SUEZ CANAL

Evening Star, Issue 23679, 12 September 1940, Page 10

SUEZ CANAL

ITALY’S LIFE LINE Most of the demands made by Italy before the war began—Corsica, Tunisia, Savoy, Nice, and Djibuti—called for concessions by France, wrote the London correspondent of the ‘ Christian Science Monitor,’ on June 11._ Only one—Suez—called for concessions by both the present Allies. By resorting to war, Italy discards earlier attempts at negotiation over its demands for a larger voice in management of the Suez Canal. Since the conquest of Ethiopia in 1935, Italy has risen to second user of the canal, exceeded only by Britain. Italy’s claims to a voice in Suez Canal management effected not only the material interest of the international shareholders of a great undertaking, but they also impinged heavily upon deep-seated popular feeling, especially in France and Egypt. There was a considerable body of opinion which favoured giving a share in the direction of the canal to all maritime nations in proportion to the extent they make use of this short-cut between the Mediterranean and the Red Sea. But this view was opposed by those representing the shareholders, who claim that, having invested their savings in the enterprise, they are entitled to control it entirely. A PRIVATE CONCERN. Italy’s share in the traffic of the canal until recently was small. Even so lately as 1933 that country ranked only fifth among the nations as a whole in this respect. In 1937 vessels totalling 36,491,332 tons passed through. Of these, 17,254,182 net tons were British and 5,866,087 were Italian. Since then Italy’s share has declined owing to the termination of the more active stages of the war in Ethiopia. Control at present is exercised by the Suez Canal Company, a private concern registered under French law. This company, while technically outside the competence of the Governments of the countries concerned, otherwise than in their capacity as shareholders, is nevertheless amenable to the international will. At present the chief countries financially interested are Egypt, France, and Britain. Egypt has reversionary rights as being the sovereign power in the territories traversed by the Canal. Prance_ and Britain hold most of the shares in the company. The company is financed by means of tolls upon ’ ships using the canal. One of Italy’s chief complaints was the heaviness of these tolls. The Suez Canal Company denied that the tariffs were too heavy and asserted that, in any case, Italy was less justified than any other nation in considering the dues too high. For a ship going from Britain to Australia the canal reduces the journey by about one-tenth, but for ships from Italy to its East African Empire the voyage is cut by about four-fifths. TOLLS REDUCED. At the beginning of 1937 the tolls were 7s 6d, per ton for loaded vessels and 3s 9d per ton for those in ballast. In September, 1938, it was decided that

as from December 15 of that'year the rates should be reduced to 5s 9d pet ton for loaded vessels and 2s IOJd for those in ballast. The company in 1937 declared a net profit of £4,793,464, a dividend of £4 19s per share. The price of a share on the London Stock Exchange in December, 1938, was about £95. The Egyptian Government’s share of the canal profits was increased in 1937 from £E200,000 to £EBOO,OOO annually. By a treaty with Egypt signed in 1936 Britain is authorised to keep in the Canal Zone adequate forces for the defence of the waterway until such time as both countries may agree that the Egyptian army is capable of performing this task efficiently. Regarding the possibility of changing the existing arrangement, Mr Neville Chamberlain, on December 19, 1938, said, in reply to a question in the House of Commons, “ the status of the Suez Canal cannot he altered without the consent of the parties to the Suez Canal Convention of 1888 and of Egypt.” CONVENTION ACCEPTED. Mr Chamberlain added that as part of the agreement signed on April 16, 1938, the British Government and the Italian Government “ reaffirmed their intention always to respect and abide by the provisions of the Convention of 1888 as it is at present in force, and they communicated this declaration to the Egyptian Government.” The original concession for the building of the Canal was obtained in 1858 by’M. de Lessens from the then Viceroy of Egypt. The concession was confirmed 10 years later by Turkey, at that time the suzerain Power. It was to extend for 99 years from November 17 1869, after which period ownership of the Canal was to he transferred to the Egyptian Government. The concession lapses therefore in 1968. The capital, authorised and issued, amounts to 200,000,000 French francs (gold> or £8,000,000, there being also very large loan and other obligations. The hulk of the controlling shares was originally distributed between French and Egyptian holders.. But Britain in 1877, when Disraeli was Prime Minister, bought for £4,000.000 the Egyptian holding, thus _ acquiring 43 per cent, of the total capital. The estimated market value of Britain’s present holding varies with franc exchange. The United Kingdom finance accounts for 1937-38 put it at £46,396,999. » very profitable investment. The Board of Management at present consists of 19 Frenchmen, 10 Britishers, 2 Egyptians, and 1 Netherlander. “ALWAYS FREE AND OPEN.” The Convention of 1888 was signed at Constantinople by Britain, Germany, Austria, Spain, France, Italy, the Netherlands, Russia, and Turkey. Its purpose was to ensure that the Canal should “ always be free and open in time of war as in time of peace to every vessel of commerce or of wap without distinction of flag.” Britain in signing made various reservations, but these were withdrawn under an Anglo-French agreement of April 8, 1904, except so far as regards a provision whereby the signatories* agents in Egypt were to meet annually to take note of the due execution of the Although the Convention forbids the closing of the Canal in war the Power which controls the Eastern Mediterranean and the Red Sea can always prevent access to it. During the 1914-18 war a temporary blockade of the Canal was declared by Britain, and Egypt.