Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, 1957, Volume XVII

307. Telegram From the Embassy in the United Kingdom to the Department of State¹

London, May 1, 1957—11 a.m.

5925. Bonn for Secretary.²SCUA. At Council mtg yesterday afternoon Selwyn Lloyd for UK summarized April 26 discussion in SC and pointed out most members SC expressed view Egyptian memo did not meet requirements of six principles. Then raised three questions mentioned Embtel 5869³ and Deptel 7627.⁴ On first question (further negotiations) he thought most unsatisfactory feature of memo was its unilateral character. Several members of SC had pointed out memo could be withdrawn or amended by Egypt at any time. Users should insist memo could not be withdrawn or modified unilaterally. In his opinion clarification of Egyptian intentions in this regard should be sought through SC.

Re second question (boycott) Lloyd thought pending clarification mentioned above every effort should be made to continue avoiding Canal. Re third question (de facto acquiescence in Egyptian memo) he thought such acquiescence premature in absence of clarification. Therefore SC should meet again Friday or Monday.⁵ Meanwhile members should continue advising shipowners avoid Canal. When Egyptian position clarified question of acquiescence in memo could be reconsidered.

Netherlands Ambassador stated Egyptian memo unsatisfactory and his government in principle would favor continuing negotiations, but since some governments had made it clear in SC they prepared acquiesce de facto in Egyptian position little was to be gained from further negotiations. Netherlands would prefer await developments before deciding whether bring matter to SC, on basis to be determined later. Re boycott, Netherlands shipowners had been cooperating up to now but could not go on much longer. Therefore users had no alternative but to acquiesce in Egyptian memo. Whether this would involve paying tolls under protest was matter to be considered. This had not been practice of Netherlands ships when using Canal in period between nationalization and closing. Favored joint declaration by SCUA that Egyptian memo not in accord with six principles and that members reserving rights.

I spoke along lines Deptel 7627, first quoting substance Lodge’s remarks in SC re US attitude⁶ and commenting re Lloyd’s three questions along lines indicated ref Deptel. Re suggestion just made by Lloyd that SC meet again to consider obtaining clarification Egyptian position re unilateral character of memo I said would ask for instructions.

Italian Rep said there general agreement that Egyptian memo not satisfactory but boycott not feasible, especially for Italy in view its geographic position. Expressed some reservations re Lloyd’s proposal that matter be taken back to SC, referring to possibility of Soviet veto. He suggested users deposit with UN declaration reserving position vis-à-vis Egyptian memo and stating they using Canal only because of necessity.

Portugal said no useful purpose further SC consideration. He favored further negotiations by committee representing SCUA. Until satisfactory agreement reached with Egypt, use of canal should be avoided, if this should prove impossible, users should agree to Egyptian memo on de facto basis without prejudice to final settlement.

Norwegian said his government could not order shipowners but would do its best to persuade them continue avoid using Canal. However, this would be difficult if other members should make increasing use of Canal. If other users should agree to acquiesce in Egyptian memo Norway would go along, while reserving its rights.

Sweden supported Lloyd’s proposal re SC. Boycott difficult to maintain and Netherlands and Italian suggestions for joint declaration not feasible.

German Rep said his government regards memo as unsatisfactory and therefore would favor further negotiations in principle but doubts whether prospects promising. It premature, however, to consider machinery to be employed. Presumably matter should be handled through UN but he without instructions on this point. Re boycott, Federal Government had been urging its shipowners use restraint but could not do more as it possessed no legal control. In circumstances Germany was prepared to acquiesce in Egyptian memo on de facto basis and await developments. This would presumably involve reservation of rights of users but his government had not yet made up its mind on this point or on precise manner of paying tolls.

Australian Rep said Egyptian memo unsatisfactory and negotiations should be continued with view obtaining acceptable international arrangements for Canal based on six principles. Agreed with Lloyd that matter should be sent back to SC on urgent basis and thought negotiations might be carried out by those members of SC, numbering he believed seven, who also members of SCUA. As Australia not shipowning nation, had no comment re boycott. Re acquiescence in Egyptian memo, thought if no progress achieved in further negotiations with Egypt, users would have to acquiesce.

New Zealand Rep saw no objection to attempting obtain clarification Egyptian intentions but doubted if this would be very fruitful. Like Australia, New Zealand had little or no shipping, but he doubted whether arguments in favor of boycott were conclusive. Eventually he thought users would have no alternative but acquiesce in Egyptian document. SCUA should remain in existence but take no part in negotiations.

Denmark agreed with Netherlands re joint declaration by SCUA but re third British question pointed out de facto acquiescence need not imply acceptance of Egyptian memo.

Spanish Rep had no instructions but expressed personal view there should be further negotiations. This was also opinion stated by Iran. Turkey had no instructions.

French Chairman expressed support for Lloyd’s proposal that clarification be sought through SC and said meanwhile French shipowners would continue avoiding Canal. Re third British point he stressed any acquiescence in Egyptian position, whether provisional or not would prejudice position of users. Pakistani and Japanese observers spoke briefly and both thought negotiations should be pursued with Egypt. Lloyd then spoke again attempting sum up discussion. Said there general agreement that Egyptian memo not such as to command confidence of users as permanent settlement and further clarification of Egyptian intentions needed. He thought most members agreed this should be done through SC next Monday but noted number dels without instructions on this proposal and perhaps meeting could be adjourned for 24 hours permit members obtain further instruction. French Chairman thought 48 hour adjournment preferable to which I agreed. In reply my question whether Brit envisage SC consideration limited to clarification Egyptian position on unilateral withdrawal or modification of declaration, Lloyd said his proposal was that SC should try to confine itself to securing clear answer from Egyptians on question of unilateral withdrawal or modification of their memo but he recognized impossible control SC meeting. He added Brit did not think Egyptians really intended withdraw or modify their document, but they should be given chance to make their position clear. Meeting then considered draft communiqués prepared by US and UK dels and agreed to anodyne text transmitted in Embassy separate telegram after it became clear that not all members had agreed to a particular substantive recommendation. Next meeting set for 2:30 pm Thursday.

In side conversation I learned from Lloyd that reason for position which he took in meeting is that Brit bankers are attempting in secret negots with Egyptians to obtain agreement in next few days repayment of tolls in free sterling currency. Brit want firmest position possible during negots to put them in best position resist Egyptian pressure to unblock Egyptian sterling balances. Therefore do not want users to take position acquiescing in Egyptian memo until these negots completed. Lloyd indicated he will press Secretary in Bonn to agree to UK proposal re SC. Envisages SC meeting confined to questioning Egypt re possibility withdrawal or modification declaration and prepared acquiesce de facto regime following SC meeting.

Claims recognize cannot hold shipowners from Canal indefinitely and only playing for time over next week. Lloyd also intimated he regards proposal for further SC meeting as device to achieve subsequent French agreement in acquiescing to Egyptian Declaration.⁷

Believe British position also motivated by desire to avoid having to state in Parliament today that Brit acquiesce in Egyptian Declaration. Such move is widely anticipated here following Security Council meeting last week and there is an appreciable volume of criticism of this prospect manifest in press. We of course expressed to Lloyd our apprehension that it might be impossible to confine SC meeting to single clarification he desires and quite possible that reconsideration that forum could reopen whole issue with no clear indication any useful outcome. If we desire avoid SCUA acceptance Lloyd’s SC suggestion or British or French raising matter in SC on their own, we should have urgent instruction here and Paris to endeavor dissuade them.

Whitney

1. Source: Department of State, Central Files, 974.7301/5–157. Confidential; Niact. Received at 8:46 a.m. Repeated Niact to Bonn and Paris.
2. Dulles arrived in Bonn on May 1 to attend a Ministerial meeting of the North Atlantic Council.
3. See footnote 2, supra.
4. Supra.
5. May 3 or May 6.
6. Reference is to Lodge’s remarks on April 26; see footnote 2, Document 303.

7. Also on May 1 in Washington and New York, Ambassador Caccia and British Representative Dixon presented U.S. officials with a memorandum proposing that a meeting of the Security Council be held on or about May 6 for the purpose of clarifying the Egyptian position on the status of the Declaration, particularly as to whether or not the Egyptians considered themselves entitled unilaterally to withdraw or amend the Declaration and to discourage use of the Canal over the next week. The memorandum and the oral presentations accompanying its delivery all emphasized that such action would facilitate the British position in negotiations with Egypt to be held in Basel, Switzerland, concerning the use of sterling for toll payments. (Telegrams 857 and 858 from USUN, May 1, and memorandum of conversation among Caccia, Dillon, and others by Shaw, May 1, and note from the British Embassy to the Department of State, May 1; all in Department of State, Central Files, 974.7301/5–157)

   Following the approach in New York, Lodge noted that, in his opinion, it would be undesirable to reconvene the Security Council on the Suez question because it would undoubtedly draw a negative response from the Egyptians and it would undoubtedly develop new differences between the United States and Great Britain in that the former could not support the British position on the Canal issue. Lodge, therefore, recommended that the United States discourage the British from calling for a meeting and concluded that: “British idea of SC meeting seems to show same semi-hysterical confusion of mind as characterized French thinking on Algeria.” (Telegram 859 from USUN, May 1; ibid.)