A Turning Point

"I am neither pro-East nor pro-West," insisted Egypt's Gamal Abdel Nasser once again last week. The day before, with the proclaimed purpose of exterminating Western influence and "foiling imperialist plots," the Dictator of the Nile announced the "Egyptianization" of all British and French banks and insurance companies in the country. All other foreign banks and companies, including the U.S.-owned First National City Bank branch in Cairo, were given five years to Egyptianize, i.e., turn over all ownership and operation to native-born Egyptian citizens.

To control the taken-over firms, and to provide him with "royalties" and jobs for hangers-on, Nasser set up a new state "Economic Organization." Since most of the firms' Egyptian assets consisted largely of operating capital, office equipment and warehouse stock, Nasser acquired only their going value. Nasser promised to pay compensation, but hinted that he might first deduct claims against Britain and France for war damage. Hardest hit: the British-owned Barclays Bank, which owned 44 branches in the country.

Threatened Ruin. But if Nasser's sweeping decrees won little immediate net gain for his treasury, they threatened ruin to Egypt's middle class, which depends on trade with the West for its existence. Abroad, Egyptianization was bound to destroy the possibility of attracting new Western private investment in Egypt.

Last week, in fact, may have been the time at which, so far as the West is concerned, Egypt's Nasser passed the point of no return. In the U.S., there was less and less inclination to suffer any prolonged niggling over the Suez Canal. "Egypt," said a State Department man in notably undiplomatic language, "is becoming a damned bore." The New York Times put all its outrage into one editorial headline, EGYPT'S HITLER.

Looking Ahead. When President Eisenhower announced his new Middle East doctrine, Nasser said: "While Russia helps us, the U.S. freezes $50 million in Egyptian funds." Last week, as Nasser kept asking Washington to "clarify the vague parts" of a plan that his controlled press was denouncing as "more sinister than anything British imperialism could possibly conceive," the U.S. made plain that it had not opposed the Anglo-French invasion of Suez just to save Nasser's bacon, and hinted that it was not out merely to restore the status quo ante (see below). The Eisenhower Administration now expects to assist only those countries --say Saudi Arabia, Iraq, Iran, Lebanon and Jordan to start with--which share its determination to bar Soviet aggression and infiltration into the Middle East. In testimony before Congress, Secretary Dulles said that any future aid to Nasser "will depend on whether Egypt's international conduct will be such as to justify help." He went on to say that while the U.S. has "no present plans" for granting aid to Egypt, it might "in a year or two," when, as he hoped, Egypt would be free of Communist influence. At the very least, if the U.S. was not trying to bring Nasser down, it felt no obligation to go out of its way to save him.

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