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(C) Crown Copyright Catalogue Reference:CAB/128/32 Image (c) crown copyright Catalogue Reference:CAB/128/32 Image Reference:0051 SECRET THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'8 GOVERNMENT Printed for the Cabinet. July 1958 C.C. (58) Copy No. 51st Conclusions CABINET CONCLUSIONS of a Meeting of the Cabinet held at 10 Downing Street, S. W. 1, on Tuesday, 1st July, 1958, at 11 a.m. Present: The Right Hon. HAROLD MACMILLAN, M.P.. Prime Minister The Right Hon. R. A. BUTLER, M.P., The Right Hon. VISCOUNT KILMUIR, Secretary of State for the Home Lord Chancellor. Department and Lord Privy Seal. The Right Hon. SELWYN LLOYD, Q.C., The Right Hon. D. HEATHCOAT AMORY, M.P., Secretary of State for Foreign M.P., Chancellor of the Exchequer. Affairs. The Right Hon. The EARL OF HOME, The Right Hon. ALAN LENNOX-BOYD, Secretary of State for Commonwealth M.P., Secretary of State for the Relations. Colonies. The Right Hon. VISCOUNT HAILSHAM, The Right Hon. DUNCAN SANDYS, M.P., Q.C., Lord President of the Council. Minister of Defence. The Right Hon. Sir DAVID ECCLES, The Right Hon. IAIN MACLEOD, M.P., M.P., President of the Board of Trade. Minister of Labour and National Service. The Right Hon. HENRY BROOKE, M.P., The Right Hon. LORD MILLS, Minister Minister of Housing and Local Gov- of Power. ernment and Minister for Welsh Affairs. The Right Hon. HAROLD WATKINSON, The Right Hon. GEOFFREY LLOYD, M.P., M.P., Minister of Transport and Civil Minister of Education. Aviation. The Right Hon. JOHN HARE, M.P., Dr. The Right Hon. CHARLES HILL, Minister of Agriculture, Fisheries and M.P., Chancellor of the Duchy of Food. Lancaster. The Right Hon. REGINALD MAUDLING, M.P., Paymaster-General. Also present: The Right Hon. EDWARD HEATH, M.P., Parliamentary Secretary, Treasury. Secretariat: The Right Hon. Sir NORMAN BROOK. Mr. B. ST. J. TREND. Mr. M. REED. 53860-8 B 2 . SECRET "" 310 CONTENT S Minute No. Subject Page 1 France ... 3 Visit of the Prime Minister and Foreign Secretary to Paris. 2 Nuclear Energy ... ... ... ... ... ... ... 3 Amendment of United States Legislation. 3 Foreign Affairs ... 4 Meeting of Heads of Governments. The Lebanon. 4 Egypt 4 Financial Negotiations. 5 Suez Canal 6 Surcharge. 6 Commonwealth Immigrants 7 France. 1, The Prime Minister reported to the Cabinet on the visit to Visit of Prime Paris which he had paid, together with the Foreign Secretary, during Minister and the previous weekend. They had received a cordial welcome from the Foreign general public and, although they had not been concerned to negotiate Secretary to on particular issues, their discussions with General de Gaulle had Paris. comprised a useful review of Anglo-French relations. The GeneraPs main preoccupations were to devise a scheme of constitutional reform, to promote a settlement of the North African problem and to establish France as a nuclear Power in her own right. He was not well-informed about the projected European Free Trade Area; but they had impressed on him the dangers of continued French intransigence in this context and there was some hope that he might exert his personal authority to secure a resumption of practical negotiations in the near future. The Cabinet— Took note of this statement. Nuclear 2. The Prime Minister informed the Cabinet that the Bill to Energy. amend the McMahon Act had now been passed by Congress. The Amendment of bilateral agreement between the United States and ourselves about the United States exchange of information on nuclear energy, which was to be executed Legislation. under this legislation, would need to be initialled forthwith if it was to (Previous come into effect before Congress adjourned after first being laid before Reference: Congress for the statutory period of thirty sitting days. At this late C.C. (58) 48th stage, however, the United States authorities had sought to insert in Conclusions, its preamble words defining its purpose as the promotion of the Minute 1.) maximum advantage to both countries in the application of nuclear energy to both civil and military purposes. This reference to the civil use of nuclear energy in an agreement to be concluded for military purposes was objectionable; for, although the wording of the preamble had no legal force, it might provide the United States authorities with a means of putting pressure on us to disclose information about the development of our civil nuclear power programme. He had therefore informed President Eisenhower that the amendment to the preamble was unacceptable; and he understood that the President had recommended the Atomic Energy Commission, with whom the final decision lay, to delete it. If they refused to do so, it was for consideration whether we should sign the bilateral agree­ ment with an explicit reservation in writing that we should expect co-operation in the civil application of nuclear energy to continue to be governed by existing agreements. In discussion there was general agreement with this suggestion. We must remain free, in the last resort, to disclose publicly the action which we had taken. But in the interests of facilitating the passage of the bilateral agreement through Congress, we should avoid, if possible, any reference to our reservation, and any public discussion of the agreement as a whole, until the statutory thirty days had expired. The Cabinet— (1) Agreed in principle that the draft agreement on the exchange of nuclear information with the United States Government should be initialled. (2) Took note that, if the final version of the preamble to this agreement implied that the provisions of the agreement would extend to co-operation in the civil, as well as the military, application of nuclear energy, the Prime Minister would inform the United States Government that we should expect civil co-operation to continue to be governed by existing agreements. 53860-8 Foreign Affairs. 3. The Cabinet were informed that the Prime Ministers reply to Meeting of the latest letter from the Soviet Prime Minister on the proposed Heads of meeting of Heads of Governments would be published that day. Governments. Meanwhile, the Soviet Government were to be represented at the (Previous conference of scientists on the supervision of the suspension of nuclear Reference : tests, the first meeting of which was to be held that day at Geneva. CC. (58) 46th Conclusions, Minute 2.) The Lebanon. The Foreign Secretary said that the situation in the Lebanon (Previous remained unsatisfactory. The Lebanese Government appeared to be Reference: unable or unwilling to crush the rebellion by force, while the Secretary- CC (58) 49th General of the United Nations was reluctant to take any action, apart Conclusions, from the despatch of the United Nations observers already in the Minute 1.) country, to implement the resolution of the Security Council that infiltration of the Lebanon should be prevented. Moreover, the observers had so far been unable to obtain evidence of infiltration on any significant scale. In discussion it was agreed that a situation which we had originally envisaged in terms of foreign subversion had developed into a civil war for which a primarily political solution must be devised. It remained important, however, that the Lebanon should remain a stable and independent State, capable of resisting the pressure of the United Arab Republic; and the continued threat of intervention by the Western Powers, combined with pressure by the United Nations, might succeed in inducing the opposing factions to agree upon a settlement which we could accept. It would be necessary, for this purpose, to seek to persuade the Secretary-General to take more positive action to give effect to the resolution of the Security Council. We should also give further consideration, in concert with the United States Government, to the best means of ensuring that, when President Chamoun's term of office expired in the near future, he should be succeeded by an individual who would be' likely to maintain the Lebanon in general alignment with the West. The Cabinet- Invited the Foreign Secretary to be guided by the considera­ tions which had emerged during their discussion. Egypt. 4. The Cabinet had before them: — Financial (i) A note by the Chancellor of the Exchequer (C. (58) 133) Negotiations. covering a memorandum by officials on the possible resumption of (Previous financial negotiations with Egypt. Reference : (ii) A memorandum by the Foreign Secretary (C. (58) 134) CC . (58) 41st discussing the administrative feasibility of distributing a iump sum Conclusions, payment of compensation by the Egyptian Government. Minute 8.) The Chancellor of the Exchequer said that the Egyptian Government had now rejected the earlier concept of a limited financial settlement, which would have excluded both the Egyptian claim for compensation for " war damage " and our own claim for damage to our property in the Suez Canal Base, and had proposed a lump sum settlement which would be deemed to take account of both these claims. Such a settlement would be in full satisfaction of our claims in respect of Egyptianised property and damage to sequestrated property; and it would comprise both the restoration of the sequestrated assets to their owners and the release to the Egyptian Government of such part of their blocked sterling balances as remained after the lump sum payment had been discharged. There would be advantages in resolving the present deadlock in negotiations as soon as possible; but the figure of £25 millions, which the Egyptian Government had privately indicated that they would be prepared to consider as the basis of a lump sum settlement, was inadequate. The total of the claims which British claimants against Egypt could advance, even if reduced to a realistic level, was of the order of £40-£45 millions; and unless the Egyptian Government could be persuaded to increase their offer to a figure in the neighbourhood of £35 millions, there would be considerable political difficulty in defending a lump sum settlement.
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