265. Memorandum of a Conversation, Mid-Ocean Club, Bermuda, March 20, 19571


  • President Eisenhower
  • Secretary Dulles
  • Prime Minister Macmillan
  • Foreign Secretary Lloyd


In discussing the problem of relations with Egypt, Mr. Macmillan raised what he called the “$64 question”, which I had put to Lord Home2 at Canberra, namely, were we going to wage political and economic warfare against Nasser or seek some arrangement with him in relation to Israel and the Canal on the basis of a combination of inducements and pressures which would mean that, if he accepted, he would get the benefit of what had been held out as inducements. Mr. [Page 706] Lloyd made a strong personal attack about Nasser and his unreliability. The President and I said that we did not debate this point, but even conceding this “What would we do?” President Eisenhower said we could not at the same time seek his cooperation and also combat him. Mr. Macmillan said that he thought the answer was clear that we should seek by all of the pressures and inducements we could marshal to get an acceptable solution of the short-term and then the long-term problems relating to the Canal and peace with Israel. [8 lines of source text not declassified]

I showed the attached two cables to Macmillan and to Lloyd, who read them with obvious interest, but made no comment either of approval or of disapproval.3

In discussing what the US might do, I referred to the resumption of normal relations with unblocking of funds, access to PL 480 wheat, technical assistance, etc. Mr. Macmillan said that the aspect of this program which worried him the most was the release of funds because that might put pressure upon them to release blocked sterling which they were reluctant to do so as long as the Egyptians had war claims against the UK. I said I did not see how we could keep the funds blocked in their entirety although it might be that we could hold on to a part in order to cover possible claims for prior tolls paid to Egypt which might be claimed by the Suez Canal Company and also possible claims for mistreatment of US persons and properties in Egypt. I thought, however, that most of the blocked funds would have to be released if we resumed normal relations and had an acceptable Suez Canal settlement. Mr. Macmillan appeared to acquiesce in this view.

John Foster Dulles4
  1. Source: Department of State, Conference Files: Lot 62 D 181, CF 865. Secret. Drafted by Dulles. This conversation took place during an informal dinner, which began shortly after 7 p.m., in Macmillan’s suite. Formal meetings began on March 21. (Eisenhower Library, President’s Appointment Book)
  2. The 14th Earl of Home, British Secretary of State for Commonwealth Relations, attended the SEATO Council session in Canberra, March 10–13.
  3. Attached to the source text were telegram 1 from Bermuda to Cairo, March 20, and telegram 3120 to Cairo, March 20, both printed in vol. XVII, pp. 449 and 445, respectively.
  4. Printed from a copy that bears this typed signature.