34. Telegram From the Department of State to the Mission at the United Nations1
Washington, January
24, 1957—3:45 p.m.
558. For Lodge. At Secretary’s suggestion Wadsworth made engagement for you and Phleger to see SYG at 11:30 a.m. Monday January 28 to inquire as to plans for Suez settlement. Phleger would like to meet you in your UN office at 11 a.m. that day. Secy’s thinking is along these lines:
- 1.
- Navy reports Canal will probably be cleared to a 25-foot depth by February 15, certainly by March 1.
- 2.
- Problem will then arise as to priority for shipping, payment of dues, operations, etc.
- 3.
- Problem of obtaining further advances for clearance, restoration shore and operational facilities, and permanent improvements also pressing.
- 4.
- If Canal opened before temporary or permanent agreement on operations reached with GOE implementing six principles user nations will be at an almost impossible disadvantage in negotiating reasonable agreement. GOE will then undoubtedly require all ships to pay dues to it, including UK and France and other nations previously paying into blocked accounts.
- 5.
- McCloy says further funds for clearance rehabilitation and improvements cannot be obtained unless GOE credit reestablished which he believes requires agreement that tolls be paid to International Bank, to be disbursed by it pursuant agreement with GOE.
- 6.
- We have no information as to any progress by SYG in obtaining temporary or permanent agreement by GOE covering operation, since his letter to Fawzi October 25 and Fawzi’s response November 2 SYG2 in asking for our advance toward clearing said he would use best efforts to obtain such agreement.
- 7.
- US, UK, France and others becoming increasingly concerned. US feels necessary to determine at earliest from SYG (a) his report of progress to date toward agreement, (b) his plans for obtaining such agreement and estimate of success, (c) his concrete views as to terms of such agreement, and (d) his progress in securing Egyptian assurances as to interim operation of Canal.
- 8.
- In light of this information US would then be in a position to make suggestions to SYG if it thought either his plans for procedure or his ideas of terms of agreement could be improved. If SYG plans acceptable US could then help in consummation.
- 9.
- If no substantial progress has been made, US contemplates suggesting SYG go to Cairo at earliest to see Nasser and ascertain promptly if agreement can be made and on what terms.
- 10.
- On basis of this information US could then make plans (a) to facilitate consummation of agreement envisaged by SYG if acceptable or (b) to take such other action as may be appropriate if no such agreement seems obtainable. Under latter circumstances and in addition other action, it is believed that individual ship-owners should not be left to fend for themselves, but arrangements should be made for payment of dues through Users Association which should act for users to protect users interest.
Dulles