Diplomats at Work

All week the State Department kept a nervous eye on the teleprinters as messages clacked in from U.S. outposts in the tense Middle East. State was braced for the possibility that Russia's Foreign Minister Dmitry Shepilov (see FOREIGN NEWS) would offer to sell Egypt arms, would offer Egypt a $1.3 billion loan--or a blank check--to build the Aswan High Dam, that Egypt's Premier Nasser would find it hard to turn down such easy and astronomical money (roughly half of Egypt's gross national product). State was concerned likewise that neighboring Israel might be fanning up a new "get tough" policy after dismissing moderate Foreign Minister Moshe Sharett.

The U.S. still stood on its conditional offer to grant Nasser $56 million toward his dam (Britain is still ready to grant $14 million), to precede a World Bank loan of $200 million. The reasons were basic and simple: 1) the U.S. offer, with its businesslike requirement of a sound Egyptian fiscal system, was good for Nasser--and he knew it; 2) the U.S. knew full well that if Nasser accepted Russian easy terms he was bound to pay a heavy price in independence besides having a hard time laying his hands on the money--and presumably Colonel Nasser knew that, too. The U.S. does not intend to bid against the Soviets on the Aswan Dam.

Other diplomatic items of the week:

Tito. Secretary Dulles advised the Senate Foreign Relations Committee that the U.S. tentatively plans to continue sending military and economic aid to Tito, although the decision is neither "final" nor "definitive." In Congress there was a growing feeling that Tito's embrace of Moscow proved that it was high time to make him prove himself (and eligibility for U.S. aid) all over again.

Bases. The U.S. was having trouble renewing its lease on the Arabian air base at Dhahran--with Saudi Arabia's King Saud holding out for big new shipments of U.S. arms. State watched with apprehension Iceland's election campaign in which four of the five contending parties were boasting about how they intended to kick the U.S. out of its base at Keflavik.

Cyprus. State proclaimed its concern over "violence . . . a blind and senseless course in the settlement of international relations" as a helpful backdrop for Britain's new plan to straighten out the Cyprus problem.

Southeast Asia. The President underlined the U.S.'s long-standing belief in independence for properly prepared colonies by deputizing Vice President Richard Nixon to be in Manila July 4 to attend the tenth-anniversary celebration of the Republic of the Philippines. The U.S. is expected next week to offer a grant of $35 million in economic aid to neutral Indonesia--about one-twentieth the sum sent in fiscal 1956 to allied South Korea, about one-sixth the U.S. Mutual Security budget for allied South Viet Nam.

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