Extract from a letter from William P. Fay to Seán Murphy (Dublin)
'The Suez Canal'
(111/16:388/56) (Confidential)

The nationalisation of the Suez Canal Company, or to give it its French title, La Compagnie Universelle du Canal de Suez, is an act of such far-reaching importance internationally – it has been described, perhaps with some exaggeration, as the most important event since the end of the Second World War – that you will no doubt wish to know immediately the reactions which have occurred in Paris. By a fortunate chance I had reasons of courtesy for calling upon both the new Secretary General of the Quai d’Orsay and the Egyptian Ambassador within the last few days and, as both were literally full of the subject, they were prepared to talk about it even without being prompted. I was therefore in a position to hear an authoritative expression of the views of both sides.

2. The reaction of the French press and French public opinion has been quick and violent, and a greater national unity has been shown on this issue than could be observed, even during the last few months on the subject of Algeria. I think it is fair to say that the Suez Canal occupies a much more important place in French minds than it does in England. To Englishmen the Canal is more a subject of commerce, even though of vital commerce; to the French, Ferdinand de Lesseps² is one of their great personalities of the 19th century and his statue situated at the entrance to Port Said, is a constant reminder to the ships of all nations that the Canal was conceived and brought to birth through the dynamic energy and persuasive skill of this remarkable man – and as the English subsequently admitted – against the determined opposition of the British Government and the united advice of all English engineers of the period.

[matter omitted]

3. Above all, the French authorities fear, and rightly, that if Nasser is allowed to ‘get away with it’ the effect in Algeria (and throughout the Arabic and African world) will be disastrous. In his pamphlet ‘The Philosophy of the Revolution’ (which ‘Express’ has just published for the first time in French) Nasser clearly looks towards the creation of a vast Arabic empire, united by its Islamic faith, and affirms that Egypt is the unifying force and the ‘actor’ of destiny in achieving the liberation of the Arab peoples from the Atlantic to the Persian Gulf. Moreover, Egypt, he says, cannot stand by and remain passive while she sees ‘the terrible and bloody struggle now going on (in Africa) between 5 million colonists and 200 million Africans’ and proceeds to refer to the formal engagement the Egyptians entered into to ‘aid them all as far as possible, even those living in the remotest corners of the jungle’.
4. When I visited M. Joxe³ who has just taken over his functions as Secretary General of the Quai d’Orsay, he spoke clearly and emphatically on the subject. France is generally satisfied with the communiqué issued in London on the 3rd inst. The French attitude is quite clear: in the first place they have no grievance either against Egypt or against the Arab States; only against Colonel Nasser. They regard him as an irresponsible dictator in whose word they can have no confidence. They are satisfied that this vitally important international waterway cannot be left under his unfettered control: they are therefore in favour of international control and international administration of the Canal. They emphasise also the international character which the Canal Company has always had – as witness its name ‘Universelle’ – and consider that nationalisation of such a Company cannot be assimilated to that of a private Egyptian company.

[matter omitted]

5. When I called on the Egyptian Ambassador⁴ (the occasion was simply to return a courtesy call which he had paid upon me), I found him in a considerable state of excitement. This is not surprising since he is a somewhat excitable kind of man: though frank and likeable in many ways, he loses his temper easily, I fear. It seems that he had a very stormy interview with Monsieur Pineau⁵ when the French Foreign Minister called him in to accept the French protest at Colonel Nasser’s action. It seems indeed that things became so hot between them that the Egyptian Ambassador refused to accept the French note, describing the terms of Monsieur Pineau’s protest as ‘inadmissible and unacceptable’. He even went so far as to suggest the possibility of a breach of diplomatic relations with Paris, but this was probably only in the heat of the moment. The Egyptian Embassy has issued a very well drafted statement on the subject of the Suez Canal, a copy of which has been furnished to me. The text of this statement appeared in ‘Le Monde’ on the 1st August. In this statement, which the Ambassador frequently referred to, it is emphasized that the Suez Canal Company is an Egyptian Company and that Egypt had a perfect right to nationalise it as any other sovereign state could do in respect of a company having its seat within the national territory. The Egyptian State therefore only anticipated the expiration of the concession in 1968. The only reason given for the nationalisation, however, is the ‘need for the Egyptian Government to assure for a people of 24 million inhabitants its legitimate right to existence’. The statement also insists upon the undertaking given by Colonel Nasser to indemnify the shareholders at the current price of their shares on the Paris Bourse and upon the intention of the Egyptian authorities to maintain freedom of navigation, and this without any increase in Canal dues. To my question why Colonel Nasser had chosen this precise moment to nationalise the Company, the Egyptian Ambassador blurted out ‘because we wanted the money’! He then referred to the circumstances in which the American Government had refused to proceed with their offer to finance the Aswan Dam. He said that the Egyptians were satisfied that the offer was never seriously made except as a countermove to the danger of a similar offer by the Russians. Once Mr. Dulles was persuaded that the Soviet Government had too many commitments elsewhere to permit them to underwrite the Aswan Dam project, he immediately withdrew the American offer even though it had been accepted by Egypt. Moreover, said the Ambassador, it was withdrawn in insulting circumstances only a few hours after the acceptance. The Ambassador went on to make it quite clear that in the mind of Colonel Nasser the nationalisation of the Suez Canal Company was in the nature of a move in a game of poker (the analogy is the Ambassador’s) with the Americans; ‘we have now seen Mr. Dulles’, he said.
6. When I enquired about the future intentions of the Egyptian Government, the Ambassador’s reply was that though he had no direct instructions on the subject, he was satisfied that Colonel Nasser would accept a control of the Canal by the United Nations, but, he emphasized, by no other authority. When I asked him the nature of the control they have in mind, he showed some hesitation: a distant supervision they would accept but they were determined to maintain the Egyptian administration of the Canal. On this subject the Egyptian Ambassador was just as firm as M. Joxe was in the opposite sense.

[matter omitted]

8. What will be the outcome? M. Joxe made it clear to me that neither Britain nor France had ruled out the immediate use of force to re-occupy the Canal, but he did not indicate whether Foster Dulles had dissuaded them. At least the London communiqué of 3rd August is a very moderate document compared with some of the rhodomontades contained in the British and French press. I gather that they will reconsider this aspect if the London Conference is a failure. On the other hand, the Egyptian Ambassador repeated again and again that if force were used they would fight – as Colonel Nasser had already publicly proclaimed; the Ambassador added that it is dangerous to threaten military men, like the Colonel, with force, since after all it is their métier. Wisdom on this issue seems to me to rest with Raymond Aron in his article in the Figaro of the 4th inst. – ‘The worst thing in present circumstances would be to join the disadvantages of retreat to the language of bravery’. Apart from accusations of ‘outdated imperialism’, Britain and France would put themselves, if they used force, in a false position vis-á-vis the United Nations, and could easily be branded as ‘aggressors’. But it cannot, unfortunately, be foreseen with any likelihood that the London Conference will prove successful, particularly as Soviet Russia will be there to keep the pot boiling. Tension in the Middle East has never been greater and it is to be feared that if Nasser succeeds in keeping the fruits of his coup, his prestige will be so enhanced as to tempt him into ending the ‘truce’ with Israel. The outlook is not re-assuring.