held unless there were a settlement. Selwyn Lloyd noted that the United Kingdom had claims and counter claims which made its attitude somewhat different.” (Ibid., Conference Files: Lot 62 D 181, CF 861)

    ↩
  3. Telegram 3120, Document 236.↩
  4. Attached to the source text and printed below.↩
  5. See footnote 6, Document 242.↩