344. Memorandum From the Acting Deputy Legal Adviser (Meeker) to the Secretary of State1
SUBJECT
- Reasons Supporting Withdrawal of United States Offer of Assistance on the Aswan Dam Project
At your suggestion conveyed to me by Mr. Macomber, I talked today with Mr. Hoover regarding his recollection of Mr. Eugene Black’s views on the Aswan Dam a year ago. Mr. Hoover said that he had talked with Mr. Black frequently concerning the Dam project, and had discussed it with him at some length at various times after the United States offer was withdrawn, as well as before July 1956.
In Mr. Hoover’s opinion, Mr. Black thought last June that the Egyptian financial position had not changed significantly in the six months since the UK–US offer was made (December 1955). Mr. Hoover remarked that Mr. Black did not at the time have access to all the intelligence which was available to the State Department, bearing on Egypt’s mortgaging of her future to pay for Soviet arms deliveries. He thought that Mr. Black nevertheless foresaw a progressive decline of Egypt’s economy if she did not receive outside assistance. Mr. Black always regarded the Aswan Dam as a project which would give a great lift to Egypt’s economy and lead to a marked improvement in Egypt’s general position. Mr. Hoover said that against this background Mr. Black thought the UK–US offer should not be withdrawn, although he was not pressing to go ahead with it immediately in June and July 1956.
Mr. Hoover said that while he was in the Department he had proceeded on the basis of the International Bank’s engineering estimate that the high dam at Aswan was the best project for power, [Page 654] irrigation, and flood control on the Nile. Subsequently, he came to believe that a less expensive and more practical solution would be to build, piecemeal, a system of smaller dams on the river and its tributaries considerably to the south of Aswan. [This kind of argument, even as applied to the Nile valley, inevitably becomes involved in the issues of power development in the Columbia River basin of our own northwest, where the contest between Hells Canyon and the smaller dams of the Idaho Power Company continues to be active.]2
Mr. Hoover said that he had come to the conclusion, in the course of the protracted negotiations with Egypt, that Samir Hilmi (Secretary-General of the High Aswan Dam Project Committee) was anything but friendly to the West and in Mr. Hoover’s opinion was probably a Communist. Mr. Hoover said he doubted whether this opinion of his appeared anywhere in the written records of the negotiations, but it was the view to which he had been led. [The Department’s Division of Biographic Information confirms that Hilmi is a strong nationalist and supporter of the RCC regime in Egypt; they say there is no agency report that he is a Communist or has Communist leanings.]2