Office of the Historian

325. Telegram From the Department of State to the Embassy in the United Kingdom1

Washington, May 11, 1957—3:15 p.m.

7951. Ambassador Caccia informed Department May 11 his Government’s appreciation US cooperation in trying to get better terms from GOE and assisting British Government in mounting difficulties. SCUA discussions revealed inability member governments to continue holding back vessels from using Canal. SCUA Communiqué welcomed.2 Government plans announce in Parliament 3:30 PM Monday withdrawal present advice to shippers permitting them use Canal provided GOE agrees opening special account into which ship tolls can be paid.3UK also discussing with Egypt possibility widening use this [Page 617] account to cover resumption current trade with Egypt. UK prepared discuss GOE desire for unblocking all Number One accounts; this would be done however only in context of settlement covering all outstanding claims and counter claims. For confidential information USG, UK planning allow payment from Number One Account to cover contracts entered into before July 28, 1956 for which no confirmed credits were opened with UK banks and in respect to which goods had not yet been shipped.

Ambassador stressed foregoing should not be interpreted as letup on Egypt. Stated UK thinks attempt should be made soon obtain better terms from Egypt. His Government still waiting reply from SYG.

Dulles
  1. Source: Department of State, Central Files, 974.7301/5–1157. Confidential. Drafted by Shaw and approved by Dillon who signed for Dulles. Repeated to Cairo.↩
  2. On May 9, the Council of the Suez Canal Users Association issued a communiqué which criticized the Egyptian Declaration for not meeting the six requirements of October 13, 1956, and noted that future use of the Canal by member states did not imply acceptance of the Egyptian Declaration as a settlement of the Suez Canal question. For text of the communiqué, see United States Policy in the Middle East, September 1956–June 1957, p. 392. Department of State instructions to the Embassy in London concerning the communiqué are in telegram 7828, May 7. (Department of State, Central Files, 974.7301/5–757)↩
  3. On May 7 in Basel, representatives of the Bank of England and the National Bank of Egypt, acting with the approval of their governments, initialed an agreement which provided for the National Bank of Egypt to open a transferable account (designated as No. 1 Special Account) with the Bank of England, through which toll charges could be paid in pounds sterling. An unofficial copy of the text of the agreement is ibid., NEA/IAI Files: Lot 69 D 488, Suez Canal Tolls and Dues 1957. According to comments made by Dillon and Rountree at the Secretary’s Staff Meeting on May 9, the agreement was “concluded successfully, from the British viewpoint”. (Tentative Notes, May 9; ibid., Secretary’s Staff Meetings: Lot 63 D 75)↩