I Understand That a Number of Persons Hsw Recently Been Arrested In

2 cms PUBLIC RECORD OFFICE ins I

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CONF.IBEITIAIl PROPERTY.,

Cypher/OTP

Mr. Crowe

Somber 21, 1959. H: 9.56 a.m. November 22, 1959.

PPJORITX, CONFIDENTIAL I understand that a number of persons hsw recently_been_ arrested in Cairo on a charge of spying *<* *™*- ^^ mostly well-off or professional people and include a Watch professor at Cairo University. They are said to be not Communists. Popular rumour puts the figure at 300, »"*£" is almost certainly exaggeratedj. A . "D-yiBritisn +-i ch PTP^Kress^ corrcon e sponuee n uo (who have the names of about 10) think that the arrests may be as many as 100. No news of the arrests has yet been published.

HHHHH

CONFIDENTIAL cms PUBLIC RECORD OFFICE ins I

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CONFIDENTIAL r IF -ARD -SAVING' .TELEGRA'

FROM CAIHQ..(BRITISH. FROPSR!rX:^M:'fISSiON)TO FOREIGN OFFICE

By Bag OREIGN OFFICE AND taTEHALL DISTRIBUTION Mr. Crowe

No.6 Saving -RvJunl 18, 1959 June 16, 1959 CONFIDENTS L

Revigw_of'Cairo Daily Press for period June 9 - 15. Internal affairs have been most prominenti a high proportion of the headlines, and more than h,-lf the leading articles, have been devoted to next month's elections for local committees, to the nomination of candidates, and to plans for economic development; warnings to Israel and her alleged supporters.in the West have been repeated every day; and there'has been a revival of ;at|acks on Iraq and British imbalalism. There has been a lot of news, but no comment, about the Sudan. Internal Affairs . '• \ 2. Just over 122,000 candidates (91,000 in Egypt and 31i000 in Syria) have nominated themselves for the elections to the: 39,000 odd seats (nearly 30,000 in Egypt and about 9.500 in-Syria) on the local committees of the National Union. All papers have been busy reminding their readers of the opportunities an;d' respons- ibilities, of true democracy, now t last to be achieved in both regions, of the U.A.R.; and Anwar Sadat has been touring; the villages of the delta to explain how "the people's voice' wifcll find, its way to President Gamal Abdul Nasser". After demons|j?|ting the necessity for screening the candidates, the Press haf turned to praise the President's decision that screening will npt'be needed after all. -. ... ' _: \ . 3, The papers are still full of reports of Cabinet and Committee meetings to redraft the plan for doubling the national income to make this possible in ten instead of twenty ye-irs. But little hard news of the plan has emerged. Daily editorials have preached the need for austerity and ln..rd work to turn all the plans into reality. . Discussion CONFIDENTIAL cms

Kef.: ins £ ^Ss

^ - m*^

Cairo .('British Property.. No. 6 Saving to Foreign Office.

1,.. Discussion of the plans for the High Aswan Dam have continued throughout the week- between the U.A.R. authorities, the Soviet 'experts and the Western consultants. The Press claims that the views of the experts from East and West are now very close; and that the Soviet proposals for open diversion canals, instead of tunnels, and for granite filling of the dam, wi|l make the project not only cheaper but also safer from nuclear attack! Israel '5» Ali Sabri and Salah Salem have joined lesser writers and spokesmen in expressing Egypt's determination never to allow Israeli cargoes ,-' and .in particular the cargo of the "Inge Toft", through the Suez Canal. .Attacks on Israeli aggressiveness and Zionist manoeuvres are now being combined with earnings to the Western powers against supporting Israel if she takes the case to the United Nations. Such support, say the commentators, 'would drive the Arab peoples back into. the arms -of Soviet Russia,. British Imperialism 6. On June 10 Salah Salem led a new attack on British policy in the Middle East: Britain was using Ben GUT ion, King Hussein and Qasim m a fresh campaign against Arab nationalism; Other writers have followed his lead, discovering, for example, tjiat 'the Iraqi Communist Party was formerly directed by the British Embassy in Cairo, .and that the birth of true .democracy in' the U.A.R. was strangled by the British in Egypt and the Drench in Syria. But apart from the recent incidents on the Jordan/Syria. frontier, there seems to be a dearth of fresh -material for 'these attacks, • { '•

7. The Iraqi Government have been accused of evading their obligations under the U.A.R. /Iraq Military Cooperation Agreement of, 'July 19, 1958, and of falling victims to imperialist wiles •by. joining Israel and Jordan in a campaign .against the U.A.R. At the same time the Iraqi Communists have been accused of more plots, demonstrations and tortures practised on true nationalists. But although 'strong words have been used about the rulers of Iraq ("Communist puppets" and "imperialist traitors" according to taste), the campaign has not been renewec with vigour ; the attack has ..:.. CONFIDENTIAL / not lDeen 1 2 cms PUBLIC RECORD OFFICE ins I •) I 2 Rel'••• D^ =^J \§H>°l\ £SS°ir I Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

er t Y .CbraaisstaltelegE^^

not been consistent or clear in analysis or intent,

Jordan c gn d Bit" attacks on Jordan nave not teen f ^ p'rOMinent, perhaps tecaus, the two country= ha, e It » sAxd, agreed to meet to discuss their frontier problems.

Sudan •9 ™The preparations for the trial of Brigadiers Shenan and a friend ifR Hghtly patr onlsjng „ Sudans reported agreement to open al for the settlement oi Wile :,a-Co ,.uu u Geneva

in cartoons, which at the hands of four Foreign Minister, who reach agreement.

&&&& CONFIDENTIAL 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 **»» *** _«. j*^

" . ... • aOffi<4 of the High Commissioner ,,••, $50 \ for Canada, . - *'°'"1 Canada House, ' .,. I London S.W.1. m«»**** i1 •. -1'* """'., .-^v,.-"''5*''"*" 30th September 1958.

Dear Mr. Clark, I have been authorised to pass on to you some information received from our Embassy in Cairo about Nasser's attitude towarls Communism in the Middle East. The information was obtained from a source who is regarded as reliable, in an interview with Nasser himself. During their two-and-a-half-hour interview, our source jjui-uit, r^ concern which Nasser seemed to show about ^^..rra^o i ^-:.%^oS^3s^^|n a context which was meant to be purely . iflttpr had tended to go over the line in Syria. He spoice in dtspara^Sg terms of Bizry and Khaled el Asm, who, he said, had taJen the?r instructions from the Soviet Embassy. The local

also was pursuing an "anti-national" policy. m our consideration of this report we have borne in mind

possibility that events may develop along similar lines. I am sending a similar letter to Sir Roger Stevens at the

Foreign Office. ^Q^Q sincerelyy

(Sgd) R.L. ROGERS Counsellor W.A.W. CLARK ESQ., C.M.G., C.B.B., ASSISTANT UNDER-SECRETORY OF STATE, COMMONWEALTH RELATIONS OFFICE, DOMING STREET, S.Wd.

Copy toj-

LLLOTTBD T0_ 3 EAST DEFT.,

SECRET cms PUBLIC RECORD OFFICE ins 1

OFFICE OF THE

HIGH COMMISSIONER FOR CANADA X" Canada House, ' // London. S.W.1. // / September^, 195# jcret

Dear Mr. Clark,

I have been authorized to pass on to you some information received from our Embassy in Cairo about Nasserfs attitude towards Communism in the Middle East. The information was obtained from viea sourcw witeh whNasseo isr regardehimselfd. as reliable, in an inter-

interview, our sourcDurine wags structheirk two-and-a-half-houby the concern whicr h Nasser seemed to show about Syria and Iraq, in a context which was meant to be purely personal. While stressing that relations between the U.A.I, and the tf.S.S.R. were satisfactory, Nasser indicated that the latter had tended to go over the line in Syria. He spoke in disparaging terms of Bizry and Khaled el Azat, who, he said, had taken their instructions from the Soviet Embassy. The local communists in Syria were continuing to pursue an "anti-national" line. If they did not stop their activities he would have to take measures against all political parties in the Syrian region. Nasser indicated that he was also concerned about the situation in Iraq. He declared that the strong Communist party there also was pursuing an "anti-national" policy.

port we have borne iIn minourd consideratio our information onf tthio ths ere- effect that the Communists in Syria support a

loosening . ,W» Glark, *.«3H., U.M.U., C.B.E., Assistant Under-Secretary of State, Commonwealth Relations Office, Downing Street, S. W. 1. 1 2 cms PUBLIC RECORD OFFICE ins I 1| I 2 «••» !•* « ,/*v j«v> I

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loosening of the U.A.R, connection and that in Iraq they support Kassem, leader of the conservative wing in the Government. If it was of these activities that Nasser was thinking it would seem to indicate that he finds the Communists in Syria a disruptive factor and even a serious threat. There appears to be even a possibility that Nasser may look upon Kassem in Iraq as a possible Communist tool. There might therefore be some grounds for viewing the situation in Iraq today as not too dis- similar from that in Syria before the formation of the U.A.R, Despite some obvious differences in the Syrian and Iraqi situations we are not disposed to rule out the possibility that events may develop along similar lines. I am sending a similar letter to Sir Roger Stevens at the Foreign Office. Yours sincerely,

^. L . R. L. Rogers Counsellor cms PUBLIC RECORD OFFICE ins I

En Glair WHITEHALL DISTRIBUTION Mr. Scott D... 12.17/p.mySeptember 29, 1958 September 29, 1958- R. 1.5$ pX September 29, 1958

Addressed to Foreign Office telegram Mo. 1J+QZ _of.

Repeated for information Saving to Amman Baghdad P.O.M.E.P* Washington Ankara Press reports here, quoting M.E.. News Agency, state that President Nasser proclaimed by decree a state of emergency throughout the U.A.R. on September 27. This declaration is said to replace the regulations relating to a state of emergency as applied in Syria in 19-19 and in Egypt in I think that the report is perhaps inaccurately phrased and that what Nasser has done is to approve a common law relating to state of emergency which has been under discussion for some time (please see paragraph 5 of my letter 10217/36/58S of August 28 to Mr. Rose). What is described as "a state of alert" has existed in Syria since July 15 when general mobilisation was ordered. 2. Also on September 27 an agrarian reform law for Syria was approved. It provides for the distribution of large landholdings to peasants against compensation and limits the area which may be owned by individuals. The principles are reported to be similar to those of the Egyptian agrarian reform law. Foreign Office please pass Saving to Baghdad and Washington as my telegrams Nos. .53 and 173 respectively. [Repeated Saving to Baghdad and Washington]

F F P F 2] cms PUBLIC RECORD OFFICE ins T

OFFICE OF THE

H'«H COMMISSIONER FOR CANADA

M. K". Ewans, Esq.

FORWARDED WITH THE COMPLIMENTS

OF THE OFFICE OF THE

HIGH COMMISSIONER FOR CANAI

Also referred to P ; 0 Office. 2] cms PUBLIC RECORD OFFICE ins T

DEPARTMENT OF EXTERNAL AFFAIRS, CANADA. (DUPLICATE) NUMBERED LETTER COPT UNCLASSIFIED TO: THE UNDER-SECRETARY OF STATE FOR Security:.. EXTERNAL AFFAIRS, OTTAWA, CANADA. 45 No: I'lie Canadian Embassy, January 25, 1958, Date: Cairo, Egypt. • I'wo Enclosures: OUT letter Ho.354 of June 17* 1957 Air or Surface Mail EGYPTIAN. GOVEKMMTT OFFICIALS. Post File No:

References

Attached in duplicate is a revised

list o'f Egyptian, government officials, which

supercedes that given in our letter under

reference, and which you may find, of some

use.

(sgd.) The Embassy,

Internal Circulation

Distribution to Posts

Jxt.l82C(Rev.2/52) PUBLIC RECORD OFFICE

PRESIDENT OP JHB REPimLW Minister of State for GAMAL ABDUL UASHER Presidential Affaire Secretary General of All SAMY the Republican Palace Grand Chamberlain Ifeitady As hour All RASHID Chief of Protocol, Presidency Grand Aide—de—Camp Sal ah EL SHAHKD Maj.Oen, Mohamed Rashad Political Counsellor Legal Counsellor Hussein Zulficar SABEY Press Counsellor Mohamed Pahmy El SITED Aviation Counsellor Air Vice Marshall Hussein Dir. President Bureau for. Zulficar SI151IY Uational Union Affairs Dir* President Bureau for Sayed Mahmoud SL ffAYYAE Internal Affairs Dir, Technical Bureau Sayed Mohie ABOU EL EZZ ANISATIONS^gS^^_m^_2 pmar 3I1ERIP

ghe<[-iCounciilii t of {MinisterJB Secretary General

^OTjncil.^for _.,Arts^.Jk__Literature ABDEL Secretary General Youssef El SET; AXE >_fOTTOSci

AJ3DEL National _Couricll_ _for_Re g® arc he a Secr e t ar y Gen eral Hj^^D^^ith^g^itx Dr. Mustafa Matrnoud HAPEZ Secretary General , arair IffiLMY Min is try of Mat ipnal _P1 annin^ Eng. Mohamed Aiimed SEIIM Minister of State Informatiori Admini Hussein EL SHAPIB Director General Saad AFRA 2. | ins 1 1 I 2 \ —1 ' j ! J 0-8 Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and ^ Conditions of supply of Public Records' leaflet

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TITLE

AGRARIAN REFORM Minister Dr. Sayed MARE1 Under • Secretary Abdel V.'ahab EZZAT MINISTRY OF AGRICIJL'BJEl Minister Dr. Sayed MAEE1 Dir. Min's Office Mustafa EL ME Under Secretary Younis Salem SABET Asst. Under Secretary Mohamed HOSNY Asst, Under Secretary Afifi EL BARBAEY Asst» Under Secretary Mohamed ROUSH33Y MINISTRY OP OOMMERCg Minister Dr. Mohamed A30U 10SSEIR Perm Under Secretary Dr. Mahmoud Badawy EL S1IIATI Under Secretary Mustafa EHAL1PA Under Secretary Dr. Youssef BARSOUM Secretary General Mustafa Kama! IBRAHIM

Minister Dr. Mustafa 1CHALIL Dir. Min's Office for Railways and Post Affairs Bng, Ibrahim SOBHI Dir» Min*s Office tor Roadjjf Eng» Soliman Metwaly SOLIMA2T Land Transport & Telecommunications Dir. Min's Office for Legal Affairs Mtre Mohamed.Salah SAID Under Secretary Eng. Abdel Moneim AZMY Secretary General Mohamed El B'etwaly Ahmed NAGUIB

Railway Authority, Dir0 Gen, Eng9 Moiiaiaed Halim EL RASI1ID

Dir0 Gen. Telephones Adna. Eng. Mahmoud HIAD Post Master General. Mustafa BAGHDADY Dir. Gen. Roads & Land Transport Adnu :Eng. Bfohamed EL BEDEWT TOAD

EI)ITCAfJIOI Minister Eaaial El Din HUSSEIN Dir. Kin's Office Sayed Aly EL HA3SEIDY Perm. . Under Secretary Ahmed laguib IIASHEM cms PUBLIC RECORD OFFICE ins

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MINISTRYOg EDUGAl'IOI Mohamed Kamel EL NAHAS Under Secretary Mohamed Taha BL NIMH Asst. Under Secretary Ahmed ZAKI Asst. Under Secretary 9?. Aly SHOIEB Asst. Under Secretary Mohamed Ali HAJBZ ,rfsst. Under Secretary Dr. Abdel Aziz EL KOUSSY Technical Advisor Mohamed Said EL BRYAH Dir. Gen, Public Affairs HIGH.COUNCIL FOR YOUTH Kamal El Din HUSSEIN President Adel TAKER Secretary General

MINISTRY OF FINANCE Dr. Abdel Moneim EL KAISSOUNY Minister Mohamed Hassan EL EBYAEY Dir Min's Office Al Attafy SQHBOL Under Secretary <*) Hassan SALAH EL DIN Asst. Under Secretary So,ad El Din TAHA. Asst, Under Secretary Lutfy EL BAIIA Asst. Under Secretary Ahmed ZEIDO Dir. Gen, Budget Dr. Hamed EL SAYEH Dir. Gen, Exchange Control Abdel Pattah KORAIBM Dir, Gen, Customs Adm, (Alex,) Hussein EL MMABAWY 1st Asst. Dir. Gen. Customs Abdullah AmTBD 2nd Asst. Dfr. Gen. Customs lahiem SAID Dir. Gen. Taxation Al Attafi SOI'BOL Acting Dir, Gen, MINISTRY Off POREIGH ACTAIRS Dr. Mahmoud FAWZY Minister Ahmed TALAAT, Dir. Min's Office Minister Plenipotentiary Arnin SAMY, Second Secretary Sherif Hosny OMAR Ambassador Hussein AZIZ Under Secretary Minister Galal EZZAf Dir. Office resigned, Jan.4» 1958. <*) • •A 2 cms PUBLIC RECORD OFFICE ins I 1

Gamal Naguib MABMOUD, Office Staff first Secretary Samih Aimed Faad SADBK, •I laird Secretary • Ayoub Aziz SKARiftBAH Third Secretary

Minister ^ed. ? Soliman ABAZA, Office Staff Third Secretary

Asst. Under Secretar J Minister Salaii KHALXL European & American Allans Hassan Wagi Office Staff Minister Ibrahim SABKX . Under Secretary Minuter TWOEttATIOl ft AMINISTEAiL'IVB DBPARTMKW

Saad 11 Bin Hamdy MORMOT, 1«* Secretary

Sayed Esaeldin RIPAAI, let Secretary Ahmed Saleh EL ZAUBD, 2«.d Secretary Salah. Bl. Din Hassan Pahmy BA3SIUHY, 2nd Secy

OHaWa El Sayed EL RAZ, 2nd Secretary

,hmed Zatt Abou BL MASK, 2nd Secretary ADdel Hady Husseto MAKHWOT, 2nd Secretary OvMohamed NAZIBP, 3rd Secretary

Moha«ed AMel A,i, EISSA, Attach* learn El Din Muntaeer, AttaohA Abdel Fattah HAGGAG, Attache Mohamad Shafik Mabmoud SHAPIK, Attach

SECUHITT DEPARTMENT Sale. Mur,d AMel PAITAH, 1st Secretary

i?Bthy Hussein KAMBL, 2nd Secretary AMel Meniem ATIEK, 3rd Secretary Medhat AHmed HAMAD, 3rd Secretary ins I cms PUBLIC RECORD OFFICE QO Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and * Condition_ .... s ofr suppl. ..._ i.y . o_.f£ Publir^. .l_l!«c. Recordsn« A^«-i-J«-»'' leafle\r\r*f\Attl

— 5*" SECTJRITY DEPARTMENT (Cont.) 11 3?arouk Abdel Meaal SHAABAN, Attache PUBLICITY & CODE DEPARTMENT Sayed Salem N'AGUIB, 1st Secretary Mohamed Said Ibrahim AL PESOUfl, 2nd Secy Abdel Kahiaan Ahmed MAREI, 3rd Secretary Ahmed Mohamed SIDET, Attach! Saleb. Hakfci Mohamed HAKK1, Attache PUBLIC 'REMflOfS Abbas Zaki EFPAT, 1st Secretary Ahmed Abdel Kader EL MALLA, 2nd Secretary Hanean Pahmy Zafci Abou SAIEM, 2nd. Secretary ARCHIVE DEPlfiTMEM Abdel As5i-7i £1 Said EL MOESY 1st Secretary Saleh Zaghloul 1ASE T;'L DIME, 2nd Secretary PROTOCOL DEPARTMENT! Chief of Protocol - Minister Eaioal El Din Maiunoud ABDEL MABI Waguiii lakhla EL WOffl»E, 2nd Counsellor Hassan Serry ESMAT, 1st Secretary Oeorge Rahba (in charge of Enemy's Coram.) Kamal Mohamad /TAORAS, 3rd Secretary Snlah el Din Saleh KATTAB, Attache Mohieddin Youssef ATTAR, Attach* TREATIES & TRANSLATION. HEPABBiElf Minister Mahmoud Shams El Din ABDEL GtTAFPAR Mohamed Ibrahim KAHEL, 1st Secretary Abdel lisrid Sialil Path EL BAB, 2nd Secretary INTERNAT IONAL OHG All 2AT I OIS & COIfEEElCIS Minister Anwar BIAZY ^AiT'iOUD Samy HAFEZ, L'nd Counsellor Mohamed Atef Riad iXNiWAWY, 1st Secretary

Abdel Halim BAI)AVrr? ,-nd Secretary EAST EUROPE DESK 1 2 cms PUBLIC RECORD OFFICE ins I 1 ' 2 H-- DQ 3*s>/ io^°n fss^r I Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

BASS? BOHOPE (Gent*.) Minister Omar EL Kama! Mofeaoed ABOOET/KHEIR, 1st Secretary Atodel Salai'AL ALAILY, 2nd, Secretary. • Salab. ElZAf». 3rd Jjjfecretary E1K0PE DESK Mustafa 11 Dito DANISH, 2nd. Coimsellor • . Adel PAEEL, 1st Secretary Saguife PAKHfflT, 2nd Secretary . Mohamad Adel Shafilc GABS, 2nd Secretary Mustafa Kamal Tbfahim EL DIWABYf 3rd Secy ASIJH Mustafa UIKBIj, -2nd Counsellor : :,, ' . 'Moiiaiaed Kheir-El Mn lASSAB,*. 1st Secretary . Ilhamy Abbas UlAAf, 3rd Secretary Baher HsraHiii fSWFIK, 3rd Secretary NORJH AMERICAN Minister Abbas EL' SIIAPIE A2is SHUKRY,.2nd Counsellor Salali El Dia Ho.hamed IHAL1FA, 1st Secretary MatittGtid Saniir AI'MED, 2nd Secrttsry SOffl •%"\ "•'' . . • ' IHustafa Iam©l SB SHALT, 2nd Oo«nsell©r Moksen El Sayed ABAZA, 1st Secretary fuad S'ewfik AB13AS, 2nd Secretary ARAB

Minister Hafez Hafez EL SHOHOUD BszeMln Abdel Azla MUSTAPA, 1st Secretary Mo3aaia©d 2nd Secretary Abdel 'fialiim Abdel • Azis HAMAD, fftft Secretary lsafcta -Boliamed SL FARJfAlAIY» 3rd Se-eretaxy . Hassen Shukry Saleh SELIM, 3rd Secretary PALES3JIHE AFFAIRS 1 2 cms PUBLIC RECORD OFFICE ins 1 1 I 21 L 1 1 .•*»/•> « r* ^T 1 1

-7*

PALESflll AFFAIHS

HAssan Salah EL Din aQHAR, 1st AFHICAir EEPAlfMEMf

Minister faha Tahe FAfHSLBII. Mohamed Kamel .AHMED,'2nd Counsellor Anwajf, Farid IJ.SR 1L DII, 1st Secretary Izael Ai'aii Amln IEHAHB1, 1st Seoretai^r MoJoamed. Abdou Hassanein MAKHLOUf, 3rd Secy Abdel Aziz KHAJHAI, 3rd PRESS DBPAK2MEI3?

Minister Samy Hisfcallah S1KIEKAH Ahm©d Halmy IBHAH1M, 2nd Couasellor MaJamoud Anviar ZAKI, 1st Secretary Ahmed fuad Awad EL PAIiHAlY, 2nd Secretary

Mofoaraed Magdy .Haiady GHEEAIITfr. 3rd;.Secaretary

Minister Hahmoud Yusry IL PAHAMAWT Ha0san WAHBT, 2nd Counsellor ."..' ' Mohamad Farouk EL HEflJAWY, 3rd Secretary Sayed Aly SAID, 3rd Secretary • COIfSULAH DEPAfifMIlf I Minister Mohamed Raehaa DAFISH Yunan Khellah" SAID, 2nd Counsellor : , Mohatned Aly FAHMY, 1st Secretary Mohamed Samy HEIBAII, 2nd Secretary G11EEAL KBPARTMEKT Mahmoud Mustafa EL KOTJ.WY, 2nd Secretary if' ... lunir Hasif Morteos AJBDEL' MALEI, Attach! Hussein Abbas MESHAHRAfAH, Atiaeh*. GE11RAL D1PAHB.CEIT P01 IlSPICflOI Mahmoud Hassan EL AHOUSSY, 2nd 'Counsellor :' ' Mahmoud RASHID, 2nd Counsellor x Minister Designate to 2l cmT PUBLIC RECORD OFFICE \ris T

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EMBASSIES, LEOAIIOSS & COHSULATES DEPAR2MBOT • Minister Mohamed SAMY Minister Salah KQISOUH EL SHAKE Minister Mohamed Zakl KIJHA1Y swiss COMMISSION Minister Hussein Sabet KARRARAH

STUDIES COMMISSION Minister Mohamed- Ibrahim EL DIN Minister Hassan Pahmy -ISMAIL Minister Mohamad SAFWAT Minister Woharaed Hamdy HEIBAH Ibrahim Amln GHALY, 1st .Goiansellor

OF Dr. .Aziz S1DKY Mini aiter Mohamed Abdel Monlem 1 Dir* Min*s Office Under Secretary for Dr. Mohamed Ezzat SALAMA Industry Affairs Under Secretary for Mineral Dr. Hussein KHALLAF . Hussein Mahmoud Under Secretory for Fuel Affairs Bl IIALAWAIY

Secretary General Uohaacd MEE2IBAI Of, lillEIOE Lt« Col, Zakariya Minister MOHIEDDII

Under Secretary Hussein MAP AT Acting Under Secretary for''Public Security Gen. Mohamed BIAS Dir» Oen. Security Dept. Gen. Abdel Aiaiz ALT Deputy Mr, of Security CJeto, Abdel Aziz MOPRBH Dir» G-en. Immigration, lationslity & Passport Ibrahim S.adelhalc SOWEILLAK Dir* Cien» Criminal Department Gen. Saddik PARID Smuggle Combatting Department MaJ. G©n* Abdel. Hamid PUAI / Dir* Gen. Investigation G@n. Abdel Azim FAHJK Dir. Gen. Police . Gen. Abdel Raouf ASSEEM 2 cms PUBLIC RECORD OFFICE

OF ...... IITMIOI I (Goat.) Commandant, Cairo ' Police (Jen, Abdel Hamid KKAIHAT Cairo Governor 'Abdel 3?attah MIII8THI Of.... . JHEf ICE . El, B1IDAEY Minister Mtr@ tinder Secretary Mohaavd Zafci SHARAP Asst. Under Secretary Er, Abbas Helmy HABIE Attorney General MIIISfEI. OF .MtariO.IP AJWAIIS Minister, Acting 33r* Kwetafa KHALI! » Minister of Dlr» Min*s Off lew - Youssef Mohamecl Undtr Secretary Dr. Aziz Ahmed YA3SII Assist. Under Secretary Sag, .Aimed 1IPAA2? Asst* Und@r Secretary Eng, Mohaa*d Farid ; ABOU' EL HOtTS Secretary General Mohamed Sidky MHAD Controller General Toueaef SADHC Ooiitroller General loaamed Said AMASf Dir« Cairo Water-Ada* Ismail 1AKEE1 Miiis$HY .pj; Minister Itr© fatliy HADWAI Dir* Min's Office Abdel Aaim AL AELT tfnder Secretary Dr* Hussein PAW2Y Under Secretary Aly -Hosny 2i@n EL AI312JIEI Secretary General & Legal Mvisor ; Mtre Motomed Tewf ik Dir. Gen, Tourist Actedn, Mohamed Eashad MOURAD Secretary General X llahmoud 1IAMZA Dr. General " Yehia HAO2 director of Cultural Affairs Abdel Asiz WASft B&YPIUJr BHOABCASf Director General Amin Controller of Engineering Sal ah ABUSE PUBLIC RECORD OFFICE TST fief.:

/ -10- ,.fX" Molaamed f AYfOUR ;' . Controller AMel Hamid EL HADIDI Controller Abdel Hamid TOOTIS Controller

nmm QJL Dr. How 11 Din SAHRA* Minister Haaed AM el RAZEK pir, Min's Office Br» Hafez AMU Under Secretary Dr.* Mohamed ALT Asst* tJnder Secretary l)r» Puad HASHII) ABBt. Under Secretary Ahmed Fuad AL HALA¥A1I Asst* Under Secretary

Ahmed EL SHARABASSY Minister Ahmed Aly KAMAL Mr.'Min'e Office Eng. Hiad Aly SOLIMAH Under Secretary Eng. Sayed ABUBL GAWAD Secretary Bag* Mohamad Ahmed EBIEBA Secretary Eng* Abdel Latif f AMY Secretary General Asst. tinder Secretary for Sayed Mohamed ABIJEL RAKIB Desert & Irrigation lag* Mohamed Khalil and,. Protects- IBRAHIM Abdel Samieh EL SHAZ1Y "f)ir. Gen, Survey Department rgggy Of $m£L&li£SSBJU££^ Hussein EL SHAPEI ' Minister Wafah HE&AZI :i)ir,:Min's Office for labour Affairs El Sayed EL MIISHAWY Mr. Min'B Office for Social Affairs Ibrahim GHARTIPI . tJnder Secretary for Labour Affairs Ibrahim MAZBAB Asst. Under Secretary ; Acting Ahmed ISMAIL Hussein Ahmed MOSTAPA Mr* &en. of Training Mohamed BADRAI Pir. G®a.. for Planning

Dr. STIHO Minister cms PUBLIC RECORD OFFICE

. r _ M>——_*».*^j__«ifr I Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

€g SHFPM...... icont« J Secretary Hassan AMI! Office Aly Ahmed EL KADRY Secretary Omar Aly TABRAF Aast* ;Wnter Secretary Dr. Ahmed AL MAHRUCT As at, Under Secretary Hohaiaed Tewfik JEBTWALY Mr, Gen* for Dept* of .finance- Mohamed. Ab

Minister- Lt. a©n. Abdel Hakim AME3 Deputy Minister of War • Mj. Gen. latM EIZK Under Secretary of State for War factories Geh« Abdel Wahab 'SL hISHRY Under Secretary Lt. Gen» Aly Chief of Staff, Army » (Jen. Mohamed IBEAHIM Chief, of Staff, Lt, Gea. Sollman BZ2AI "Chief of Staff, Air Force Air Marshall Mohaaed Sldky MAHMOUD Commandant Goast Guard, 13. Gen. Abdel Aaia PATHI Dir* Gen* Ports & Lights R/Adm. Youssef HAMAD, CONFIDENTIAL IS THE TEXT OF A DESPATCH DATED. 3RD FEBRUARY; 1.958 FROM .THE CASPIAN S SAD OR, CAIRO. WHICH HAS BEEN RECEIVED , CANADA HOUSE". h-UV Egypt. 1957; Annual Review

INTRODUCTION In the first part of the year Egypt held the centre of the world's stage and at one point threatened to drag Canada into an acrimonious dialogue fraught with serious consequences- Domestic questions received less attention from the government than foreign affairs. The aftermath of the Sinai-Suez aggression and continuing tension .in the Middle East in part explain why so much of the energy of the government was directed towards non-domestic questions. Nevertheless president Nasser's/perhaps excessive concern about Egypt's sovereignty and dignity and his ambitions in inter-Arab and African affairs undoubtedly wo-uld have, in any case, given rise to considerable emphasis on foreign affairs. 1957 was divided into two parts by the issuance on April 24 of the Egyptian declaration on the operation of the Suez Canal. For the first four months attention was focused on post-aggression problems* The stationing of UNSF on the Egyptian side of the Egyptian-Israeli demarcation line, the withdrawal of Israeli troops from Egyptian territory, the clearance of the Suez Canal and the establishment of a regime for the future operationNof the Canal all involved important questions. Canada, as an important contributor to UNEF and a leading participant in the General Assembly discussions, was directly concerned with developments in Egypt during these four months. In consequence (and this can be stated as a simple fact by one. who was not in Cairo at the time) a heavy load of responsibility wsls carried by the Cairo Embassy during this period. After Apr/a. 1 the more continuing problems of inter-Arab relations, external assistance, Egypt's attitude towards the West and the U.S.S.R., and,the problems arising out of the domestic ta^ks facing the government reasserted themselves. /

EXTERNAL RELATIONS < . : The year opened with the U.N. salvage fleet commencing operations in the Suez Canal, Israeli troops withdrawing east of El Apish and the first elements of UNEF reaching Eg^rpt. The basic principle behind all these activities had been left unclear by the General Assembly owing to.differing views on whether the U.N. should simply restore the status quo ante or should endeavour to move towards estab11shlng'bett er conditions than those which had brought about the use of armed force. These differing approaches to the role of the U.F. resulted in serious problems arising with respect to Israel's withdrawal, the clearing of the Canal and the full establishment of UNEF. ' It was this last problem, involving as it did the arrival of additional Canadian troops in Egypt, which gave idse to the crisis in Canadian-Egyptian relations. The . Egyptian approach to all these developments appeared to stem from suspicions that any progress towards easing the tensions of the Arab-Israeli dispute would involve concessions at Egypt's expense and gains on the part of Israel. Any such outcome would have compromised President Nasser's position vis-a-vis his more extreme colleagues and perhaps in the eyes of the Egyptian people, and would- have weakened Egypt1 s position in the Arab world* Consequently Egypt-was insistent that the status quo ante should be restored, and extremely sensitive about the nature of the regime for the future operation of the Suez Canal and about Egypt's rights with respect to the entry, stationing and deployment of UNEF. CONFIDENTIAL /Canada . cms PUBLIC RECORD OFFICE •*• Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

Canada was' anxious that this experiment in TOT. action should succeed. Differences with Egypt over the arrival of additional Canadian troops put the whole UeN. operation in jeopardy and it was essential that a quick solution be found. Representations to President Nasser by this mission and "by . U.N. officials obtained the withdrawal of his opposition to the arrival of the additional Canadian troops. The differences had arisen as a result, of the suspicions mentioned above being aggravated by misleading and incomplete reports of statements in the House of Commons by' th®. Prime Minister and at the General Assembly by the Secretary of State for External Affairs. It had seemed to President Nasser that Canada was joining forces with the powers most hostile towards Egypt with a view to. exerting pressure to obtain settlements of current Questions concerning UNEF, ,the Gaza Strip and the Suez Canal which were contrary to his view of Egyptian interests,, The final straw for the President had been the reports (subsequently proved wrong) that Canadian troops had fired on demonstrators in Gaza. in the President's mind this alleged action was ample confirmation that Canada was part of a conspiracy directed against Egypt. He had then, in his characteristic impulsive fashion,, issued the order that additional Canadian troops should not. enter Egypt. • He later admitted that he had been wrong,, , , . Given President Nasser's subjective and suspicious mind and his impulsive nature, it is perhaps not surprising that events of the first .four months were somewhat turbulent. Nevertheless on March k, after heavy pressure from the U.S. • aiid Mr. Dulles' meeting with representatives of non-Zionist Jewish organizations, Israel issued the definitive order for the withdrawal of her troops from all Egyptian territory. On March 8 U.N. troops, took up position at Sharm. El Sheik and Egypt announced that the Suez Canal was open for ships up to 500 tons. .After the difficulties concerning the arrival of the additional Canadian troops were overcome on March Hj., UNISF was fully established and in position to carry out the role which had been assigned to it by the. General Assembly. On April 2l| after some weeks of discussions between the Egyptian representatives and Mr. Hammarskjoeld and between members of the Egyptian Government and the U. S, Ambassador in Cairo, Egypt issued its declaration on the future operation of the Suez Canal. While Egyptian-Israeli relations were not plagued with the infiltrations and armed incursions of the past, owing in part to the presence of UEBF, no significant progress was made in easing tension between the two countries. Ho?/ever one hopeful development was Egypt's action in permitting some non-Israeli ships with Israeli cargoes to pass through the Suez Canal. To the Egyptian demand that the Egyptian-Israeli Mixed Armistice Commission be revived, and that the armistice be restored to the status quo ante;Israel replied that it would reject all such Egyptian requests because of President Kasser's insistence that a state of war exists. On the problem of the Gulf of Aqaba Egypt was remarkably silent, having apparently shifted the role of complainant to Saudi Arabia with the establishment of UXSF at Sharm El Sheik. Of much more significance in Middle East affairs was the state of Egypt's inter-Arab relations. After an apparently auspicious beginning these relations quickly deteriorated and remained poor f:o» the rest of the year. On January 19 the presidents of Egypt and Syria and the kings of Jordan and Saudi Arabia signed in Cairfl the "Arab Solidarity Agreement" which provided for annual financial aid to Jordan of 12.5 million pounds from the other three states. Then during the following month a four-day meeting in Cairo of the heads of state of Egypt, Jordan, Saudi Arabia and Syria concluded on February 27 with a declaration of "positive neutrality" in /the CONFIDENTIAL I ner.; | _y \^ -aa, ,j> f | W I* 1 I ^ - •— . — Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

CONFIDENTIAL j the cold war. . This seeming solidarity, however, merely reflected the least common denominator of agreement among the four states, and the united front was soon shattered with the Jordanian crisis; Premier Nabulsi, a pursuer of Egyptian- type policies, was removed from office and there was a subsequent Egyptian demand for the withdrawal of the Jordanian Ambassador in Cairo. By the end of the'year relations between the two countries had so deteriorated that the Egyptians had refused to make their contribution under the Arab Solidarity Agreement and the Egyptian press and radio freely attacked King Hussein and incited the population to overthrow, him. With Saudi Arabia no open break occurred though relations might be dec-cribed as cool and correct. With Syria the trend of relations was in the opposite.direction. During the initial Syrian-Turkish crisis All Sabry, the Minister of State for Presidentail Affairs, declared that Syria's safety and independence was part of Egypt's safety and independence. Subsequently, on October 13, elements of the Egyptian armed forces arrived in Syria and by the end of the year the .two governments were actively espousing the cause of Egyptian-Syrian union. Throughout the year President Nasser continued in his speeches to assert that Arab solidarity and Arab nationalism were cornerstones of Egyptian policy.. On July 27 the President declared that the Arab people would continue to fight "against treason", an obvious threat to the leaders of those . Arab states who, in Nasser's 'view, had identified themselves with imperialism. It continues to be Egyptian policy to undermine the position of those Arab governments which do not pursue policies in harmony with Nasser's ideas about Arab nationalism. Moreover the notions that the Egyptian Revolution represents the path of progress for the Middle East and that Nasser will strengthen the unity'of Arab people appear to continue to sustain Nasser's prestige among sections of the population in these countries. On the wider international scene Egypt appeared to play an equivocal role- A propensity to engage in clandestine activities, which for the most part were aimed at undermining the .position of the governments of nearby states including the Sudan, Libya, Lebaon and Saudi Arabia, resulted in the expulsion of a number of Egyptian military attache's,, On February 15 Superior Haiiie Selassie accused Egypt of trying to stir up the large Muslim population in Ethiopia with the intention of subverting the kingdom.

The Egyptian press and radio freely attacked the U0Se while carefully avoiding criticism of the U<,S.Sc,R. In spite of the U.S. role at the time of the withdrawal of Israeli troops .from Egyptian territory, not much progress was made in improving Egyptian-U0 S. relations and they appeared to deteriorate, for a time at least, after the U.S. intervention in the Jordanian crisis. During the year Egypt became more heavily indebted to the Ue 8. S,R. .which, went out of its way to supply Egypt at its time of economic crisis following the .aggression with wheat, kerosene and industrial lubricants. Continued military and diplomatic support also was rendered and in November negotiations between the two countries were concluded on the principles for a Soviet loan of 700 million roubles, usually described (with a certain optimism about exchange rates) as $200 million. Negotiations were opened in the course-of the year with the U0K. and France to resolve outstanding economic and financial problems. These negotiations however made slow-progress and by the end of the year their successful conclusion was not yet in sight. In view of Canada's responsibility as protector of Australian interests in Egypt, of particular interest to Canada were Egyptian-Australian relations. No move was /made CONFIDENTIAL. cms PUBLIC RECORD OFFICE ins

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CONFIDENTIAL made towards the restoration of diplomatic relations but discussions for the resumption of operations-by Qantas Airlines made significant progress." In July President Nasser in a public speech went out of his way to criticize the Prime Minister of Australia. -An Australian initiative to open talks on outstanding problems did not result in any further developments. The year closed with the Afro-Asian Solidarity Conference in Cairo. The meeting was essentially an attempt to exploit national movements in Africa in pursuance of Egyptian objectives. With their Communist collaborators who assisted in staging the conference the Egyptians seemed to play a competitive game, each side endeavouring to take most of the tricks. At the conclusion of the conference it appeared that the Communists had exploited the situation more successfully than the Egyptians. DOMESTIC AFFAIRS In addition to other efforts to create the new Egypt steps were taken towards "the establishment of a sound democracy", the sixth objective of the Revolution. The government announced in March that parliamentary elections would be held during the summer. It was apparent from statements by members of the government, however, that at this stage of the Revolution, the elections could be free only within limits set by the regime and that the Council of the Nation (at times called the National Assembly) which was to be elected would be a transitional body. The government viev/s the Council as a political r e as seiiiblement ?/ithout partisan party spirit5 the primary aim of which is to support.government policy. The July elections showed that some voters were not satisfied with the performance of the government. A small minority or returned members subsequently indicated that they wished to play a more significant role in political life. This situation appears to have been met satisfactorily from the regime's point of view and the activities of the Council, which, has not dealt with questions of policy, have been fairly innocuous. Nevertheless on occasions v/hen the Council has had an opportunity to consider more important questions it has acted energetically. In such instances the government did not, or perhp^s could not, totally disregard the wishes of the "people's representatives". The regime also has laid the groundwork for the National Union, an appendage to the Council which is meant "to unite all Egyptians, to achieve -the aims of the Revolution and to build up a politically, socially and economically healthy nation". This movement, a pillar on which President Nasser's future "socialist co-operative democratic society" is to be built, is only.in its preliminary stages and has not been organized at grass roots level as yete Measures were taken to eradicate the remaining marks of so-called imperialism, another objective of the Revolution. Laws were enacted in February providing for the Egyptianization of foreign banks, insurance companies and commercial agencies. "Ex-enemy" establishments were given one month to comply with this legislation. Thus the government was able to complete the process, which had been going on for some years and pre- dated the Revolution, of obtaining complete financial autonomy for the country. The agression provided the .government with a convenient opportunity and excuse to terminate the predominance of foreign banks and financial firms. .The Sequestrator General was authorized in April to dispose of all the more important British and French industrial and business concerns. Twenty British and French secondary schools passed into Egyptian hands in May and cultural and scientific establishments of these two countries were taken over in June. The Egyptianization /laws CONFIDENTIAL 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 Ref.: QO 2^1^ i oiL^t i ^ss^ r* Piea:se note that this copy is supplied subject to the Public Record Office's terms and conditions and that your JSe of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

CONFIDENTIAL— i laws and the indirect pressures on foreigners and non— fcs-v Muslim elements of the population have prompted several tens of, thousands of the foreign minorities to leave Egypt, This exodus, ' together with the absence of the British and French, has resulted in a decline in Western influence in day-to-day life while Soviet-bloc cultural influence has been making progress. Local Communists continue to be brought before the courts for illegal activities and their party has no legal status in the country. The more immediate economic problems have' been met fairly satisfactorily. The balance of trade improved and preliminary estimates indicate a deficit of only £E 11 million, compared to a deficit of £E 44«8 million in 1956 and £E 43.8 million in 1955. This result was achieved through severe restrictions on the import of luxury goods. Essential requirements, however, have been obtained; kerosene and wheat have come primarily from the Soviet Unions which was Egypt's largest ' single trading partner- There has been no significant shortage of non-luxury goods and no undue inflation. Cotton exports have been the largest source of income and yielded approximately £E 106 million, some 6 'per cent more than in 1956«, Although all figures are not yet available, the ftr commodity trade deficit probably has been more tuan offset by a surplus in invisible items. There has been no improvement in the foreign exchange situation and it can be assumed that implementation of the ambitious industrialization plans which were drafted in 1956 have thereby been hindered; the Soviet loan will help in this respect. The government has stated that it proposed to commence the first stage of the Aswan High Dai7i but at the year's end there was no indication that this work would commence in the near future. A steel plant and petroleum refinery were completed. These establishments have been acquired by the State Economic Organization, a body created in January for developing the national economy through ' commercial, industrial,, agricultural and financial activities. This organization is the instrument for government control over the economy and it has been given large' powers. Most of the Egyptianized establishments were acquired by the organization and it has a voice in most sectors of the economy, CONCLUSION At the. year's end President Nasser no doubt felt some measure of achievement and satisfaction. He had steered his course through a complex variety of problems and, in his view, without giving an inch had avoided disaster and retained his position as the executor of the Egyptian Revolution and . as a leader in the Middle East. These achievements, however, do not spell progress, and to the outside observer it appeared that in spite of the efforts which the government is .making in the fields of agrarian reform, education and industrialization the so-called progress of the Revolution consisted more of speeches, blue-prints and circuses than of significant political, economic and social advancement. True, the Egyptian economy had not succumbed to the consequences of the disruption in economic relations with the U.K., France and the U.S. However commercial relations with the Soviet bloc had increased significantly (which could lead to unwelcome Soviet pressures) and the foreign exchange situation was such that early progress on the industrialization programme appeared in doubt. Moreover on the political side, in spite of internal stability and the creation of the National Assembly, which gave at least a limited opportunity for the expression of popular feeling, the administration did not appear to have been able to fill the gulf winch separates it from the masses. The National Union, the chosen instrument for this purpose, was obscurely grappling with' the first stages of organization.

CONFIDENTIAL cms PUBLIC RECORD OFFICE

CONFIDENTIAL / In international questions Egypt had seen Israeli troops return to the Israeli side of the demarcation line, no re-establishment of relations with the U,K, and France, and continued estrangement with the U0S. Again, Egypt had avoided the consequences of the absence of friendly relations with the West by turning towards the Soviet 'bloc. The events of the year seemed to confirm that President Nasser's policies are designed to exclude any special relation- ship between- countries of the West on the one hand and countries of the Middle Sast and neighbouring .Africa on the other. He is prepared to accept maximum-Soviet support and hopes to play a dominant role in the Middle East. On Israel there were some indications that he may be prepared to accept eventual normalization of relations; at any rate there was an absence . of extravagant statements,, in view of the substantial military;, economic and .diplomatic support which the U. S.S.R. provides Egypt, it seems that President Nasser enjoys Soviet backing and finds the present situation not uncomfortable. Nevertheless there were no signs that this realistic opportunist did not believe in the maxim that he who sups with the devil must have a long spoon. No doubt he realizes that the U.S, would not be able to support him to the same degree as the U.S.SoR= and indeed would not render any support for his adventures, intrigues and ambitions in the Middle East and in Africa. As regards communism Nasser continued to hold the view that coping with domestic communists was an entirely separate matter from collaboration with the U0S,S0R» in the international field or using U0S.S.R. support for his own purposes in the Middle East. -He describes himself as a strong anti-communist. As the architect of the Egyptian Revolution with its emphasis on the eradication of past evils, the needs of the "people", and Arab unity, Nasser has undoubtedly acouired prestige among the people of the Middle East (though how much it is difficult to judge) and perhaps in other parts of the Afro-Asian'world as well* A western.observer may question the ability of his regime to deliver the goods in terms of social and economic advancement, but his sincerity in this regard appears genuine. As the proclaimed benefactor, or at least the would-be benefactor, of the common man he tends to occupy a unique position in the Arab world. Since Nasser believes that his Revolution embodies the aspirations of Arab people everywhere, and since there may be considerable numbers of Arabs outside Egypt who think, the same way, the- success or failure of the Revolution is not only important as a domestic Egyptian question but has implications for other countries in the Middle East and North Africa.

Canadian Embassy, Cairo. January 30, 1958.

CONFIDENTIAL 2 cms PUBLIC RECORD OFFICE ins I

EGYPT,. 1957? CHRONOLOGY

Israel withdraws armed forces from El.Arish President Nasser, in Ms first statement on the Eisenhower Doctrine, declares that some parts of the doctrine are vague and that Egypt is neither pro-East nor pro-Vfest, President Nasser, King Hussein, King Saud and Premier Assail meet in Cairo and agree to supply Jordan with money and arms. Israel withdraws armed forces from Gaza Strip, thereby evacuating all Egyptian territory except Snarm el Sheik. President Nasser signs law for the Bgyptianization of .all foreign banks and insurance companies; British and'French banks and insurance companies to be Egyptianized forthwith and others to be allowed 5 years. Egypt states that it cannot agree to an expanded role for UNEF and that Egypt's consent is required for the entry, stationing and deployment of UNEF troops in Egypt, President'Nasser, King Saud, King Hussein and President Kuwatly conclude four-day meeting in Cairo with declaration of "positive neutrality", . . . Israel announces the imminent withdrawal of troops to behind Egyptian»~Israeli demarcation line, Egypt announces that Suez Canal will be open to ships up to 500 tons starting March 8« UNEP troops occupy Sharm el Sheik* Following on entry of UNEP into Gaza and subsequent_ riot, Egypt announces appointment of an Administrative Governor for Gaza, Suez canal opened to ships up to 10,000 tons. First convoy for five months entered canal k days later. President Nasser accuses U.S. of trying to starve Egypt by refusing to sell wheat. Hammerskooeld states that Egypt has said that it would emphasize periodically to the inhabitants of Gaza that it was Egyptian policy to prevent infiltration across the demarcation line. 18 Seven banks and seventeen insurance companies were Egyptianized after contracts had been signed for their sale to Egyptian companies, Egypt issues declaration on the operation of the Suez Canal, 2k Egypt and the .U.K. coiumence financial tal&s in Rome on financial problems arising out of the intervention,, /June cms PUBLIC RECORD OFFICE ins

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Details of the 5-year industrialization plan are announced in the press. President Nasser states that Egypt will go ahead with the construction of the Aswan High Dam. Egypt orders the expulsion of the Jordanian Ambassador. President Nasser approves candidates for the elections of the National Assembly. Jordan requests payment of the subsidies agreed upon at the Cairo meeting on January 19. Egypt again asks that the Egyptian-Israeli Mixed Armistice Commission be revived in the Gaza Strip and that the armistice "be restored to the status quo ante, the agression* Israel declares it will reject all Egyptian requests for resumption of the MAC due to President Nasserfs insistence that a state of war exists. National Budget announced with revenue and expenditure balanced at 300,5 million. National elections for 350 seats in the National Assembly are held* Second stage of elections for the National Assembly takes place. President Nasser opens the National Assembly, President Nasser speaks in Alexandria. Joint Egyptian—Syrian statement about proposed Federal Union, 20 An Israeli chartered ship passes through the Suez Canal. Efcpteniber 6 All Sabry states that.Syria's safety and independence is part of Egypt's safety and independence, 7 Egyptian-Syrian economic unity agreement announced. 11 President Nasser confers with Major-General Bizry and Col« Serraj of Syria for the co-ordination of military plans* 12 Col* Hatem declares in London that Egypt » *«. has now closed the "book on the past." Eygpt announces that the Suez Canal is open for ships .of 33 foot draught* 28 President Nasser in an interview with the A. P. and N,B.C» states that the U«, S. policy is the isolation of Egypt and the application of economic pressures. 30 The Egyptian Government indicates that military law will "be .applied to local tradesmen who withhdld produce from the market and foster higher prices. October 6 The Premier of Sudan leaves Cairo after a visit during which preliminary talks on the Nile waters took place. A3 PUBLIC RECORD OFFICE

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Egyptian armed forces arrive in Syria, Opening of trial of Communists in Egypt charged

Vf'i* with breaking the law. November 2 Egyptian~U.K« financial talks in Rome are resumed. 3 President announces the formation of the National Unionc Electric furnace in the new iron and steel plant at Helwan is started. First attempt by Minister of Education, Hussein, to resign from government• Press statement that all parts for Egypt's atomic reactor have arrived from the U.S.S«R.

21 General Amer returns from three-week visit to the Soviet Union and announcement made of Egyptian- Russian economic agreement for loan of two hundred million dollars, Col. Younis, Managing Director, Suez Canal Authority leaves for the U,S* Dr* Fawzi, the Foreign Minister, confers with Mr* Dulles in Washington. Minister of Education, Hussein, again tries to resign from government and resignation is not accepted by President Nasser, Egyptian~U.K. financial talks in Rome suspended, Afro-Asian Solidarity Conference open in Cairo* Second round of Egyptian-Sudanese discussions on Nile Waters and after two weeks and Sudanese representatives return to Khartoum, .

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References

• '•'•. •. ,'; • • •: I'itfltf* 4m9&#M--:* .visit' to Wppsr- Egypt by •• -tsaif.:*m»& âigto^fbl.*®-:- wltl^^^^gujeie^.. etx, •••*§&* O^m , i • • >. ::^tî»î|^':i^.'|i",$*•.': ,,i>ii^:iii^^m3^'^9Â^^:^^ •• .- •^'M^fjjfi^m. '1^,1^13,11. «ijjjgB^^ jtanetr.«ai'k--.' •.. ' 'r <;i ;^«iîft-:î^ .• w@nlA -g^flS*v^Jtat .ieatt :©tf ©aftmity .• .'«f.' : studying the country in detail, but timetables , v:l^^';;i||iip[i^' -pt••.ami/ this. 'irpyagt; await mit. *1wr -fitted. . :•. ;i$i$i!:-$it- HKMI «ft£|iiKi^»r«"-:.; •'; /:' ••. ••;.: • ••., • ;• •'.'.'.; ;.;^• . :-J*&&; '::-'• - !l:j^tis-fid*d;o:ii®ia^' :fey :rail,• f|^©« QaiJt^to Aswte •. a-I||i|||*?s|if vgil*i)'!'aiid: tli»^/mor|^/ba<^'%0-.2iMôr/fP^ ,mil««)» ;*:^^^;f-''»«i'.iiilt'-'b^'th«î•7iiii||l^^-iiliMi^^ ^ a^ • isojitiîet''»rth to. " : ; 1 '.•î5i-y: •:• .,:fiiftr «îMRl *»-i*ii*iitg'road' tnwgL;f«a ; f tWlii: /-le^-'gf;;. tht ^|oiir»: ^ .wa& ; : 't^- sej* >:;tht•• towttry. • • fh* 'tsly' .• .•;i^l|l||i!i^|iii»-,ft/;y;.Yti^^tt v %«tw»m^ • f|&rov •saa«d ^ IWD^ ' •*»*».• thi«- ,«t*ettfal»fii^' liW'* ' 1 also wished to have the car in Assiut In order to pay a wid- ely scattered series oJ-«i!i»* „ .• l^Rrttg. :««^liitti"' Internal ;ip|:.;;pi^ti|'',l "haw i^r:«^m"î* *lXt T«lie|p' $*#*'•&!#.•-• • Circulation Mediterranean to the site of the proposed Aswan High ,: Dam^ a few miles south of the town of Aswan. . ' :.VV-'" "•;-*: .•• - ••;•• •. .:- ' - '' •;:^r'--:/ :? -::' ••' -'• .• ' ''.''' *!: -';'"'1"' " fhtîrltlt: t©^ .:A8^^';»hi®ir |ajt»d Jtint «^tr; ;,ws^:' iiif@tfd./;î^||r:tt- -'|e;ô:3pie3^^tr^î*»* •|pi .l»;^l^'|i^-'ia!i -dîe -|a t|- dtireiitf' i|ii .. .^^w^p^ ,@f -;iî«^.:1|g^%,;gr,;:at |A*st ft te\g|«^t*-.:i»fi them, and it was interesting to observe the infectious enthusiasm of the engineers and other-officials with •. whom I talked. . ; These people who are actually engaged |i;'-Jilpp|lisi§ a»d .4tvtiiN&lw&i». artîplW^':fSiF--ipfciv .' '"V;y.'-. ,.-t^li^| M 'WMi^ water..for irrigatiin aad itwi^: • •.. -''"' prbductio; n dwarfs all others in importance, display '- . '^tt"'^gt atfet^k@tiv« sridit- 4f• matittBaiiiKDii fhtf : Jteatw. • Distribution titieplr.fite^ thiy art frtud ^f ^thelbp •afeiiiti©iE|'." -»i. far to Posts m ore dramatically than an official at a desk in Cairo' they can point out to you on the ground what hat been • accomplished and .what remains to be done in order to raise the Egyptian standard of living. Others may argue about the politics or economics of a given project, but the man on the cone true t ion site is sure "" '• :thaf wltat'he i« 4&&t-to, wtrthwhliif* ; • - '•

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•*•>

4« I was taken in hand, fcy the Aswan High Dam Authority, and Indeed was met by them at the' steps of the train, driven t® ny hotel, picked, up on the day of my departure ami put safely aboard the train again. They arranged a programme Of visits, provided transport, and accompanied me to other entities such as the power plant and the fertiliser plant* The Chief Engineer and one of hie assistants, armed with plans and drawings, spent a good many hours showing me their project from every conceivable viewpoint except the underwater. I think they were pleased at the interest shewn by a foreign representative, and X also think that taking the trouble to via it them was useful from the loag~ramge poiat of view of enlisting confidence and building up good relations with the Egyptians. But though these officials were most cordial on their own ground they could not be enticed off it* When I asked them if they would have lunch with me at the hotel I wan met %y a refusal, without explanations or excuses. Restrictions m contacts with foreigners evidently operate in Aswan as well as in Cairo* 5. A despatch of this sort is not the place to report on partioular toplos. 1 shall merely raewd briefly my programme in Aswan, -if only to iadioate that it was extensive. Visits were paid as follows! {a) Aswan Hiah Dam (i) Examination of plane and drawings at the Authority1! field efficient ' - (ii) Imepeetion of the site at the Bum's axis from the top of the graaite cliffs on the west bank of the gorge? (iii) Journey by river boat through the whole streteh of river that will be affected, from the upstream opening® of the diversion tunnels down to tie existing Aswan dam, (b) ...Ivjiro^llettrio f,ower',Jlijfflfr* situated at the'1 western end of the" existing Aswan damj ' , . work started in 1955 and power i0 to be proiueei by the eai of 19591 (i) Examination of plans, drawings and models at the offices of the Ministry of l»ublio Worknj (ii) Inspection of abandoned power house site, where considerable excavation had been done before it was found to be in the wrong place (a costly change Of Mind}} (iii) Inspection from top and bottom of work in progress at the final site - dans, tunnels, concrete work penstocks, turbinesi etc.

(6) fertlliger Plant* Shis is a large-aeale scheme , for producing ammonium nitrate from looal hydrogen and nitrogen and nearby limestone, using electricity froa the Aswan power plant!

' * 4» • **

If- cms PUBLIC RECORD OFFICE

amination of plans at the field office® of the Company (53$ gOTernment- owned)? four ©f the plant site and building® in various stages of construction; of the housing development and community facilities being erected on the desert for plant personnel. ita talamt* fhie is a plant"" to Miidle ore mined 'some • twelve miles »a©k in the desert hills and destined for the iron and steel plant in Helwan near Cairo. I was taken through it from bottom to top, the latter being a considerable distance above the former, sad emerged the colour of iron ore myself-*' 6# . At the ©omolueion of thi» programme I went north by traim to Itoxogr spent the night there , md the Heart day droYe1 about 160' miles 'to > Assist , the fowrth largest eity i&'llgypt (after Cairo » Alexandria and fantah)* y©r all but a few miles this Journey was accomplished over an indifferent and excessively dusty dirt road, but the opportunity of seeing ('from the inside, as it were) this agriculturally important fart of Upper Egypt compensated for the 4i®©o»f<»f8* At Assiut I wmi iailteA to sfay at the home of relatives of an Egyptian doctor whom I have come to know in Cairo. 7* Hy pttrpeies in visiting AfMrtnt, apart from getting to know •MWtiiiRg of the oapital of Upper ,%ypt wtre to p$y a courtesy call on the Governor and to learn whaf t I could lit first hand of the work Of the Canadian miesionary group. These asstatber sirrem atalta «ad fire children aid represent the only th$m& t&at oaa fee termed a Canadian oouroaity in Igypt outside Cairo* S. My em31 @» the ioTer»or Lewa (Creneral) layoujai Hashem, was received vd.th due pomfp and circumstance in tim f ©r» of a police «mrd of homotir and a bugler. He Br«ttg&t ia tilt OMef of Policet a represestattvw of tlie Mimiatry ©f th* 2iittri©rf am iatelligeBO* offiwr (I) aafl a couple of other officials. We chatted about things Egyptian and Gasadiam for three-quartert of am hour, whieh is longer than tfc* aveapmte for this type of oallf and I wa» eTentmally glvw a farewell preaent-arms and bugled out of the Governorate. . . It will be recognized that I established firm contact with thi« diftiRgttimA official when I report that 1 met him at eTery seal of tke

*«• cms PUBLIC RECORD OFFICE insT

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(Sgd.) 8*M* Maedomnell 1 2 cms PUBLIC RECORD OFFICE ins I •) I 2 **> DO ^/ io*8°l\ ^SS^r* Pieasse note that this copy is supplied subject to the Public Record Office's terms and conditions and that your iJSe of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

. •*.:':*. . EPABTMENT OF EXTERNAL AFFAIRS, CANADA NUMBERED LETTER

-SECRETARY OF STATE FOR AFFAIRS, OTTAWA, CANADA.

References • Subject:... JKXBKSQfr "WESGSKV£Of 'Of File No.

More than one thousand members of the various minorities continue to leave Egypt each week. This e»dua of population gives rise naturally t© natty • - complaints about the nature of the Regime and the s®elitl oemflitioas which it encourages, fhe problem is a eomplex ©ne. In this letter we propo»e to explain in more detail than in previous reports the nature ' of the pressure® which are f@lt "by the minorities ant the conditions which have induced these pressures. 2. Until recently the minority groups 0©mprl»«I'- some 200,000 individuals including approximately 100,000 Sreelts* 65,000 Italians and *50OOQ Jtws {©f whom 15,000 were Greek or Italian}* Thest e minorities were wtll organifis«d and prtsp«r©us and they emj|©yed a higher standard of living than the indigenous population. Many types of bualaessaetivity were largely In their hauls or were shared with British and French Interests* Minorities tended to live apart from Bgyftiaa life and their attitude towards the native Egyptian was not always "beyomd reproach, In the light of the privileged economic and social position of the minorities, muslim Egyptians tended to look upon them with some disfavour Internal and to Identify them with foreign Interests* I® some Circulation earfeeat tl» Armenian Igyptiams (some 40fOOO to 50tOOO) aiast the Copti also were gremped with these mlnerltles - in the eyes of the muslims. The Revolution has affected this situation in two principal ways, legislation limiting the economic activities and employment of the nationals of these minorities has been passed and the feeling against the minorities has been released 00 that It say "be directly felt through various informal types of discri^pinatioiiu As a result several tens of thousands of the minorities have left the country since the nationalisation of the Suez Canal, 5* . The pressure arises primarily from the feeling ®f seat f®relgae2*» that tn today *e Egypt they.no leaager have their place in the sun* Ehe natlfioiallst and Distribution religious awakening which has accompanied the Revolution to Posts no doubt has aggravated the popular resentment felt towards the miaerltles. While this attitude of the aute* chthons, which no doubt 10 shared by the regime, may have m®re direct effect In the future, It Is the economic pares«*»*- ereatei by the **llgyftlanliatlQ!aw (or perhaps mare correctly described as "lelamization") laws which 1 2 cms PUBLIC RECORD OFFICE ins I 1 i 2

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-3-

^:"at present makes life in Igypt increasingly m&p&tll&fttt* iftaemployment ia widespread among fcf' them have been diumissed and are1 still out t , . 0«WKi*» ar« not now jtrmitted t0ii|j> 5ii@st th* Ja*nr«n** »«a|»aiil«» aad especially ag«aei«8 which, can now fee owned and managed oy <' AiythMr« fner® are r«a0«rfi that efctton brokerage will next, 2He»« restrictions, altaough legally unobjeetionable and «fce£*«tl7 l«*ti«t«tol« from a» Bgyptiaa point of view, tend of coursn t.® dreate a statt ©f anxiirty am®ng tH@ f@rtign population, Outri^bit discrimination t&es more di$er®et f®ras*, @em3ag tne |»re«nta«t of foreiî âiploytes is not jf the g©^«m»nt te» insued on a aum1»«r «f ©ceasiene *tirit instruetions t© r«plaett foreign «mfloy««s hy iaasl»® who !<*»« thtto 4«^« are net girjn, ©r are giv«a id«raUt delay, a new »cart« de tramil«* ôvy art «indu«*dw t® mak« their purchases fr«im»li» not f

by foreigners, l^urtliermor e , for some time to come Egypt will need foreign engineers, doctors, dentists, technicians and various \ types of employee* Btpever. few of the foreigners are prepared to attempt this adjustment* fhey do not expert that ta« "Bgvpt for the Egyptians" campaign will cease and. they wonder how far it will go Above all they fear for their children.? they consider , and perhapf s rightly^ that it will be impossible f ©r their ehlldrai to prosper in thla country* fhe parents prefer their children to settle somewhere else. They are &L&Q worried about the education problem now that come of the British and French schools have "been • Bgyptiani&ed and as it 10 not unlikely that most of the other foreign schools may undergo the same treatment within a deea4f (sfe our letter Wo, 59,5 of «T«ly 8 )# 7« ' Sfhe solution which most of the foreigners envisage therefore is to leare the country asraoon as conveniently possible arid to resettle down either In, their homeland or somewhere else. The Bgyptlaas are pleased with this situation and their attitude is understandable « ffhe foreigners ' ttsed to control large sectors of the e&onowyf they had the better employment s the better living areas ill the cities, and, perhaps above all, showet d little regard for the native umslisu It is therefore not surprising that the %yptl«as are prepared to see all these skilled workers and teoh- nicians leave, although it may be a generation before they are replaced with native Egyptians*

H.M.

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^lQJbD,EPARTM«NT OF EXTERNAL AFFAIRS, CANADA. * NUMBERED LETTER

T©: BER-SECRETARY OF STATE FOR AFFAIRS, OTTA»A, CANADA.

FROM: I* MIR* of Reference:. Air or Surface Mai/1-. •fSB 10I«E Of fHE OOtHGIlt 0? 2?HE Subject: < I JSIQS (WXSLAf US ASSEMBLY) Ottawa File No*

References

As the second, part of the first session of the Oounoil of the Hat ion has been in session for some time (n«e p««M^Ai»h ' 1 of ow l»tt«r rad«r iftferfi^st) w® woiild ills* in tals l*tttr t® m»ke a prtlimiajtry auntsinsitfat of fh« »ol* of tk« Oomcil in tl» polltital 112* ^f XfiTyt* ft &»T* prtvitunly a?«p®rt«t that tho Eeg4«« msre*1 i»t*mMA t® rtstoy* full ttm«03f»tic p«a?lia»«taary lit® *t this of the Revolution; it had imagined the legislative 08 t, politiaal raasemblement without which would second the government' 9 policies and give a broad constitutional basis to the Revolution, The slefctiems, carefully planned though they w«r« (see President Nasser's expectations and it now seems apparent eiideav®ur to go beyond the part for whieh they aave "been, oast. 2, 3E&® sitmatlon has "been mtt satitEfaytt©^!!^ «»©«g^ fj»o» the point of Tlew of tht Regime» $h» 0«iv«rs»t»t • haa lit erne, to exert its authority and does not seem to hesitate to put dlr«tto th® ojEffieliCL yl®w* It Internal for instance, that the general polities of the government Circulation as well as questions to which mi$it be attached some ar® not raistd in tlie Gowieil* «x**yt at the instigation ®£ the government. This applies especially to defence and foreign affairs matters. No interpellation has yet been made on defence policy. The Goimcil unanimousl; and without discussion adopted the resolutions on Oman. an& j&gftttfc (»** paragraph 2 «£ o&r X*fet«$ 41 2* 195?) whieh had "betia tabled at the Invtigi • regime. Similarly, General Amer v?as the object of a unanimous vote of thinks following hie report to the Assembly on his mission to the USSR. The resolution on Oman may have reflected the general consensus of opinion but it Is known that some members were strongly against the economic assistance agreement with the Soviet Union. Distribution 3* A similar sit**ati

t.,182C(Rev.2 /52) 1 2 cms PUBLIC RECORD OFFICE

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ijat-ters to which the govei-nment attaches importance have been vo$*4 waapttim©n«ly$ t&« wippleatatary budgtt of £1 1 million for tb* Xbdftyjr. erf • Social Affairs and th@ KyaDuif «r «f CB 2 million ftrcnt the fiv«-y«ar plan to the Ministry of Xtfueatioa wer0 not tven defeated. Although these bills may have had general support there wa» me tffocrt to subj&tt th«ia? details 'to any scrutiny* Ho aeitoer raided any oju«6ti» atetut the bill on employment ©f feaf«igtt«r;S« Until now> opposition naa only arisen in c,a0es of •bill* "of limited -interest , as^ for instance » th« "bill to combat agricultural pests, against which thirty members voted, i.e. ' '! l*jMrth«ft tin p«re«nt of tint Council* On th« other hand* in • •-. so far 'as w« have been able to ascertain, draft bills tabled ; • by muiitiMKnr hare all fail«i# fh® oe«nitt«*« to which, private Mils ' must be referred for decision a» to whether these bills should be taWLef in th* Council f ««-em to be the graveyard for members* private initiatives. It is clear that the Regime at this stage is not prepared to let members have initiative with respect to laws and that it prefers their draft bills to be disposed of in committees w&ere they receive little or no attention* A draft bill calling for th» suupfflision 0f demolishing old buildinga in Cairo until new dwellings are built was buried in the proposals committ®®^ Similarlyr draft bills relating to medical examination before marriage » th.6 txtrcis^ of th« legal profession and to liquor establishments '' .., never came out of the cosaaittee stagef A group of members tabled ': as interesting piece of legislation r

More recently the Council debated the ojawtion of school graduates who cannot be accepted as regular or external students la universities, fhe debate progressively- warmed up and the Minister of Education, was taxed in defending the point .<«£ view of his 'department. He explained that the establish- fet ment for both regular and external students was already overfilled and that the government was taking st@p0 to cope with this situation* lotwithstandtag a good report on the part of the Minister* the Oeumoil flt3rprt»sed a wish", in. accordance with Article 92 of the Constitutionf that more ©attemal students should be enrolled in tmtvttrtltl«>* Following the Assembly vote* the Minister tendti his rteigaation to the President on the grounds that he was unable to carry-out the decision of the Council. Jhe President refused to a«oept the resignation* She Gouncil immediately reeanted; it made It clear that -it had expressed only a wish which was not binding on the government* Some members expressed regrets over and ap®lsgi«« about the Minister1 & resignation* After th® resignation was withdraws th« Minister declared at a press conference that his department would endeavour to provide adequate employment for eight thousand secondary high school graduates* - ?* 3?he debates on fahrir province and educational facilities- are illustrative of the proate^nga of the Council and of the litttted though actual role which It trie® to play in'Egyptian politics. Both these debates originated in questions of limited importance. I'hey can be considered, it seems, as spontaneous mamif ©.stations «f disenchantment from members who would like to have some tiling significant to do* fhe debate® also show that the regime has the necessary means to bring the Council around-to i.t& vi«wn4 Sagdy Hassantin and the three other deputies involved in tht Al Sahrir affair have been whitewashed and apologies and rtgrets were expressed to tht Minister of Bdttfcatlon* l«t and this is what ia important* the government cannot altogethe# r ignore tM«. ie&l&iens and the wishes of the "people's representatives | it demoted Magdy Has sane in and the Minister of Education made public stat«R«sfea that he would arrange for school grmtaetes to be employed in firms and industries, Shis acknowledgement of popular pressures is interesting in a dictatorial regise aaadife may be that on minor points the regime will not wish or be able to ignore views expressed by independent-minded members in the Gouncil of the Hation.

(Sgd.) • R. M. Macdonnell • . The Embassy. ins

C 0 N F I. DEN T I A L

NASSER*S SPEECH AT THE CO-OPERATIVE CONFERENCE ON DECEMBER 5th 1 ; 'Nasser's speech on December 5th at. the Co-operative Conference was an unusually, realistic, general review of achievements and prospect, Nasser seems to have acquired a somewhat clearer, if still rough-and ready, understanding of his' country's true economic position. He now postpones his Utopian socialist society . to the far future, declaring that austerity will be necessary for .some time arid1 that the-fruits of Egypt's extra effort might not be seen .for many years, (T.iais corresponds to his more recent statement, that Arab union is 'a long way off in practice)*" The. main points :were:, . (a) ; the struggle for Egyptian and .Arab independence in the field bf.foreign affairs and the struggle to improve production and raise the:standard of living at home, were different aspects of the same ;battle'. Failure in one sphere Y\rauld mean failure in the other and the "imperialists" were campaigning on both fronts, (b) the- importance of keeping the initiative both at home and abroad "by adopting the tactics of movement... and shunning the tactics of stagnation", .. ' - The1 speech contained several illustrations of what Nassermeans by a "socialist"1,, democratic co~operative society'* and was .notable for the relative frankness with which he discussed such soaee subjects as clandestine radios. Liberation Province, official corruption and meat distribution,, .' , 2, . Nasser began by stating that Egypt now enjoyed 'complete independence as a result of her long struggle and refusal to follow the path of inaction. Political and social revolutions had proceeded . side by side, 'While the British were, being .ousted, : industrialisation, the develpment of the national economy and social welfare were making progress, • ;. - . 3. Independence implied opposition to spheres of influence, and. "the rejection, of'alliances with major powers outside the area. No sooner-1 had national independence been-achieved than the-regime saw "that t'he-.'West intended to bring the whole Arab world within its sphere of Influence« The Baghdad. Pact proved this, although the Arab-' battle against the West began after World War I, In.the struggle "imperialism" used various tactics, while pretending to combat Communism, .'. •' (a) It sought1 to establish puppet Governments and indirect rule, (b) It used its supposed arms monopoly to impose conditions on ';v"Arab' States, Egypt's arms deals, had defeated this line of -'approach and the supply of British .and American arms to Tunisia showed that the days in whic'h the arras monopoly could be used as 'an instrument of policy had gone for ever,.j (c) Bribery of the press and corrupt politicians, , . ,. (d) Conspiracies and., assassinations, as in the case- of Adnan al Malki* ' ' ' ' -•";.- '': •;."t{3) 'Clandestine radios, .^These uttered "foul talk" and .aimed at misleading "free nationalists" by.spreading suspicion among the /Arabs A'L 21 cms PUBLIC RECORD OFFICE ins I

C 0' N F I D E N T I A L • . - 2 - Arabs and by frightening neighbouring Arab states with the bogey of Egyptian republicanism. Their methods "used to have success", .' . \ (f) Israel. "' " .".-•:••. .:••;••• • -...-.-••••

Thus,:^he war of national independence .had. developed into 'an "all out war" of which'Egyptian resistance to .the..."Tripartite Aggression" in November 1956 was the culmination, '.Imperialism would nev^er renounce its aim of trying to bring the/Middle East within its'- • sphere of influence, • . ... „ U. • : At home the-social revolution,, with.;its programmes of industrialisation, and social welfare,-, .was pro'eeed.ing. The •nationalisation of 'the^Canal with its annual profit of £Elj-0 million.: was equivalent to the reclamation of one million acres of land, "Imperialism" had failed to prevent Egyptian prosperity by the •economic blockade and other pressure. To bring about a prosperous - society it was necessary to ensure that the-.few did not exploit the many'and to substitute co-operation for opportunism and exploitation. .Socialism was .the raising of the standard; .of .living.'of the majority, by State particiaption in capital developments and State supervision but not elimination of private '.capital. There was a parallel with - the regime's agrarian policy which was not to transform land-owners, into labourers, but labourers into land-owners. ;- 3. Nc"ssurv£nt on -to discuss the importance, of removing evils., prevalent in Egyptian, society. .. There was.too'much idla.'gossip• , about corruption. .It was still to be found,, but- at a .much lower level inlsQciety than in the past. To put an end to it might.take up-to ten years. Any incident involving corrupt'practices should - be reported, to his own "complaints bureau" which would investigate it. Campaigns? often launched by'foreign Embassies and imperialist agents? spitefully aimed at ruining particular individuals would be ignored. According;to the clandestine radios £E,80 million had been .-.smuggled'out .of the country from Liberation Province funds* There . might have been,'some extravagance and administrative error. ;in-,the :/y- plan but no corruption, . • •• - - . :• 6, The- two. main internal problems were of production and distribution, Egypt had a growing population* With the" redistribution of wealth? demand for consumer gQods/.was increasing, Tha man: who could afford -one cotton-robe in the , past could'now afford two, Co.tton now exported for hard currency, would soon be ^required. for local use. There must be no unnecessary consumption .and. ; .; , imports-should be kept to the bare minimum. The harder the people ; worked and the more they saved and in-rested the better. The; plan , for industrial expansion would add £E130.million to the national revenue and provide, work for half a million people. This ..would not "be enough. There would be a further five-year .plan. The co-operative element should be introduced into the distribution system of.the country.so as to cut out waste? prevent petty monopolies and ensure fair prices and profit margins. At present some merchants •preferred to put .half their goods on the market? sell, them at high • prices and let the rest go to waste, rather than offer all that was available at low prices,' 7. It wag not possible to make an overall paper plan for Egypt's future. The final •• objective .was -"the:, establishment -of a socialist;, democratic and cbfoporative society free from political? economic and social exploitations". Meanwhile individual problems would have to be dealt with step by step, Tfi eresult s of their labours might not be seen for many .years; but they w-ere .: laying foundations for the

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.fsPEECH BY NASSER DECS DESPITE ADVANCE BILLING AS A MAJOR TO A CO-OPERATIVE CONFERENCE CONTAINED NO POLICIES.IN FACT IT WAS LITTLE MORE THAN A RESTATEMENT OF THE SIX

OBJECTIVES OF THE REVCLUTION.ESSENTIALLY IT WAS A PEP TALK ABOUT

HOW COMPLETE INDEPENDENCE CANNOT BE SECURED UNTIL ALL THE GOALS CF

THE SOCIAL AND ECONOMIC REVOLUTION HAVE BEEN ATTAINED.IT CAME OUT

STRONGLY IN FAVOUR OF HARD 80RK AND SAVINS.AND PUT PARTICULAR

EMPHASIS ON NON-EXPLOITATION OF CLASS BY CLASS,THE FIGW AGAINST CCR-

RUPTIONUHE EXISTENCE OF HUGH WAS ADMITTEBSAMD THE BUILDING OF A

DEMOCRATIC SOCIALIST CO-OPERATIVE SOCIETY.THE ROAD TO IN.tflSTRIAUZ-

ATION HILL BE LONG AND DIFFICULT BUT THE NEXT GENERATION i'lLL BENEFiT,

2.THE FOREIGN CONTENTS-HICK WAS CONSIDERABIECHAINLY INTRODUCTORY BUT

CROPPING UP ELSEWHERE>,WftS A RAMBLING RECITAL OF THE WICKEDR'SS OF

IMPERIALISM.THIS WAS THE PUSH-BUTTON NASSER.PRESS A BUTTON MAI .(CD

SUEZ OR BAGHDAD PACT OR ARAB NATIONALISM AND OUT COMES A SONORCUS

STREAM OF BELL-POLISHED PLATITUDES.THE POINT MADE MS THAT EGYP'l IS

NOW COMPLETELY INDEPENDENT BUT THAT ARAB NATIONALISM IS STILL

THREATENED BY IMPERIALISM ACTING THROUGH THE NEB TECHNIQUE OF AGENT,

AND STOOGES,AND SEEKING TO DIVIDE THE ARAB WORLD. 3.NO REF WAS MADE TO CURRENT OR FUTURE RELATIONS WITH EAST OR WEST

ALTHOUGH WESTERN POLICIES WERE BEHATED.IT IS INTERESTING THAT IN A

SPEECH EMPHASIZING THE DIFICULTY OF PUTTING THROUGH THE FIVE-YEAR

INDUSTRIALIZATION PLAN NO MENTION WAS MADE CF THE SOVIET LOAN OF

700 MILLION ROUBLES.THIS MAN IS SPECIFICALLY EARMARKED FOR THE

INDUSTRIALIZATION PLAN.

H.A LET ANALYZING THE SPEECH BILL

CRECD LDN 090806Z/KB) cms PUBLIC RECORD OFFICE ins I

Following is extract froi Syrnon to Sir G, Laithwaite, 26th Nov conversation with President Iskander Mirza Begins, I showed the President the gist of the appreciation of Nas se r ' s per sonal standing in the Middle East which was sent to us with GcR.O. Savingram W0 No. 1+32 of 25th October, The President was very interested and expressed "broad agreement with the assessment, 1 told him that I had not yet shown the appreciation to anyone in the Foreign Office„ He agreed, but expressed the hope that 1 would show the paper to Baig when he returned from New York. When he came to the passage on the Lebanon, the President said that i should tell you that the best service we could do to the Lebanon was to try and secure the removal of the Patriarch who had been put in by the Pope and who-. was bitterly opposed to President Ghamoun. On. Algeria, he said that General Franco had told him that he was preparing a memorandum to illustrate the strong Communist Influence in that country. Ho said that General Franco had promised to let him have a copy of the memorandum* Snds<> Copy to:- D.I rv- »R.Oo Vines Foreign. Office Mr. Arculus "• (African De !l ( Levant Mr. Hadow " (AfrioarTDept Mr- HoF, Smith Mr. Wilton

ALLOTTED TO MIDDLE EAST DEPT,

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•.:...... NASSER'S. PRESENT. .STANDING IN MIDDLE EAST On August 19th Vire'a&fced United Kingdom, Mi'clclle East posts for I**! .a brief, indication of Nasser's present standing with the governments and peoples of Ira.q, Lebanon, ...Libya, ".Morocco, the ' •' Sudan, ..Tunisia, Algeria, the Persian Gulf, Turkey,, and Iran,.'- All the-, posts5 ^?ith'the. exception of Bahrain and Tunis, have now sent -in their reports, ' ' The .-following survey, which is. based on these repo.rts9 does'- not • take' Syria or. Saudi Arabia irit.o 'acoount,

'••• • -GENERAL : ' '••• : :•"" " ; ' . • ' '"•' - .'• '; , '-'•• --1 jo-!. The.general picture is .that.Nasser is, .in the main, disliked • •-' -:.ahd .mistrusted "by the Governments of other Arab countries^ "but that .'they are reluctant to'Offend him because of his great ^ the influence of Egyptian propaganda and the extent to which-. some of them rely on trained Egyptian personnel. With' the peoples-of the ^rab countries Nasser',s standing remains high. He .is regarded as the symbol of Arab nationalism. Support for ": • -him -is- particularly strong among young people in the universities 'and armed forces. The literate urban population';;who .mould : public opinion, generally 'support him* . The .Governments":would find .great difficulty in'taking,their peoples with therein any • policy of'which Nasser'openly.disapproved. ''. * .

2. The present Government regard .Nasser with "much less marked disfavour" than did Nuri9 but are privately glad when things go . badly with him because they recognise that his- relations with the Soviet •bloc .and his activities in other Arab countries are In • :; time likely, to militate, against Iraqi interests. .They would 'not be prepared., to take a: stand alone against him, "...... "• 3. With th© 'people', ' Nasser1 s reputation as a. symbol 'of Arab nationalism and its best -available champion remains high. His dalliance with the 'Soviet .bloc is discounted. His personal popularity suffered somewhat as a result of the .permitted, •passage .of ships bound for Israel through the Canal and Egypt s failure 'to -do -anything about the Gulf of Aqaba. . I '••• Lebanon; - •.., • '. • 1|. .The leaders of the present Lebanese Government "do not like Nasser. . They mistrust- hims but would be most reluctant to Offend him, . . ".•-,,'.•- 5. The- majority of Moslems, admire him as the leader- of Arab nationalism and some Christians feel the .same, /. .'

Libya; • . ' • *•' .- ,-.: - : 6,- . The Government s .and particularly the "King, .-are , suspicious of Nas.se r'j although there, is a strong .pro-Egypt i'ah"' '"influence ..:" . , in the royal entourage. ., . Egyptian influence with ; the Government has hot"however9 been- seriously- "weakened as the 'Libyans are consci'ous .-of tho 'immenso 'power Egyptian propaganda "wields with the urban masses and Libya depends pn Egyptian- trained teacher's, •7, The ' Cyrenaican provincial Government have resisted. Egyptian' interference fairly stoutly and been reluctant.vto.':'alienato their. British friends,, but -as. the British move out, they may be obliged to look els-e-where, " • ;. • ...'•'' ,.."' ' • ' ' ':' .•;,.;• c-.o.-sr F i D'-E.N T IAL PUBLIC RECORD OFFICE

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8. The people..3../partiG^larly the school-children are always ready to applaud Nasser, •••'• . '• ••; Morocco; . ' '•"' • ,: " ;"-.,.- . ' ' *" "' • ; 9. By and large, the Government ..suspect Nasser for his ambition ;t;0-dsmliiate .Morocco and the rest of the Ar£b world, "but some elements'feel a, certain admiration for. him as having dealt with the British as they would like to deal with the French. 1"0. These elements would probably obtain support among Moroccan youth in the universities and to. some extent in* the armed forces. The general pub-lie are strongly .influenced "by Egyptian propaganda and. it is doubtful whether the Government could take the people . along; with-them 'on'any policy of which Nasser disapproved. The, Sudan; '•• ' '", •: '•'"-'. 11. The"Sudanese Government must look very much towards Egypt and are; ;not prepared to, ..quarrel with her so lon-g as independence and major Sudanese interests are not at stake. This is despite the fact that, Nasser is, in the main, disliked "by the present Government, with the exception.of some P.D.P. ministers. 12. .The literate townspeople, the students and young off ice rs , all tend to support Nasser, : Algeria '.. . • . : . • .' : . •• •.-•'.. 13. Nasser's.. influence on the Algerians has dwindled since the .-. disruption oif the Cairo Cpmmittee of the F.L.N. "by Ben Bella's:i ,• arrest and the .shift of the,F.L.N. leadership..to Tunis. The Algerians in general feel a "brotherly fellow-feeling for the Egyptians "but regard them as hopelessly "backward and at least. • • 50 years "behind the Algerian'Moslems. . ; Turkey; . .'•'.-.'.• ' ..,';• 14* There wer.e certain! .sign : s of a Turkish—Egyptian rapprochement. A move was afoot to exchange ambassadors,- but this has now been . stopped, probaloly as a result' of Nasser's firm, support for-Syria. , . 15, In general, the Turks, despise Nasser as an Arab mountebank,. , dislike him for his'support,of Greece over Cyprus, and distrust - him as .a near-communist stooge. Public and. governmental opinion could be influenced in his favour however in; the unlikely event of him changing, his policy .on. Syria and-Cyprus. Iran; .. • ' 16. The Shah regards Nasser as a regicide, enemy of the Bagdad fact and a dangerous demagogue, but' feels'that.'as he is ^evidently here to stay9 it might be as -well for Her Majesty's Government to .resume relations 'with him and 'attempt, to- steer him away from his leftward course. The 'Iranian Government follow the Shah's .lines, . •but find it embarrassing .to "be on bad terms with a fellow Moslem state, -. ':'•••• ' " • ;• •:' •,":' " • •• . -' • '17..- The mass of the people have no' interest in Nasse-r "but younger : 9 nationalist and radical-opinion has a -'good deal: of .admiration for...... his. achievements., . ; '' :- .- :- • •••"-. ..,.-- ; ,'

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, (D-MI8) Wl 37089-P141 50m 8/55 V.B. Gp 835 1 2 ins I ! I"— 2 Ref, DO S^SJ O ~«^««,i oi^ ir Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

DEPARTMENT OF EXTERNAL AFFAIRS, CANADA NUMBERED LETTER

TO: THE UNDER-SECRETARY OF STATE FOR EXTERNAL AFFAIRS, OTTAWA, CANADA. The Canadian Embassy, -FROM: Cairo, Egypt. Our letter Ho.449 of August 5. 1957 Reference• " * Council of the Nation - a Revie.w. .qf Subject: ' Post File the Initial Meetings of the Natipna] Ottawa File No. .«**• ,...... f.. .1*»*. tY- Assembly,

References «•-'"! We reported in our letter Ho, 499 that following the inaugural sitting of July 22, the Council of the Nation would meet again on August 5. The dozen sittings which it has held since August 5 were devoted to reports from Ministers (paragraph 5 of our letter) and to the situation In Algeria and Oman, 2, It had not been anticipated that the activities of the Council during this irffcial period, particularly before the report of the Foreign Minister, would go beyond the scope of domestic affairs. Resolutions of August 6 on Oman and Algeria therefore were somewhat unexpected though not a surprise. They expressed condemnation in the name of the Egyptian people of "the aggression of the French forces" against the people of Algeria and. "the British brutal aggression" against the people of Oman, and appealed to all governments of the world "to put an end to these wars of extermination". 3, These resolutions no doubt were put forward at the instigation of the Government. Presumably we may expect the Parliament to express Its views from time to time on Arab affairs. It might well suit the Internal Regime to have Its Arab policy, the basic elements of Circulation which are perhaps largely non-controversial in Egyptf endorsed by the "representatives of the people". In' this connection, we have noted that the Council has recently been referred to in the local press as "the parliament of the Arabs" and "the hearth of Arab nationalism". The speaker, el Boghdady, has stated on a number of occasions that members of Arab parliaments would be invited to attend the sittings and to address the Council, and two Syrian deputies already have attended sittings and addressed the House* 4, The Ministers' reports were of limited interest and appeared to be expanded versions of President Nasser's speech at the Inaugural sitting of the Council, These reports cf the Ministers are meant essentially to refi®w Distribution the achievements of the Revolution and are not intended to Posts to lay out the future policy of the government. The Ministers who have reported to date to the Council have laid emphasis whenever it was possible on the economl and social developments in Egypt during the last five

• • * &

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years. Even the Minister of Wafks (religious affairs) mentioned the contribution of Ms Ministry to the economic development through the large investments it mad© to industrial and trade projects. It is not expected that the statements of the Ministers of Foreign Affairs, Municipal Affairs and Defence (the only Ministers who have not yet reported to th© Council) will announce any mail or new developments* 5, 'Hie reports have all been debated in the House. The press has been very cautious in its reporting of the proceedings, but it is apparent that everything did not go smoothly for all the Ministers. The interpellations of the Ministers of Agriculture and the Interior were vigorous and frequent and reflected considerable doubts If not hostility to some of* the activities of the Ministries.

®» ; Although there were, of course, no debates on the genefial policies of the government, there were some questions relating thereto, such as whether the economic policy of the government was built on a capitalist or socialist basis* It may be noted that the Minister concerned replied that the state contributed capital to essential projects and left the door open for free capital in small and middle-sise Industries. The interpellations and debates were usually focused on specific domestic questions and were often aimed at ensuring some control by the House over Government action. There was, among others, a suggestion that a parliamentary delegation visit internee campsi the suggestion was dropped after the Minister of the Interior alleged that there were at present no camps for political Internees in Egypt. Sharp criticisms were also addressed to the Ministry of Land Reform which, it was suggested, should be amalgamated with the Ministry of Agriculture. 7. The debates on Al Tahrir (Liberation) Province and the question of pasteurization of milk, appeared to have been the most turbulent. Al Tahrlr Province, an important project of the Regime, was indirectly attacked by a number of deputies when they questioned whether the cost of the re-claimed land was much too high* Members proposed that a parliamentary committee should be set up to study whether th© project should be continued, suspended or amended. As the debate was coming to a head, the Speaker impressed upon the members that the matter should be referred to the Agricultural Committee, The question of pasteurization of milk proved to be even a more delicate issue. After the Minister of Supply had stated that another pasteurisation plant was to be built, he was accused of mismanagement* Interpellation became more acid when a deputy claimed that It was foolishness to suggest another factory when the plant in Alexandria, which has a capacity of eighty tons a day, never produced more than fifteen tons. The debate got so out of hand that the Minister finally stated that the interpellation was "unpatriotic" and his supporters proposed a vote of congratulation. 8* It is not impossible that some meetings would have nearly broken up in confusion had not the Speaker, loghdady, displayed such maltrjse in conducting the proceedings. It seems that he will play a leading part in the Council and will act more as a leader than Speaker. In this connection, he has recently met on a number of occasions with deputies to brief them on their role in the House? he emphasized to them that they should represent all the nation and no particular

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~7 classes or parties. He also Impressed upon them that he is the normal intermediary between the government and themselves. 9. The performance by some deputies ean not be construed as general opposition to the government. It Is not yet possible to say whether any trends may be developing in the parliament or to analyse the amount of opposition and the number of members involved. There are at present 546 deputies and it would be sufficient for opposition to come from 20 percent or less to give rise to a heated debate. It can be said, however, that the Ministers1 reports are not mere formalities endorsed by automatic and unanimous applause. On the contrary, each Minister had to explain and sometimes to defend the activities of his Ministry,

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UNITED KINGDOM HIGH COMMISSION KARACHI

1. Scarcities of consumer goods, spare parts, refined petroleum-products and specially of lubricants still continue. Attempts to purchase them from Eastern countries have not succeeded nuch. Prices tend to remain high. Stocks are difficult to ascertain. The official price indices for the first quarter of 19^7 are not vet available. According to financial circles; tne wnolesale prices continued: to increase during the first three months of the year due to higher import costs aristae from (i) premiums paid for hard-to-get xoreign currencie^, and (ii) higher prices for some' steel products and machinery imported from Soviet bloc. • • Ther^ aweo:-«cl to be no shortage of food supplies or other essential consumer it«^s, essept pharmaceutix>als. DimdmiBhed yield of. corn crop necessitated increased wheat import*. Certain types of luxury .gooos and spare parts for transportation and industrial equipment continued to be scarce. 2 Wa^es have not changed and have been deliberately kept stable presumably to give°th& .impression that the cost of living in the country is not rising. 3. There seems to be no seas-city of change in the prices of raw materials and producer

SECRET. UNITED KINGDOM HIGH COMMISSION SECRET. KARACHI - 2 -

Egyptian Government's Net lnd.ebtedn.ess •with the Hatiomi Bank of Egypt (in Million L.E.)

January 29, 1955 19. 0. June 25. 1955 33. 2 December 2k., 1955 83.8. June 30, 1956 9k. 4. . December 27, 1956 145. k. March 21, 1957 154. '6. (+ Source: National Bank of Egypt) Article M\. of Law No. 57 of 1951, which is concerned with cover requirements for the National Banks' Note issues (paper currency), was amended on. February 4, 1957, "by Law No. 50. This law penults Egyptian stocks (company shares) guaranteed by the Egyptia.ii Government and commercial paper acceptable for discount to "be used as paper currency cover, in addition to gold, foreign bonds and Egyptian Government "bonds and treasury "bills as originally authorised in Article 14« Monetary circulation (outside the National Basnk of Egypt) during January and February, 1957» remained at about, the same levels as at the end of December, 1956. The money supply is usually at a maximum irx the winter months and at a rainrunum in the summer, reflecting largely cotton financing needs. Total note issues during the first two months of 1957 were about the same as those prevailing at the end of the prev ious year. Egypt's foreign exc.ha.nge holdings were bolstered by'a second $.15 million drawing from the International Monetary Fund early in. February. Date regarding loans to business by private banks are not yet available for the first quarter of 1957. According to banking circles, loans cont.ijn.ued to be greater in the quarter than in the same months of the previous year mainly owing to a demand for additional funds to finance slow moving cotton stocks because of lagging export sales. 7. Hungary and. Bulgaria, offered to pay Egypt for her imports from the free world, but it was very small. Generally no credits are given by the Soviet-bloc countries to Egypt, except for armaments. (b) Some capital goods have beai exported by Soviet-bloc countries in substantial quantities. Hungary is building bridges and East Germany is exporting some Electric Power Plants and participating in Iron and Steel factory, Czechoslovakia is building a Shoe Factory and Skoda Plant. Egypt's imports increased from the Soviet bloc, specially of wheat and petroleum. About 35?° .of all imports came from the Soviet bloc in January and February, 1957, compared to 11 Jo in. the same months of 1956. Exports to the Soviet bloc in January and February, 1957 (mostly cotton) amounted to 56^ of total shipments aii comparison with 2$fo for the same two months in 1956. This is because of a sharp drop in the current year cotton seJL.es to Western Europe, particularly France, United Kingdom., India, and Japan. Total cotton shipments to the Soviet bloc in the current crop year, from September 1st through March 27, were below those in the same period in 1956. 8, Soviet bloc aid is not only limited to oil, grains and arms, but also extends to capital development projects. In fact, many observers think that the hold of the Soviet bloc countries on the Egyptian economy is increasing. Capital goods are being imported, from Czechoslovakia and other countries. /Recently

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a Technical . «- Soviet "bloc. Tt i* difficult to estimte exactly but there are quite a number If SouiefaSiSfand technical everts in Egypt. But the** number « - Csechoslavakia and other Soviet bloc countrxes. and insurance companies have been

etc. , hsve been put under ^sequestratio^ n only.

-srrss .^s^ssri-2n .sars s a 368 under Proclamtioa No. 5. CBrxtxs h, v**"™ * ^ Proclamation No.J.

of a minor nature.

eventuallDy by the resumption of dxplomatic relations. (11) Houses and flats of British subjects have been entered by some - — — confirmed by the Swiss Legation.

II. - OIL.

12 The Egyptian oil industry gradually recovered from ^effects of 5=

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UNITED KINGDOM HIGH COMMISSION KARACHI

S E G R B T.

> 4 - . . Sinai were 10000 tons daily, which made possible the functioning of both the refineries at Suez, which are now producing 10000 tons per day. During the period when Sinai crude oil was not .available, these refineries operated only sporadically, being supplied partially from domestic fields along the West shore of the Red Sea and partially from the Persian Gulf. Crude oil. and some refined products were purchased from this latter area and paid for in dollars supplied by the Saudi Arabia. These purchases, with Soviet bloc deliveries of refined products, principally kerosene, had by March substantially alleviated the shortage of petroleum products which existed two months earlier as a re'sult of the economic dislocations caused from January 1, 1957; its extension to other products subsequently proved unnecessary. By late 'March, the danger diesel oil end lubricants, the supply of which remained of refined products following hostilities were obtained almost entirely from the Soviet Union and Rumania against cotton deliveries. (Sic). Refined products had previously been imported largely through American and British oil Companies. Early in February a new oil company, the Eastern Petroleum Society, was formed to assume the operation of the two newest Sinai Oil Fields, Wadi Feiran and Belayim. Capital for the new company wsus contributed 51;& by the International Egyptian Petroleum Company (IBPO), 29/t> by the Egyptian Cooperative Petroleum Society ("Co-ops"), and 21^ by-the G-eneral Petroleum Authority. Prior to the formation of Eastern, operations at Wadi Feiran and Belayim had been carried on by the National Petroleum Company of Egypt (NPGE), -a wholly-Owned subsidiary of IEPO, under contract for (go-ops, which held the mining leases for the two fields* Through its holdings in Eastern, the Egyptian Government attained a share in the ownership of the exploiting entity it had long sought. Sequestra- tion of the British-owned Shell Oil Company of Egypt and the French-owned Societe Egyptienne des Petroles as a war measure raised the proportion-of the Egyptian oil industry under the control of the Government to more than two-thirds. 13. There is considerable activity in the Oil Fields in the Gulf of Suez. 14. Yes - the Suez having been cleared of mines, the flow of oil from Ras Gharib to Suea has become normal. 15. It is difficult to estimate arrivals of crude oil and oil products from abroad, except Press reports which indicate arrivals from Soviet Russia. 16. Oil is understood to be short in Russia and satellite countries. Although much of the Kerosene has been supplied, the lubricating oil. of which there is a great shortage in the country, could not be .procured,, No further indication'is available.

- COLONIAL QUESTIONS.

17. It is difficult to say to what extent the Egyptians are giving scholarships to British Somalis from Soraaliland and Arabs from Alea and the Aden Protectorate. It is believed that there are some students from these places in Azhar. The number of such students in Cairo and other Universities in Egypt is limited. 18. The students from British Colonies and Protectorates are treated not badly. There are 100 students from Malaya out of which 48 are in Azhar, and the rest in Cairo University and other institutions of the Ministry of Education. Of these students, 18 are getting their own Government stipends while the others are receiving Egyptian Government support, Azhar University gives each student £.4i?. Forty of the Malayan students are getting scholarships from the Islamic Congress..

/There are

S.E C R E T. cms PUBLIC RECORD OFFICE ms I

UNITED KINGDOM HIGH COMMISSION KARACHI

SECRET. - 5 -

There are Mk- students from the East Africa, and 4 from South Africa. From Nigeria the** are 50 students. 20 are studying in the Azhar and the rest irTbairo University. 10 of them are on regular stipends from their Government at £.30 per month. Of the 12 students from the Gold Coast, one is on regular stipend of £.30 per month from his Government and is studying in. the Ashar.

In view of the facilities of education available in Cairo and scholarships offered to some of the students, it is not Relieved that they will return disillusioned to their country, but obviously some of them are not completely satisfied for the financial or other reasons and nay return dissatisfied to their country.

19. It is understood that there is a full-fledged Malayan Association in Cairo located at 10, Sharia Sharif Pasha, and Mr. Md Ghazali, a student of Faculty of Religion in the Azhar University, is its Secretary. Not much is known about the activities of this Association, except that this is a cultural body which serves as a meeting ground of the students from Malaya.

Sd/- xx (S.A.H. Ahsani) • Charge d1 Affairs, 26. 5. 57.

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C ° N F I D E N T I A REC , FOR. AF? QEVBSSQN I REGY 12AUG1857

Following is text of telegram House) dated August 3rd from Canadian 'Cairg to Department of External Affairs otta'ws:

EGYPT'S INTERNATICTTAL_POLICIES There appears to be a reasonable chance that the Egyptian Government will for a-'time devote a major part of its attention to domestic'problems and will take no disturbing initiatives in international affairs. 'What could prevent this from occurring would be new developments involving inter-Arab relations, the Gulf of Aqaba and attitudes towards Israel. 2. No doubt the press will continue to take an anti-Western line, the principal target being the U.S.A. as an imperialist power with France being attacked over Algeria. (The"United Kingdom which has had considerate treatment for months is again under attack over Muscat and Oman 'though it will no doubt emerge from this dog-house if the affair is settled). But it is always prudent to distinguish between words and action, and press attacks do not necessarily mean that Egypt intends to unset any further international apple-carts, 3. Westerners in Cairo, and orobably the Epyptian business community now feel relieved that a week of ardently nationalist ceremonies passed off with nothing more damaging than oratory. Between July 22nd and 27th Nasser addressed the "first meetin-: of the National Assembly, reviewed a military parade in Cairo, gave a public speech in Alexandria arid took part in a Naval Review nearby. This represented a combined celebration of the nationalization of the Suez Canal arid the fifth anniversary of the revolution of 1952 and the de-nationalization of King Farouk, with "victory" over the Anglo-French-Israeli aggressors thrown in for good measure. Given the highly charged atmosphere there was inevitably speculation in advance about whether Nasser would take a slap, other than verbal, at the West. He did not, and the occasion having passed any temptation to trouble the international waters may have passed as well. U. As indicated in paragraph 1, however, any such conclusion must be qualified by the cautious realization that anythinr can happen in the Arab world. On the surface there is bicker ins- and beneath the surface there is a lot of unexplained coming arid going. For example the Egyptian Defence Minister recently visited Saudi Arabia and the Secretary-General of the Arab L .ague is paying a series of visits to Arab capitals. What these mean we do not yet know, but conceivably Egypt might find it necessary to take an extreme position on the Gulf" of Aqaba (about -which the Egyptians have been remarkably silent) or some other explosive problem of the area. 5. One thing to watch now is the National Assembly which starts its sessions on August 5th. If, as seems likely, it concerns itself mainly with domestic affairs this will help take the spot-light away from international problems conversely of course deputies could make inflammatory speeches about such questions as Aqaba or Arab refugees or UNEF in which case it would be reasonable to assume that the Government had put them up to it. The extent to which foreign affairs are kept out" of the Assembly will"be "a measure of the Government's desire for a period of international cairn. we have, in fact, entered upon such a period of calm it will improve the atmosphere for the discussion of mid-Eastern ouestions at the General Assembly. MacDonnell. , " Copy to: C_0_l F I D E N T I A' L -

*En Glair. FOREIGN OFFICE AND Mr. Middleton WHITEHALL DISTRIBUTION No. 805 I D.'l2.36 p.m. August 1, 1957. August 1, 195/1 "• •• •'•'•'/OF 2.15, P.m. August,1.r 1957. PRIORITY : /.OF

ASISfl Addressed to Foreign Office telegram No. 305 of August i, Repeated for infonaaticn Saving to: Bagdad, Khartoum, Benghazi, Tehran, Bahrain, • "•• •:•.•'': Tripoli, Kuwait. Following are extracts from today's Lebanese newspapers commenting on Nasser's speech in Alexandria. • ' '-:''= 1 . Amal writes "Nasser was quite explicit in his speech that his accusations had a retroactive effect and referred not only to present Arab leaders and regimes, "but also all Arab leaders as far back as 1918. This means that people like Kings Abdul-Aziz bin Saud, Abdullah Imam Yahya, Faisal and the Iraqi regent, Sheikh Beshara el Khoury Riad Sulh, Nuri Said Shukri Kuwatly - the only ally of Egypt at present - etc. are all traitors. Nasser seems determined to demolish all bridges between Egypt and the Arab States. What do the Nasserite slaves have to say, seeing that they too, and their leaders are involved?" 2. In another article Amal says "Could the throwing of explosives (at the U.S.I.S. offices in Beirut and the Jordanian Embassy) be the natural echo of the empty boast of President Nasser at Alexandria? " Sada Lubnan writes "Whatever Nasser's views on Arab cooperation, the fact remains that, as an Arab country, Egypt cannot get away from Arab cooperation. Should Jordan be attacked by Israel would Egypt stand by as a mere spectator? Or would she send her Army to support a sister-state? Should Egypt herself fall victims to Israel aggression, would she not accept the support of her sister Arab States, despite the fact that those States have been /labelled 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 I— ' .no =vsJ icys°M fss^r Piesise note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet i

to her rescue, would the leaderL.r pi ^™ , -.- are discussed? If. EpEgyptt really wishes to serve tn

yrugjuooo, j.wv-.~ —- '

xxm FROM BEIRUT TO FOREIGN OFFICE

En Glair FOREIGN OFFICE AND WHITEHALL DISTRIBUTION

Mr. Middleton No: 802 July 31 , 1957. July 31, 1 957. July. 31, 1957.

PRIORITY ASIDE

Addressed to Foreign Off ice" telegram No: 802 of July. 31 Repeated for information. Saving to: Bagdad. Amman. Khartoum. Tehran. Tripoli. Benghazi. Bahrain. Kuwait. Following are extracts from today's Lebanese newspapers commenting on Nasser's speech in Alexandria. '1. An-Nas writes. "Nasser's speech was not extempore, it was carefully prepared. It marks a dangerous deviation in the ultimate objective of the Egyptian revolution. Originally, the revolution was meant to. remain purely "Egyptian", with Egypt cooperating..with Arab, Islamic, African and Eastern States. When the clause, fthe Egyptian people form part of the Arab nation1, was introduced into.the Egyptian constitution the revolution assumed a pan-Arab character and gave Egypt the right to intervene in the 'affairs of other Arab States,, as well as the right to work for a change of any system of government to which she does not -agree. While not recognizing this right for Egypt, we cannot deny that certain groups in Lebanon and the fertile Crescent States . have helped the Egyptian revolution to expand and extend its activities beyond Egyptian territory, one of these groups is the one which, by a freak of fate, is now in power in Damascus. We hope that in trying to win the Arab world, the Egyptian revolution will not lose Egypt itself". 2. 'Sada Lubnan says "By his speech, the Egyptian President has set the new Egyptian democracy - if It may be called a democracy at all - a crucial test. . Will any member of the new Egyptian Parliament dare raise his voice, in questioning President Nasser about his touching on a subject which is not within his competence as Head of State, and in a manner not becoming a. PUBLIC RECORD OPFICP

Beirut telegram Ho: 802 to .Foreign Office

- 2 - "becoming a.Head of .State ? (The writer refers here to Nasser's rejection of cooperation with certain other Arab States and the accusations he levelled at them). The. dictatorial tone of Nasser's speech does not appeal to the Arab world. Nasser may not like to cooperate with those whom he calls traitors, but he cannot prevent those "traitors" from cooperating with each other. Unfortunately, the role Egypt has so far played in the Arab world has lead only to complications, interventions and confusion". 3. Amal writes cynically "Nasser .is a man of logic, he wishes to impose on others what he himself cannot accept. He does not accept'conditional'economic aid from .any country, but His "Eminence" sees no reason why he should not impose conditions on Arab States whom he wants to adopt his foreign policy and his system of government, all this return for his condescension to assume.the title of "Arab nationalism"." He wants them to raise to power those whom he chooses, in return for an expression of satisfaction on his part, the suspension of his Military Attache'1 s activities and the. removal from his speeches of charges of treachery. Otherwise, any country which'sees it in conformity with her interest, sovereignty and independence to refuse to open its doors to Soviet influence will be "ex-communicated", condemned as traitors, and opposition elements in it supported by Communists, will be strengthened. ; fill the Egyptian Ambassador in Beirut tell his President that his' deeds and words tend to scare the Lebanon away from Arab ism and from Egypt ?" I. In another article Arnal says "To allow a Danish ship loaded with rice from Israel to pass through the Suez Canal, at a time when'the Arab States are tightening their blockade l against Israel, is of no importance, but the smuggling of a few eggs from Lebanon or Syria into Israel exposes the poor smuggler to prosecution and imprisonment, and provokes shouts of down with Charles Malek.' The participation of the "liberated Egyptian youth" with Israeli youth at the Moscow Youth Bally, where the Egyptian flag is depicted side by side with'the Israeli flag, also deserves shouts of .down with Malek". . Foreign Office please pass saving to Khartoum, Tripoli and Benghazi. [Repeated Saving to Khartoum, Tripoli and Benghazi] JJJJJ 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 C Ret I0^°{\ #SS ir I Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

... -. „.,.,.. ., ,„_ . „.,_„ .„,„.

FROM BAGDAD TO FOREIGN OFFICE

En Glair FOREIGN OFFICE MD WHITEHALL DISTRIBUTION

Mr. Beaumont :. 12 Noon July 31, 1957. 57:.Ip. m. July 31,1957. July 31, 1957.

President Nasser's two speeches at the first session of the new parliament and on anniversary of the Egyptian revolution. Bagdad Press comment has been very scarce. Left wing nationalist Al Yaqdha was loud in praise of "great progress made in Egypt", believing "the revolution has achieved miracles in the fields of industry and economy, and the Egyptian efforts have surpassed those of Iraqi Governments. This has proved that the Arabs are not incapable of achieving success". 2. The pro-government Al Sha'ab, on the other hand, asks what is the meaning of these speeches and whether the new era will be different from the old. It was significant that the development of Egyptian policy was in the direction taken in the I.T.V. interview with Mr. Day. "Nasser is today stronger because he has admitted that he made mistakes during the revolution. Now there will be a change of policy so that the policy adopted is one which is in Egypt's own interests". 3. Al Bilad reported criticisms printed in Jordan Press. (Amman telegram No: 1265).

JJJJJ 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 M o^ ^sJ i&u°i\ #ss^r Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet HPPPWMH^^^^^^^^^^^^^^"P^"l^^l^—gll^^^^^g^^^^^^^^^^^^^^^^^i^

FROM BEIRUT TO FOREIGN OFFICE

En Glair FOREIGN OFFICE AND 4jifTEHALL DISTRIBUTION

Mr. Middle ton D. -1.iyp.ni. July 30, 1957 ul July 30, 1957 LOCAT R-./3y^...-Pj.J5i.J y 30, 1957

PRIORITY ASIDE

Adcfr e s s e d t o_For eig p. Office t elegr an No . 799 of July Repeated for information Saving to: Bagdad Amman- Khartoum Tehran Tripoli Benghazi Bahrain Kuwait

Following are extracts from the Lebanese newspapers commenting on Nasser's speech in Alexandria.

1. Ruwwad of July 28, under the heading "The Traitors" writes:

"If Arab cooperation is to be suspended for a long time, who is going to deal with the most outstanding of Arab questions, namely the Palestine question? Is His Excellency to tackle this problem single-handed?"

2. Nahar of July 30, under the heading "A Unicorn" says:

"If Nasser wishes to put into effect the contents of his speech, he will have to quarrel with all the world Powers - even the Eastern Powers - as he will not find any country whicfi does not have relations with Britain, America and France. • Egypt will therefore have to withdraw her diplomatic representatives from all countries - with the natural exception of Syria. He probably thinks that cooperation with Egypt alon£ is sufficient, and forgets that Egypt herself is in need of Western resources more than any other country in the world. Let us hope that Nasser meant his speech to be for local consumption only." /3. Sada Lubnan cms PUBLIC RECORD OFFICE ms T

Beirut telegram. Ho. 799. :tojtorgignj)£j£cs.

-2-

3. Sada Lubnan of July 30 writes:

"It is for Nasser to decide whether to cooperate or not with other Arab States but to try to justify his refusal to cooperate on the grounds that Arab States and Arab Leaders are traitors, cannot be passed over lightly. Does he consider, for example, Saudi Arabia and King Saud, the Lebanon and President Chamoun, Israel and King Faisal, Jordan and King Hussein, Syria and President Kuwatly, etc. all as traitors? By what right does Nasser install himself as-supreme judge and arbiter? Does he realize the gravity of the consequences of the judgment he has pronounced? Or was it a mere slip of the tongue before an enthusiastic crowd?

i. Amal of July 30 writes:

"By his speech Nasser has lost more than 99 per cent, of the balance be had in the'bank of Arab sympathy and support. This is evident from the widespread and vehement reaction witnessed during the last three days. Even the local slaves of Abdul Nasser in the Lebanon were ashamed of the speech of their master and do not what to do. If cooperation with the West in.general, and with America In'particular, is to be considered high treason, what should cooperation with the Soviet Union be considered?

"There are a thousand and one proofs that Egypt has become a satellite within the orbit of Communist imperialism. Have the leaders of the Egyptian revolution forgotten the assistance rendered them by those whom Nasser accuses of treason?

"We are sorry that his speech has dealt such a deadly blow to Arab and international cooperation, at a time when such •cooperation is most vital for Egypt herself."

5. In another article Anal says:

"Every word of Nasser's speech condemns him. The speech-is self-contradicting it was an outburst emanating from despair or a manoeuvre to divert Egyptian attention from the serious crisis through which the country is passing. Not one of the accused Arab leaders will stoop to answer him." /Foreign Office 2 cms PUBLIC RECORD OFFICE insI

to Foreign Office

-3-

Foreign Office please pass Saving Unnumbered to Khartoum, Tripoli and Benghazi.

[Repeated Saving to Khartoum, Tripoli and Benghazi.]

7777777 cms PUBLIC RECORD OFFICE ins I

Cyoher/OTP

Mr. Mason ' / i etrflhr-July 29, 1957 July 29, 1957 nf ^"u'TlmZiuly 29, 1957

OTFIOTTIAL Addressed to Foreign uOfficeT telegram K_o.....l266_of

Repeate£alL-29>d" for information to Bagdad, Bahrain, Beirut and P.O.M.E.F. /

My immediately preceding telegram. \\ ^ j King Hussein originally wished this attack on Nasser to "be published in the form of an interview with A.M.A. The local representative of the Agency advised against this on the ground that King Hussein should not personally attack Nasser and the statement as published was drafted "by Midhat Jumas First Chamberlain, formerly Under-Secretary in the Ministry of Foreign Affairs. Foreign Office pass Bagdad 3V9, Bahrain 37, Beirut 313 and P.O.M.E.F. 736. [Repeated to Bagdad, Bahrain, Beirut and P.O.M.E.F.]

HHHHH cms PUBLIC RECORD OFFICE

rj,, fa'O fa En Clair REC "*L""/ "- FOR. AFF 3RJJIGN OFFICE AND WHITEHALL., W ' DISTRIBUTION Mr. Mason 1 AUG J8S

29,1957 29,1957 29,1957 Addressed to Forei/n Office telegram No. 1265 of July 29* Repeated for information to Bagdad Tripoli Bahrain Kuwait Beirut P.OJO.F. Khartoum My telegram No. 1256: Nasser's speech. ( B) Follovdng commentary by "a prominent Jordanian politician" is published in today's Press. Begins. Abdul Nasser's speech was full of fallacies aiming at bluffing the credulous people of Egypt in order to preserve his position as a ruler of the country. Regarding his alleged glorious acts in connexion with the Suez Canal question and. the Suez war, we have to list the . following indisputable facts resulting from this issue: (1) Withdrawal of the Egyptian Army from Gaza leaving it under the protection of the United Nations emergency force •'. (2) Occupation of valuable Egyptian territory by the United Nations emergency force which now holds positions at Sharm al Sheikh and the strait of the Gulf of A gata (3) Permission for Israel ships and naval units to navigate and cruise freely in the Gulf with the knowledge of Egypt and under the protection of the Israel naval units including the former Egyptian frigate Ibrahim I (i) Formation of Israel mechanized and armoured units from Egyptian arms left behind by the Egyptian Army in Sinai (5) Permission for the Israel test ship to navigate in Egyptian territorial waters and to pass through the Suez Canal following payment of the Canal dues. / President Abdul 1 2 cms PUBLIC RECORD OFFICE ins 1 •) I 2 . Ret'»• D^ ^/ IOU°I\ fSS°ir Piea;se note that this copy is supplied subject to the Public Record Office's terms and conditions and that your JSe of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

Amman telegram No,126.5 to Foreign Office

' -.. -..';.'.". ~ 2 - President Abdul Nasser in his speech at the Egyptian, House of-Varliament claimed to the people that he has stabilise<$'the true democratic life and regime in the country, as if democracy is dictated to the people •,-and. the true democratic regime is derived from a detestable dictatorial ruleestablished^on the lives of hundred of victims and ten thousands -of prisoners and on the denial of the rights of many Egyptain personalities to carry out political activities and on pushing forward a number of officers and subversive elements to the highest ranks. This is the kind,' of democratic life in Egypt and this Is the end of the reign of terror in Egypt., What the revolution has accomplished, as a result of the vigilance of its leaders, led to [? words omitted] such unfavourable results in Egypt and abroad. The waders of the Egyptian revolutions have been using Arab nationalism as a material for bargaining whenever the Egyptian President pleases as if the Arab nationalism has resurged on the banks of the Nile and not in Mecca, the Damascus desert and on the shores of the Tigris, fhe'n King Hussein Ibn All was fighting, for liberty, Egypt was busy in making poems praising the Ottoman Caliph.in1 Constantinople and in opening its country for British occupation. Arab unity, is a sublime mission shouldered by the young King who is protecting Arabism and the first, defence line, Arabised the army and abrogated the Anglo-Jordan treaty. The King, since he ascended the throne, has been working for Arab unity and promotion of the dignity of Arabism. He concluded the Arab solidarity agreement and has been repaid by foreign officers and unfaithful members of the political parties by conspiracies and ingratitude and-by the breaking of the pledges Syria and Egypt made to his country. The Egyptian President declared his intention not to carry out the provision of. the Arab solidarity agreement as if this international agreement has been concluded by Egypt and the outgoing criminal gang. But Jordan is determined to continue deriving her ideology from the principles of true Arab nationalism and Arab renaissance and pot from international Communism,subversive doctrines, criminal conspiracies and intruders. - / I am Amman telegram No.1265 to Foreign Office - 3 - I am unable to understand how the Egyptian President dared to distort the facts when he claimed that the Arab Armies failed to rescue the Egyptian force at Falugeh and that the Syrian Army marched to Hebron and rescued the Egyptian force while everybody knows that the Syrian Army never reached Hebron and that the reason for the defeat of the Egyptian Army was due to bad arms and irresponsible leadership and that the Jordan Army did not give any of the territory it had occupied. The Egyptian President wanted to direct the attention of the people to the Falugeh incident in order to distract their attentions from other important internal affairs and to conceal the true reasons for the defeat of the Egyptian Army, and the conclusion of the Egyptian-Israel truce agreement in Rhodes. Egypt was the first Arab State to conclude such an agreement. President Abdul Nasser has forgotten that in 1948 the Egyptian Army was about 'to throw Israel in the sea and that the Syrian Army was twice as large as the Jordan Army and that Egypt seized the ship which was transporting arms and ammunition to Jordan and that the plan was that the Egyptian Army should reach Jerusalem in order to crush Israel and to separate her into two parts in conjunction with the Iragi and Jordan Armies. He has forgotten that King Abdullah offered to extend military aid to the Egyptian Army and that the Egyptian Prime Minister refused the offer. He has forgotten that the Jordan Army had reached Beit Jibrin and Beersheba and that it had collected the Egyptian arms left behind for the Jews by the Egyptian Army and that the number of the brave Jordanian soldiers who entered Palestine and did not give up any Arab part of Palestine did not exceed 500. If this is untrue why did President Abdul Nasser and his colleagues revolt ? Was it not because of the fraud and defeat of Egypt in Palestine ? This fact is quoted from a statement by President Abdul Nasser himself. The methods of dictatorship throughout the world are alike. They aim at bluffing the credulous people in the beginning but they will soon disappear since they are based on conspiracies, misleading?, intrigues and distortion • of the facts .' Ends.

G G G G cms PUBLIC RECORD OFFICE ins 1

fe'

En Glair

Mr. Mason p.m. J-uly 29, 1957., p.m. July 29, 1957. July 29, 1957

M!««i",::; tor u.°<~«°. ,.,«,».-'-" '"•• '4SS^, -—».™* "-•<»•'•">•'

deterioration of tta JWB

said that ^^ agreenellt

Hasser tod declared that the .ra ^ ^^ finanolal 1 no xonger valid "in ^^S^ ^. agreed to carve .or co«itment to Jordan". apP ° the internal affairs OTn interests only and it is clear t & twaty ar , r,n

of the country v»ith »hiot t « to alDrogate that treaty.

TTTT FROM BEIRUT TO FOREIGN OFFICE

En Glair GN OFFICE AND WHITEHALL ISTifeuTION Mr. MlddtetolT No. 794- \ f°fi D: 2*96 p.m. July 29,1957 July 29,1^57 R: 3/22, p.m. July 29,1957

ASILE \OF. Addressed to Foreign Office telegram No, 791 of July 29. Repeated for information saving to Bagdad Tripoli • Amman Benghazi Khartoum Bahrain Tehran Kuwait Following three extracts are taken from articles appearing on Jtfly 28 in comment on Nasser's speech in Alexandria. 2, Anal writes "It seems that in Nasser's opinion it is Western imperialism which should "be fought; Red imperialism with all the humiliation and suppression of freedom which it entails is praiseworthy." He seejas to have forgotten that it was America not Russia who first intervened to stop the aggression on Egypt - and that Kings Saud, Hussein, Faisal and Sinussi, as well as President Chamoun, cannot be labelled as traitors and dissenters simply because they found it in the interest of their countries to cooperate with the West ~ by what authority does the Egyptian President take the - liberty of issuing and distributing certificates of conduct on Arab nationalism ? le here, in the Lebanon, do not need lessons in nationalism and it is up to the heads of other Arab States to express opinion of the peoples on this question.t! 3. In another article the paper says " in his speech at the opening of parliament Nasser spoke as a responsible head of state but at Alexandria he spoke as an irresponsible dictator - his pessimistic outlook on Arab cooperation emanates from his bitter disappointment at the failure of his Arab policy which has only led to isolation of his country", i, Beirut Yffites "Nasser's speech at the opening of Parliament was moderate, well - balanced and more of general review of the achievements, of the revolution - his speech at Alexandria was violent, fiery and sentimental - his reflections on the policy of certain Arab states and their Rulers is a dangerous precedent, likewise is his pessimistic / outlook on cms PUBLIC RECORD OFFICE ins 1

Beirut telegram No. 79^ to Foreign Office

— 2 — outlook on the question of Arab cooperation at a time when-such cooperation is most urgently needed - the leaders of these Arab states cannot be accused of treason and. dissension simply "because they choose to fight international Communism, which conflicts'with the spiritual legacy of the Arahs, both Christians and Moslems* Arab cooperation, though stahbed "by Nasser in the hack, will continue to moke progress." Foreign Office please pass Saving unnumbered to Khartoum, Tripoli and Benghazi.

[Repeated Saving to Khartoum, Tripoli, and Benghazi ]

G G G G "DHRIICRECORD OFFICE ins cms

CONFIDENTIAL

PRESIDENT NASSER'S

Following is text of telegram No. L\.^>6 of July 29th from Canadian Embassy, Cairo to Department of External Affairs, Ottawa,

This speech was in the President's words "the story of this glorious year" and was a rather 'bad-tampered threshing of old straw. It contained nothing new ,±n the way of ideas or policies, domestic or foreign. It reviewed events since the nationalization of the Canal from Nas-ser ' s point of view. There was heavy emphasis on Egypt's dignity, the role of the Egyptian x people, imperialist conspii\aciesx- the Monzies mission with its "threats and menaces", the uw-&art'isfactory policy of the U.8«A« following the cessation of hostilities, and the virtues of Arab nationalism, A few concluding remarks aloout domestic policy seem, to have "been an after-thought. •

2. From the point of view of the West it was an unsatisfactory demonstration. The President spoke without a prepared text and produced one after another the main lines of Government propaganda over recent months. lie was particularly forthright in his denunciation of the UftS0A0 and took a negative attitude towards the Palestine question, declaring "imperialism is aiming at the liquidation of the Palestine question for the interest of Israel". This is certainly in contrast to the moderation in his interviews during the past year,

3« It seems clear from the speech that Nasser has run out of ideas for the moment and is at something of a dead end* Indeed some comfort can "be taken from the fact that he produced no new anti-western ralohit from his hat as some here had predicted. Having nothing new to say, and "being una"ble to allow a glorious anniversary to slip "by unnoticed, he could do little else than re-hash the alleged-Egyptian triumphs of the past year. It is perhaps not surprising that in order to "bolster his prestige he adopted a fairly "belligerent tone,, In fact we have heard that Egyptians were surprised that the speech, was not more extreme. Nasser may have "been, somewhat on the defensive in Alexandria and hopeful of stirring up popular enthusiasm. The applause was light and scattered.

l4» It is worth noticing that the references to the U.S.S.R. we're perfunctory in the extreme and non-alignment with East and West was stressed., Indeed after criticizing the West, saying remarkably little in favour of the East, and taking to task in strong terms most of the Arab States, Nasser seemed to conclude that everyone was out of step except Egypt and Syria.

5, On the whole there would seem to "be little advantage in the West paying much public attention to this "blowing off of steam for domestic purposes. In our view any attempts to refute Nasser's points or to indulge in counter-argument would only "build up the importance of the speech and Nasser's prestige as well. While the languaige was intemperate there was no action taken or predicted 'that would appear to justify counter action. 6. Nasser had some special comments concerning Mr. Menzies' mis-si on. We are forwarding in a separate telegram the full text of those comments so that you may pass them to the Australians. Macdonnell,

/Copy to:-

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CONFIDE N T I A L r -2- Copy to:- D.BI CANAL DISTRIBUTION UoK. High Commissioner in 0/tawa U.K. High Commissioner in C/ariberra U.K. High Commissioner in y/ellington U. K o H i gh G ornmi s s i o tie r in/Pretoria U.K. High Commissioner in/New Delhi U.K. High Commissioner in/ Karachi U.K. High Commissioner in/ Colombo U.K. High Commissioner in Accra U.K. High Commissioner^in S'alisoury

SOUTH ASIA MW MIDDLE EAST DEPT. cms PUBLIC RECORD OFFICE

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En Glair FOREIGN. OFFICE AND - Mr, Mason No. 1256. July 27, Jul j! If8 *'*• * 27, 1957. «• --28 p.m. juiy 2/j 1957> 5asKaj s^f ^M«m^i,£a^^ -*•""—-^ ».* ^ * Bahrain Tripoli f^t Benghazi Kuwait

II Jihad today criticizes Nasser for not mentioning ?. Gulf of Aqaba, Sharam Al Sheikh or the Palestine question, all topics which the people anticipated* "The Egyptian President said that the Palestine war was a fraud and that the Syrian troops rescued the Egyptian force which was captured at Mlugah", ¥e agree that the Palestine war was a fraud on the part of the Egyptian army, which evacuated nearly one third of Palestine. If they had not done this, Israel would not exist. As for the Egyptian force at Fallugah, everyone knows the part played by Jordan in supplying them with food and ammunition. by airmail29 Copie* s of original editorial sent to Middle East posts ins cms '"PUBLIC RECORD OFFICE U ^O f ^ .-I I Office's terms and conditions and that your ^....ation is given in the enclosed Terms and may ; Records' leaflet

v- CON F IDENTIAL

xllowirig is text of telegram from Canadian J .' , ,,; f in C4iro to Department of Externa^l, ..Affairs, LET,;,/Ottawa dated .JuOy 21}.th. ii-QQ^'C.-.. Begins. o y

NASSER'S ADDRESS TO Nv^TIOITAL ASSEMBLY

; ...;.- This address- on July. 22nd contained little that .was new and: was. an historical review rather than a "bold new "blue-print for the future. » It. reflected Nasser's pragnatic rather than ideological approach'. 'It "began •on .w;hat .appears ,t,o "be ,a rather defensive note with an 'explanation of .why- the: , country, had to wait for five .years • aftea? the .revolution "before a national ass.epit>ly could meet; the. reason .given was. that' Egypt first had to .'get. rid ^ 'of 'imperialism, feudalism and political corruption as 'they stood /between the revolutionary regime . and the'. "people. The speech terminates with a rather -impressionistic look to the future. with emphasis on hurn.es sing the support- of all Egyptians "behind Government * s efforts to. build a new Egypt, ;

. ,2»s . ..'"Between the "beginning and ending there were -domestic and international section. About one third of th£'."sgeech reviewed ; in considerable detail the progress allegedly achieved in' industry, agriculture-, public works' and other domestic fields. The' international section said nothing unusual about the 'Baghdad Pact,: • Israel, .the refusal of arms by. the West and gratitude to the U,|;,,S.R. .for its help', the Bandung Conference, the 'Aswan '.High Dam, .the nationalisation of the Sue2. Canal and. the Anglo~Prench-Israeli action*' • . , :-3;.L: 'The apparently., only really new material is a • -statement more precise than earlier ones'" about. ] the' •Government's intention regarding the Aswan High. Dam. 1 A; first i stage requiring five years will cost £60 million '(:|l65 million) of w.hich £2§; million will "be foreign-. " ',.' , currency. • This will provide greatly increased irrigation' and:; consequently odd production; nothing is said about . power production. , . ; . ' .

V IV

0 0 N F I D B N-T I A L cms PUBLIC RECORD OFFICE

I Kef.: }J^ «^^ / I U U M , , . Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

— 2 —

km It is of interest to note in the reference to Suez and Anglo-French-Israeli action one small parenthetical tribute to tfie United Nations,1 "With the assistance of the United Nations, to which we cannot but pay. tribute .for the part it played in the final struggle as a whole, -whether in its attempts to find a peaceful solution to the Suez Canal question or its efforts to stop hostilities - with the assistance of the United Nations, the Egyptian Suez Canal authorities succeeded in restoring normal navigation ;:to the Suez Canal." .There is no reference to U.N.B.F. 5, Bearing^in mind that .this speech was made to the National Assembly, that it. was the .first such speech on --the '-.part of the President'.'and: that it. came on the anniversary of five-''years- of power, •'•"it would seem to fi-t into the expected pattern. The speech certainly reflects- the President's rather simple revolutionary faith and his':belief that, - given the objectives of his-revolution,- the people of Egypt will wish to-support him if only they are"given ample opportunity to understand what his'Government is doing. It admits that mistakes have been made and is noteworthy'for.its frank recognition of the.population problem. While the President sought to sell the army to the people, particularly notic'eable in the limited acknowledgement of United Nations help, it is also noteworthy that ha indicated that the array's role in bringing about and protecting the revolution was largely accomplished and that it now should withdraw to the sidelines. The- speech therefore would internationaseem to reflecl tquestions more concer, n - with domesti. c matters than with -

6, The.absence of any histrionics or bombast has caused much comment, 'Indeed the speech is notable for certain omissions and its general concilliatory attitudes., Although Iraq was specifically mentioned in dealing with the problem of Mid Bast defence, nothing unpleasant was said. Similarly the treatment of the Suez intervention makes no specific mention of the United Kingdom and France and the references to. the so-called isolation of the Egyptian people make no mention of the United States of America, Even.the references to opportunists'within Egypt is couched in /sympathetic- terms. We understand that compared with the President's speeches last year the tenor of this statement was quite moderate, . Even the section in pia-s't' year's speeches which dealt with the Government's domestic programme .indulged in some table thumping. Bearing in m.nd that this is'the first speech that the President has made for a year, it is perhaps fair to suspect that the events of the past year, including the apparent expressions: of disapproval of the regime during the recent elections, have chastened the President. The long and detailed recital of alleged domestic achievements may be essentially a defensive position.

7. We/ CONFIDENTIAL

7. .We are tentatively of the opinion that the speech primarily reflects concern about domestic matters and an anxiety to press on with these problems. In this connection the two references to the population problem may "be significant "because we have heard that hitherto the Junta generally has refused to take the population problem very seriously. Inasmuch as the President will make another speech on July 26th, we would prefer not to form any conclusion until we see what he has to say in the •ircumstances which prevail in Alexandria. The audience will not be parliamentary and it will undoubtedly include a majority of people who hitherto have made their living on the import-export trade which at present and for the foreseeable future will not sustain their previous level of prosperity. Ends.

Copy to:-

D.II SUEZ CANAL DISTRIBUTION U.K. High Commissioner in awa U..K. High Commissioner in :iberra U.K. High Commissioner in, Wellington U.K. High Commissioner i) Pretoria U»K.. High Commissioner in Delhi U.K. High Commissioner/in Karachi U.K. High Commissioner in Colombo U.K. High Commissioner in Accra U.K. High Commissio/ier in Salisbury

\ SOUTH ASIA AMD MIDDLE EAST DEPT.

G 0 N P IDENTIAL cms PUBLIC RECORD OFFICE ins

SECRET FROM WASHINGTON TO FOREIGN OFFICE Cypher/OTP. 1H3ir H. Cacoia FOREI&ILQFFICE .A) YffllTEHALL DISTRIBUTION.

Nq.Jjj.5j,. D. 12.07 a//u Jul"y 20, 1957 July 19, 1957 Ik 1.38/a.n. July 20, 1957

SECRET

Addressed to Foreign Office telegram No... H5V of July 19. Repeated for information to Tel Aviv P.Q.M.E.F. My immediately preceding telegram Egypt. Mr, Dulles said that his information was that Nasser was it) a pretty desperate mood. Although he had done his best to cook the elections, they had not turned out a resounding success from his point of view. In many cases where alternative candidates had been allowed, these had been elected despite the fact that it -was known that first candidates had Nasser's particular approval. 2. On the external side, Nasser had gone a good 'way towards losing the leadership of the Arab World. Consequently, we could take it for certain that he was stirring up Saud on Aqaba and that he was probably also involved in the Oman game. 3. with this background there was the Inevitable speculation of what Nasser would say and do on the anniversary of the nationalisation of the Suez Canal. It had even been suggested that he might declare a Holy war on Israel in order to rally the Arabs behind him. once more. Alternatively it was suggested that he might incite the Syrians to some act of folly against Israel. i 4. On present evidence, Mr. Dulles thought that these speculations •ffere nore illustrative of a general awareness of Nasser's current frustrations than to be accepted at their face value. But he concluded that we may be lucky if we get past the anniversary with only another speech by Nasser.

Foreign Office pass Tel Aviv and P.O.M.E.F. as my telegrams Nos. 58 and 66 respectively. [Repeated to Tel Aviv and P.O.M.B.F.]

uuuuu PUBLIC RECORD OFFICE Ins I

C.R.O.

1it/45/7

Mr ,.

il &aX^?°lvJ^^* ?»- ».

(D4938) Wt52721- Gp835 1 2 cms PUBLIC RECORD OFFICE ins I 1 1 I 2 I— oo ^/ \w°i\ #ss°)r I Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

(JE 1015/181) f"> GN OFFICE, S.W.I. CONFIDENTIAL July 2, 1957.

Many thanks for your letter SA 189/45/7S< of :<*•• June 2U> enclosing copies of two reports on conditions in Egypt prepared by the South African Legation in Cairo.

These are most interesting and informative and will be very useful to us. I agree that the United Kingdom High Commissioner should be asked to thank the Union authorities warmly for supplying these reports. M

W. G. Larnarque, Esq.., Commonwealth Relations Office. 2]cms PUBLIC RECORD OFFICE ins I

.., , -l» LETTEftL...7' " OFfICS OF THE HIGH COMMISSIONER ^ RES """"" I FOR THE UNITED KING-DO!, GAPE TOWN. No Duplicates June, 1

I enclose a couple of reports on conditions in Egypt compiled by the South African Legation in Cairo, which Bob Jones of the Department of External Affairs handed over to the Acting High Commissioner today. Belcher has of course thanked Jones for these docu- ments, but if you or the Foreign Office find them of any particular value you may wish us to send a more formal expression of thanks to the Union authorities. Incidentally, these reports are something of a red letter occasion, for they represent, we believe, the first time, so far as the Union is concerned, that hathse becomtraffiec two-wayof Commonwealt. h exchange of information

5i • C*~»-ty

(J.O. WRIGHT)

W.G. LAMARQUS, ESQ., M.B.E., COMMONWEALTH RELATIONS OFFICE, LOHPOIT. Please noie mat mi, ™ry i. ...pp..!., -',hjr rt , J }. _, ,, „x itmti ^ ^^^ ^

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SECRET RE '•>«« telT0. ^ v.x... i May 28th, 1957. •PLAC'cD ON FILE I

The Secretary for External Affairs, IPretoria. Conditions In Igypt.

With further reference to your minute Ho. 1/38/9/2 of the 1st lebruary last and In continuation of my despatch of the 7th. May 1957, I now forward details of smeh information as I have been able to obtain from variotis reliable sources relating to the position in Igypt in regard to oil and oil p?oduets. In doing SO| however, I must onee again em^iasize that data as to oil stocks is extremely difficult to obtain - the Egyptian authorities are so chary of giving information that the petroleum companies are finding it extremely difficult to work out an import pattern best calculated to meet demand and to accord with available shipping. Generally speaking, it would appear that the situation in regard to crude oil and petroleum products has improved considerably in recent weeks and there is now little fear that the country will face anything resembling an aeute shortage or that Industry will grind to a halt owing to the lack of adequate lubricants of sufficiently high quality, as was feared a month or two ago. The reasons for the improvement in the situation would seem to be the heavy shipments from Roumania and Russian Black Sea ports, the agreement between Egypt and Saudi-Arabia relating to the supply of Saudi crude and the reopening of the Suez Ganal. fhese factors are discussed more fully later in this despatch under various relevant notes. As already stated, figures reflecting existing stocks of crude oil and oil products are simply not available and any efforts to obtain such data would be looked upon with the gravest suspicion by the authorities, who regard the subject as ©ne of strategic and logistic importance, with a high security classi- fication. Sellable sources, however, are satisfied that the stock position is sound, but in regard hereto, it should be borne in mind that while Egyptian oilfields continue to produce crude oil of the type currently available from Sas Gharib and Sinai, it will continue to be necessary for the country to import quantities of fuel oil, kerosine and lubricating oils. It is especially in regard to the latter that the foreign exchange now becoming available through the renewed operation of the Suez Canal is proving invaluable. It is fairly established that the Bloc is not in a position to supply Igyptian requirements of lubricants, both because of insufficiency of supply and because of relative poor quality, unsuitable for use in regard to most of the western-type plants and machinery operating in the country. Wp to now, the difficulties in obtaining foreign exchange have inhibited importation through the medium of organisations like Mobiloil, %so Standard and so on. This problem has now been , met cms PUBLIC RECORD OFFICE ins 1

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off against ImportaS « .n ylaent8 baln8 "t oompanies rroa toerican,°Brm' fc ««• owned doin8 800«S50 tons pep day and IB about

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160,000 tons.

Orude oil *» tononss «« information is avail «Kil*I«*J!* 37,000 tons. '''

in concision, I subjolll toa text aas Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

- 3 -

has ;just appeared in the local press?— M5he disputes "between, the Government and the various oil companies operating in Egypt over differences in prices have been resolved. 5?his was announced yesterday by Dr. Aziz Sedky, Minister of Industry. fhese disputes, which have been dragging on for nearly six years, were settled in accordance with the Government's views, the Minister said. It was also disclosed by Dr. Sedky that an agreement had been signed between the Government and Esso Standard, whereby the latter*s accounts have been settled and that similar agreements would be signed with the other oil companies next week." I have not had time to discuss this matter with anyone connected with the oil industry, and am not sure as to the meaning and extent of the settlement to which reference is made. Certainly, the American oil organisations operating in Egypt have been working in an atmosphere of uncertainty and despondency for some time, mainly owing to the difficulties inherent in the foreign exchange position and their inability to embark on any sound future planning because of outstanding differences with the Egyptian authorities, which they would appear to ascribe mainly to the impact of current American foreign policy on the Egyptian Government. I might add that there is a general impression in informed circles in Cairo that it is the ultimate intention of the Egyptian Government to return the Shell Company of Egypt and the Anglo- Egyptian Oilfields, Ltd., to their former ownership, which might explain why, apparently, no progress has been made in regard to the "egyptianization" of these associated concerns. In commenting on this, the remark was made to me, somewhat wryly, that the apparently expected return of the Shell company to popularity could only mean a further relapse from favour of the American-owned undertakings operating in Egypt.

Charge d'Affaires. ins I 1 I 1 2 cms PUBLIC RECORD OFFICE c 2 RBI,; f)O %>SJ \b^°\\ #ss ir Piesse note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet -

Legation of the Union of South Africa, SEOEET. Cairo. 7th May, 1957.

The Secretary for External Affairs, Pretoria*

Conditions in

With further reference to your minute Ho. 1/38/9/2 of the 1st February, and to my interim reply of the 27th April, I now submit the following report on certain aspects of the current internal economic situation in Egypt. In doing so, I must once again stress the paucity of reliable information, especially from official sources, since the events of last November* The Egyptian authorities could never be accused of openhandedness in supplying information regarding internal matters, either to the press or to enquirers, but latterly a veil of secrecy has been pulled down which makes it almost impossible to verify supposed trends and developments. In these circumstances, it will be understood that the picture which we now attempt to present is incomplete, in some respects probably out-of~date and to a large extent based on conjecture. It needs no official statistics to verify the current shortages in various types of consumer goods, all that is required being a visit to either wholesalers or retailers in an attempt to purchase items which were formerly in plentiful supply. It is true that these shortages do not, in the main, affect the living standards of the mass of the population, who are mainly dependent upon 'locally produced articles of consumption and dress. As regards the basic necessities of life for this class, no shortages of importance have been noted and generally, speaking, price controls on foodstuffs have been successfully maintained, though the decline in quality of bread since the wholesale importation of Russian wheat commenced has caused considerable unfavourable comment. A further development which has adversely affected the masses as well as the more prosperous class has been the sharp increase in the prices of many types of locally~produced textiles, resulting from the restrictions on the importation of foreign cloth. Sharp price increases have been noted in practically all items imported from abroad. Tea, coffee, most varieties of canned goods, textiles, particularly woollen and silk materials, and particularly Pharmaceuticals are the outstanding examples. It is impossible to obtain any information relating to stocks, particularly since current legislation has commenced to impose "egyptianisation" on import agencies, coupled with the sequestration of all British and French-owned business, but with the restrictions on imports generally, the difficulties incurred in obtaining foreign exchange for any but the most essential items and the reported inability of the Bloc to supply adequate substitutes for Western products, one would assume that stocks may be running low. 3?his view is confirmed by the increases from day to day in black market prices for "under ...... / ins cms

Ple a S e u s e of°it may be subject to copyright restriction^ ^ ^^ Records> ^^ ^ _

"under the counter" goods. The position would appear to be particularly unsatisfactory in regard to pharmaeeutleals. It is a common experience to have a drug prescribed by a doctor and to spend literally days on end visiting chemists in an endeavour, very often vain, to find one willing to dispose of it, usually at a fantastically inflated price. The Minister concerned regularly issues statements denying any shortage, but strangely enough, only a few weeks ago the Ministry of Public Health issued a list containing the names of no fewer than 1500 substitutes for regular items usually prescribed. It is understood that arrangements have now been made to import pharmaceutical essentials from Holland, the Ministryfs efforts to obtain supplies from the Bloc having apparently ended in failure. As regards wage rates, no changes have been reported, either in basic wages or in eost-of-living allowances. All efforts by ourselves or by colleagues, such as the American Umbassy, to establish the current position have been fruitless, even information regarding the salary scales of 01vil servants being refused by the authorities. A similar la©k of information exists in regard to the level of employment, though it must be admitted that to the outside observer there is no evidence of an increase in unemployment or of the introduction of short- time working. Work on the improvement of existing roads or the construction of new roads and on certain building projects has been held up, the reason given being the diversion, of labour and materials for the reconstruction of Port Said. The construction of factories and of the important capital development projects, such as the ceramics plant, the steelworks at Helwan and the associated power plant, various new bridges across the JJile both In ^airo and further afield and tire small oil refinery at Alexandria continues. On the other hand, some degree of unemployment has already resulted from the application of the "Sgyptianlsatlon" laws to foreign firms or to locally-registered fttma with largely foreign capital, and from the lack of raw materials due to exchange and Import restrictions. The Kodak Company, for instance, has dismissed some 60 employees, while I learn that Philips Orient have warned the authorities that lack of raw materials will compel them to cease operations in certain departments after a month or so. Certain foreign firms, notably airline eompanies, oil companies and organisations such as Coca-Cola are in the process of gradually moving their headquarters elsewhere, in most eases to Beirut or Home, a development which will, of course, affect employment to some extent, while finally, they* is In Cairo a glut of domestic servants as a result of the departure of British, French and immigrant families. The nett Indebtedness of the Egyptian Government with the central bank (the National Bank of Egypt) has shewn a phenomenal rise since the commencement of 1955> a trend which gives every indication of continuing, as indicated by the following table:- Nett Indebtedness in LI. million. January, 1955 19.0 June, 1955 33.2 December, 1955 83.0 June, 1956 94.4 December, 1956 145 4 larch, 1957 154.6 This 1 2 cms PUBLIC RECORD OFFICE ins I 1 I 2 Ret... o^ ^sJ IQ^°I\ ^ss^r Piea se note that this copy is supplied subject to the Public Record Office's terms and conditions and that your JSe of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

- 3 - b-3S3° ti-Efa S This statement takes no account of a sum of LE.50 million, which was funded in two amounts of US.25 million eaeh by the issue of treasury bonds during the latter part of 1955 and the middle of 19156. le are not aware of any further funding operations of this type subsequently. In this regard it is of interest to note Egyptian Law Ho. 50 of February 4th, 1957, whioh amended Article Ik of Law Ho. 57 of 1951» which governed the cover requirements for the national Bank's note issue. The amendment permits Egyptian stocks guaranteed by the Egyptian Government and commercial paper acceptable for discount to be used as cover for note issue by the Hational Bank, in addition to gold, foreign bonds, Egyptian Government bonds and treasury bills, as originally prescribed by Article 14 of Law Ho. 57. Apart from a jump during November, 1956, note circulation has remained relatively stable over the past few months, The following table gives the position up to January, 1957* the latest available official figures, but I understand that the position for February shews little change:- Mote Circulation (LE. Million) January, 1956 173.8 July, 1956 165.9 August, 1956 170.0 September, 1956 188.5 October, 1956 200.5 Hovember, 1956 219.9 December, 1956 222.7 January, 1957 221.6 The increase between August and November, 1956, is explained by official circles as due to the increase in the value of the 1956 cotton crop (LE.120 - 130 million) as against the 1955 erop (LI,90 - 100 million). Mote circulation in Igypt is usually considerably higher during the winter months than in the summer, due to the requirements of cotton financing* As regards Egyptian foreign exchange holdings, these were, of course, bolstered by a second drawing of 15 million dollars from the International Monetary fund early in February, 1957. The following figures, supplied by the Hational Bank of Egypt, reflect!^ the position in regard to foreign exchange reserves at the end of January and February, 1957» as compared with the same dates in 1956:- In LE. Million. Jan.. 1956. feb.,1956. Jan.. 1957* Feb.,1957. Sterling (1)) 38.1 33.5 25.7 (a) 26.0 (a) Sterling (2) 105.2 105.2 80.7 (a) 80.7 (a) Gold 60.6 60.6 65.6 65.6 U.S. DollarsB 25.0 25.1 21.2 (b) 25.5 (b) Other 10.6 11.0 15.8 JAl•7 lif.f 235.4 209.0 /kii• 5 Note: (a) Affected by British blocking of Egyptian assets on July 28th, 1956. (b) Affected by American blocking of Egyptian assets on July 31st, 1956 j Includes drawing of 15 million dollars from the I.M:.?. The following statement, also deriving from the Hational Bank ...... 2 cms PUBLIC RECORD OFFICE ms T

/f ~ r; n ^ ,<" n \ \ \ \ * * ** i \ <•

Bank of Sgypt, gives the Bank's relative position, as at the and of January, 1957, compared with that obtaining at the end of January, 1956;- In IB. millions, 1957. Assets; .' - • Egyptian dovt* treasury Bills 23.0 21.3 Igyptian &ovt» Securities 9.1 9.6 Foreign tovt. Treasury Bills 13.5 3.7 foreign 0/ovt. Securities 55.2 41,5 Advances to banks 9.4 20,,1 Other advances 10.0 17.• 3 Bills discounted 3.6 Clearing accounts 10*. 6 16.7 foreign balances and gold 8.3 19.7 Liabilities;- •Egyptian Cfcovt. deposits 10.4 10.9 Deposits by banks U.7 43.9 Other deposits 68.4 70.2 Clearing accounts 20.1 23.5 An interesting feature has been the steady and almost consistent rise in the level of deposits in ©oramereial banks since June, 1955. This might be largely explained by the difficulties encountered in obtaining foreign exchange for import purposes, coupled with declining inventories of imported goods which cannot, under existing circumstances, be replaced, plus seepage into private accounts of Government funds spent locally. The following table reflects the position up to the end of February, 1957;- In LI. millions. 1956. January 168.7 184.6 193.0 February 166.2 181.0 194.5 June 160.8 186,,7 July 165.6 188,,5 Hovember 177.2 183.,1 December 182.7 196.5 Information and data relating to Governmental revenue and expenditure for the nine months of the financial year ending March 31st, 1957, are not as yet available. It has been announced, however, that customs receipts for that period (July 1st, 1956 - March 31st, 1957) amounted to I*S.65.3 million compared with I*B.73.9 million for the same period of the financial year 1955/56. As regards trade relations between Egypt and the Bloc countries, as well as between relatively new customers and purchasers on the Egyptian market, it might be as well to endeavour to indicate the trends which are reflected in the following table, both as regards the importation of Egyptian products and the export to Egypt of various commodities. For obvious reasons, sufficient information is not available to enable us to present a break-down of the commodities in question, hence the figures represent total trade only:- ,. 5 - '-'"i Countries of destination of Igyptian exports for January and Jeternary, 195$*ana 1957* In Ll« millions. 1956. 1957. India 5.51 Soviet Union 6.90 Czechoslovakia 3.04 Czechoslovakia 2.18 France 2.82 last Germany 1.43 United Kingdom 1.65 Belgium 1.01 Italy 1,59 United States 0.92 Poland 1.44 Italy 0.91 West Germany 1.36 Netherlands 8.89 United States 1.2? Poland 0.8? Japan 1.20 Sudan 0.86 Switzerland 0.09 West Germany 0.83

Countries of origin of Egyptian imports for January and February. 1956 and 1957* in LE. millions. 1957. United Kingdom 4.64 Soviet Union 5.67 United States 4.32 United States 2.59 West Germany 3.22 west Germany 2.27 France 2.68 India 1.47 Italy 2.41 Italy 1.19 Netherlands 1.17 Roumania 1.03 Ceylon 1.03 East Germany 1.02 Switzerland 0,97 Netherlands §.86 India 0,96 Syria 0.77 Austria 0.90 Switzerland 0.60 Note;- In each of these tables, the ten leading countries only are reflected. Imports and re-exports of military equipment are not talobn into account. Total Egyptian exports during the first two months of 1957 amounted to LI.23.4 million and imports to LI.25.8 million, as compared to US. 28.0 million and LE.32.9 million respectively for the same period in 1956. Exports to Sloe countries, including Communist China, for January and february, 1957, totalled 56$ of total exports, compared to 25$ for the first two months of 1956. For the same period in 1957f Imports from the Iloe amounted to 35$ of the total, compared to 11$ for January and february, 1956. The increase reflected in the percentage of both imports and exports was due to heavy Importation of Soviet wheat and petroleum products, and to the Increased exportation of cotton to the Bloo. It is not possible to state with any degree of certainty that the Bioc is or is not assisting Egypt in financing its imports from the West. There is reason to believe that Communist China has been of assistance In this regard, and some recent deals would seem to indicate that help is forthcoming, e.g. the recent purchase by Egypt of 100,000 tons of American wheat through Zurich. On the other hand, it is known that Japan is providing a certain amount in dollars through clearing account. What is more certain is that the Bloc is doing everything in its power to harness the Egyptian economy to the communist countries, hence the maintenance of cotton prices on the Alexandria market in excess of ruling world prices in order to ensure that Egypt remains in credit in Moscow. It ia reliably reported, for instance, that despite heavy payments (in cotton) for.. PUBLIC RECORD OFFICE ins I

F! Lss .- 6 - :T Soviet arms, large Imports of Russian wheat totalling some M)Q,QQQ tons and heavy imports of petroleum products, Igypt still maintains a credit balance in Moscow totalling some LE.4,5 millions, although this figure would indicate a drop from about Ut.10 million. Certainly, also, Egyptian dependence at present on Russian petroleum products, especially kerosine, and on Russian wheat is frightening* There would also, in general, appear to be no slowing-up in the importation of machinery and capital equipment from communist sources. The new ceramics factory is being erected and equipped by Czechoslovakia, Poland and other Bloc countries are concerned with the erection of the new Nile bridges in the country and in Cairo, and also in the building and equipment of the steel factory and the related power plant at Helwan. Practically all new vehicles which appear on the streets and in the countryside are of CLaech origin, aad railway locomotives and rolling stock appear to be entirely supplied by communist sources. The recent excellently-staged and presented West German industrial exhibition showed up the superiority of western equipment admirably, but Igypt presents a ready-made sales territory foijrelatively obsolete Bloc equipment from the point of view of availability aad ease of payment. Ho figures are more closely guarded thafc those relating to the employment in Egypt of communist advisers, technicians and other experts. The estimates vary from 4000 to 11000, but I know of no sound basis on which an estimate could be founded and such figures are at best only guesses. Certainly there is a very large number in the country - the continuous arrival of large parties from the 11oe is confirmed by the airlines - and equally certainly, large numbers of Egyptians are proceeding regularly to Iron Curtain countries to receive training under various technical assistance schemes. finally, in order to complete this admittedly inadequate sketch of the existing internal economic situation in Egypt, I subjoin short accounts of various new laws which have been enacted and which have a direct bearing on the subject:- Law Mo. 20 of 1957: This law establishes "The Economic Organisation of Egypt" as an independent government entity, whose objectives are (a) to promote the national economy in the commercial, industrial, agricultural and financial fields; (b)to establish an investment policy for the funds of the Organisation and to allocate them to joint-stock companies and public organisations; (c) to orient and supervise on behalf of the Government those public organisations designated by the President to serve the interests of the national economy and (d) to draft a programme which will ensure co-operation between the Government and public and private Institutions. According to Press reports, the Organisation's capital is expected to be LE.50 million, while the participation and interests of the Government in the capital of major undertakings such as the Iron and Steel Company, the Chemical Industries Company and the industrial and mortgage banks is transferred to it to this end. All Government participation in industry and banking have been centred in the Organisation. It is interesting to note that the President of the Republic Is empowered by the Law to appoint the Chairman of the Board of Directors, the Managing Director and the General Manager of each undertaking in which the Organi- sation «*. * • 1 2 cms PUBLIC RECORD OFFICE ins 1 1 ' 2 C flCrfft*i J* no ^sJ icrs°n £SS ir PieasIe note that this copy is supplied subject to the Public Record Office's terms and conditions and that your jse of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

E! \\ L-" i!< 3 V . 7 - V :j (pa /<;ss£j ' -•* Sr* HB or more of the capital. vrganisation owns Law Mb.22 of fhls is the decree which regularises and requires the "Egyptian!sation" of banks. It enacts that all banks operating in Igypt must be organised as Egyptian joint-stock companies and must be entirely Igyptian-owned and managed. The paid-up capital may in no case be less tha LE.500,000. Under supp- lementary regulations promulgated by the Ministry of finance, sequestrated banks were given until 18th April, 1957, to comply with the Law. Other banks were given until 18th February, 1958, to carry out its provisions, but a proviso exists whereby the Minister may grant a delay of up to a total of five years ill such cases. Law Mo. 23 of 19*57 i-* fhis Law enacted provisions similar to those outlined above in respect of insurance companies operating in Egypt, except that the paid-up capital may not be less than LI.50,000. Law Mo. 2k of 1957:- This is the third in the series of "IgyptianiseSfon" laws enacted this year. It provides that for import purposes, foreign firms may be represented in Igypt only by persons or undertakings registered with the Ministry of Commerce. Su-oh firms or undertakings must be Egyptian joint-stock companies, entirely Igyptian-owned and managed, with the members of the boards of management and the directors being Egyptian nationals. Individuals representing foreign import firms must be Egyptians, fhe decision as to whether an undertaking is subject to th© provisions of the Law is administratively vested in the Minister of Commerce, and some uncertainty still exists as to its application to firms of various types, such as Kodak, Philips, oil companies and oar importers and assemblers.

Charga a cms PUBLIC RECORD OFFICE

CONFIDENTIAL IWARD..SAVING.TELEGRAM /,:;: " /'' •" K,;,,;•> FROM WASHINGTON TO FOREIGN OFFICE-- By Bag. IJIDDLE EAST (SECRET) (CABtfa) DISTRIBUTION

Sir PI. Caccia No: 282 Saving R: May 2J>, 1957, lay 22, 1957.

CONFIDENTIAL

Addressed to Foreign Office telegram No: 282 of May 22 Repeated for Information Saving to: Amman. Beirut. Bagdad, Paris. P.O.M.E.F. Khartoum. Bagdad telegram No: 6J>6 [of May 18] (not to all). INTERNAL SITUATION IN EGYPT The State Department have not received any report suggesting Salah Salem had "been executed. The last they had heard of him was that his application for a visa to reside in the Sudan (Khartoum fortnightly report No: 39 of May 10 Ja paragraph 1} had "been refused by the Sudan Government. '

JJJJJ =5>^> / I VJ O t I ., . _ Please note that this copy is supplied subject to the Public Record Office's terms and conditions and that your use of it may be subject to copyright restrictions. Further information is given in the enclosed Terms and Conditions of supply of Public Records' leaflet

:°^->n

SECRET

FROM BAGDAD TO OFFIc Cypher/OTP. MIDDLE EAST"'(SECRET) Sir M. Wright CABINET DISTRIBUTION No; 646 D: 10,10 a.m. May 18, 1957, May 18, 1957. R: 11.35 a.m. May 18, 1957. SECRET

Addressed to Foreign Office telegram No.6.46 of May 18, Repeated for informatioEt to: Amman, Beirut, P.O.M.E.F., And Saving to: Paris, Washington.

Amman telegram No. 905 to Foreign Office: Internal Situation in Egypt. Nuri has confirmed to me that Saud had told the Iraqis he had heard that Salah Salem had been executed. The Iraq Government had no confirmation. Nuri had no knowledge of the report about Neguib.

Foreign Office pass to Amman, Beirut, P.O.M.B«F. & Saving to Paris and Washington as my telegrams 58,-181, 168, 13 and 81 respectively. t# — „ ~~U -r [Repeated to Amman, Beirut and P.O.M.E.F. and Saving to Paris]

XXXXX 2] cms PUBLIC RECORD OFFICE ins T

REG! FOR. AFFAI REGY 21M DUP» SECRET FROM Cypher/OTP MIDDLE EAST(SECRET) (CABINET) DISTRIBUTION Mr. Johnston.

12^.905 D.10.l6.a.m.May 17, 1957 May 17, 1957 R.H.ifi.a.m.May 17, 1957 SECRET Addressed to Foreign Office telegram No.905 of May 17» Repeated for information to: Bagdad, Beirut, P.O.M.E.F., and Saving to: Paris and Washington.

Internal Situation - Egypt. My Iraqi colleague told me yesterday that his Government had heard through King Saud that Sal ah Salem had recently "been executed, "by shooting, at the order of. the Nasser regime. He also had an unconfirmed report that Neguib had teen shot too. Foreign Office pass routine to Bagdad No.253, Beirut No.186, P.O.M.E.F. No.5-19 and Saving to Paris No.11 and Washington No.HI. [Repeated, to Bagdad, Beirut, P.O.M.E.F., and Saving to Paris and Washington],

&&&&&& FROM BEIRUT TO FOREIGN OFFI En Glair OFFICE MD "'V yljETBHALL DISTRIBUTION Mr. Middleton 8-MAY 195'

May 7, 1957 %21iD.p.ni.May 7,1957 R.i.13.p.m.May 7, 1957

Addressed to Foreign Office telegram No.A7^ of Ma.y 7, Repeated for information to: Bagdad, Tehran, Khartoum : and Saving to: Amman, Benghazi end Tripoli.

Lebanese Press Comment. Following are extracts from leader in Le Jour of May 6 by V'erax. Egypt is preparing for general elections which will take place in July. 2. The Egyptians will not be free to vote as they would wish. They will form a kind of "Union Rationale". The latter will have the monopoly to put forward candidates for election to the National Assembly. 3. Thus, political parties are banned aad the Union Nationale is to all intents and purposes the only party. Its objective is to see that by using all the means at its disposal the principle: of the revolution gain the day. i. It has been said that the Presidential re'gime is of the jt'unerican type. This is not so. In-the United States, the executive is distinct from the legislative. 5. The Egyptian constitution is of the autocratic type. The power is concentrated in the hands of President Jamal Abdul Nasser. As for the National Assembly, he will do with it as he wishes, as the only eligible candidates belong to the only party - L1Union Rationale - of which he is the leader. 6. In the Assembly the elected representatives will repeat aloud whet the military junta whispers to them. Foreign Office please pass Saving to Benghazi and Tripoli as ray telegrams Wos.lij. and H.

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