OCB
files, lot 62 D 430, “Egypt”
No. 1364
Memorandum by the Operations
Coordinator (Radius) to the
Acting Secretary of State1
top secret
Washington, September 28, 1954.
Subject:
- Status Report Item 7(b)—Military Assistance to Egypt
Attached (Tab A) is the briefing memorandum from Mr. Jernegan recommending that you
concur in the proposals of the ad hoc working
group.
Mr. Nolting does not concur in
this proposal on the grounds that it will not remain secret and he
does not approve the precedent.
Also attached (Tab B) is a memorandum for the OCB from Mr. Staats summarizing the discussions and suggestions
of the working group. These coincide closely with Mr. Jernegan’s recommendations. The
question of source of funds may be subject to further discussion. It
should also be noted that the $10,000,000 figure is an upper
limit.
Mr. Jernegan and Mr. Nolting will participate in the
briefing session to enable you to reach a decision as to the
position to be taken at the OCB
meeting.
[Page 2305]
[Tab A]
Memorandum by the Deputy Assistant Secretary
of State for Near Eastern, South Asian, and African Affairs
(Jernegan) to the
Acting Secretary of State2
top
secret
Washington, September 28,
1954.
Subject:
- Military Assistance to Egypt.
The Ad HocOCB Working Group (State, Defense,CIA and FOA) met yesterday evening and agreed to submit the
following to their respective principals:
- (1)
- We shall proceed, as at present, to attempt to work out a
bonafide economic development program for Egypt in the
magnitude of $40 million.
- (2)
- . . . , we should advise Prime Minister Nasir that we cannot
undertake a full scale military aid program unless and until
he is able to conclude a normal military assistance
agreement. However, in view of our special friendship and
our desire to assist his regime to maintain and consolidate
itself, we are willing to make available a modest additional
amount of economic aid in such a way that it will release
dollars for the purchase by Egypt of American military
equipment. This would be kept strictly secret. It would
apply only to the present fiscal year and Nasir would be told very
clearly that any future assistance could be obtained only in
the usual way.
- (3)
- If Nasir agrees, a
sum of not to exceed $10 million would be earmarked by
Defense for transfer to FOA
economic aid funds, to be added to the $40 million proposed
for genuine economic aid.
- (4)
- The actual decision on items to be sold to Egypt and the
placing of the necessary orders, etc., would be carried on
overtly in the normal way as if the funds involved had
originated solely from Egyptian resources.
I concurred in this proposal because the magnitude of military
purchases involved (not over $10 million) is small enough to
prevent other states from assuming that the US has shown special
favoritism to Egypt. Even without any assistance from us, Egypt
might well scrape together $10 million to buy equipment. A year
or two ago she was prepared to spend $11 million in this
country, at a time when she was receiving no aid of any kind
from any one.
I also think that a grand total of $50 million in economic aid to
Egypt will not seem out of line, in view of the size of the
country and its obvious needs for economic development.
Finally, I believe there is some merit in the CIA argument that Nasir genuinely believes we
are committed to give him some military
[Page 2306]
help. I also believe he can be very
useful to us in the Near Eastern picture if properly supported
and cultivated. Therefore, I think a special gesture of this
kind is worth trying.
However, if Nasir should
reject this arrangement as inadequate or as otherwise
unacceptable, I would recommend reverting to our original
position that he gets no military assistance in any form until
he is ready to sign the usual agreement.
I anticipate that this subject will be raised in the OCB meeting September 29th.3
[Tab B]
Memorandum by the Executive Officer of the
Operations Coordinating Board (Staats) to the Operations Coordinating
Board
top
secret
Washington, September 28,
1954.
There was convened at the offices of the OCB a special meeting of representatives of State,
Defense, FOA and CIA on September 27 to consider the
problem of military assistance to Egypt. The following persons
were present:
Present
- State
- Mr. John D.
Jernegan
- Mr. Louis Frechtling
- Mr. William
Burdett
- Defense
- CIA
- Mr. Richard
Bissell
- Mr. Kermit Roosevelt
- FOA
- OCB
- Mr. Elmer B.
Staats
- Mr. Max W.
Bishop
Mr. Jernegan chaired the
meeting and opened the discussion by stating that the United
States had a commitment to Egypt to give both military and
economic aid. that the Egyptian Foreign Minister had indicated
to Ambassador Caffery that
because of existing conditions, Egypt did not wish to conclude a
military assistance agreement at this time; that the U.S.
commitment to give military
[Page 2307]
assistance to Egypt did not include any
unusual circumstances and assistance was to be given only in
accordance with normal procedures; that in view of Egypt’s
expressed unwillingness to take military aid at this time, it
was felt undesirable to raise the issue in an effort to convince
the Egyptians that they should accept a military assistance
agreement; but that, in view of the recent discussions of this
matter at the OCB, if a
convenient device could be found to give not more than $10
million worth of military assistance to Egypt under . . . some
arrangement such as economic aid, Mr. Jernegan thought such
arrangement would be politically acceptable and would not cause
us embarrassment.
Mr. Staats and Mr. Godel
reviewed briefly the discussion which had taken place at the
last OCB meeting on Wednesday,
September 22.4 Mr. Godel went on to say that Defense had
earmarked a little over $20 million for military assistance to
Egypt and that a part of this might be transferred to FOA providing the OCB found it necessary and
desirable to do so. Mr. Godel emphasized at the same time that
there were other demands on this money . . . .
Mr. Roosevelt and Mr.
Bissell described
briefly the situation in Egypt . . . .
There was considerable discussion of the type of materials which
the Egyptians want at this time. It was agreed that it would be
highly desirable to send American military officiers to Egypt to
advise the Egyptians on the materiel which they should obtain
and to see to it, insofar as possible, that United States wishes
were met.
Mr. Paul stated that
FOA could within a short
time develop programs of economic aid for $40 million and a . .
. plan for $10 million which the Egyptians could use to purchase
military supplies from the United States.
It was agreed that the group would suggest to the OCB at its meeting of September
295 the following program
of action:
- 1.
- . . . get in touch with Colonel Nasir and . . . inform
the latter that while grant military aid can be given
only under a military assistance agreement, it might be
possible to make available to him, . . . , up to $10
million which he could use to purchase military supplies
from the United States, that this aid is all that he can expect in this
fiscal year, and that if such a program is desired by
Colonel Nasir,
he should have his Foreign Minister approach the
American Embassy and request assistance and advice to
purchase some $10 million worth of military supplies in
the United
[Page 2308]
States, and that no information would be given the
Egyptian Government of the total program of economic aid
contemplated until Colonel Nasir has indicated his concurrence or
non-concurrence with the proposal.
- 2.
- That the Defense Department would then in response to
an open request from the Egyptians send a military
survey team to Egypt in civilian clothes to advise the
Egyptians on the type of matériel which they should
purchase in order to get maximum benefit from their
expenditures.
- 3.
- That FOA should devise
programs for $40 million economic aid to Egypt from
FOA funds and up to
$10 million economic aid . . . for Egyptian military
purchases in the U.S. from Department of Defense funds
which would be transferred to FOA.
