384. Memorandum of a Conversation, Department of State, Washington, October 15, 19571
SUBJECT
- British and American Policy Toward Egypt
PARTICIPANTS
- U.S.
- The Secretary
- C. Burke Elbrick, EUR
- Stuart W. Rockwell, NE
- John Dorman, NE
- William N. Dale, BNA
- U.K.
- Selwyn Lloyd, British Foreign Secretary
- Sir Harold Caccia, British Ambassador
- Viscount Samuel Hood, Minister, British Embassy
- Morris, First Secretary, British Embassy
- Dennis Laskey, Private Secretary/Foreign Secretary
Mr. Lloyd opened the discussion of this item by referring to conversations between British and Egyptian representatives in Rome concerning economic matters.2 He said that he thought that if Egypt were prepared to desequestrate British property in Egypt (estimated by Mr. Lloyd as being valued at between 40 and 50 million pounds) the United Kingdom would agree to resume normal trade with Egypt. If Egypt were to agree to assess and pay compensation for “Egyptianized” British property or to “de-Egyptianize” this property, the United Kingdom would probably agree to unblock Egyptian funds up to a total of around 21 million pounds. The above figures were tentative as there had been no definite conclusion reached on this point in the United Kingdom. Mr. Lloyd said that the British were willing to go step by step with the Egyptians but that the latter must “do something” in order for the British to reach agreement with them.
Mr. Lloyd thought there were three general lines British policy might follow. The British could say they would not discuss anything at all with the Egyptians and maintain a complete “freeze” on relations with Egypt; they could change their policy completely and say that if Nasser would work with the West he could “have anything he wanted” from the U.K.; there was a line of policy in between these two extremes which the British preferred.
Mr. Lloyd asked what United States policy toward Egypt was to be in the next year or so and how we regarded Nasser’s situation.
The Secretary said that our policy toward Egypt at present might be regarded as “coolly correct”. We do the minimum required to deal with a country with which we are not at war and with which we have no formal trouble. We have said we expect to keep Egyptian funds here blocked until there is a settlement with the Canal Company, which looks as if it would require a long time. We are not giving assistance to Egypt and have cut off the CARE program, and do not presently contemplate resuming either one.
He had recently told Ambassador Hussein that it is not so much a question of a listing of specific steps the Egyptian Government might take to improve relations with the U.S.; the basic difference lies in our appraisal of the situation. Nasser thinks he can deal safely with the USSR and we do not. We do not intend to help him ease the way for the destruction of Egypt, and for Communist penetration of the Middle East. We believe that as long as Nasser holds his present views concerning the alleged lack of harm in dealing with the USSR, Egypt’s best interests and those of the Middle East are not being served. We do not intend to help Egypt in these circumstances or give the impression [Page 764] that we approve of Egyptian policy by aiding the Egyptian Government. We could cooperate with Egypt if there were a realization on the part of the Egyptian Government of the dangers of dealing with the Soviet Union and adequate manifestation of this realization in Egyptian policy.
Turning to the UK’s dealings with Egypt, the Secretary said that if an agreement between the two countries were to be judged to be a victory for Nasser, the political consequences would be very bad. If the agreement resulted in judgment that Nasser had given in, this would be all right. We were not in a position to express an opinion as to what specific formula would be required to reach an agreement which would be a victory for the U.K. However, if the British arrived at an agreement which in effect was a capitulation to Nasser, we might have to make adjustments in our own policy toward Egypt.
Foreign Secretary Lloyd asked whether the Secretary thought Nasser is in real difficulties. The Secretary said that he thought Nasser has serious problems but no immediate real difficulties.
Mr. Lloyd said that it was not possible for the U.K. to say that it would not have any dealings with Nasser. The Secretary replied that he realized this. The problem was in getting off a position without it being wrongly interpreted. The Foreign Secretary agreed.
Mr. Lloyd observed that in his view it would be better for the U.K. to have no agreement at all with Egypt than one which involved British payment of war damages to Egypt.
In conclusion the Foreign Secretary said that the U.K. would keep us advised of what it plans to do with regard to the possibility of reaching any kind of agreements with Egypt.
- Source: Department of State, Central Files, 611.74/10–1557. Secret. Drafted by Rockwell. Rountree forwarded a briefing memorandum to Dulles on October 15 prior to this conversation. (Ibid., 783.00/10–1557)↩
- Since the previous May, British and Egyptian officials had been negotiating intermittently over financial matters in Rome. Reports received from the British Government concerning these discussions are ibid., 641.74.↩