Letter from Harold MacMillan, Chancellor of the Exchequer to Prime Minister Anthony Eden, 29th August 1956 (PREM 11/1135)
The Egyptian President, Colonel Nasser, had announced the nationalisation of the Suez Canal over a month earlier
We have talked several times about the importance of making our people at home understand what the Canal and the oil means to us. I have given some discreet guidance from here to the press and I had intended in my Press Conference to develop this theme.
On reflection however, and after discussion with some of my advisers who are specially concerned with the maintenance of sterling and of confidence at this moment, I have decided to reduce this part of my speech to the minimum. It is really too dangerous, and there are too many sterling balances which could easily be withdraw. We have had a curious example of how tricky this over Chinese sterling balances. The Chinese owe the Egyptians money, we block the Egyptian balances, so the Chinese buy Swiss francs and pay the Egyptians. In the circumstances, therefore, I think we must postpone the educational campaign until the critical moment, if and when it comes.
It is a dilemma that is continually occurring here- whether to speak to the people at home or to the folk abroad. I send this because I have about the proposed article in the Daily Telegraph. I really feel that coming at a time when the news will show, in a day or two, a very big loss- over $100 million August on the reserves, this might do a lot of harm. Of course an article on the Canal, trade and shipping and the international character of the problem could do no harm, but an article that said anything like what I said in my paper to the Egypt Committee “The Egypt Crisis and the British Economy” might be very dangerous.
29th August, 1956