238. Telegram From the Delegation at the Bermuda Conference to the Embassy in Egypt1
1. For Ambassador from Secretary. Please inform Hammarskjold in connection his negotiations Egyptian Government that US regrets release by Egypt of memorandum on Suez Canal arrangement2 even before negotiations with the Secretary General commenced. We note however the oral advice to us that this Egyptian memorandum subject to negotiation. We find Egyptian proposals in their present form to be inadequate and urge Secretary General endeavor to secure promptly amended proposals as near as possible to four nations’ suggestions put to him.
We earnestly hope that amended proposals can be transmitted to US and other members four-nation group for consideration before finalization of public release.
We attach particular importance to reaffirmation of six principles and arrangement providing payment to agent designated by Egypt, such as UN or World Bank, one half to go to Egypt and the balance of one half to be held pending and subject to definitive settlement. Part of latter one half should be allotted to an improvement fund such as described paragraph 5 Egyptian memorandum. This might be an agreed percentage of general magnitude former company practice of, say 20 percent, with balance of 30 percent held in a fund to secure the payment of compensation and claims resulting from nationalization to be settled by direct agreement or arbitration, as described paragraph 3 of Egyptian memorandum. We believe it essential that this 50 percent be held so as to be beyond Egyptian control pending settlement except for agreed purposes.
We believe it possible Egyptian memorandum drafted with view maintaining sufficient flexibility to arrive at agreement with Hammarskjold along foregoing lines. Whether or not this true, important thing is to translate intentions of Egyptian Government as set forth in memorandum into specific proposals which will meet minimum requirements of principal users within framework six principles. In order avoid exacerbating situation and rendering it more difficult for Egypt assume flexible attitude this regard, we are refraining from substantive [Page 450] comment on Egyptian memorandum at this time, stating matter now under discussion between Egypt and Hammarskjold, and that our evaluation must await results of these talks.
- Source: Department of State, Central Files, 611.41/3–2057. Secret; Priority. Repeated Priority to the Department of State, which is the source text.↩
- For text, see telegram 2929, Document 231.↩