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

71. Telegram From the Department of State to the Mission at the United Nations¹

Washington, February 9, 1957—6:37 p.m.

Gadel 138. Subject: Suez Canal. Ref Delga 685.² SYG’s working paper presumably drafted prior conveyance Cordier Dept views contained in Gadel 133.³

Generally speaking Dept believes working paper is not satisfactory.⁴

Since SYG requests US views on working paper, request you advise SYG appropriate manner Dept’s general view as described above⁵ and also convey following specific observations:

1. Long preamble of paper (paragraph 1 through 6 and including 6 (c)) repeatedly emphasizes proposition that nationalization of Canal was lawful and valid. This view has not been accepted by some of parties, and statement and reiteration of it would not be compatible with principle that positions of parties shall not be prejudiced and negotiations on final settlement shall not be prejudged by terms of interim arrangement. We see no necessity for such a preamble and think its inclusion in any paper on interim arrangement highly undesirable.

2. Believe question of agency to receive and hold Canal tolls is of great importance and not incidental “special question”. US views on agency set forth in Gadel 133.

3. Toll account should not stand in name of Egypt, thus implying unrestricted Egyptian control of funds. As suggested in Gadel 133, Egypt might appoint agent to receive tolls and agent would keep them in separate Suez Canal account.

4. It would be unsatisfactory for arrangement to provide that Egypt could draw on toll account except for amounts deposited by particular users with a reservation. This point has been referred to in Dept.’s views set forth in Gadel 133. Individual users should not be confronted with choice of making unconditional or conditional payments into toll account. It would be highly undesirable for distinctions to be made among users.

5. Para 7(a) in Secretariat memorandum suggests agreement between the parties on disbursements from toll account as a possible alternative. This seems to us essential, and we have set forth in Gadel 133 the type of agreement which we think both fair and practicable. Para 8 of Secretariat paper not consistent with such agreement.

We would urge SYG to give careful attention to ideas advanced by US to Cordier on February 7. Any interim arrangement presupposes application of six principles as envisaged in SYG’s letter to us requesting advance $5 million for Canal clearance.⁶

Dulles

1. Source: Department of State, Central Files, 974.7301/2–757. Confidential. Drafted by Meeker, Metzger, and Waring; cleared in substance by Shaw; and approved by Wilcox who initialed for Dulles.
2. Document 67.
3. Document 61.
4. At this point, the following passage appears on the source text but was deleted prior to transmission: “and would hinder rather than aid progress toward a mutually acceptable provisional solution. Would seem preferable therefore to scrap working paper entirely and start afresh in accordance with terms of Gadel 133 which contain basic elements in simple terms for an equitable interim arrangement.”
5. Presumably reference is to the passage stricken from the text of Gadel 138.
6. Reference is presumably to Hammarskjöld’s note to Lodge of December 25 and the informal memorandum which Dulles used as a “talking paper” during his conversation with Hammarskjöld on December 31. See Documents 1 and 2.