FACTS ABOUT THE SUEZ CANAL

Dominion, Volume 32, Issue 154, 25 March 1939, Page 6 (Supplement)

FACTS ABOUT THE SUEZ CANAL

Disraeli’s Brilliant Investment

The Suez Canal is 69 years old. But its most important birthday will be In 1908, when it reaches the age of 99 and the concession granted by the Egyptian Government to the Canal Company expires, writes N. P. Macdonald in the "Christian Science Monitor.” Wiiat will then happen to this strip of water which is sometimes called the lifeline of the British Empire? Or will its future have been decided long before that by the pressure of political events in Europe? By tlie terms of the Anglo-Eygptian Treaty of 1930, the Suez Canal is to be protected by British armed forces till such time as the Egyptian army and air force are able to undertake this task.

Britain will never abandon the canal to an unfriendly Egypt, and she cannot, therefore, afford to let the Egyptians adopt too independent a foreign policy. As each of the shares In the Canal Company is now worth approximately 24,000 francs, the expiry of the concession in 30 years’ time causes some anxiety to the shareholders, and also to the French management of the company in their office at No. 1 Ruo d'Astorg, Baris.

It was proposed that the Egyptian Government should extend the concession for another 40 years, to 2008. According to this plan, which was put forward in 1910, Egypt was to be paid £4,000,000 in cash, and receive, after 1921, a proportion of the net profits on a rising scale. For 1937, this-propor-tion would have been between £600.000 and £700,000.

The Egyptian Government approved the scheme in principle, but it was defeated in the General Assembly by 00 votes to 1, Zaghloul Pasha being leader of the Opposition. A Suez Canal was planned, and even begun, by King Seti, in 1340 B.C. In the 3269 years that elapsed between the King’s engineering efforts and the final opening of the waterway in 1869, when the Empress Eugenie sailed through the canal on November 17, in the French Imperial yacht, many had planned the cutting of a canal, iuclud- ‘ ing Napoleon. But, where they had failed, the Frenchman, Ferdinand de Lessepes, succeeded and the sea route between London and Bombay was shortened by 4500 miles as a result.

At the outset, the Egyptian Government had a financial interest in the Suez Canal, but they surrendered it in 1875, when Disraeli, who borrowed the money from the Rothschilds, paid the Khedive Ismail £4,000,000 for 176,602 of the total 400,000 shares in the Canal Company. Though much criticized at the time, Disraeli’s investment has proved abundantly worthwhile for Britain, the shares in 1937 having been worth approximately £78,000,000.

It is widely believed that Britain controls the Suez Canal. Actually, as a single holder of shares, she has 25 votes, the maximum number allowed to the possessor of more than 25 shares, and she is represented on the board by only 10 directors out of a total of 32; against 19 Frenchmen, two Egyptians and one Dutchman.

The total tonnage which passed through the canal in 1937 showed an increase of 12.7 percent., being 36,491,000, or 4,112,000 more than in 1936. Of this total, British ships accounted for 17,254,000 tons, being followed by Italy with 5,866,000 tons, and Germany with a tonnage of 3,313,000. All ships passing through the caiiitl have to declare the number of passengers, and the tonnage of cargo they are carrying. For each passenger a tax of 6/- has to be paid, and a similar sum for each ton of cargo (Suez Canal ton equals 100 cubic feet). For ships in ballast the charge is 3/- a ton. These dues are paid either in English currency or Egyptian piastres. It is often said that the Canal Company makes abnormally high profits. But out of these profits 100 pilots and 2000 other employees hav® to be paid, and a waterway 100 miles long has to be kept open, in good repair and constantly improved. Since the Suez Canal was built, the' company has spent 1,009,000,000 gold francs in improving it.

In any case, the canal dues have little effect on the ultimate retail prices of commodities passing through it. The wholesale price of wool would be only 3 per cent, lower if it travelled by a longer route: sugar, which is bulky, would be 2.8 per cent, cheaper, rice 3.1 i>er cent., and jute only 1.6 per cent, lower in cost.