Foreign Relations of the United States, 1955–1957, Arab-Israeli Dispute, January 1–July 26, 1956, Volume XV

399. Telegram From the Embassy in Egypt to the Department of State¹

Cairo, June 16, 1956—4 p.m.

2515. There will be some repetition of previous messages contained herein but as we see similarity between where we stand now on subject High Dam and where we were last fall on question arms it seems to us following summary compiled from record might be useful to Department.

According … Nasser’s own talks with me which were reported, Russian Ambassador Solod May 21, 1955 offered Soviet technological and economic assistance including help on High Dam.² During same conversation Nasser reportedly queried Solod regarding military assistance. From that time until September 1955 Nasser attempted secure arms from United States under conditions which he felt would permit him refuse Soviet offer in spite of contrary pressures from Egyptian army. Finally faced with increasingly hostile actions of Israel and failure United States act affirmatively on his request for assistance in financing arms purchases unless he was willing accommodate himself to proceeding on Palestine settlement he accepted Soviet offer. I reported at that time that he felt he had to make this move to retain control and that I felt he probably was correct in his assessment.³

Appears to us Soviet financing of High Dam may be about to be completed on similar pattern. As Ambassador Hussein told Secretary July 29, 1955⁴ “High Dam is most important element in Egyptian economic development and without it Egypt cannot make progress”. This Embassy has also stressed on many occasions importance Egyptians attached to Dam. As we said in Embassy telegram 12 July 2, 1955⁵ “Egyptians have so far been wary of Soviet offers but if IBRD and/or other forms of Western financing fail materialize Soviet offer if renewed may appear more interesting”.

When Hussein returned Cairo August 1955 he reported Nasser had talked to him at some length of problems he faced with his military supporters. Nasser related how Shepilov had said Russia was prepared finance High Dam in exchange for cotton to assist Egypt in economic development and to supply MIGs and latest weapons payable in cotton (Embassy telegram 234 August 15⁶). We commentated (Embassy telegram 235 August 15⁷), “competition in economic fields with Soviet Bloc in Egypt must perhaps be faced up to although Nasser has so far refused Bloc help. It is in fact difficult for me to see how he can continue refuse their offers assistance in implementing economic development progress particularly High Aswan Dam”.

Observations we made last year are even more germane today. Generally speaking Egyptians are satisfied with Soviet arms program. Consequently when pressures are being renewed by Soviets in favor Soviet financing High Dam reluctance which many Egyptians still have over deals with Soviets because of possible “strings” is, to some extent at least, fading. Doubts Russia would follow through rarely heard now as Soviet economic drive contrasted with West’s own failure complete negotiations begun with United States and United Kingdom following Black’s January visit. Those Egyptians who argue Western financing Dam essential in national interest to balance Soviet military aid prevent subordination Egypt’s economy to Soviet Bloc and enable Egypt maintain “independent policy” vis–à–vis East and West find their position equally difficult maintain as United States and United Kingdom not only stall but give public impression of perhaps being unable move due congressional and parliamentary sentiments.

At same time urgency of announcing plans for project increases as time nears for inception parliamentary regime in Egypt. Government aware it must soon take vigorous steps meet domestic problems and High Dam as primary effort this end must therefore be begun without delay or at least plans made firm in order avoid public criticism which might be difficult suppress.

Combination of circumstances therefore in almost all respects parallels those leading to arms deal: 1) compelling need; 2) appearance of Western indifference; 3) Soviet eagerness help.

I have pointed out in several messages this spring that our failure move forward on High Dam negotiations would lead Egyptians conclude we were merely stalling to conceal fact we had reached decision not extend assistance High Dam financing at this time (Embassy telegram 1794 March 8,⁸ Embassy telegram 1910 March 27,⁹ Embassy telegram 2251 May 15,¹⁰ Embassy telegram 2285 May 18¹¹). We do not consider approach made in compliance Department telegram 2815 May 24¹² to be of any significance as far as record is concerned.

Hussein told me yesterday Nasser had told him recently he now convinced we would not follow through on High Dam. (We should remember in connection any statements we may make if Russian offer accepted that Nasser’s own conclusion coincides with public feeling as well as local foreign press representatives who seem to be supplied their own information from visiting press or possibly from home office.) This connection might be well repeat what we said in another message on April 19¹³ “please bear in mind that Nasser is not certain if United States can and will assist him with Dam to its completion and he never has been, regardless obvious good intentions shown by Department. He sees hesitation and delay for what he considers policy purposes even prior to concluding agreement. He undoubtedly connects this with our disillusionment his ability to move in manner we desired on Israeli settlement. Even if agreement concluded after that he sees an unpredictable Congress and future administration whose policy on Arab and Israel matters now beyond prediction. We consider it highly probable Nasser thinks he requires definitive agreement for pre–election use. In spite of fact we know Nasser wishes to work with West on this project, if there continues to be no response at all Department should not be surprised if some day it reads in press that decision has been made to accept Russian assistance”.

It should therefore not come as surprise to Department that we now begin hear reports implying GOE has almost decided accept Soviet financing High Dam. We speculate that Soviet offer (terms of which might be substantially similar those suggested Embassy telegram 2438¹⁴) might possibly be part “package deal” along lines Embassy telegram 2470¹⁵ in which Egypt in exchange Soviet financing Dam, Soviet support Arab viewpoint in United Nations discussions Arab–Israel issues and possible treaty of friendship incorporating guarantee against Israeli aggression would be asked cooperate with Soviets on peace move in Palestine on basis United Nations resolutions and coordinate with Soviets on “anti–imperialist tactics” in Near East and Africa.

Soviets would probably hope announce acceptance during Shepilov’s visit. While have felt this probable for some days now am not at present so certain this will be case as there seems to be new evidence that Nasser hopes get through upcoming ceremonies and visits without statements or announcements that would irritate West. It may be therefore (we just don’t know at this stage) that we will have short period of grace between Shepilov’s visit and July 23 (or perhaps opening of Parliament—or Nasser visit Russia) during which Egyptians as they did in arms deal might seek “final test our intentions” against concrete Soviet proposals perhaps to establish record for defense their action against criticism they went too far in creating dependence upon Soviets. Even if we should be given this “grace period” do not know whether it is possible at this late date to salvage situation since our ability to do so might well depend on whether sufficiently persuasive arguments could be offered to match possible Shepilov package offer which if offered would most probably be “leaked” locally to obtain popular support.

Purpose this message is therefore three–fold (1) to summarize the record as of possible use to Department in event of sudden move here (2) to reiterate that although time is running out it may still be possible counter Soviets by concretely reaffirming sympathetic attitude towards High Dam project to which (as explained in Embassy telegram 2346¹⁶) I believe we stand for better or worse publicly committed (3) to express as clearly as I can my conviction that GOE is determined proceed with this project come what may and that we had best prepare ourselves if we are unable to resume negotiations to meet with the maximum political skill of which we are capable consequences which in my opinion will make things really difficult here and I fear will extend again as in case of arms deal considerably beyond Egypt’s own boundaries.

Byroade

1. Source: Department of State, Central Files, 874.2614/6–1656. Secret. Received at 11:35 p.m. Repeated to Tel Aviv, London, Amman, Baghdad, Beirut, Jidda, and Damascus.
2. See vol. XIV, p. 261.
3. See telegrams 528 and 547, ibid., pp. 497 and 508.
4. See ibid., p. 332.
5. Ibid., p. 275.
6. Ibid., p. 355.
7. See ibid., footnote 3, p. 353.
8. Document 179.
9. Document 219.
10. Not printed. (Department of State, Central Files, 874.2614/5–1556)
11. Document 356.
12. Document 365.
13. Reference is to telegram 2087, Document 294.
14. See footnote 3, Document 394.
15. Document 394.
16. Document 370.