1 2 PUBLIC RECORD OFFICE mi I «./ ay i Please note that this copy is supplied subject to the Public Record Office's tejms 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 !-. U0> nut ( ictt BRITISH EMBASSY, CONFIDENTIAL FT" BBIKUT. (10217/5/57) January 31 > 1957. This is our weekly letter on conditions in Egypt and Syria; as before, we are reporting on the Damascus trials separately. The information on Syria comes mostly from the Syrian press (mainly as reported in the Lebanese papers, since the ban on Syrian papers entering Lebanon has been extended. AS for the Egyptian press, however, which the Foreign Office do receive (via this Embassy) we shall in future only refer to it in this series when we get local confirmation of reports in it, presumably the ample evidence in it on matters like Egyptian reorganisation of foreign trade and (under the "Five "fear plan") of domestic industry is collated in London. 2. With reference to paragraph 8 of last week's letter, the Lebanese Press widely reports that the populist party has elected its new executive. Its Chairman is still Rushdi Kekhi*, but he is expected to resign shortly and retire from active politics. Adnan Atassi, Nazim Qudsi, Rashad Jabri and Shaker el Aas, of the right wing of the party, are said to be excluded. The party has announced a new policy condemning the Bagdad pact, denouncing the alleged authors of the "Plot", and supporting the policy of "positive neutrality", 3* A Lebanese working for I. C. I. » who some time ago told us that the Syrian Government had made it practically impossible to obtain import licences for British and French goods, now says there are signs that they are making this easier. k» A leading Aleppo lawyer tells an ex-member (Syrian) of our Vice-Consulate there that the economic situation there is bad, and payment of debts is b^ing delayed. He thought the Baath Socialists were not sufficiently confident of their support - particularly in the Army - to risk elections yet. He also said that though he had no knowledge of a "Russian base" at SBSAFB (the story carried recently by the British press) he had been firmly discouraged by the local authorities from visiting the place. 5* The Inspector of the British Bank of the Kiddle East has been told by the Syrian Government that he must "gyrianise" his bank within two months (i.e. put in Syrian managers) or close it in Syria, MO» was he allowed to visit Syria to make the necessary arrangements. He expects that the Bank will comply and that nationalisation will follow. The Bank is doing no business. 6, The stories of the arrival of Russian technicians, to the number of 250, seem well authenticated. 7» The Director-General of the Lebanese Ministry of Defence and another high official were agreed in saying that the real power in Syria rested with Akram Hpurani and Michel Aflak; and that in two or three months one could J. H. A, Watson, Esq., /expect FOBEIGH OFFICE. -2- expect a coup within the Army whereby Sarraj would oust Nizamuddin. 81 An I. p. C, official here, who is normally very we<li informed, tells us that the Syrian Finance Minister, Trabulsi, and the Exchange Controller, Sarakat, have both been seeking Jobs outside Syria in anticipation of an economic crash. The same informant says the proposal to raise a popular loan in Syria seems to have been shelved for the time being, but that in Aleppo money for defence funds, etc., is being extorted from the merchants, starting with the Christians. Egypt $. A MENA report says that 35*326 evacuees have returned to Port said; 11,1^92 of these are living in Government camps. Small loans are being made to small traders and artisans among them, and doles are to be paid to unemployed dockers until there is work for them. 10. The Egyptian Minister of Commerce, as reported in the press, said in Cairo on January 22 that he was studying a scheme for the regulation of trade as Ma profession" for which there must be conditions and rules. "It is not sufficient that a person should have a sum of money to engage in commerce or to carry out export and import operations ... persons engaged in trade should have a know- ledge of the principles of commerce ... leaving the field of commerce open to anyone who wanted to engage in it without any conditions or limitations was the reason for the bankruptcy of many traders who lacked knowledge of commerce". He has also (same source) set up a committee to draft a law on the control of foreign trade. 11. First-hand accounts from Egypt of the results of the instructions about drugs and Pharmaceuticals reported in paragraph 10 of last week's letter indicate utter confusion Chinese products with unknown quantities and qualities, and a widespread shortage. 12. Beirut paper "Nahar" (BBS.and anti-communiBt) runs a long story which our Information Section have summarised in their telegram to Foreign office (for Infor- mation Policy Department) No. 135 of January 26, but which fits in here too. According to this, the Revolutionary Council in Egypt is divided between its left wing and Nasser's following over the interpretation of the decision taken by the recent Pour Power conference in Cairo over the "Eisenhower Plan'1* During that conference, Nasser had said that he hoped to cooperate with the U.S.A. but that, in view of the help it had given, particularly over grain supply recently, he could not turn his back on the tJ. S. 8. R. Nasser had told the American Ambassador in Cairo more than once that he had the Egyptian communists under his thumb and had no fear of a communist coup d'etat. Nor had he hidden from King Saud, King Hussein and Sabri Assail that he detested communism, feared the menace of it in Jordan, and considered A^ram Hurani dangerous. According to "Nahar", well-informed circles in Egypt are saying that Nasser relies on Kuwatly co restrain the excesses of the Baathists in Syria. King Saud on the other hand is afraid lest Nasser has himself lost control of the leftist trend. The internal division in Egypt is likely to be accentuated by the trials said to be going on in secret of a number of political personalities - /notably cms -3- notably All Maher, Dr* Sanhoury, Pouad Sara;} Ed Din - accused of treason for having advised Nasser to accept the Franco- British ultimatum of October 31 last* Haeaer claims to be in possession of documents proving complicity with Paris and London* and showing Ali f aher as the Anglo-French candidate for leader of the Egyptian Government which would have negotiated with the two powers* According to ^ahar", howeverf this accusation commands little public belief and is likely to cause trouble* The "Nahar" despatch has appeared in other Lebanese papers - one of which adds that Nasser has not forgotten that Akrairi Rurani and K haled Riled ache used to call his government "The Government of the Bikdachi". A Lebanese informant who may be connected with a Counsellor of the Lebanese ministry of Foreign Affairs told us that, according to a report received by the Lebanese Government, fabri Assali himself had asked Saud and jiasser, when he was in Egypt for the quadripartite meeting, to do something to put the brake on Russian influence in Syria; and alleged that zakaria Mohieddin held the real power in the revolutionary Council. I3« The POAC representative in Egypt (Eg ptian born but of a Syrian mother) relates that "islamisation" and "Egyptian- isation" are the order of the day. The official identity card shows one* s religion and is the first item t> be looked at in any official business* one muet either by a Muslim or "Egyptian! sed" - which appears to mean being descended on both sides from Egyptian-born parents as far back as can be traced. The Copts are being relegated to the junior or provincial posts and o'-her ; religions, apart from Islam, are being treated likewise. Indeed, a law is on the tapis whereby firms would have to employ 75 '• Muslims and 20t "Kgyptianioed" - which, in view of the comparative lack of talent among Muslim Egyptians for certain professions such as banking, would cause chaos. The only way to run staff matters is apparently to put an Egyptian Muslim in charge of them and let him "fix* the authorities* This tendency is confirmed by the Head of the Overseas Section of the Lebanese Ministry of Foreign Affairs (see cur letter No, 1011/16/57 of to-day to Levant Department), who tells us that the expulsion of Egyptians of Lebanese origin is proving a headache for Lebanon. liu The informant quoted in paragraph 11 above had also heard that the Egyptian Finance Minister, Kaisaouni, sees the crash coming but that the Military Junta will not allow him access to Hasser, and threaten him with press attacks based on hie having an English wife. 15. On January 29 the buying rate for the Egyptian pound in Beirut was 6*35 (Bank Hote) and 5.50 (virersent inte"rieur) • (I. D. Scott) cms Cond 9 ln the en • 't'onsofsunnlu of Public P—-•" -- ~ dosed Terms anrt """""••"-•»•i—-_i_^_ V. (1028/20/57) BRITISH EMBASSY, IRUT. UNCLASSIFIED February 7> 1957. Dear Department, The proceedings in the Damascus trial, which we have "been trying to follow, (our letter 1028/17/57 of January 29), were to be resumed on February 5.