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Call Na 3^7. $T-A-n-/6) 6 f ^Accession No. 2-~) >7 2~ 
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THE SUEZ CANAL 

Its Pasty Present, and Future 

MORE than half the inter- 
continental shipping of the 
world passes through the Suez and 
Panama canals, and of the ships 
passing through the former more 
than half fly the British flag. The 
Suez Canal is thus, as Disraeli 
realized, the key to India, and 
much else. 

In this, the first book on the 
subject published by an Englishman 
for nearly sixty years, the history 
of the Suez Canal from the earliest 
times to. the present is set forth 
authoritatively and vividly from the 
point of view of British interests. 
The narrative is amply documented, 
and includes much material and 
some ideas which will be new to 
many readers. 

The author's aim is to throw 
light and focus public opinion upon 
a problem which, in the words 
of the late Lord Grey, - is very 
complicated and requires to be 

elucidated*. He has certainly 
succeeded in doing so. 


By the same Author 

THE PERSIAN GULF. 1928 

A BIBLIOGRAPHY OF PERSIA. 1930 

LOYALTIES: MESOPOTAMIA, 1914- 

1917. 1930 

Reissued in Oxford Bookshelf . 1936 

MESOPOTAMIA, 1917-1920; A Clash of 

Loyalties. 1931 

Reissued in Oxford Bookshelf . 


PERSIA (Modern World Series). 1932 

WALKS AND TALKS. 1934 

Reissued in Oxford Bookshelf. T 935 

WALKS AND TALKS ABROAD. 1936 

Reissued in Oxford Bookshelf . *939 

RICHARD BURTON (Fifth Burton Memo- 
rial Lecture). 


INDUSTRIAL ASSURANCE. 1937 

BURIAL REFORM AND FUNERAL 
COSTS. 1938 

WORKMEN'S COMPENSATION. 1939 

GALLANTRY: its public recognition in peace 
and in war at home and abroad. *939 


THE 

SUEZ CANAL 

Its Past y Present, and Future 

BY 

LT.-COL. SIR ARNOLD T. WILSON 

K.C.I.E., C.S.I., C.M.G., D.S.O., M.P. 


* The question of the Suez Canal Company's con- 
cession is a very complicated matter, which requires 
to be elucidated.' MR ,, CRrY 

in House of Commons, Juty 1910. 


* The prosperity of the Kast is now dependent upon 
the interests of civilization at lar^e, and the best 
means of contributing to its welfare, as well as to 
that of humanity, is to break down the barriers which 
still divide men, races, and nations/ 

OK LFSSFPS, July 


' He that taketh a\vay weights doth as much advan- 
tage motion as he that acideth wm^s.' 

LORD CHANCELLOR BACON. 


SECOND EDITION 


OXFORD UNIVERSITY PRESS 
LONDON NEW YORK TORONTO 


OXFORD UNIVERSITY PRESS 

AMEN HOUSE, E C. 4 

LONDON EDINBURGH GLASGOW NEW YORK 

TORONTO MELBOURNE CAPETOWN BOMBAY 

CALCUITA MADRAS 

HUMPHREY MILFORD 

PUBLISHER TO THE UNIVERSITY 


PRINTED IN GREAT BRITAIN AT THE UNIVERSITY PRESS, OXFORD 
BY JOHN JOHNSON, PRINTER TO THE UNIVERSITY 


' Much can be done by temperate and courteous 
discussion. It is impossible that two great nations 
like France and England should not have clashing and 
conflicting interests, for they have possessions and 
protectorates in every quarter of" the globe, and they 
touch each other in almost every part of the world. 
If they had not competing interests and rival ambitions 
they would not be the great nations they are. Rivalry 
in every direction is the very essence of their greatness, 
and neither can complain of the other because it is 
ambitious and far-reaching. Neither could forgo its 
ambitions vuthout descending in the scale of nations. ' 

Monsieur WASHINGTON 
French Ambassador, at the hlansion House 
' 6 March 1893 


PREFACE TO THE SECOND EDITION 

book was published in December 1933, at a time more 
-- favourable than the present to the dispassionate consideration of 
international problems. Much has happened since then. A Treaty of 
Alliance between Great Britain and Egypt, signed on 26th August 
1936, has substituted a permanent military defensive alliance for the 
British military occupation of Egypt. Egypt was therein recognized as 
a sovereign independent State and announced her intention of joining 
the League of Nations (she has since done so). 
The following article deals with the Canal Zone. 

'ARTICLE 8. In view of the fact that the Suez Canal, while being an integral 
part of Egypt, is a universal means of communication as also an essential means of 
communication between the different parts of the British Empire, His Majesty 
the King of Egypt, until such time as the High Contracting Parties agree 1 that 
the Egyptian Army is in a position to ensure by its own resources the liberty and 
entire security of navigation of the Canal, authorises His Majesty the King and 
Emperor to station forces in Egyptian territory in the vicinity of the Canal, in the 
zone specified in the annex to this Article, with a view to ensuring in co-operation 
with the Egyptian forces the defence of the Canal. The presence of these forces 
shall not constitute in any manner an occupation and will in no way prejudice the 
sovereign rights of Egypt.' 

The Annex provides that, without prejudice to the provisions of 
Article 7, the numbers of the British forces to be maintained in the 
vicinity of the Canal shall not exceed, of the land forces 10,000, and 
of the air forces 400 pilots, together with the necessary ancillary per- 
sonnel for administrative and technical duties, excluding civilian per- 
sonnel, e.g. clerks, artisans, and labourers. The areas over which the 
forces will be distributed are specified; necessary lands and durable 
barrack and technical accommodation, including an emergency water- 
supply and reasonable amenities, are to be provided for them by the 
Egyptian Government, with certain contributions from H.M. Govern- 
ment. 

The effect of this clause can best be understood in the light of 
the Constantinople Convention of 1888 (to which Austria-Hungary, 

1 It is understood that at. the end of the period of twenty years specified in Article 16 
the question whether the presence of British forces is no longer necessary owing to the 
fact that the Egyptian Army is in a position to ensure by its own resources the liberty and 
entire security of navigation of the Canal may, if the High Contracting Parties do not agree 
thereon, b^ submitted to the Council of the League of Nations for decision in accordance 
with the provisions of the Covenant in force at the time of signature of the present treaty 
or to such other person or body of persons for decision in accordance with such other 
procedure as the High Contracting Parties may agree. 


b PREFACE 

Britain, France, Germany, Holland, Italy, Russia, Spain, and Turkey 
were parties). The preamble of this Convention set forth the desire of 
the signatories to create 'an organization definitely able to guarantee 
the rights of all nations to the use of the canal as specified by the first 
and second concessions of Said Pasha (1854-56) and the firman of the 
Sultan of Turkey (February, 1866)'. 
Article i reads as follows : 

'The Suez Canal shall always be open, in time of war as well as in time of peace, 
to every vessel, commercial and military, without distinction of its flag. In con- 
sequence, the high contracting parties agree not to disturb in any manner what- 
soever the free use of the canal either in times of peace or in times of war. The 
canal shall never be subject to blockade.' 

Article 9 provides that the Government of Egypt is responsible for 
the defence of the Canal. If she is unable to undertake it, the task 
reverts to the Ottoman Empire, Article 10 provides that the Govern- 
ment of Egypt and the Ottoman Empire may take whatever steps 
they deem opportune to assure a proper defence of Egypt. 

Since 1915, when Egypt became independent of Turkey, these 
clauses have become obsolete and, under the Treaty of 1936, Britain 
has naturally and properly assumed responsibilities formerly apper- 
taining to Turkey. But the Convention of 1888 remains valid in inter- 
national law, and binding upon all signatories so far at least as it has 
not been rendered obsolete by changed circumstances. The Canal 
has not been neutralized, but rather universalized. It is required to 
be kept open in time of peace and of war to the ships of all nations, 
including ships of war and those carrying military supplies. It is 
neutral only to the extent that, under the Convention of 1888, 'no act 
of hostility may be committed within its limits*. 

It is not easy to reconcile the International Convention of 1888 with 
the Anglo-Egyptian Treaty of 1936. The former is unquestionably 
in some respects obsolete: the latter corresponds to the facts of the 
present day and to the interests and needs of the signatories. The 
Canal is of primary importance to Britain, but is also, as the Treaty 
explicity recognizes, *a universal means of communication', and 
incidentally a vital link in the French, Dutch, and Italian line of 
communication with their overseas possessions. It is, in fact, of vital 
importance in time of peace to all Europe, and in time of war to any 
belligerent with possessions east of Suez. The Italian claim that the 
defence of the Canal is a matter of international concern is therefore not 
intrinsically unreasonable and, as part of a general settlement, deserves 
discussion by those Powers (including France and Holland) to whose 
territorial possessions overseas the Suez Canal is a vital highway. 


PREFACE c 

Having said so much as to the strategical and juridical aspects of 
the Canal, some reference is necessary to commercial and financial 
developments since this book was published. 

Traffic through the Canal (see p. 121) has continued to increase, 
as the following figures show. 

(thousands of net tons) 

1932 1933 1934 ^935 1936 1937 1938 

28,340 30,677 3 J 75 32,800 3 2 37 8 3 6 >94* 34>4 

Figures to the end of May 1939 show a drop of about 10 per cent, 
on those for 1938. 

The nationality of this tonnage (see p. 136) is as follows: 1 

(Per thousand net tons) 


Tear. 


Great 
Britain 
(including 
Dominions). 


Italy. 


France. 


Germany. 


Holland. 


Other 
nations. 


1870-80 
1901-10 
1919 
1929 

1935 
1936 
1937 
1938 


761 
623 
709 

571 
480 
465 

473 
504 


27 
H 

20 

4 6 

185 

2O2 

161 
134 


83 
60 

30 
65 
54 
5* 

5 
5o 


12 
I 5 6 

103 
82 
89 

9 1 
9 1 


4i 

47 
47 
1 06 

7i 
70 

77 
88 


7 6 

IOO 

194 
109 

128 
123 
148 
133 


Payments (see p. 133) have been kept fairly steady. 

(In millions of current French francs) 

1932 1933 J 934 1935 i93<> 1937 

344 339 348 342 35 8 595 

Earnings (see p. 131) have more than kept pace with payments. 

1932 1933 *934 1935 1936 1937 
849 886 895 927 986 1,448 

1 The average proportions of Suez Canal tonnage dues paid by ships of each of the five 
principal flags using the Canal have been calculated for the three years 1935 to 1937 as 
follows, from information published by the Suez Canal Company: 

British* 46-9 

Italian 17-5 

German ...... 9*3 

Dutch 7-5 

,* * French 5-5 

The British and Dutch ships pay a little less than others in proportion to their tonnage 
owing to the number of tankers under these flags passing through the canal in balkst. 


d PREFACE 

Surplus profits (see p. 127) have consequently risen steadily, 

(In millions of current French francs) 

1932 1933 1934 1935 1936 1937 

505-2 522-1 522-1 552-8 625-7 852-2 

It should be added that the vast sums already in reserve have been 
very substantially increased since 1932. 

It is not, therefore, surprising that the Suez Canal Company should 
have found itself under the necessity of making an annual ex gratia pay- 
ment to the Egyptian Government from May 1936 of ^.300,000. x 
The appetite thus created will certainly grow. 

The Company has also undertaken to nominate two Egyptian 
directors to the Board (who will not displace the existing British 
representatives), and gradually to raise to 33 per cent, the proportion 
of Egyptians in its service. It has also undertaken to build a road for 
military purposes in the Suez Canal zone at a cost not exceeding 
;E. 300,000. 

The British Government's shareholding is now 353,504 shares out 
of 800,000: its voting power remains unaltered, viz. ten votes, the 
maximum allowed by the Articles of Association. 2 Dividends on these 
shares for the past four years are as follows : 

Equivalent to 
per cent, on 
prime cost. 

1935 2,449,073 ^o- 1 

1936 2,248,457 55-2 

1937- i975>65 8 4 8 '5 

T 93 8 1,699,269 ..... 41-0 

Payments to the thirty-two Directors (2 per cent, of net profits) 
has averaged about 125,000 for the past six years. 

These matters are, however, subsidiary from the point of view of 
the general public to that of the amount of dues levied (see p. 122). 
They have fluctuated as follows : 

1913 6-25 gold francs per Suez Canal ton. 3 

1920 8-50 

1929 6-90 

(Dec.) 1938 4-08 ( 5 s. yd. sterling). 

1 This is in addition to the 1 5 per cent, of its net profits payable to the Egyptian Govern- 
ment in terms of the Concession; this right was, however (see p. 109), sold outright to a 
French bank in 1 880 for 22 million francs. It brings in 1 50 million francs a year to-day. 

2 Debates H.C. 5.12.38. 

3 A Suez Canal ton may be one-third more on some types of ships but averages io- 1 2O 
per cent, more than a British net ton calculated by British standards. Per ton of cargo 
carried the dues are nearly 20 per cent, more than per ton net. 


PREFACE e 

The sterling equivalent of Suez Canal dues in 1929 was 55. 3-6^.; 
in 1930, 5^. 2-6*/.; in 1931, $s. 3*5^.; in 1932, 6s. 2-4^. The present 
rate of $s. 9^. is thus higher than the average for the past ten years. 

When a ship is on a long voyage, to the Far East, for example, 
Canal dues form a smaller proportion of the gross costs than in the 
case of short voyages. The Chairman of the Orient Steam Naviga- 
tion Company stated recently (The Times, I4th November 1938) that 
Suez Canal dues absorbed 1 3 per cent, of the gross revenue from pas- 
sengers for the year, and in one case 47^ per cent, of the gross earnings 
on a six weeks' trip. For ships trading to East African ports on short 
runs, the burden is proportionately greater. It follows that they bear 
heavily on Italian vessels going to and from Ethiopia. 

The following table shows the principal geographical divisions of 
traffic through the Canal (in thousands of net tons) during the year 


India, Burma, Ceylon, and Siam . . . 8,993 

China, Japan, Philippines, and Indo-China . 8,346 

Persian Gulf ...... 5733 

Malaya ....... 3,743 

Red Sea and Aden ..... 2,632 

East Africa ...... 2 >359 

Australasia ...... 2,268 

Miscellaneous ...... 344 

These facts underlie the demand, long in the background but not 
even yet formulated, of certain maritime Powers for a re-examination 
of the international status and commercial management of the Suez 
Canal. Before examining these demands students of affairs will do 
well to bear in mind a few salient facts. First and foremost is the 
justifiable amour propre of the French people in all that concerns the 
Canal. It is the creation of a great Frenchman, Ferdinand de Lesseps, 
whose last years were saddened by his failure to repeat his triumph in 
the Isthmus of Panama. It was built by French and Egyptian capital. 
But for Said Pasha's noble and generous support the Suez Canal 
Company could not have gone to allotment. It was started against the 
advice of the best British engineers and completed in spite of the 
strenuous opposition of British statesmen. Whilst 46 per cent, of 
the shares, bought by Disraeli from Said Pasha's successor, are in the 
hands of the British Treasury, almost all the remainder are held by 
French citizens. The British shares carry next to no voting rights, for 
the Abides of Association provide that twenty-five shares give the 
right to a vote, but no shareholder may have more than ten votes. 
The management of the Canal is almost exclusively French, so far as 


/ PREFACE 

it is not Egyptian and, whilst it has sometimes been criticized, not 
without justice, as expensive, is unquestionably efficient. 

Nor should Egyptian amour propre be under-estimated. In less than 
thirty years* time the Canal will become the property of the Egyptian 
Government and people, who remember that it was made with the 
(often forced) labour of their hands, and largely paid for with their 
money. They will never accept any arrangement which deprives them 
of some at least of the fruits of the almost accidental location in their 
territory of this other great isthmus between two continental land 
masses. They are not willing to contemplate the separation of the 
Canal zone from Egypt as the Panama Canal zone was detached 
from Colombia. That is, perhaps, why Zaghlul Pasha, when Minister 
of Justice, said in the General Assembly, on 1 6th March 1910, that when 
the concession expired Egypt would probably have to make the passage 
of the Canal free and forgo direct profits. That is the policy adopted 
by the U.S.A. in the case of the Panama Canal, and it has been amply 
justified. 

On what lines can an agreed and lasting settlement be sought? 
Not, certainly, in seeking to maintain the present situation until, by 
efflux of time, the concession expires in 1968. Not by a petty re- 
distribution of shares or otiose directorships. Not, let us hope, by a 
vague formula which hides the real difficulty and defers a settlement 
for a time, with the certainty that it will become more difficult to 
achieve. 

Italy's strategic ambitions are decided by and are dependent upon 
her political attitude. If the Canal is in the future, as in the past, to be 
a free corridor for all belligerents, this is presumably all she requires. 

The key to the puzzle is in Egyptian hands, but it can be used only 
if they, the French, and the British Governments agree. The Egyptian 
Government might do now what under Article 1 9 the League should 
have done long ago; viz. summon an international conference as in 
1873 when tonnage rates were at issue and, with Anglo-French con- 
currence, take over the Canal, buy out the shareholders, and manage 
the Canal, with the assistance of the existing highly efficient French 
and Egyptian staff, as a Public Utility, under the general control of 
an International Advisory Board. 

This is but to revert to a proposal made by Lord Farrer at the Board 
of Trade, fifty years ago, when he suggested tha't the Canal should be 
placed under a European Commission for purposes of management. 
'Complications and difficulties', he wrote, 'will be endless, so long as 
this great highway of nations remains in the hands of a private com- 
pany/ Only the Sublime Porte, and Mr. Gladstone, stood in the 
way of this solution. 


PREFACE g 

Alternatively, the Suez Canal Company's place might be taken by 
a new Corporation in which the Egyptian Government would have a 
controlling interest, subject to a self-denying ordinance as to profits, 
and to the vesting of administrative responsibility in an International 
Board representing the principal users. Such a policy will entail 
financial loss, to be made good by somebody, represented roughly by 
the difference between the present value of the shares and their par 
value, less the reserves of the Company, which are very extensive, and 
less the sums payable by the Egyptian Government to the Company 
under Article 1 5 in respect of materiel et objets mobiliers. It would be 
a cheap contribution to international justice. In any case the time 
has passed when a commercial company, however efficient, can sit 
astride an international highway and levy tolls, regardless of the 
commercial consequences and of the political repercussions of its 
activities. The greatest single avoidable handicap of the trade of 
Europe in Eastern waters is the high level of canal dues. 

Dues should be calculated in future on a basis of services rendered, 
viz., of draft, or of cargo carried, or of both. The present system is 
unduly onerous on passenger and on lightly laden ships. The problem 
is thorny, and discussions must of necessity reveal many divergent 
claims and interests, but that is all the more reason why it should be 
tackled in good time and not deferred till those concerned can bear 
nee mala ipsa nee eorum remedia, neither the ills, nor the cure. 

Speaking in the House of Commons on 23rd July, 1883, Mr. Glad- 
stone said: 

4 We will not be parties to employing influence which may attach to our 
temporary and exceptional position in Egypt, for the purpose of securing any 
abatement of any right lawfully enjoyed. . . We cannot undertake to do any act 
inconsistent with the acknowledgement that the Canal has been made for the 
benefit of all nations at large, and that the rights connected with it are of common 
European interest.' 

Britain has honestly maintained this attitude during the last fifty-five 
years, and the Treaty of 1936, so far as it affects the Suez Canal, does 
little more than restate these principles. 

The question of the Suez Canal, like that of Tunis, is many sided: 
it is admittedly difficult, for the de facto position does not correspond 
at every point with the de jure position established between 1854 and 
1890. The Anglo-Egyptian Treaty has done much to clarify it but 
more must be done before the obstacles to good international relations 
can be-refhoved. 

The proper course, as in 1873 an( ^ 1888, is by a conference 
of principal users of the Canal, to be summoned by the Government 


h PREFACE 

of Egypt with the consent of her ally and of France. Whatever is 
living is subject to change; whatever has lost the power of adaptation 
to circumstances must perish. Nothing can be gained by refusing to 
recognize that things have changed. We rightly declare that we will 
make no concessions to the threat of force. In so saying we imply 
that we will concede much to argument. 

The government of the world, said Disraeli in the House of Com- 
mons on gth February 1876, with reference to complaints then being 
made against the Canal Company, 

'is not a mere alternation between abstract right and overwhelming force. . . . The 
world is governed by conciliation, compromise, influence, varied interests, the 
recognition of the rights of others, coupled with the assertion of one's own, and, 
in addition, a general conviction, resulting from explanation and good under- 
standing, that it is for the interest of all parties that matters should be conducted 
in a satisfactory and peaceful manner.' 

That was said six years after the Franco-Prussian War, two years 
before the Congress of Berlin : it doubtless seemed as optimistic to 
his hearers as it would seem to us to-day. But the event justified his 
hopes; the Congress of Berlin put an end to war on European soil 
for thirty-six years. 

De Lesseps above all Frenchmen of his generation sought settle- 
ment by agreement: the Canal meant more to him than profits. He 
was not a philanthropist, but he worked single-mindedly for his 
fellow men. Were he living to-day I believe that he would be fore- 
most in seeking such a solution as I have outlined, and I believe he 
would succeed. 

ARNOLD WILSON 

June 6, 1939 


PREFACE 

OF all the great engineering works of the nineteenth century none 
has proved of more enduring value, none more permanently 
profitable to its owners, than the Suez Canal. It is a monument to the 
technical skill of French engineers, to the patient labour of the 
Egyptian peasantry, and to the laudable ambitions of the rulers of 
Egypt. Above them all towers the mighty figure of de Lesseps, whose 
extraordinary pertinacity, combined with rare diplomatic genius, 
enabled him almost single handed to overcome political difficulties 
compared with which the hidden rocks and shifting sands of the 
desert were trifling obstacles. 

For nearly forty years, from 1840 onwards, the question of the 
Suez Canal was, in one form or another, an important though never 
a ruling factor in diplomatic discussions between the Great Powers. 
Not until it was actually completed could de Lesseps convince the 
world that it was practicable, and the English Government that it was 
desirable. It took him another seven years to prove it financially success- 
ful. The problems of international law created by its construction 
remained in doubt until 1 904 and are not yet completely solved. 

The question of the Suez Canal to-day is two-fold firstly, is the 
control of a great international highway by a commercial company, 
bent on paying as large dividends as possible, consistent with modern 
ideas and modern needs? Upon the answer to this question depends 
the reply that must eventually be returned to the second should the 
concession, which terminates in 1968, be renewed; if so, in what form 
and on what terms? 

The literature on the subject is of very unequal value. The refer- 
ences to a maritime canal in ancient and medieval histories are incidental 
to the general narrative and often contradictory. The developments of 
the eighteenth century are fully treated by Ch. Roux's two works, 
which are based mainly on original material, both English and French, 
but his treatment of the question from 1855 onwards is less satisfac- 
tory. He drew his information almost exclusively from de Lesseps' 
published works ; he made little use of British documentary sources, 
and adopted an attitude uniformly hostile to the British Government, 
showing little understanding of public opinion in England or of its 
effect upon Government policy. Public archives were not accessible 
when Jie. wrote and, perhaps for this reason, current history becomes 
in his hands a fortuitous concatenation of events. 

Another French writer, Monsieur Voisin, deals mainly with the 


viii PREFACE 

engineering problems of the canal, though his first volume, based on 
de Lesseps' writings, is devoted to political history. Subsequent writers, 
British and American, German and French, were until recently content 
to draw upon these works and upon ephemeral journalistic studies 
and technical writings. 

An Egyptian student of London University, Muhammad Kassim, 
wrote in April 1924 a thesis on The History of the Suez Canal Question 
1854-66 in which, for the first time, the Archives of the Public Record 
Offices in London, Paris, Amsterdam, and Vienna were laid under 
tribute. His thesis, which earned him a Doctorate of Philosophy, is a 
lucid and admirably documented history which merits publication, 
whether in English or French. In 1928 appeared British Routes to India, 
a work of great merit, by Dr. Halford Lancaster Hoskins of Tufts 
College, Massachusetts, U.S.A., in which, for the first time, the Suez 
Canal question was dealt with as part of a wider problem. In 1 930 was 
published The Suez Canal, by Dr. Charles W. Hallberg of Syracuse 
University. He, too, has drawn extensively on original sources and 
within his self-imposed limits is accurate and reliable. To both these 
authors I make grateful acknowledgement. 

No Englishman appears to have made a comprehensive study of the 
Suez Canal since Fitzgerald, who wrote his two volumes in 1876. 
Recent literature published in England consists almost exclusively of 
topical, rather than critical, articles in monthly and quarterly reviews, 
The Times 1 and the latest issue of The Encyclopaedia Britannica, all alike 
from the pen of Sir Ian Malcolm, the Senior British Government 
Director, who has been at pains in every case to avoid any reference to 
the financial aspect of the operations of the Company. 

In an article in The Quarterly Review of January 1930 he observed 
that 

'No foreigner who visits the canal annually can fail to note the extraordinary happy 
family feeling which exists between all classes of the Company's servants: there 
is general satisfaction with the existing condition of things . . . there is a great 
desire in every grade to get sons and nephews taken into the service. One need 
not disguise one's own pleasure in sharing in so admirable a state of affairs, for 
which friendship, enlightened generosity, gratitude and glad co-operation are 
about equally responsible. Long may it continue for the advantage of all con- 
cerned.' 

This frank admission was followed by the statement that 

'Sooner, rather than later, the question of the future of the Canal will come up 
again, although not until all parties are agreed that the question is ripe for dis- 

* * 
1 Special articles and illustrations celebrating the Jubilee of the Suez Canal, and 'The 

Diamond Wedding* of the two oceans, appeared in The Times of 15 November 1929. 


PREFACE ix 

cussion. The parties primarily concerned are Egypt, the Suez Canal Company, 
and the British Empire.' 

This announcement, made at a moment when the profits of the 
Company had reached the highest level in history, and when British 
shipping, and indeed that of the world at large, was finding it difficult 
to pay any dividends at all, suggested to my mind a series of investiga- 
tions which have led to the publication of the present work. 

I take this opportunity of acknowledging with gratitude the invalu- 
able assistance which I have received from Mr. H. W. Macrosty, 
O.B.E., formerly Chief Statistical Officer to the Board of Trade and 
now Honorary Secretary of the Royal Statistical Society. The statistical 
and comparative tables prepared by him for inclusion in Chapters VIII 
and X are for the most part quite new and, though based wholly on 
official data, have not, for the most part, been published elsewhere, nor 
are the requisite data easily accessible. 

The extension or renewal of the Suez Canal Company's concession, 
contemplated in 1883, and pressed upon the Egyptian Government 
in 1910, was again brought forward in Anglo-Egyptian negotiations 
in 1921. On the i yth August and again on 1 3th October of that year, 
the Foreign Office desired to provide in the Treaty of Alliance for the 
prolongation of the Suez Canal Concession for a further forty years, on 
the lines advocated in 1 9 1 o by Sir E. Gorst. No agreement was reached 
and the question is still governed by the Declaration of 28th Feb. 1922, 
which read as follows : 

' Whereas H.M.'s Government, in accordance with theirdeclared intentions, desire 
forthwith to recognize Egypt as an independent sovereign State, and whereas the 
relations between H.M.'s Government and Egypt are of vital interest to the British 
Empire; 

The following principles are hereby declared: 

i. The British Protectorate over Egypt is terminated and Egypt is declared to be 

an independent sovereign state. . . . 

3. The following matters are absolutely reserved to the discretion of His Majesty's 

Government until such time as it may be possible by free discussion and friendly 

accommodation on both sides to conclude agreements in regard thereto between 

H.M. Government and the Government of Egypt. 

(a) The security of the communications of the British Empire in Egypt. 

(b) The defence of Egypt against all foreign aggression or interference, direct 
or indirect. 

(c) The protection of foreign interests in Egypt and the protection of minorities. 

(d) The Sudan. 

Pending conclusion of such agreement the status quo in all these matters shall 
remain irilact.' 

At first sight it would appear that this document must preclude 

b 


x PREFACE 

ad hoc negotiations for the renewal of the Company's concession. But 
it was stated in 1910 that the consent of the Egyptian National 
Assembly to such renewal was not necessary: still less requisite is the 
prior approval of the British House of Commons, and subsequent con- 
stitutional developments since that date have tended to weaken rather 
than to strengthen the control exercised by parliaments over govern- 
ments. Apart from this, however, though it is generally believed in 
Egypt that the renewal of the Concession is still a cardinal point in 
the policy of the British Government, much study has brought me to 
the conclusion that to renew the Concession in its present form would 
be injurious not only to the interests of His Majesty's Dominions and 
Dependencies east of Suez and to those of Great Britain, but to the 
commerce of Europe and Asia. 

De Lesseps at every stage in his career regarded the construction of 
the canal not primarily as a money-making enterprise, but as a service 
to be rendered to the commerce of the world an enterprise of pub- 
lic utility to be conducted on an international basis by a Company in 
the management of which no one nation would predominate. It was 
not to the cupidity of French investors, but to their patriotism and to 
their imagination that he appealed : it was not the bourgeoisie^ but the 
Bourse that brought pressure to bear on him to pay large dividends, 
and until his death in 1 894 he was well content to regard 25 per cent, 
as a reasonable maximum dividend. The management is no longer 
international : the Statute which requires direction to be drawn from 
'the nationalities principally interested* is ignored. The only nation 
now represented, other than Great Britain or France, is Holland, and 
commercial interests other than shipping are almost unrepresented. 

The fortunes of the Canal Company are to a large extent unaffected 
by the vicissitudes of prices, markets, or fashion. Its monopoly is indeed 
threatened, in some directions, by the Panama Canal ; in others by the 
construction of pipe lines across the Arabian desert, by the growth of 
air transport, and by increasing enthusiasm in every country for policies 
of national self-sufficiency. But its monopolistic position is not as yet 
seriously threatened. In the words of Mr. Baldwin (House of Commons 
1929). 

'The Public is best served by an efficient industry operating freely. But special 
considerations arise where a single undertaking dominates . . . (its duty is, in such 
circumstances) ... to supply on reasonable terms: and the public have a right to be 
satisfied that those terms are reasonable.' 

It is time to apply this principle to the Suez Canal, and'thr sooner 
the task is taken in hand the more favourable the prospect of a just 
solution. Augescunt aliae gentes^ aliae minuuntur. The proportion of 


PREFACE xi 

British shipping using the canal is falling slowly but steadily, that of 
French shipping is not increasing. The question can only be solved 
in connexion with, or as a result of a settlement of Anglo-Egyptian 
relations, but it does not concern only the Governments or Great 
Britain and Egypt and the Suez Canal Company. The Governments 
of India, Australia, New Zealand and S. Africa, of Germany, Italy, the 
Netherlands and France, of China, Japan, and Siam, of British posses- 
sions and protectorates in Africa and Asia are also entitled to be heard. 

In this connexion the protests of the Australian Government, made 
as long ago as 1 906 and reproduced as an Appendix to this volume, are 
of particular interest. 

The problem is thorny, and discussions must of necessity reveal 
many divergent claims and interests, but that is no reason why it should 
be shelved or avoided at the cost of perpetuating the present unsatis- 
factory state of affairs. 

'The government of the world', said Disraeli in the House of Com- 
mons on gth February 1876, with reference to complaints then being 
made against the Canal Company, 

'is not a mere alternation between abstract right and overwhelming force. . . . The 
world is governed by conciliation, compromise, influence, varied interests, the 
recognition of the rights of others, coupled with the assertion of one's own; and, 
in addition, a general conviction, resulting from explanation and good understand- 
ing, that it is for the interest of all parties that matters should be conducted in 
a satisfactory and peaceful manner.' 

To secure such a settlement by agreement is the fittest tribute that we 
of this generation can pay to the work of the illustrious Frenchman 
who has deserved so well of his country and of all civilized nations. 

A. T. WILSON 


CONTENTS 

PREFACE 

CHAPTER I. FIRST BEGINNINGS .... pages 1-14 
Geological aspects of Isthmus. Trans- Isthmian Canals in Herodotus, Strabo, 
Diodorus, and Pliny. Changes in Geography of Nile. Early canals between Nile 
and Red Sea. Great canals in Mesopotamia. Ptolemy. The Khalifs. The 
Venetians. Napoleon Bonaparte. The first surveys. Chesney's report. Muham- 
mad Ali's scheme for a Suez-Cairo Canal. Proposed Alexandria-Cairo Railway. 
Monsieur Enfantin. Arthur Anderson. Lord Palmerston. Robert Stephenson. 
Thomas Waghorn. Abbas Pasha. Said Pasha. Ferdinand de Lesseps. 

CHAPTER II. PRELIMINARY NEGOTIATIONS 1854-65 pages 15-30 

Draft Concession. Napoleon Ill's interest. Lord Stratford de Redcliffe. Lord 
Clarendon. The International Scientific Commission. The Euphrates Valley 
Railway. Sir Daniel Lange. Disraeli. Gladstone. The Canal Company's capital 
subscribed in France. Work on the canal begins. Turkish protests. Intervention 
of Napoleon III. Austrian support. Sir Henry Bulwer. Said Pasha is succeeded 
by Ismail Pasha. Arbitration by Napoleon III. The Sultan of Turkey's firman 
of approval. Lord Palmerston dies. 

CHAPTER III. THE COMPLETION AND OPENING OF THE CANAL, 
1866-73 ........ pages 31-43 

Work on the canal progresses. Sir Charles Hartley. Voisin Bey. Dredging 
machines introduced. Sir John Hawkshaw. Revised Estimates. Immigrant 
labour. Charles Doughty. Port Said. Ismailia. Port Tewfik. Mishaps at the 
last moment. The opening ceremonies. The Empress Eugenie. The Prince of 
Wales. Mail contracts. Effect of Suez Canal on Cape of Good Hope route. 

CHAPTER IV. THE ACQUISITION OF THE KHEDIVE'S SHAREHOLD- 
ING BY THE BRITISH GOVERNMENT .... pages 44-58 
Financial difficulties. Difficulties with shareholders. Proposed International 
Control. Turkish objections. Proposed purchase by British interests. British 
grievances. The point of view of the Canal Administration. The consequences 
of the accession of Disraeli to power. Ismail Pasha's debts. Proposed mortgage 
on or sale of his Suez Canal shares. Lord Derby's views. Disraeli's decision. 
Sir Stafford Northcote. Parliamentary Discussions. Appendix. 

CHAPTER V. THE QUESTION OF CANAL DUES, 1870-84 pages 59-88 
Financial Situation 18702. System of Measurement. Gross Tonnage. Net 
Registeied* Tonnage. Suez Canal Measurement. Decision of International 
Commission of 1873, de Lesseps refuses to comply. Sultan insists. Prevarications. 
Principle established. Arabi Pasha's Rebellion. Agitation in 1883 for second 


xiv CONTENTS 

canal. View of Law Officers. Official Negotiations with de Lesseps. Agreement 
of loth July 1883. View of British Directors. Discussion in Commons. Mr. 
Childers. Mr. Gladstone. Public disapproval. Agreement withdrawn. De 
Lesseps' attitude. Lord Salisbury's views. Mr. Gladstone's announcement. Sir 
Stafford Northcote's arguments. Debate in House of Commons. Conclusions to 
be drawn. De Lesseps resumes negotiations with shipowners. Agreement of 
3Oth November 1883. Lord Granville's approval. Attitude of Her Majesty's 
Government, relations with France. De Lesseps' satisfaction. Appendix (A) 
Agreement of 3Oth November 1883 and connected correspondence. (B) Summary 
of public discussions, &c., in regard to the Suez Canal, 1883. 

CHAPTER VI. THE NEUTRALIZATION OF THE SUEZ CANAL 

pages 89-93 

Origin of idea. Definition of term. Status of neutrality. Proposals of Metternich 
and de Lesseps. Events of 1882. Proposals of British Government. Proposed 
Conference at Cairo. Convention of Constantinople, 1889. Tests of Convention 
in 1904. Anglo-French Agreement of 1906. 

CHAPTER VII. THE SUEZ CANAL FROM 1889 TO 1914 />^ 94-108 
Growth of Prosperity: Increase of Traffic. Application for renewal of Conces- 
sion. Sir Edward Grey's view. Sir Eldon Gorst's attitude. Preliminary dis- 
cussion in the General Assembly of Egypt. Assassination of Boutros Pasha Ghali. 
Committee of Assembly recommends rejection of project. Discussion of Report. 
Zaghlul Pasha's views. Sidky Pasha's support. Rejection of Egyptian Govern- 
ment's proposals. Hostility to Great Britain. Discussion in House of Commons. 
Mr. G. J. Sandys. Sir E. Grey. Anomalous position of British Government. 

CHAPTER VIII. THE FINANCES OF THE SUEZ CANAL COMPANY 

pages 109-33 

First allotment of profits in 1875. Financial situation 1870-83. Cost of improve- 
ments. Increase of traffic. Dues levied, 1884-1913. Dividends, 1883-1903. 
Dividends, 1904-13. Cost of improvements, 1884-1913. Loans in 1887. Suez 
Canal Accounts, 1 884-1 9 1 4. Surplus profits, 1 884-1 9 1 3. Causes of variation in 
traffic figures. Suez Canal Traffic, 1890-1912. Cargoes, 191 1-13. 

Canal traffic receipts, 191431. Fluctuations during war period. Suez Canal 
Accounts, 1914-19. Surplus profits, 191419. Traffic variations. Suez Canal 
Accounts, 1920-7. Surplus profits, 1920-7. Dividends, 1920-7. Suez Canal 
Accounts, 1928-31. Surplus profits, 1928-31. Remuneration of directors. Cost 
of improvements, 191419. How met. Summary of Balance Sheet of 3ist 
December 1931. Summary of net profits, 18701931 and discussion of principles. 
Dues and goods, comparative figures: classes of goods carried: incidence of dues 
of various commodities and per cargo ton. 

Table I. Suez Canal Receipts. Table II. Suez Canal Payments. Table III. 
Suez Canal Division of Surplus Profits. Table IV. Suez Canal Traffic. By 
nationalities. Table V. Traffic through Suez Canal with countries east and 
south. 


CONTENTS xv 

CHAPTER IX. THE SUEZ CANAL DURING THE GREAT WAR 

pages 138-43 

Position on outbreak of war. Enemy merchant ships. Declaration of War by 
Turkey. Canal defended. Activity of spies. Sir John Maxwell takes command. 
Defensive system. Attacks by the Turks. Mines placed in canal. Advanced line 
of defence organized. Effect of abandonment of Gallipoli. Sir A. Murray suc- 
ceeds Sir John Maxwell. Ocean wharves constructed at Qantara: railway de- 
velopments. Lt.-Col. Elgood's comments. 

CHAPTER X. THE PANAMA CANAL: A RIVAL ROUTE . pages 144-51 
The Panama and Suez Canals compared. Tolls. Transits. Tonnage. Receipts. 
Expenses. Deficits. Nationality of Shipping. Effect on Trade of U.S.A. Relative 
distances via Suez and Panama. 

CHAPTER XL COMMENTS, CRITICISMS, AND REPLIES, 1931-3 

pages i 5 269 

Post- War decline in Shipping. Protests of Liverpool Steamship Owners' Associa- 
tion. Reply of Suez Canal Company. Protest of British Shipping and Commerical 
Interests. Reply of Lord Inchcape. Rejoinder of Liverpool Steamship Owners' 
Association. Questions and Answers in Parliament. The question reopened in 
March 1933. Views expressed to Royal Central Asian Society. Reply of Marquis 
de Vorgiie. Further Addresses. Article in The Nineteenth Century and jifter. 

CHAPTER XII. CONCLUSIONS pages 170-2 

APPENDICES ........ pages 173-215 

1. ACT OF CONCESSION OF THE VICEROY OF EGYPT FOR THE CONSTRUCTION AND 

WORKING OF THE SUEZ MARITIME CANAL AND ITS DEPENDENCIES FROM THE 
MEDITERRANEAN TO THE RED SEA. Cairo, 30 November 1854. 

2. ACT OF CONCESSION OF THE VICEROY OF EGYPT AND 'CAHIER DES CHARGES' 
FOR THE CONSTRUCTION AND WORKING OF THE SUEZ MARITIME CANAL AND 
ITS DEPENDENCIES. Alexandria, 5 January 1856. 

3. STATUTES OF THE UNIVERSAL COMPANY OF THE SUEZ MARITIME CANAL. 
Alexandria, 5 January 1856. 

4. CONVENTION BETWEEN THE VICEROY OF EGYPT AND THE SUEZ MARITIME 
CANAL COMPANY. Signed at Cairo, 22 February 1866. (Extract.) 

5. SUEZ CANAL. RULES OF NAVIGATION, Jan. 1933. 

6. CORRESPONDENCE RELATING TO SUEZ CANAL DUES. Presented to Parliament 
in March 1907. Cd. 3345. 

7. NOTE ON EFFECT OF SUEZ CANAL ON MIGRATION OF MARINE FAUNA. 

INDEX pages 217-24 

MAP OF THE SUEZ CANAL ....... at end 


CORRECTIONS 

p. xv, line 18: for Vorgu read Vogue*. 

p. 3, one line from bottom: dele semi-colon. 

p. 1 8, 6 lines from bottom \for making read working. 

p. 33, line i 2 \ for sulphuric read sulphurous. 

p. 40. The premiere of Aida was in Cairo on Dec. 24, 1871, and not as 
stated. 

p. 92, line 5 : de/e full stop. 

p. 97. Prince Husain Kamal, the late Sultan, died in 1918. 

p. 97, 9 lines from bottom '.for Abdu read Abdul. 

p. 98. The reference to Boutros Ghali Pasha and Lord Cromer is incorrect. 
Mr. Arthur Penfold, a high authority, \vrote (in The Egyptian 
Gazette of Jan. i, 1934) as follows on this subject: 

'Sir Arnold Wilson goes all wrong about the murder of Butros 
Ghali Pasha. He was not killed on February 21, 1910, on the 
steps of the Ministry of Justice in Cairo, as our author tells us, 
but was shot on February 20, 1910, outside the Ministry of 
Foreign Affairs. More serious is the statement, on the same 
page (98), that Ghali Pasha "had been compelled in 1906 by 
Lord Cromer to sit as a member of the Special Tribunal which 
tried the Denshawi case, though he was wholly without judicial 
experience." In fact, that tribunal was constituted on the basis 
of a Khedivial decree dated February 25, 1895, issued to provide 
for the trial of Egyptians accused of offences against personnel 
of the Army of Occupation. The second article of that decree 
begins as under: 

ARTICLE 2 

This tribunal shall be composed as follows. 
The Minister of Justice, President . . . 

Immediately the Denshawi affair happened, the acting British 
Agent and Consul General demanded of the Egyptian Govern- 
ment that a tribunal constituted in terms of the decree be set 
up. That was done. Butros Ghali Pasha was then the acting 
Minister of Justice and he automatically became president of 
the tribunal. Lord Cromer, who was absent from Egypt, on 
leave in England, had nothing to do with the circumstance that 
Butros Ghali Pasha presided over the special court which tried 
the Denshawi affair. The composition of that court was an 
inevitable consequence of the Khedivial decree of fifteen years 
earlier. Moreover, while it may be strictly true to say that Ghali 
Pasha "was wholly without judicial experience," he had spent 
almost the whole of his career, from 1867 to 1903, in the 
Ministry of Justice.* 

p. 99, line 4: the second dash is misplaced. 

p. 104. In para (5) the word * known' should be inserted between 'made* 
and 'through*. 

p. 117, line 20: insert inverted comma after 'market*. 


Wtlson: Stiez Canal. 


CHAPTER I 
FIRST BEGINNINGS 

Geological aspects of Isthmus. Trans-Isthmian canals in Herodotus^ Strabo^ Diodorus^ 
and Pliny. Changes in Geography of Nile. Early canals between Nile and Red 
Sea. Great canals in Mesopotamia. Ptolemy. The Khalifs. The Venetians. 
Napoleon Bonaparte. The first surveys. Chesney's report. Muhammad jtl?s 
scheme for a Suez Cairo Canal. Proposed Alexandria Cairo Railway. Monsieur 
Enfantin. Arthur Anderson. Lord Palmerston. Robert Stephenson. Thomas 
Jfaghorn. jihbas Pasha. Satd Pasha. Ferdinand de Lesseps. Bibliography. 

WE first trace the area now occupied by Egypt and Sinai as a land 
surface of granite on which were deposited the Nubian sand- 
stones. After this land had sunk beneath the sea, Cretaceous and 
Eocene limestones were laid down. At the end of the Eocene period 
the whole area was folded and raised again above sea-level. In this 
process the trench of the Gulf of Suez and the Red Sea came into being. 

In Miocene times this trench was invaded by the waters of the 
Mediterranean ; there was, however, as yet no water connexion with the 
Indian Ocean. The fauna was purely Mediterranean until Middle 
Pliocene times, when the waters of the Southern Seas entered the 
trench and the marine creatures of the two seas began to mingle. 

When and how the Gulf of Suez was cut off from the Mediter- 
ranean we do not know; we do know, however, that in the past three 
millennia the land between the Bitter Lakes and Suez has risen by 
three metres : the process may have started in Late Pliocene times and 
may still persist. It is certain that in Pleistocene times a fresh-water 
lake, fed presumably from the Nile, existed on the Isthmus. 1 

The boundaries of this lake are not known, but we know that in 
early historical times the Bitter Lakes were connected with, and were 
in fact an extension of, the Gulf of Suez. Either Sesostris (2000 B.C.) 
or Necho (600 B.C.) or both these Pharaohs in turn dug a canal joining 
the most easterly or Pelusiac branch of the Nile to this northern 
extremity of the Erythrean Sea. 

Herodotus is the first writer who tells us anything on the subject, 
in his Euterpe, c. 158: 

'Psammitichus had a son whose name was Necho, by whom he was succeeded 
in his authority. This Prince first commenced that canal leading to the Red Sea 
which Darius, King of Persia, afterwards continued. The length of this canal is 
equal to a four days' voyage, and is wide enough to admit two triremes abreast. The 

1 Hume, quoted in Trans. Zool. Soc., 1926. 
B 


2 HERODOTUS - STRABO DIODORUS 2000 B.C. 

water enters it from the Nile, a little above the city of Bubastis. It terminated in 
the Red Sea, not far from Patumos, an Arabian town. They began to dig this 
canal in that part of Egypt which is nearest to Arabia. Contiguous to it is a 
mountain which stretches towards Memphis, and contains quarries of stone. 
Commencing at the foot of this, it extends, from west to east, through a con- 
siderable tract of country and, where a mountain opens to the south, is discharged 
into the Arabian Gulf. In the prosecution of this work under Necho no less than 
100,000 Egyptians perished. He at length desisted from his undertaking, being 
admonished by an oracle that all his labour would turn to the advantage of a 
barbarian.' 

Strabo gives the following account: 

'There is another canal terminating in the Arabian Gulf at the city of Arsinoe, 
sometimes called Cleopatris (Suez). 1 It passes through the Bitter Lakes, whose 
waters were, indeed, formerly bitter but which, sweetened since the cutting of this 
canal by an admixture with those of the Nile, now abound with delicate fish, and 
are crowded with waterfowl. This canal was first made by Sesostris before the 
war of Troy. Some say that the son of Psamrnitichus (Necho) first began the work 
and then died. The first Darius carried on the undertaking, but desisted from 
finishing it on a false opinion that as the Red Sea is higher than Egypt, the cutting 
of the isthmus between them would necessarily lay that under water. The Ptole- 
mies disproved this error, and by means of weirs or locks rendered the canal 
navigable to the sea without obstruction or inconvenience. Near to Arsinoe stand 
the cities of Heroum and Cleopatris, the latter of which is on that recess of the 
Arabian Gulf which penetrates into Egypt. Here are harbours and dwellings 
and several canals with lakes adjacent to them. The canal leading to the Red Sea 
begins at Phaccusa, to which the village of Philon is immediately contiguous.' 

Diodorus has the following version: 

'From Pelusium 2 to the Arabian Sea a canal was made. Necho, son of Psamrni- 
tichus, first began the work; after him Darius the Persian carried it on, but left 
it unfinished, being told that if he cut through the isthmus, Egypt would be laid 

1 Suez al Hajar (Suez the Stony) occupies the site of several former cities. Ancient 
Egyptian remains have been found, and on an adjacent eminence (Kum al Kulzum) are the 
ruins of the Ptolemaic fortress of Clysma Praesidium, the Kulzum of Arab geographers. 
Nearby are the earlier ruins of Arsinoe built by Ptolemy Philadelphus (c. 230 B.C.) and later 
named Cleopatris. It was a naval station in the time of Selim 1(1517), water being brought 
by aqueduct from a well on the Cairo road a league and a quarter distant, as well as from the 
Wells of Moses eight miles away. 

Yaqut mentions the presence here of magnetic rock (maghnatls). Encyclopaedia of 
Islam. 

2 Pelusium (pe/os=mud) was anciently a strong city with a circumference, according to 
Strabo, of 2 J miles. It occupied a site near the present Arab village Tineh (mud) the 
Sin of Exod. xvi. I . Ezekiel (xxx. I 5) refers to the place as the strength of Egypt and it was 
still so regarded in Roman times. Here the army of Sennacherib lost 185,000 men in one 
night by the angel of death; here it was that Cambyses defeated the Egyptians, and here 
Pompey was assassinated. The ruins are still extensive and include a fort of Roman 
construction placed upon an eminence (Nourse). 


Chap, i DIODORUS PLINY 3 

under water, as the Red Sea was higher than Egypt. The last attempt was made 
by Ptolemy the Second, who succeeded by means of a new canal with sluices 
which were opened and shut as convenience required. The canal opened by 
Ptolemy was called after his name, and fell into the sea at Arsinoe.' 

Pliny says: 

'Sesostris, King of Egypt, was the first that planned the scheme for uniting the 
Red Sea with the Nile by a navigable canal of 62 thousand paces, which is the 
space that intervenes between them. In this he was followed by Darius, King 
of Persia, and also by Ptolemy of Egypt, the second of that name, who made a 
canal of 100 feet wide by 30 feet in depth, continuing it 37^ thousand paces, to the 
Bitter Fountains. At this point the work was interrupted, for it was found that 
the Red Sea lay higher than the land of Egypt by 3 cubits, and a general inundation 
was feared. But some will have it that the true cause was, that if the sea was 
let into the Nile, the water of it, of which alone the inhabitants drink, would be 
spoiled.' 

It will be observed that whilst Herodotus and Diodorus both give 
Necho credit for the original design and commencement of the work, 
Strabo and Pliny ascribe it to Sesostris. All, however, agree that 
Darius Hystaspes continued and, according to Herodotus, completed 
it, whereas Diodorus and Strabo agree that Ptolemy the Second was 
the person who actually completed it. Pliny, however, does not admit 
that it was ever finished. 

To explain the situation of these ancient canals, it is necessary first 
of all to remember the changes which have taken place in the geo- 
graphy of the Nile during the last two thousand years. A little distance 
below Babylon (now modern Cairo, very nearly) the river divided 
itself, in ancient times, into three great branches. Two of these are 
still extant, viz. the western one, discharging into the Mediterranean 
at the Rosetta Mouth, the middle one, or Damietta River; whilst the 
third, or eastern branch, called the Pelusiac, has disappeared. It is 
with this one, however, we have to deal. Leaving the main stream 
below Babylon or Cairo, it flowed north-easterly, and discharged into 
the Mediterranean near modern Tineh, anciently Pelusium. About 
midway on its length there was a large fresh-water lake adjoining the 
ancient city of Bubastis ; and it was from this lake, and not from the 
Mediterranean Sea, that the canal of Necho was carried towards 
Arsinoe or Suez, 1 but terminating in the Bitter Lakes, which lie some 
distance north-west of the head of the Red Sea. From these Bitter 
Lakes the canal of Ptolemy extended to the Red Sea itself; at Suez 
passing on its way through the city of Heroopolis, which was, it is 

1 To the west of Suez lie the steep cliffs of Attakah, on whose heights ages ago Phoeni- 
cian sailors bound for Ophir lighted fires and offered sacrifices to Baal Zephon, god of the 
north wind. 


4 EARLY CANALS 1000 B.C. 

supposed, situated some 5 or 6 miles to the south-east of them, and 
about 1 5 miles north-west of Suez. And many writers agree that the 
Red Sea in ancient times extended much farther north : indeed, if not 
as far as the Bitter Lakes themselves, certainly to Heroopolis. The 
indications of the retreat of the sea southwards are so manifest in 
various places as to make it clear that the waters of the Mediterranean 
and the Red Sea were at one time commingled. 

It has been observed that the head of the canal of Necho at Bubastis 
was about the same distance from the Mediterranean as from the Red 
Sea; and this was probably done with a view of securing a current all 
the way from the Nile into the Red Sea, and so as to prevent the return 
of the salt water inland. That this actually took place there is little 
doubt, now that the levels are actually known : indeed, Herodotus con- 
firms the fact, for he says that 'it entered the canal from the Nile, and 
discharged itself into the Arabian Gulf. 

With respect to the dimensions of these canals, according to Hero- 
dotus that of Necho and Darius was wide enough to admit two triremes 
abreast\ and Strabo says that the canal of Ptolemy was 100 cubits 
broad, and had a depth sufficient for the largest merchant ships. Pliny, 
however, only allows 100 feet for the breadth, and 30 feet for the 
depth, which must clearly be erroneous. A work of such proportions 
would not stand. 

There is no reason to regard these statements with suspicion, for the 
construction of great canals, for purposes of irrigation, was brought, 
both in Egypt and in Mesopotamia, to a high degree of perfection in 
the second millennium before Christ. The great Nahrwan Canal on the 
Tigris above Baghdad, with its three heads, which still exists almost 
intact, is 400 feet wide and 17 feet deep. Nimrod is credited with 
having constructed the dam and turned the river. This work existed 
for over 3,000 years, and was only swept away in the time of the last 
feeble Khalifs. The ancient Babylonians controlled the Euphrates by 
means of powerful escapes into two depressions capable of holding six 
milliards of tons of water, of which about a quarter was utilized for 
feeding the rivers, in time of low supply, at the rate, during sixty days, 
of over 40,000 cubic feet a second. They made of the Euphrates delta 
a country so rich that Alexander the Great would, but for his untimely 
death, have made Babylon the capital of the world. Long after its glory 
had departed, the son of Harun er Rashid is reported to have exclaimed, 
on ascending the Mokattam Hill, which overlooks Cairo: * Cursed be 
Pharaoh who said in his pride, <4 Am I not Pharaoh, King of Egypt". 
Had he seen Babylonia, he would have said it with humility/ 

With such traditions, and with such examples before their eyes, it is 
not surprising that the question of a canal across the Isthmus of Suez 


Chap, i DARIUS, XERXES, AND PTOLEMY 5 

was a matter of practical interest to successive rulers of Egypt. 1 The 
object to be thus obtained varied, however, with the requirements of 
each period. For many centuries the primary purpose was a passage 
for sailing ships between the Red Sea and the Nile, in order to facilitate 
commerce between Egypt and Arabia, which from the remotest ages 
was of high importance. When the natural channel between the Bitter 
Lakes and the present Gulf of Suez silted up Darius and Xerxes 
(5th century B.C.) built a ship canal to facilitate navigation between the 
Bitter Lakes and the Gulf. Under Ptolemy II (3rd century B.C.) this 
work was completed and direct water connexion from the Gulf to the 
Nile restored. So long as the largest vessels in use at that time could 
pass up the Nile, no other solution of the problem was required. Again 
and again, as empires rose and fell, such waterways fell into decay and 
ruin, and were restored, or not, according to the political or strategical 
conceptions of the rulers of Egypt. Under Roman rule, the needs of 
commerce differed little from those of the past, but the Pelusiac branch 
was at this time silting up. This circumstance, and the increased 
draught of vessels, having rendered the navigable channel between 
Bubastis (the modern Zagazig) and the Red Sea precarious, in the 
second century A.D. the canal was deepened by Trajan, and a new 
head constructed, taking off from the main stream above the Delta, 
near the spot where Cairo now stands. Thence it ran eastwards till it 
met the canal of Necho, near the modern Belbeis at a point half-way 
between the Bubastis and the Bitter Lakes. 

The new canal does not seem to have long remained navigable: 
Ptolemy the geographer does not refer to it, though he lived within 
fifty years of the time of Trajan. Centuries later, at the time of the 
Arab invasion in A.D. 639, Amru ibn el Aas, the lieutenant of the 
Khalif Omar, joined the two seas by a direct canal from Suez to 
the Nile at Cairo, following the line of Trajan's canal, to facilitate 
the transport of foodstuffs to Arabian ports. Omar, however, moved 
by the fear of laying open to Christian vessels a path to Arabia, 
closed Egypt herself to the trade of Europe, 2 but his successor the 
Khalif Abu Jafar Abdullah el Mansur filled it up in A.D. 767 at the 
junction of Necho's canal and the Bitter Lakes in order to reduce to 
starvation the insurgents of Medina, then, as now, wholly dependent 
upon imported foodstuffs. The winds and the sands did the rest, and 

1 A comprehensive survey of ancient canal works in Egypt is given in Roux, Uhthme et 
le Canal de Suez, 2 vols., vol. i, ch. i, Paris, 1901. See also Grover, Hamley and Warming- 
ton. 

2 Amr is also said to have contemplated the construction of a branch canal from Lake 
Timsah northwards to the Mediterranean, and to have been forbidden by Omar to pro- 
ceed with the project. Vide Butler, p. 345 note. 


6 KHALIFS VENETIANS BONAPARTE jtA-ittA Cent. 

produced the ridge of Serapeum, which probably covers the site of 
HeroOpolis. 

The Venetians, in the fifteenth century, urged the need for a marine 
canal to counteract the diversion of their trade into Portuguese hands. 
They could not, however, finance the venture themselves, and the 
Mameluke Sultans saw no profit in it. 

From the sixteenth century until the middle of the nineteenth, 
Egypt played an unimportant part in the Oriental trade, but the project 
of a marine canal was never wholly forgotten, especially in France. It 
was recommended to Louis XIV by Leibniz. Colbert played with the 
idea, as did the Ministers of Louis XV and Louis XVI. 

Not, however, until almost the beginning of the nineteenth century 
were facilities for navigation between the Mediterranean Sea and the 
Indian Ocean needed, or such provision likely to be commercially 
profitable or politically desirable. 

The conquest of Egypt by the French revived the long dormant 
project of a canal which would take the largest ocean vessels. It ap- 
pealed strongly to Napoleon Bonaparte as a means whereby the English 
might be circumvented and French commercial interests advanced. 
Among the scientists who accompanied him to Egypt in 1798 were 
several surveyors, charged with the duty of running lines of levels 
from sea to sea. 

In December 1798 Bonaparte, accompanied by Berthier and Caf- 
farelli and several scientists, spent ten days in Suez. He condemned it 
as a squalid and filthy place. Everywhere was neglect and decay, the 
harbour choked with sand, the shipyards deserted, the transit trade 
ruined by three centuries of Turkish and Mameluke misrule. Could 
he pierce the Isthmus he might destroy England's commercial 
supremacy. It would be a stupendous achievement, if it were prac- 
ticable. The aims of Bonaparte's Egyptian expedition, as officially 
defined by a secret decree on 1 2th April, included the capture of Egypt 
and the exclusion of the English from 'all their possessions in the East 
to which the general can come'. He was also to have the Isthmus of 
Suez cut through and to assure 'the free and exclusive possession of the 
Red Sea to the French Republic'. 1 (Here, perhaps, we have the key to 
the determined opposition offered by Great Britain, for more than half 
a century to the schemes of de Lesseps.) Riding into the desert he 
discovered traces of Amru's canal, and decided to re-excavate this 
ancient waterway, deferring the greater scheme to a more favourable 
juncture. 2 

Fate decided otherwise, and he gave his name to neither. He was 
not well served by his engineers, under Monsieur Lepere, and the 

1 Rose, i. 1 8 1 . 2 Elgood (pp. 1 84-5), whom I have here and elsewhere followed closely. 


Chap, i EARLY SURVEYS 7 

survey of the Isthmus was bungled. It began in January 1799; inter- 
rupted in February, it was resumed in September and completed in 
December. The surveyors were changed, and different kinds of in- 
struments used on different sections: the results, owing to Arab 
hostility, were not checked. The surveyors reported the waters of the 
Red Sea at high tide to be 32 feet 6 inches above those of the Mediter- 
ranean at low tide. The figures, impressively published in Napoleon's 
monumental Description d'Egypte, were accepted without criticism by 
the world at large. The alleged difference in level was inconsistent 
with the existence of Amru's canal, but old accounts, which showed that 
salt water was carried as much as 20 miles up an ancient Nile canal 
by the tides of the Red Sea, were adduced in support of a thesis 
which Laplace and Fourier had long ago rejected on theoretical 
grounds. For thirty years nearly all further projects, and they were 
numerous, assumed the correctness of the French levels. Among 
such projects were those of an English engineer, R. H. Galloway, 1 
Captain J. B. Seeley, 2 and J. S. Buckingham, 3 the great traveller: all 
alike assumed the need for locks or sluices. 

In 1830 Captain F. R. Chesney 4 went to Kgypt with instructions to 
survey the Isthmus, with a view to reporting on the practicability of 
carrying out the project of a great ship canal. He reported no essential 
difference in the levels of the two seas, but his report apparently 5 carried 
little weight, even in England, where it was duly considered by the 
Select Committee of the House of Commons. 

The main question of a trans-Isthmian canal was now obscured by 
several new developments. Muhammad Ali had in 1831 contemplated 
a new canal from Suez to Cairo, a project on which by 1834 the India 
Board and Foreign Office looked with favour. This project was 
shelved in favour of a railway from Cairo to Suez which received strong 
support in Egypt and in Whitehall. Finally, a French engineer in the 
service of Muhammad Ali, Monsieur Linant, ran fresh levels and 
confirmed Chesney's conclusions. 

In 1 833 a Frenchman of good family and some means, the leader of 
a group of Saint Simonian visionaries, Monsieur Prosper Enfantin, 
came upon the scene, with a party of twenty technicians 6 with the 
intention of prosecuting fresh surveys and putting new life into two 
projects, the Suez Canal and the Nile barrage. He met with Ferdinand 

1 Parliamentary Papers, 1834, No. 478. Asiatic Journal, xx, O.S. 364, 600. 

2 Asiatic Journal, xx, O.S. 538; ibid, xviii, O.S. 330. 

3 Oriental Herald, v. 9. 4 Chesney, Lane-Poole, Rockwell. 

5 There is, however, reason to think that Lord Palmerston was already cognizant of the 
error in the calculations of the French surveyors. 

6 See Enfantin. 


8 EARLY SURVEYS 1830-43 

de Lesseps, then Vice-Consul under the French Consul-General, 
Monsieur Mimaut, who presented Enfantin to the Khedive Muham- 
mad Ali. His schemes were placed before Muhammad Ali's Council. 
They approved the barrage scheme but not the canal. Enfantin re- 
mained till 1837 at work on the barrage; then he returned to France. 
The hour for the Suez Canal project was not yet ripe. Nevertheless 
Linant and Chesney's sober reports on a trans-Isthmian canal came to the 
notice of Ferdinand de Lesseps, whose interest had been aroused by 
reading the memoirs of the abortive Lepere expedition and, perhaps, 
by Enfantin's enthusiasm. 1 It was, however, many years before it 
began to take shape. 

During the next few years nothing was done to press forward either 
a canal or a railway across the Isthmus. From 1841 onwards, projects 
for a canal were uppermost for a few years. The East India Company 
favoured a canal, as also the P. and O. S. N. Company, whose Managing 
Director, Arthur Anderson, made in 1 841 a careful study of the whole 
question. Writing to Palmerston, he estimated the cost at a quarter 
of a million pounds sterling, but was confident that it would be pro- 
fitable at ten times the amount, 'since the whole of our political and 
commercial intercourse with the vast territories of the east would of 
necessity fall into the Channel and the distance between them and Great 
Britain for all purposes be reduced by many thousands of miles 7 . He 
was confident that all Europe, except Russia, would benefit. He be- 
lieved that the Pasha would give a concession for such a canal, failing 
which a right of way could be secured from the Sultan whose approval 
was in any case essential. Two years later Anderson's views were 
published in pamphlet form 2 and had considerable influence on public 
opinion in England. From this time onwards the project of a canal 
joining the Nile to the Red Sea was by common consent abandoned 
owing to the increasing size of steamships. 

Further unofficial surveys were made, all of them indicating that 
there was little if any difference in level between the two seas. 3 Expert 
opinion tended to harden in favour of the practicability of the canal as 
an engineering project. The British Government were thus compelled 
to review the whole question, and reach a decision as to the line they 
should take, on the broadest grounds of expediency, in the national 
interest. Palmerston was not long in arriving at the conclusion that, 
however great the commercial advantages, this 'second Bosphorus' 

1 Lesseps, 1887. 2 Anderson, Asiatic Journal, 3rd series, ii. 304, 305. 

3 The difference in level between ordinary high and ordinary low water at Suez is 3 feet 9 
inches; at Port Said 9 inches. The extreme difference, caused by contrary winds, observed 
at Suez is 8 feet 6 inches, and at Port Said 4 feet 6 inches (Hartley, op. cit.). These 
differences are sufficient to prevent stagnation. 


Chap, i BRITISH OPPOSITION 9 

might be a source of grave embarrassment. The British Government 
had refused, in 1834, to give any financial guarantees to an Egyptian 
railway from Alexandria via Cairo to Suez; Lord Palmerston saw 
stronger objections still to guaranteeing a Suez canal, and his opposi- 
tion was strengthened by the willingness of the French Government 
to sponsor the scheme, and by the belief, frequently avowed by 
Metternich, that it would largely divert eastern trade to Austria. 

By 1843 it was clear that Great Britain must either oppose con- 
struction or, by espousing it, embark on a line of conduct which might 
lead to the annexation of a part, at all events, of Egypt by force of 
arms and the dismemberment of the Ottoman Empire which, it will be 
remembered, at this period exercised more than nominal control over 
greater areas in North Africa than in Asiatic Turkey. The Turkish 
question was perennial : Palmerston shrank from adding an Egyptian 
question, and when Palmerston hesitated, his colleagues recoiled from 
decision. 

The French, with the support of their Government, were anxious to 
proceed with a project disavowed by their English rivals, and the 
British Government found themselves compelled to descend from 
aloofness to definite opposition and to advocate, as a counterpoise, the 
Cairo-Suez Railway. The rest of Europe supported the canal project, 
as did Muhammad Ali Pasha, the Sultan's Viceroy. England was not 
popular in Egypt, nor at the Sublime Porte, but she was feared. The 
occupation of Aden, the war in Syria, and a hostile naval demonstration 
against Italy were fresh in men's minds. Great Britain was for this 
reason long able to withstand the weight of hostile influences: her 
naval supremacy was long a sufficient deterrent to overt action, and her 
influence at Constantinople tended to increase as the years passed. 

Mr. Murray, the British Consul-General in Egypt, wrote in May 
1847 that 'a plan for the Suez Canal has been formed, purporting to 
be complete in all its details ; ... it has been favourably received by the 
Egyptian Government. ... In the present state of Science I dare not 
take it upon myself ... to assure anyone of its impracticability/ He 
was instructed, in reply, to remain entirely passive on the subject, and 
to press the Suez railway scheme as a preferable substitute. Hence- 
forward British authorities both at home and in Egypt consistently 
displayed an attitude of scepticism and incredulity towards the canal 
scheme which was wholly unjustified by the available evidence. 

In 1846 there had been constituted in Paris a 4 Socit d'dtudes du 
Canal de Suez', consisting of Robert Stephenson and Edward Starbuck, 
of London, Louis Negrelli, of Vienna, MM. Feronce and Sellier, of 
Liepzig, on behalf of certain German interests, and five Frenchmen 
MM. Arl&s, Enfantin, Jules, Lon, and Paulin Talabot. The Siige 


io NEGRELLI STEPHENSON WAGHORN 1846 

Social of this company, which had an initial capital of 1 50,000 francs, 
was in the house of Monsieur Enfantin. 1 It was in reality a semi- 
official commission, whose operations were facilitated in every way by 
Muhammad Ali Pasha, and by his staff, including the able Monsieur 
Linant. The Viceroy, too, bore most if not all the cost, a matter of 
some ^4,000. How Robert Stephenson came to be associated with an 
enterprise, the object of which ran counter to all the views that he had 
expressed both before and after 1 846, remains a mystery. He was urged 
by Waghorn 2 to have nothing to do with it: he chose a middle course, 
neither resigning, nor taking an active part in the work. All members 
of the party agreed that there was no essential difference in the height 
of the two seas. The Austrian engineers, headed by Negrelli, thought 
a sea-level canal possible but foresaw difficulties at the termini. The 
French advocated a canal with locks. Stephenson announced that he 
had great faith in the project for a sea-level canal so long as the thirty- 
odd feet of difference in level was believed to exist, for he considered 
a current of three or four miles an hour necessary, in the light sandy 
soil of the Isthmus, to keep the channel clear. A long channel deep 
enough for the largest vessels, without any current flowing through it, 
would be but a stagnant ditch between tideless seas, enormously 
costly, wholly unprofitable. A railway alone could adequately serve 
Britain's need. His convictions corresponded very closely with his 
interest in the proposed Egyptian railway, and with the known senti- 
ments of the Government of his country. The Post Office was officially 
'opposed to steam navigation as a mode of conveyance for the mails'. 
His views formed the basis of arguments for Lord Palmerston and 
others, in opposing the canal scheme, long after they had been dis- 
proved. 

In 1849 tne c^nal scheme received a fresh set-back on the death of 
Muhammad Ali Pasha, whose successor in the Viceroyalty, Abbas 
Pasha, was attached to English rather than French interests. During 

1 Enfantin, 1869; Parliamentary Papers, 1851, No. 605, p. 223. 

2 Thomas Waghorn, son of a Rochester tradesman and a Hugli pilot, was the pioneer of 
mail communication via the Red Sea. He associated with the Arabs between Cairo and Suez, 
lived in their tents, and having gained their confidence established a regular caravan service. 
He built eight stage-houses between Cairo and Suez (still visible from the air) and made 
what had been a dangerous path beset with robbers a secure highway equipped with horses, 
vans, and English mail coaches. To his memory in 1 869 a bust was erected by de Lesseps at 
Port Said, where it serves to remind us of de Lesseps* magnanimity. (Why is there no 
statue to Nelson overlooking the Bay of Aboukir?) The impression he made on his 
contemporaries is referred to by Thackeray, A Journey from Cornhill to Cairo-. l The 
bells are ringing prodigiously; and Lieut. Waghorn is bouncing in and out of the court- 
yard full of business. He only left Bombay yesterday morning, was seen in the Red Sea on 
Tuesday, is engaged to dinner this afternoon in the Regent's Park. . . . If any man can be at 
two places at once, Waghorn is he.' 


Chap, i RAILWAY SCHEMES 11 

the six years of his rule little was heard of the canal. Englishmen 
replaced the French advisers who sought the downfall of Abbas, whose 
position, as grandson of the hated Muhammad AH, was precarious, for 
he could rely on no active support from the British Government. Rail- 
way schemes again came to the front; the Alexandria Cairo section of 
the Alexandria-Suez railway was commenced in 1851 and completed 
two years later at a cost of 1 1,000 per mile for the 140 miles partly 
double and partly single track covered, including the initial provision 
of rolling stock. For his services in this connexion Robert Stephenson 
received 55,000. Scarcely had this section been finished when the 
short reign of Abbas ended ingloriously in 1854. His successor, Sai'd 
Pasha, restored to his counsels the French advisers whom Abbas had 
spurned. Work on the Cairo Suez railway was not, however, stopped 
and was completed in 1858. But, if British counsels were at a discount 
in Cairo, they were at a premium in Constantinople, for with the 
opening of the Crimean War the Sultan of Turkey could not disregard 
British counsels. The British Cabinet were now more than ever on the 
defensive, though, as will later be seen, the parliamentary opposition 
took a different view. 

Every circumstance pointed at this time to a permanent French 
settlement in Egypt, inconsistent with a real neutrality, and likely to 
lead to grave political difficulty. French newspapers and public men 
vied with each other in pointing out the extent to which the canal 
would damage British interests. Events have not taken the course 
anticipated by the opponents of the Canal, but have not wholly falsified 
Palmerston's anticipations. 

With the accession of Said Pasha, a definite French project for the 
construction of a canal across the Isthmus brought its author, Fer- 
dinand de Lesseps, into prominence. His father had been French 
Political Agent in Egypt during the rise of Napoleon Bonaparte, and 
had materially assisted Muhammad Ali Pasha to establish himself in 
the Viceroyalty. His son Ferdinand spent his early youth in company 
with Sai'd Pasha and other members of Muhammad Ali's household. 
He had been e/eve in the French Consulate at Cairo, and Vice-Consul 
at Alexandria; he had, as already mentioned, noted the early efforts of 
Chesney and of Waghorn. He had been in touch with all the leading 
personages connected with railway and canal projects. Though his 
early adult life had been spent in France and in Algeria, he had never 
ceased to interest himself in the union of the Western and Eastern 
oceans. He had retired at the age of about 50 from the service of the 
French Government because he felt unable, as French Ambassador at 
Rome, to approve the policy of Monsieur de Tocqueville in 1849 f 
sending a French army to reinstate the Pope. His apprehensions were 


12 DE DESSEPS AND SAID PASHA 1854 

justified by the event. He would fain have gone to Egypt forthwith, 
but so long as Muhammad Ali lived nothing could be done and de 
Lesseps remained on his estate in Algeria till news reached him of 
SaYd's accession. De Lesseps was a man of action, but also a diplomat 
by instinct and training. His first act was to write to his friend of his 
youth, the new Viceroy, to renew his friendship and assure him of a 
congratulatory visit. Hurrying out to Egypt, he was soon installed in 
a mansion, and in the confidence of the new ruler, and within three 
months had succeeded in transforming his personal intimacy with the 
Viceroy into a business relationship. His perfect riding won the hearts 
of men more adept in the saddle than in the office chair. One day he 
was in the desert with the Viceroy, his tent was pitched upon an 
eminence covered with loose stones: in one place only was a parapet 
it was a dangerous jump. De Lesseps put his horse at it, and cleared it. 
His hardihood excited the admiration of all, and of none more whole- 
heartedly than of Said Pasha. The great plan was first presented on 
1 5th November 1854 with a confidence and enthusiasm that proved 
infectious. *I accept your plan', said he. * ... Consider the matter 
settled. You may rely upon me/ Ten days later the preliminary draft 
of a concession to be issued by the Viceroy, with the consent of his 
Suzerain, was prepared, approved, and signed on 3<Dth November sub- 
ject, however, to the consent of the Great Powers, and the great project 
began to emerge. The Viceroy is said to have signed the document 
without having read it: it was certainly not scrutinized on his behalf 
by expert judicial or financial counsellors. 

The event was a landmark in the history of the canal. Looking back 
at an interval of seventy years, one is struck by the fact that the most 
important single link in the chain of events was the youthful friendship 
between SaTd Pasha and de Lesseps. But for this fortuitous circum- 
stance, de Lesseps, or some one else, might have approached the Sultan, 
not the Khedive. The Sultan might have excluded this barren strip of 
desert from the control of the Khedive and a series of contingencies 
might have culminated in the emergence in very truth ot a second 
Bosphorus in Turkish hands. Such speculations are unprofitable, 
but they suggest that SaTd Pasha, with all his failings, deserves more 
recognition both in Egypt and in Europe than historians have yet seen 
fit to accord, for though the conditions of his time and his own 
extravagance were against him, he was in many ways a remarkable 
man: the youngest son of his father Muhammad Ali, born in 1822, he 
had been sent to Constantinople at the age of 19 to negotiate with the 
Porte as to the Egyptian tribute. The intrigues of his predecessor 
Abbas, who aimed at modifying the law of succession in favour of 
his own descendants, would probably have succeeded but for his 


Chap, i THE CONCESSION GRANTED 13 

premature death, in which case Sai'd Pasha would have been excluded 
from the throne. Shortly after his accession he created a Council of 
State; in 1858 he granted to all his subjects freedom to own and dis- 
pose of landed property, and he was the first Khedive to attempt to 
abolish the slave-trade. Shortly after his accession he announced his 
intention to visit Paris but, as observed by Lord Stratford de Redclifte 
in a dispatch of 5th October 1855 (F.O. 78/1087), he was at this time 
chiefly occupied with his Army, and 'wanted only the opportunity to 
follow in the footsteps of Mehemet AH'. Not the least of de Lesseps' 
titles to the gratitude of the Egyptian people is the tact that he used 
his influence to divert his august master's wayward energies into more 
fruitful channels. 

BIBLIOGRAPHY 

(London, unless otherwise stated, is in all cases the place of publication.) 

Anderson, Arthur. The Prat tic ability and Utility of opening a Communication between the 

Red Sea and the Mediterranean by a Ship-Canal. 1843. 
Anon. Le Percement de risthme de Suez. Enfantin M. de Lesseps. Resume" Historique. 

Pans, i 869. 

Anon. The Egyptian Rat/way, or the Interest of England in Egypt. 18^2. 
Anon. The Present Crisis in Egypt in Relation to our Overland Communications with India, 

No. i. 1 8$ i. 

Asiatic 'Journal, vols. xviii and xx sqq., ^rd series, voK. ii and xxxix. 
Brunlccs, J., and Webb, E. B. Proposed Ship-railway across the Isthmus of Suez. I 859. 
Butler, A. J. The Arab Conquest of Egypt. Oxford, 1902. 
Cahutta Revieic, vol. xxiv sqq. 

Cameron, D. A. Egypt in the XlXth Century. \ 898. 
Chesney, Francis R., Capt., R.A. Narrative of the Euphrates Expedition. 
Clarkson, Ed. The Suez Navigable Canal for Accelerated Communication with India. 1 843. 
Diplomatic Renew * 1853. 
Edinburgh Philosophical Journal, Oct. 1825. 
Edinburgh Review, vol. Ix sqq. vol. ciii, 193 1 . 
Elgood, P. G. Bonaparte's Adventure in Egypt. 2 vols. 
Fitzgerald, Percy. The Great Canal at Suez. \ 876. 
P'oreign Office Suez Canal Papers, i 833 sqq. 
Hallberg, C. W. The Suez Canal. P.S*. King & Son. 193 1 . 
Hamley, W. G . A New Sea and an Old Land. 1871. 
Hansard. Parliamentary Debates. 
Heron, R. iM. The Suez Canal Question. 1875. 
Hoskins, H. L. British Routes to India. 1928. 
International Scientific Commission, Report and Plan of, 1857. 
Lauture, E. de. 'Influence du Canal dc Suez sur le commerce.' 1855 (Bulletin de la Socie'te' 

de Geographie). 

Lane-Poole, S. Life of General F. R. Chesney. 
Lesseps, F. de. The Isthmus of Suez Question. 1855. 

Inquiry into the Opinions of the Commercial Classes of Great Britain on the 

Suez Ship Canal. 1857. 

Resume" Hi storique. 1869. 


14 BIBLIOGRAPHY 

Lesseps, F. de, The Suez Canal. Letters and Documents descriptive of its Rise and Progress 

in 1 854-6. 1876. 

Recollections of Forty Tears. 1 887. 

McCoan, J. Egypt as it is. New York, 1877. 

Nederlands Rijv. Archief. Dispatches, &c. 1855. 

Oriental Herald, vol. v sqq. 

Public Record Office. P.O. 97/408, Transit through Egypt: Navigation of the Nile, 

1841-8 and P.O. 97/41 1. 

P.O. 78, numbers 887, 1 1 56, 1340, 1421, 1489, 1 560. Suez Canal, 1854 to 1860. 

Parliamentary Papers, 47 8, 1834; 60 5, 1851. 

Price, John Spencer. The Early History of the Suez Canal. (N.D.) 

Rockwell, C. H. The Suez Canal. 1867. 

Rose, J . H . Life of Napoleon . 1902. 

Roux, J. Charles. Ulsthme et le Canal de Suez. 2 vols. Paris, 1901. 

St. Hilaire (De Lesseps ed.). New Facts and Figures relative to the Isthmus of the Suez 

Canal. 1856. 

Seeley, Capt. J. B. See Asiatic Journal, xviii, xx, O.S. 
Simencourt, A. de. Ulsthme de Suez, 1859. 
Stephenson, Robert. See The Engineer, 1 5th Peb. 1856. 

The Isthmus of Suez Canal. 1858. 

Symons, M.Travers. The Riddle of Egypt. (N.D.) 

Twiss, Sir Travers. 'Le Canal Maritime de Suez.' 1885. (Revue de Droit Internationa/.) 

Urquhart, D. See Diplomatic Review for 1876. 

Vetch, Capt. J. R. E., P.R.S. Inquiry into . . . Ship Navigation between the Mediterranean 

and Red Seas. 1843. 

Wannington, E. H. The Commerce between the Roman Empire and India. 1928. 
Willcocks, W. The Irrigation of Mesopotamia. 1917. 


CHAPTER II 
PRELIMINARY NEGOTIATIONS 1854-65 

'Marchez a la tete des ide*es de votre siecle, ces ide*es vous suivent et vous soutiennent. 
Marchez a leur suite, elles vous entrainent. Marchez centre elles, elles vous renversent.' 

Louis Napoleon, du prison de Ham, 1841. 

Draft Concession. Napoleon Ill's interest. Lord Stratford de Redcliffe. Lord 
Clarendon. The International Scientific Commission. The Euphrates Palley 
Railway. Sir Daniel Lange. Disraeli. Gladstone. The Canal Company's 
capita/ subscribed in France. IVork on the canal begins. Turkish protests. Inter- 
vention of Napoleon III. Austrian support. Sir Henry Bulwer. Said Pasha is 
succeeded by Ismail Pasha. Arbitration by Napoleon III. The Sultan of Turkey's 
firman of approval. Lord P aimer ston dies. Bibliography. 

* I *HE first concession, the text of which was based on railway con- 
J- cessions in France, provided for a company to be organized, not as 
a French, but as a strictly international enterprise having its origin in 
Egypt, known as the Compagnie Universe lie du Canal Maritime de Suez. 
The concession was to endure for ninety-nine years and the Chairman 
was always to be appointed by the Egyptian Government, and to be 
chosen as far as possible from among the shareholders most interested 
in the enterprise. 1 The canal works were to be executed at the cost 
of the Company, but all fortifications were to be installed by the Viceroy 
alone. The route of the canal was not specified. Tariff discrimination 
was forbidden. The net profits were to be divided as follows: 
The founders . . . .10 per cent. 

The Egyptian Government . 15 ,, 

The shareholders . . 75 

Said Pasha at once wrote, as in duty bound, to the Sultan of Turkey, 
seeking his approval both for the canal, and for the Cairo-Suez railway, 
intending to use the one as a counterpoise to the other. De Lesseps 
was loth to see these questions thrown afresh to the diplomatic lions 
of Europe, but the facts were too strong for him. The Viceroy had 
scarcely presented this application to the Porte, when he was invested 
with the insignia of the Legion of Honour by the French Consul- 
General, on behalf of Napoleon III, who thus made clear to the world 
his peculiar interest in the canal project. In making the presentation, 
the Consul-General assured Said Pasha that, in the glorious but arduous 
work of reorganization and reform in Egypt, His Highness could rely 
upon the encouragement, and if need be, the support of Napoleon III. 

1 The Statutes provide that the Board of Directors is to be composed of thirty-two 
members representing the principal nationalities interested in the enterprise. 


16 LOUIS NAPOLEON AND THE CANAL 1856 

'The Emperor of Europe' did not even at this early stage reserve 
expressions of his approval for such ceremonial occasions. 'His 
philanthropy*, as Lord Cowley remarked in another connexion, 'far 
exceeded his respect for Treaties'. At the Congress of Paris in 1 856 he 
testified, at the close of a farewell dinner party to the assembled pleni- 
potentiaries, to the deep interest he took in a scheme which seemed to 
him a universal benefit. He had studied it, he said, in all its aspects, 
and acquainted himself with all the documents bearing on it, and 
earnestly wished it success. But the enterprise, admirable as it was in 
every way, had given rise to certain objections and obstructions, 
especially in England. For his part he could not consider that these 
objections were well founded, and hoped to see them removed. At the 
same time he was not disposed to rush matters for fear of com- 
promising their success. Instead, relying upon the happy alliance 
which united the two peoples, he looked to the future and to a very 
near future for an agreement upon this question. 1 In such an 
utterance Napoleon III was seen at his best, sustaining a remote and 
beneficent design with a statesmanlike appreciation of the proper 
method for its attainment, and to this policy he adhered with admirable 
good temper. When, three years later, after some particularly dis- 
couraging dispatch from London, he told Lesseps not to worry, 'You 
can count,' he said, 'on my support and protection', but he added, 'it is 
a squall, we must shorten sail'. 2 Would that he had always pursued his 
own dreams in the same spirit! As it was, the opening of the Suez 
Canal by the Empress was destined to furnish his chequered reign 
with almost the last and not the least deserved of its triumphs. 

The Suez Canal took the place, at this period, in Louis Napoleon's 
mind, 3 of the Nicaragua Canal, the claims of which he had urged, as 
against those of Panama, in a pamphlet written, for the most part, 
during the period of his captivity at Ham. It was to be called the Canale 
Napoleone de Nicaragua. With the events of 1848 the whole scheme 
was, so far as he was concerned, thrown to the winds. Yet perhaps only 
chance, and Lord Palmerston, prevented the canal from the Medi- 
terranean to the Red Sea being called not after an insignificant hamlet 
at the southern end, but after Louis Napoleon himself. 

1 De Lesseps, Souvenirs, ii. 429, 430. Lord Cowley's dispatch of 3rd April 1856, 
states that there was at this time no pressure from the French Government, but much 
from de Lesseps. Said Pasha desired to conciliate France as a means to secure for 
himself complete independence. He was at this juncture busy in raising, 'with the utmost 
violence and oppression*, more than double the 1 8,000 troops fixed by the firman of 1 841 . 

i Ibid. 692, 693, quoted by Simpson. 

3 Louis Napoleon's Life of Caesar (i. 163) shows how deeply he was imbued with the 
philanthropic urge to bring prosperity to the East by the accomplishment of de Lesseps' 
project. 


Chap, n LORD STRATFORD DE REDCLIFFE 17 

The British Government, whose agents in Cairo made no secret of 
their opposition, were well represented at Constantinople, where Lord 
Stratford de Redcliffe was at the height of his power. Vigorous and 
aggressive, and well acquainted with the guiles and wiles of oriental 
diplomatists, he was feared by his colleagues, and respected by the 
Porte. Kinglake, in his Invasion of the Crimea (i. 1 1 1), speaking of Lord 
Stratford says: 'he was so gifted by nature that whether men studied 
his despatches, or whether they listened to his spoken word, or whether 
they were only bystanders caught and fascinated by the grace of his 
presence, they could scarcely help thinking that if the English nation 
was to be maintained in peace or drawn into war by the will of a single 
mortal, there was no man who looked so worthy to fix its destiny as 
Sir Stratford Canning. . . . His temper was fierce, and his assertion of 
self so closely involved in his conflicts, that he followed up his opinions 
with the whole strength of his imperious nature/ When de Lesseps 
visited Constantinople in February 1855 he found the Grand Vizier 
apparently quite favourable to the project, but such was the fear in- 
spired by 'Sultan Stratford*, or 'Abdul Canning*, as he was often called, 
that he was refused recognition in any official capacity. Only the 
Austrian Minister 1 accorded him official support; for the rest he had 
to rely on such personal influence as he had. So untiring were his 
efforts that Lord Stratford reported, before the end of the month, that 
the Turkish Government would confirm the canal concession before 
long unless he could raise objections on official grounds. He had 
hitherto acted not 'against* but 'without* instructions, a distinction to 
which great importance attached in days when communications were 
slow. De Lesseps* representations to Lord Stratford de Redcliffe 
were ignored 2 and vigorous oral representations made to the Porte, 
depicting the perils of severance of Egypt from Turkey and of the 
interposition of a French colony on the canal between the Asiatic and 
African possessions of the Porte, culminating in a French protectorate 
over Egypt. British statesmen could scarcely forget that the Indian 
Empire was laid by merchants who gradually acquired trading privileges, 
lands, the management of revenue, and finally sovereign powers. They 
had no mind to see the same process repeated in Egypt. De Lesseps 
was foiled for the moment, and returned to Cairo, angry but not beaten. 

Opinion in favour of de Lesseps grew in strength, and Lord 
Stratford realized that without open official interference he could 

1 Lord Clarendon, however, wrote to Lord Stratford on loth December 1857 that 
the Austrian Government was highly favourable to the canal project, but would not sup- 
port de Lesseps until all the interested powers of Europe had come to an agreement on the 
subject. The Ottoman Government took, at this time, the same view. 

2 De Lesseps, Recollections of Forty Tears, 1887. 


1 8 LORD PALMERSTON'S OPPOSITION 1856 

not hope indefinitely to postpone the confirmation of the concession. 
After further sparring, Lord Clarendon, then Secretary of State for 
Foreign Affairs, summarized in a note to Count Walewski, the French 
Ambassador, the considered views of the British Government in terms 
which may be summarized as follows: 

(1) The canal project was physically impossible except at a pro- 
hibitive cost. If undertaken, it can only be for political objects. 

(2) The project would delay if not prevent the Cairo Suez railway, 1 
which was all the British Government required. 

(3) The scheme was founded upon an antagonistic policy on the 
part of France with regard to Egypt ; 2 it had survived the policy out of 
which it arose and should now be dropped. 

At this point the canal project as a political issue was temporarily 
eclipsed in importance by the urgencies of the Crimean War. De 
Lesseps used the enforced truce between the Quai d'Orsay and 
Downing Street to initiate a campaign of public education. With 
implicit confidence in the soundness of his plans he proceeded to place 
them, over the heads of the British Government, before the English 
people themselves. Arriving in London at the end of June 1855 he 
busied himself in interviewing officials and merchants in London. The 
Prime Minister, Lord Palmerston, was as suspicious and unsympathetic 
as Lord Clarendon, but mercantile opinion was far more favourable. 
De Lesseps' pamphlet The Isthmus of Suez Question was favourably 
received: the East India Company adopted a benevolent attitude. The 
Peninsular and Oriental Company, ignoring the expressed views of 
the Foreign Office, definitely espoused the scheme. Unofficial opinion 
in India was equally favourable. On 5th January 1856 de Lesseps 
secured the signature of the Viceroy to a second Act of Concession, in 
amplification and completion of the first. To this Act were annexed 
the Statutes, or Articles of Association, of a Company for making the 
Concession ; these two documents form the Charter of the Suez Canal 
Company. The grant of the second Act of Concession was followed 
by no change in the policy of Her Majesty's Government, for, whilst 
de Lesseps had largely succeeded in converting mercantile and public 
opinion in England, he had not been able to modify in any way the 

1 This argument was weak to the point of falsity, for Said Pasha had ordered rails for and 
ordered work to proceed on the Suez railway regardless of the fate of the canal. M. Walew- 
ski assured Lord Cowley (v. his dispatch, 4.1.57) that he had warned M. de Lesseps that 
he was not to expect countenance or assistance from the French Government, so long as 
H.M. Government were opposed to the scheme. The French Government felt that 
H.M. Government were masters of the ground at Constantinople and had no desire to 
come into collision with H.M. Government on such matters. 

2 The motd'ordre of French newspapers had long been 'en percant Tlsthme de Suez nous 
persons le point faible de la cuirasse anglaise'. 


Chap, ii EUPHRATES VALLEY RAILWAY 19 

official attitude of hostility. Nothing daunted he returned to Paris, 
after three months in England, to convene, as an International Scientific 
Commission, a group of leading engineers from the principal countries 
of Europe, who were to pass a final judgement on his proposals. Great 
Britain was represented by three eminent engineers, Mr. J. M. 
Rendel, Mr. J. R. McClean, and Mr. C. Manby, with a representative 
of the East India Company. Their survey was completed in January 
1856, but was only published twelve months later. The report, which 
was unreservedly favourable to the designs of de Lesseps, concluded 
with the following pregnant paragraph : 

'It is not our province to judge what motives may have retarded the execution 
of a work of this character. But we believe that we are only echoing the universal 
opinion in saying that all delay is to be deplored when once a well-matured opinion 
on the subject has been formed. Our object has been to enlighten, as far as in us 
lay, the Governments and Nations of the world; with all confidence, we submit to 
them the final resultsof our inquiry. May our labour hasten the moment when all im- 
pediments, other than those in the actual natureof things, shall be removed, and when 
the artificial Bosphorus at Suez may be thrown open to the navies of all nations.' 

The Report profoundly influenced public opinion, but the British 
Government refused to be convinced, and even before the Report was 
published renewed their opposition at Cairo and Constantinople. They 
were still Opposed to steam navigation for the conveyance of the mails', 
and so abhorrent was the idea of trans-Isthmian communication that, 
on the outbreak of the Indian Mutiny, the War Office sent all reinforce- 
ments via the Cape, until compelled by public opinion to ask the con- 
currence of the Porte and the Khedive to the transport of troops via 
Suez. The required permission was readily granted. 

In vain did de Lesseps, who never failed to maintain his dignity and 
diplomatic magnanimity, use, with complete success, his influence to 
secure for Great Britain free telegraphic communication between Eng- 
land and her Eastern possessions across Egypt. He found Palmerston, 
in his own words, 'defiant and prejudiced', and Sai'd Pasha so weary of 
opposition as to be nearly ready, for the sake of peace, to abandon the 
enterprise. Behind Lord Palmerston's defiance and Lord Stratford's 
determination was the knowledge that the reconnaissance of the pro- 
jected Euphrates Valley railway had demonstrated this project to be in 
all respects practicable. Though surveys had not begun, the shares of 
the Company 1 formed to build it were already at a premium. Such 
a railway would speed up communications with India more than the 
Suez Canal could hope to do, it would develop the supposed resources 
of Mesopotamia, then reputed to be a potential granary. Sentiment in 
Europe was stronger than ever in favour of a canal, but the proposed 

1 'The Association for the Promotion of the Euphrates Valley Railway.' 


20 DE LESSEPS AND ROBERT STEPHENSON 1857 

short cut to the Persian Gulf from Seleucia by Antioch and Aleppo to 
the Euphrates and thus to Baghdad and Basrah would shorten the 
passage to India by 1,000 miles for a mere 16,000,000. The plan 
pleased Lord Palmerston and was supported by Lord Clarendon : the 
Porte was favourably inclined. But a Government guarantee was neces- 
sary, and was not forthcoming. On that rock the project foundered, as 
it would founder to-day. Professor H. L. Hoskins in his British Routes 
to India tells the whole story with admirable lucidity. It is enough to 
record here that the project was essentially political, not commercial, 
and that whilst, for passengers, it was a possible alternative to the canal, 
it could never have existed along with it. 

The brief war with Persia early in 1857, difficulties in China, and 
the outbreak of the Indian Mutiny in May of that year gave a fresh 
turn to public discussion. Troops were urgently needed; they all went 
by way of the Cape. At this juncture de Lesseps made a fresh descent 
upon England. With the assistance (wholly gratuitous) of Mr. (later 
Sir) Daniel Lange, a British subject and an old friend, he addressed 
meetings in the principal mercantile centres of the United Kingdom. 
His mission was remarkably successful and undermined, while it 
hardened, the official opposition. Lord Palmerston declared in the 
House of Commons that the canal would be profitable to France, but 
hostile to England's interests. This statement, which created a deep 
sensation, did more to assist de Lesseps in raising capital in his own 
country than the most energetic support of the French Government 
could have done. A few months later Robert Stephenson, who had 
entered the House of Commons, supported Palmerston's views in 
Parliament. He was waited upon by a representative of de Lesseps 
with a letter requiring him to name two friends and to furnish a written 
explanation to de Lesseps who 'placed himself entirely at Mr. Stephen- 
son's disposal'. Explanations followed and the challenge was withdrawn. 

In December 1857 Lord Stratford de Redcliffe, the Great Elchi, 
was on the point of severing his long connexion with Turkey, but the 
British Government had been at pains to assure the Porte that their 
policy remained unchanged. On ist January 1858 Lord Clarendon 
clinched matters by announcing to the Grand Vizier (Rashid Pasha) 
that if the Sultan were to give his consent to the Suez Canal Scheme 
'the direct and obvious object of which is to separate Egypt from 
Turkey, the Sultan must not expect that the maintenance and in- 
tegrity of the Ottoman Empire could thereafter be a principle to guide 
the policy of the Great Powers of Europe, because the Sultan would 
himself have been a party to the setting aside of that principle'. The 
Porte gave way, for the time being, promising not to give assent to the 
project without the consent of His Majesty's Government. A few days 


Chap, u MR. GLADSTONE'S VIEWS 21 

later Rashid Pasha was seized with convulsions after drinking a cup of 
coffee, and soon expired. De Lesseps lamented his death, as he seemed 1 
'to have shaken himself pretty free of English influence in regard to 
the canal. He was succeeded by Aali Pasha, an upright man, but timid. 

In February 1858 Palmerston fell, but there was no official change 
in the attitude of the British Government. Indeed Disraeli described 
the canal project in the House of Commons as 'a most futile attempt 
and totally impossible to be carried out'. 

In June 1858 the matter was again raised in the House of Common, 
where de Lesseps now had many warm supporters. Lord Palmerston 
took his customary line: the canal would be a step towards the dis- 
memberment both of the Turkish and British Empires, the arguments 
by which it was commended to foolish and credulous investors were 
unsound, if not worse: the railway would always serve British needs 
more economically than a canal. Never would he be a party to such 
a sacrifice of British interests. 2 

Mr. Gladstone followed. With close reasoning he argued against 
the proposition that the canal must tend to sever Turkey from Egypt. 
As to possible danger to our own interests, was it not a canal that would 
fall within the control of the strongest maritime power in Europe ? 
And what could that power be but ourselves? What could be more 
unwise than to present ourselves to the world as the opponents of a 
scheme on the face of it beneficial to mankind, on no better ground 
than remote and contingent danger to interests of our own. 'You have 
engaged', he said, 'in a contest in which you will, in the end, certainly 
give way. . . . There is not a statesman in Europe who does not 
denounce the policy of this opposition as unwarrantable and selfish/ 
'Let us', he concluded, 'regard the Suez canal as a commercial project, 
as such let it stand or fall/ His cogent arguments did not at the 
time commend themselves to his hearers, who were as much against 
the canal as they were, sixteen years later, in favour of Disraeli's coup, 
but his words were not without effect upon public opinion at home. 

Abroad, Palmerston's stormy words had already an effect very dif- 
ferent from that intended. The theatre of French action was trans- 
ferred to Constantinople, where the representatives of other European 

1 There is little doubt that a pecuniary bond existed between Rashid Pasha and the 
Khedive in 1854, and for some years afterwards. On his death his estate was found to be 
in debt to the Government to the extent of 83,000. 

2 In a holograph note on a dispatch of Lord Cowley, dated I3th October 1859, Lord 
Palmerston summarized his own views as follows: 'There are three authorities adverse to 
the execution of this scheme. The English Government, the Turkish Government, and 
Nature. The two first are not likely to change their views, but the third will be found 
inflexible.' The note indicates what a heavy responsibility for his attitude rests on the 
British engineers who had advised him. 


22 SUEZ CANAL COMPANY FORMED Nov. 1858 

nations had official instructions to promote the interests of the Canal 
Company. There was, however, no immediate prospect of the Sublime 
Porte reaching a decision, and de Lesseps found himself once again 
faced with ruin. One course only remained to him ; he returned to Paris 
to constitute his company. Disregarding the advice of expert financiers, 
ignoring the great banking companies even Rothschild's because 
their terms appeared exorbitant, he appealed direct to the people. 

The capital of the Company was fixed at two hundred million francs, 
divided into 400,000 shares of 500 francs each. On 5th November he 
opened his subscription lists, on 3Oth November they were closed. 
The issue was not a complete success. The French allotment was fully 
subscribed, but there were no applications from England or the United 
States, Austria, or Russia. It was the Viceroy of Egypt, Said Pasha, 
prodigal but in this case far-seeing, who came to the rescue and sub- 
scribed sixty million francs. 1 The fact that but for him the Company 
could scarcely have gone to allotment should, injustice to his memory 
and to his residuary legatees, the Egyptian people, be borne in mind. 
The whole capital had been subscribed, mostly in small sums, except 
for some 85,000 shares reserved for investors in England, Austria, 
Russia, and the United States, in order that the enterprise might be, 
at all events from the outset, truly international. 

In his Recollections de Lesseps wrote on this subject ( i st January 1859): 

'His Highness having wished that the French investments should not much 

exceed one half of the whole, in order that the company might, so far as possible, 
maintain its universal character, we have fixed the total number of shares as follows: 

France ........ 207,111 

Ottoman Empire exclusive of Viceroy's personal investment 96,5 1 7 

Spain ........ 4^046 

Holland 2,615 

Tunis . . . . . . . . I 5 7H 

Piedmont . . . . . . . . i>353 

Switzerland ........ 460 

Belgium ........ 324 

Tuscany ........ 176 

Naples ........ 97 

Rome ........ 54 

Prussia ........ 15 

Denmark ........ 7 

Portugal ........ 5 

Sums held in reserve for Austria, Great Britain, Russia, and 
U.S.A., which the Viceroy authorizes me to guarantee 

for him should they not be taken .... 85,506 

400,000 
1 Sir Ian Malcolm in The National Review, May 1921 (first edition). 


Chap, ii CONSTRUCTION BEGINS 23 

De Lesseps was now the titular head of a strong organization, com- 
plete with an administrative council and a vast amount of public and 
official goodwill in most European countries, to foster and strengthen 
which he published his own fortnightly Journal de f Union des deux 
Mers from a Bureau at 52 Rue de Vernueil, Paris, in which the views 
of the Canalistes were propagated and progress recorded. His obliga- 
tions were, however, no longer to the Viceroy of Egypt, but to his 
stockholders. As the head of a corporation controlled in France he 
was a fair target for his enemies. The Sulfan was reminded 1 of the 
danger for a separatist movement in Egypt, fostered by the Canal 
Company: Said Pasha was warned of the peril he had incurred in 
suffering, without the consent of the Porte, the incorporation under his 
aegis of a Company endowed with almost sovereign rights. 

De Lesseps, now in his fifty-fifth year, was equal to the occasion. 
He drew, with the skill of a trained lawyer a distinction between the 
execution of an engineering project and the construction of an inter- 
national highway. In the Acts of Concession, and in the empty words 
of approval that had issued from time to time by the Porte, he found 
sufficient authorization for the construction not of an international 
highway but of a navigable waterway. He would, he declared, leave to 
others, preferably to an international congress, the settlement of the 
political status of the work when completed. He was no longer a 
diplomat, but a man of business, the president of a commercial cor- 
poration charged with works of construction. 

In April 1859 the work began at Port Said. Little excavation was 
done for the first two years, which were devoted to surveys, the erection 
of storehouses and workshops, the organization of work gangs, and the 
purchase of dredgers, machinery, tools, timber, iron, lime, cement, &c. 
Great Britain, strongly seconded now by Austria, made fresh protests 
at Constantinople and on ist June 1859 de Lesseps was ordered to 
suspend operations. The Viceroy did not, however, recall the labourers, 
and work continued; to the vigorous remonstrances of the British 
Agents, Said Pasha replied that he had no control over the Europeans 
working on the canal ; they must be recalled, if at all, by their own 
Governments. Never, perhaps, in the history of Egypt, did the 
Capitulations prove so valuable as at that moment. Fresh protests at 
Constantinople evoked a note from the Grand Vizier directing the 

1 Vide Dispatch from the Austrian Ambassador at Constantinople to Count Apponyi 
dated 30.1 1.59: 'L'embarras est done grand la Porte. Sir H. Bulwer doit lui avoir dit 
(puisqu'il 1'a dit \ moi) qu'elle etait maitresse de se prononcer pour le canal mais que, dans 
ce cas, il s'en suivrait un changement dans les dispositions de TAngleterre pour 1'Empire 
Ottoman, tandis que, dans 1'autre cas, si la Porte prononcerait centre le canal, 1'Angleterre 
la soutiendrait centre quiconque voulut violenter son droit de volont6 inde*pendante . . . 
L'Ambassadeur de France se tient dans les limites d'une moderation tres sage.' 


24 BRITISH OPPOSITION MAINTAINED 1860 

Viceroy to stop all work on the canal as altogether unauthorized by the 
Sultan, and Said Pasha announced his intention to carry out the orders 
of his august master. De Lesseps appeared to have played his last 
card, and lost. 

His only chance was to enlist the open and official support of the 
Emperor Napoleon who, on Sai'd Pasha's accession and on subsequent 
occasions, had shown himself a good friend of de Lesseps and his 
schemes, while the political situation in Europe was favourable. De 
Lesseps returned to Paris in July 1859 and appealed, with success, to 
the Throne. The Emperor not only promised protection, but in- 
structed the diplomatic corps to give active assistance, while Count 
Walewski, his envoy at the Court of St. James, was instructed to convey 
to the British Cabinet the Emperor's hope that they would at last 
desist from opposition. The Cabinet were unmoved, and reiterated 
their objections, but excavations continued at Port Said. 

It was suggested at about this time to the Porte (Sir H. Bulwer's 
dispatch of 28th December 1859) that they should refer the whole 
question of the Suez Canal to the Great Powers of Europe, who were 
then identical with the Great Maritime Powers, by means of a circular 
letter. In Congress assembled, their jealousy of each other would 
protect Turkey: by treating with all the Porte would avoid controversy 
with any one Power. The idea is as old as Solomon. 'Where no good 
counsayle is, there the people decaye: but where as many are that can 
give counsaile, there is wealth/ (Prov. xi. 14, Bible of 1549.) It may 
be necessary to invoke it before 1968. 

Napoleon III was not inactive: in concluding terms of peace with 
France the Austrian Government pledged its support anew to the canal : 
Russia followed suit. 1 Finding that nothing could be done at Con- 
stantinople the British Government shifted their efforts to Cairo. The 
application of the corvee, or forced labour system, to the construction 
of the canal was represented as a form of slavery, a catchword which 
was as popular in England then as now. The Viceroy had indeed been 

1 The pertinacity of the Emperor Louis Napoleon in supporting de Lesseps through all 
the vicissitudes of fortune is a notable feature of the history of the canal, and one to which 
more importance perhaps attached than is admitted by some commentators. The interplay 
of European politics at this period is well shown by the following dispatch to the Austrian 
Ambassador in London, Count Apponyi, from the Foreign Office at Vienna, dated 
1 4th November 1859: 'L'entente qui subsistait autrefois entre les Cabinets de Vienne 
et de Londres sur les questions les plus importantes de la politique europeenne nous 
imposait, comme de raison, une certaine mesure dans Tappui que meritait d'ailleurs une 
ceuvre sur Texdcution de laquelle le commerce autrichien fonde de justes espeVances. 
Mais si cette entente ne doit plus subsister, si le Cabinet Britannique s'engage irrevocable- 
ment dans une voie qui Teloigne tous les jours de nous, alors Lord J. Russell ne pourra pas 
s'e*tonner de nous voir agir a Constantinople aussi ouvertement centre 1'Angleterre que 


Chap, ii DEATH OF SAID PASHA 25 

urged by the British Consul at Cairo to apply the corvee to the con- 
struction of the Suez railway a few years before, but this did not prevent 
his successor from utilizing the system to create prejudice. 

Sir Henry Bulwer represented to the Porte in June 1860 that the 
Viceroy had no legal right to employ the funds of Egypt in such an 
enterprise as the canal project, and that, having forfeited the conditions 
under which he held the government of Egypt, he might well be de- 
posed by the Sultan. Sai'd Pasha's resolution was unshaken. 'I do not 
know', he said to the British Consul on one occasion, 'if this affair will 
be commercially advantageous, but of this I am sure, that if the canal 
project is realized under my reign and with my assistance, my name 
will be immortalized.' His anticipation has been fulfilled. A high 
Turkish functionary was sent from the Porte to remonstrate with him, 
but in vain. He would yield, he said, only to force, and he was satisfied 
in his own mind that the forces for and against the canal were well 
balanced. 

Nearly two years passed without material change in the diplomatic 
situation, but the canal continued to make progress, though slowly, and 
when Sir Henry Bulwer was sent from Constantinople in November, 
1862, he was surprised at the forward state of operations on the canal. 

On 1 8th November 1862 M. de Lesseps, emulating Moses at 
Massah and Meribah, was able to declare at Ismai'liyah 'In the name 
of His Highness the Viceroy and by the Grace of God, I command the 
waters of the Mediterranean to enter Lake Timsah'. As with Moses, 
so with de Lesseps, the flowing water was associated with chiding 
(massati) and provocation (meribaK). 

In January 1863 de Lesseps suffered a severe personal and official 
loss in the death of Sai'd Pasha. He was succeeded by his nephew 
Ismail Pasha, who accepted obligations to the canal enterprise such as 
he found them, for it was unquestionably popular with his subjects, but 
was less prepared than his predecessor to make great sacrifices. He 
was described by Sir H. Bulwer as 'proud, shy, intelligent and to a 
certain degree timid'; yet the magnitude of the work appealed to his 
ambition, and its regenerative effect on Egypt to his imagination. He 
hoped, however, to recover much of the land in the canal zone that 
his uncle had ceded to the Company. The British Ambassador was 
not slow to exploit the new situation thus created, and suggested to 

1'Angleterre se montre franchement hostile a 1'Autriche en Italic. Si le Gouvernement 
anglais attache quelque prix a notre neutralit^ dans la question de Suez, qu'il songe 
bien que sa propre attitude au Congres qui va s'ouvrir reglera notre conduite a cet e*gard.' 

The point at issue was the restoration of the Arch-dukes in Parma and Modena. 
Austrian support of de Lesseps at Constantinople was intended to secure French support 
against Italy in this matter. 


26 EMPLOYMENT OF CONTRACTORS 1863 

the Porte that Ismail should be informed that his predecessor's Acts 
of Concession not having been ratified by the Porte, the Suez Canal 
Company had no standing in Egypt, and no authority to proceed 
with construction work. In July 1863 the Porte issued an ultimatum 
to the Viceroy. He was no longer to permit forced labour: 1 he was 
to repurchase the alienated lands; the canal itself was to be of a depth 
which whilst admitting merchant ships would exclude vessels of war. 
In the event of failure to accept these conditions within six months 
the Company was to be dissolved, the shareholders compensated, and 
the canal built under Egyptian auspices. 

De Lesseps, however, did not allow these diplomatic difficulties to 
interfere in any way with the work of construction. The Suez Canal 
Company had at first decided to entrust M. Hardon with the carrying 
out of the works, receiving 60 per cent, of the profits on the prices 
fixed by the original estimates of the International Commission, and 
reserving to itself merely the general superintendence, the drawing up 
of the plans, and the furnishing of machinery and stores. 

This method was found not to work well, and the agreement with 
M. Hardon was subsequently cancelled, an indemnity being paid to 
him of ^72,000. 

The company next undertook the works for its own account, but 
eventually entered into agreements with four French contracting firms, 
who undertook a series of contracts aggregating some ^4,600,000, 
the details of which are given by Rabino. 

These large contracts, involving several million pounds sterling, were 
all granted at the very moment when the diplomatic fate of the canal 
was hanging in the balance. The political effect in France was very 

freat: de Lesseps was sure, from the outset, of popular support 2 in 
ranee in a measure that carried with it the certainty of official support. 
Faced with the threats implicit in the ultimatum of the Porte, he 
appealed at once to Napoleon III, with the consent of the Porte, in the 
name of French investors, to secure better terms from the Sultan. A 
Commission of Arbitration was nominated in March 1864, and sat 
until July. The award made by the Emperor was calculated to deter- 
mine the Company's status in Egypt and to remove any existing 
grounds for the withholding of approval by the Porte. The Company 
was to abandon its claim to free labour in return for compensation in 
the sum of 84 million francs. All lands on the Isthmus, covering 

1 One of the results of the American war was that Egyptian cotton touched 2s. 6d. per 
lb.; cultivators could earn far more than ever before on the land, and the Viceroy found it 
cheaper, in practice, to recompense the Company in cash than to provide labour. 

2 French opinion in Egypt was, however, on the whole definitely unfavourable to 
de Lesseps (Sir H. L. Bulwer to Lord Russell, 3.3.63). 


Chap, ii TURKISH APPROVAL SECURED 27 

60,000 hectares, the fresh water and all subsidiary canals and naviga- 
tion rights thereon were likewise to be relinquished against a payment 
of 46 million francs, payable in annuities. The total sum of over 3 J 
millions was not excessive, and was badly needed by the Company to 
finance current construction. The retrocession of the irrigable lands 
was unquestionably on political grounds a wise step. It prevented the 
Company from acquiring too great political power or local influence 
in the immediate vicinity of the waterway: it met the principal, if not 
the only, legitimate objection of the British Government which might 
well have seized the occasion to reverse its attitude of hostility and 
to accept, gracefully, the fait accompli, but continued, on the contrary, 
a policy of obstruction at Constantinople. The agreement was finally 
sealed and documents exchanged in December 1864, but the firman 
of the Porte was still not forthcoming. Once more, in February 1865, 
de Lesseps appealed to Napoleon. A year later, on igth March 1866, 
the long diplomatic conflict was brought to a close by the promulgation 
of the Definitive Firman of Approval by the Sultan. It ran, in part, thus : 

4 The realization of the great work destined to give new facilities to commerce 
and for navigation by the cutting of a Canal between the Mediterranean and the 
Red Sea being one of the most desirable events in this age of Science and of pro- 
gress, conferences have been had for some time past with the Company which asks 
authority to execute this work, and they have ended in a manner conformable as 
regards the present and the future, with the sacred rights of the Sublime Porte, 
as well as with those of the Egyptian Government. 

'The agreement . . . has been drawn up and signed by the Egyptian Government, 
in conjunction with the representatives of the Company; it has been submitted for 
our Imperial Sanction, and, after having read it, we have given Our assent to it.' 1 

The long duel between de Lesseps and the British Government had 
ended. De Lesseps, as Gladstone predicted, had won : the construction 
of the canal, moreover, had already reached an advanced state and public 
opinion in Europe, and even in England, was ready to welcome the 
completion of the great work. The Admiralty, indeed, had already 
anticipated the event, and had taken steps, in May 1863, to increase the 
harbour and docking facilities at Malta, and to extend the fortifications. 
The application to the Maltese Government for funds was supported 
by a picture of the prosperity that would result from the piercing of the 
Isthmus by de Lesseps. The Peninsular and Oriental Company, too, 
had anticipated completion and intended to transfer their shipping to 
this route at the earliest possible moment. Similar preparations were 
already in progress at Aden and Bombay. The Canal Company was 
now certain to succeed. 

1 Parliamentary Papers, C. 1415, 1876. 


28 PROGRESS IN CONSTRUCTION 1862-4 

Rabino summarizes the progress achieved during the years 18626 
as follows: 

1862-3 

PORT SAID. Four dredgers, with cranes at work. 

MARITIME CANAL General Works. Second sea water cutting for service of 
works, 50 feet wide, 3 to 6 feet deep, from Port Said to El Ferdane. Buildings 
along isthmus: March 1862, 56,500 square yards; April 1863, 96,500 sq. yds. 

North of Lake Timsah. 18,000 men at work since November 1862; trench 
50 feet by 4 to 6 feet deep, connecting Mediterranean and Lake Timsah; 
4,350,000 cubic metres (153,600,000 cubic feet) at O'68 fr. the cubic metre. 

South of Lake Timsah. From Lake Timsah to Toussoum plateau, canal 190 
feet wide and 6 feet below the Mediterranean level, 21,200,000 cubic feet; 21 
dredgers at work; 3 dredgers nearly ready, raising each over 353,000 cubic feet per 
month; 20 other dredgers to be established, raising each 1,050,000 cubic feet. 

FRESHWATER CANAL AND WATER SUPPLY. Canal from Nefiche to Suez 
begun; 24 miles finished, 64 feet wide at water line, 26 feet at bottom, 6 feet 
draught of water; cubic feet about 50,000,000. 

1863-4 

PORT SAID. Large tract of land reclaimed, area 142,000 yards, to establish 
works of Compagnie des forges et chantiers de la Mediterranee and those of E. 
Gouin of Paris; 20 new dredgers, with barges and accessories fitted up; landing 
stage lengthened 330 feet; about 600 feet quays finished; canal Cheikh Carpouti, 
2,000 feet (subsequently 3,300), connecting port with shore of lake and Damietta, 
and assuring draught of water. 

MARITIME CANAL General Works. Total area built over, 128,000 sq. yds. 

North of Lake Timsah. Excavations from Port Said to El Ferdane, 43,000,000 
cubic feet; excavation of gypseous stone along Lake Ballah, 4,500,000 cubic feet. 

South of Lake Timsah. Maritime canal lengthened 4 miles; between Timsah 
and Serapeum excavations 7,600,000 cubic feet; two cuttings, the one to the 
Southwater Canal, Ismailia, and the second, east of Lake Timsah, to a stone 
quarry. 

FRESHWATER CANAL AND WATER SUPPLY. Canal completed from Nefiche 
to the sea over 55 miles; had taken thirteen months; 1 18,000,000 cubic feet. 

1864 

PORT SAID. 530,000 cubic feet of stone taken from the quarries at Mex 
(Alexandria) for the Port Said quays and embankments; Dussaud freres establish 
their plant for manufacture and submersion of artificial stone for moles. Tonnage 
of port, January-July 1864, vessels, 124; tons, 35,220. 

MARITIME CANAL General Works. Telegraph system finished; 13,000 
natives at work first three months only; Borel and Lavalley, who afterwards 
carried out such vast operations, employed in planning their work. 

North of Lake Timsah. Port Said to Timsah; excavation of natives, 23,000,000 
cubic feet; Aiton's excavations (with company's plant), Port Said, 1,050,000 cubic 


Chap, ii DEATH OF LORD PALMERSTON 29 

feet; in the canal, 8,100,000 cubic feet; Couvreux's excavation, 2,2OO,OOO, using 
2 excavators, 4 miles of railway, 4 engines, and 30 trucks. 

South of Lake Timsah. South of Chalouf; excavation of natives, 48,000,000 
cubic feet; transverse canal to Serapeum, 3,200,000 cubic feet; transverse canal 
to Chalouf, 425,000 cubic feet. 

FRESHWATER CANAL AND WATER SUPPLY. Junction at Ismailia, 1,300,000 
cubic feet; water supplied, Port Said, from loth April; reservoir, plateau of El 
Guisr, 110,000 gallons; reservoir, Port Said, 154,000 gallons. 

1864-6 

PORT SAID. Plan of harbour modified; instead of two parallel moles, 1,300 
feet apart, eastern mole started from shore at a distance of 4,500 feet from western 
mole, gradually approaching to 1,300 feet, and thus forming a fine port; pass of 
Port Said 200 to 300 feet wide, 16 feet deep; entry of basin 600 feet wide, 16 to 
20 feet deep. Tonnage of port, i5th July 1865 to i5th June 1866; vessels, 
595; tons, 108,539. [Work during June 1865 was much hampered by an out- 
break of cholera and the consequent flight of 4,000 labourers.] 

MARITIME CANAL General Works. Borel and Lavalley; 32 long trough 
dredgers at work along 35 miles of canal; native contingents abolished, May 1864, 
replaced with almost no delay; in 1866, 7,954 European labourers; 10,806 
Africans and Asiatics, viz. Arabs, Syrians, &c. 

North of Lake Timsah. Canal from Port Said to Timsah widened to 325 feet, 
thus allowing formation of strands for the protection of banks from passing 
vessels, and economizing stone embankments; El Guisr ridge trench widened and 
deepened by Couvreux, 6 miles, by Gioja, on account of company. 

South of Lake Timsah. Timsah to Suez; first excavations by hand, afterwards 
by dredgers from Timsah to south of Toussoum; from Toussoum to Bitter Lakes 
trench opened 5 miles; rock of Chalouf removed, 1 1,100 feet long; earth, 
3,200,000 cubic feet; stone, 1,000,000 cubic feet. 

FRESHWATER CANAL AND WATER SUPPLY. Viceroy set 80,000 men to work 
at canal from Cairo to Wady; 5th October 1865, 70,000,000 cubic feet; sub- 
sequently, 105,000,000; leaving 70,000,000; allowing of the passage of Nile 
water in all seasons; the company had finished 30,750,000 cubic feet, placed to its 
charge by the imperial award. 

Realizing that success was in sight, the British Government began 
to consider ways and means whereby the new waterway could subserve 
imperials needs. On i8th October 1865 Lord Palmerston died at 
Brocket Hall, his country residence in Hertfordshire; with his death 
there passed from the scene the most formidable of de Lesseps' 
antagonists. 

1 The Seuil of Chalouf is a hard bank of rock some 2 feet thick at a depth of 6 to 16 feet 
below sea-level and four miles across. The clay here was full of fossil remains of the elephant 
and the dog-fish, mixed with layers of bicarbonate of magnesia. Nearly all this section was 
worked by hand, and fifteen hundred men from Piedmont were specially employed on the 
work (Nourse, p. 56). 


30 

BIBLIOGRAPHY 

(London, unless otherwise stated, is in all cases the place of publication.) 

Fitzgerald. Op. cit. 

Foreign Office, Suez Canal Papers. 

Freycinet, C. de. La Question d'figypte. Paris, 1904. 

Hansard. Parliamentary Debates. 

Hoskins, R. L. Op. cit. 

Kenney, C. L. The Gates of the East. 1857. 

De Lesseps, F. Lettres Journal et Documents pour ser-mr a Fhistoire du Canal de Suez, 

1854. Paris, 1875. 

Conferences de la rue de la Palx; entretiens sur le canal de Suez. Paris, 1 864. 

Morley, John. Life of Gladstone, 2 vols. 1903. 

Nourse, J. E. The Maritime Canal of Suez. Washington, 1884. 

Parliamentary Papers, .1415, 1876. 

Quarterly Review, vol. cii. 

Price, J. S. Early History of the Suez Canal. 

Public Record Office. F.O. 78, numbers 1560, 1715, 1795, 1796, 1849, 1850, 1895, 

1896, 1897, 1898, 1951, and F.O. 97/422. Suez Canal, 1860-5. 
Rabino, J. 'The Statistical Story of the Suez Canal.' Journal Roy. Stat. Soc., 1887. 
Roux, Charles. Op. cit. 
Simpson, F. A. The Rise of Louis Napoleon and the Recovery of France. 1923. 

The Rise of Louis Napoleon. 1925. 

State Papers, British and Foreign. Ivi. 

Stephenson, Robert. A Letter addressed to the Editor of the Austrian Gazette . . . in reply to 

the statement ofM. de Negrelli. 
Wiener Staatsarchiv. Berichte aus London, 1856-9. 


CHAPTER III 

THE COMPLETION AND OPENING 
OF THE CANAL, 1866-1873 

'In France, if you venture to tell the public that you are acting for yourself, no one 
will listen to you. But in England, the man who speaks for himself is always listened to.' 

de Lesseps, Entrcticns, 1 864. 

Work on the canal progresses. Sir Charles Hartley. Voisin Bey. Dredging machines 
introduced. Sir John Hawkshaw. Revised Estimates. Immigrant labour. 
Charles Doughty. Port Said. Ismailia. Port Tewfik. Mishaps at the last 
moment. The opening ceremonies. The Empress Eugenie. The Prince of Wales. 
Mail contracts. Effect of Suez Canal on Cape of Good Hope route. 

* I *HE Sultan's firman left de Lesseps in almost undisputed possession 
-L of the political field, and with his official and personal friendships 
intact. The work itself was well advanced, for it had been in progress 
since August 1859, when de Lesseps formally inaugurated the con- 
struction of the port on the Mediterranean that has served to immor- 
talize the name of his patron and friend, Said Pasha. A vast amount 
of preliminary work had been done. Machinery had been designed in 
France, shipped, and erected in position. Machine and repair shops 
had been provided, workmen's quarters erected, and the details of 
commissariat, recruitment, and sanitation worked out. The first 
structures at Port Said were temporary, being replaced gradually by 
more permanent works as the project advanced. The labourers 
(jellahiri) supplied by the Egyptian Government in conformity with 
the terms of the Concession were paid from 6 to 8 piastres daily (one 
shilling to i s. 4<^.)> though skilled workmen received more. Water had 
to be brought to them from a distance, usually on camel-back, and when 
the supply failed, as it occasionally did, men perished. But the allega- 
tions, made even by responsible writers, of the heavy loss of life amongst 
the labourers on the Canal are in no way borne out by the published 
statistics of the Company's chief medical officer, which give the 
mortality per thousand 

in 1863 as 1-40 

1864,, 1-36 average working staff. 

1866 2-49 . . . 18,605 
1867 1-85 . . . 25,770 
1868 1-52 . . . 34> 2 5 8 

De Lesseps was equally solicitous for the religious welfare of his labour 
force. Places of worship were provided for Muslims and for Christians 


32 MECHANICAL APPLIANCES USED 1861-3 

of the Roman Catholic and Greek Orthodox Church, and were main- 
tained at his expense. 

Early in March 1861 Mr. (later Sir Charles) Hartley, a British 
engineer of great experience, visited the canal works at the invitation 
of M. de Lesseps. He expressed the opinion that the scheme was 
entirely practicable and successful realization only a question of time 
and money; both could be saved by the substitution of efficient 
mechanical appliances for hand-labour. 

At the time of his visit not one-fiftieth of the earthwork of the canal 
had been removed a condition of affairs due to shortage of money, 
as well as of labour, to difficulties in the supply of water, and to the 
inefficiency of dredging appliances. The newly dredged entrance at 
Port Said could not be kept open until the jetties had been built. The 
Fresh-water Canal from Cairo to Suez by way of Ismailia had to be 
completed and duplicate iron-pipes laid from Ismailia to Port Said to 
ensure a constant and ample supply of drinking water for the workmen 
along the whole length of the canal. Mr. Hartley's report was, how- 
ever, in general very favourable, but not being published had little 
immediate effect. 

Early in 1862, however, all these works were complete, and 25,000 
labourers were in regular employment. The skill and resource of 
Voisin Bey, the first engineer-in-chief, and his assistants Laroche, 
Larousse, and Gioia had worked wonders. A French contractor, 
M. Lavalley, had devised and constructed a fleet of powerful trough- 
dredgers, the prototype of modern steam excavators which deposited 
silt by long shoots at some distance from either bank of the canal, 
without the intervention of barges. These and other mechanical 
appliances totalling 10,000 h.p., capable of removing two million cubic 
metres a month, had the effect of reducing by three-fourths the number 
of workmen needed, while the completion of the Fresh-water Canal in 
1 863 relieved the company of the vast expense of conveying water on 
camel-back from the Nile. A rock-breaker was also devised for deepen- 
ing the canal on the limestone reef under Serapeum, which was found 
exactly where Sir John Hawkshaw predicted. 

The line of work in general was from north to south, but at a later 
stage, after the issue of the Sultan's firman, operations were carried on 
at various points simultaneously. Behind Port Said, which in 1861 
was simply a collection of hovels on a belt of sandy dunes, separated 
from the sea by a tongue of land 600 feet wide, lay the great Menzaleh 
basin, and here dredging began not long after the foundations for 
a port had been laid. In ancient times this was one of the most fertile 
parts of Egypt. Beneath the waters are seen the ruins of cities : the 
base of a large temple, columns of red granite, and masses of brick. 


Chap, in SIR JOHN HAWKSHAW'S REPORT 33 

South-west was the city of Touna, on the west Zoan, mentioned in 
Psalm Ixxviii and Isaiah and Ezekiel, and at a later day Mansurah, 
where Saint Louis was taken captive in the crusade of 1251. To the 
east is Tineh (vide p. 3). The line of the canal here for some 25 
miles presented peculiar difficulties until suitable dredgers had been 
imported, owing to its varying depth. The vigorous race of fishermen 
on its borders, accustomed to the sun and mud, scooped up the clay 
in their hands, rolled it into balls on their chests, and then carried it 
on their backs with the arms crossed behind. In this way they raised 
some 400,000 cubic metres until the first dredger, let down into the 
mud by sections, carried forward the work, followed by twenty others. 
The sulphuric exhalations of the mud were almost unbearable but 
caused little actual sickness. The men who had toiled all day in the 
mud with their hands slept on rafts. They were paid at current rates, 
with free rations of rice, millet, dates, and onions. To these men, 
unhonoured and unsung, their posterity owes a debt which it has, 
perhaps fortunately, not attempted to symbolize by any monument of 
marble or aes perennis. 

Work next began on cuttings to connect Lake Timsah with the 
waters of the Mediterranean, and before Sai'd Pasha's death on 1 7th 
January 1863, at Alexandria, where he was buried, the entire line of 
the canal was well outlined. On the accession of his nephew Ismai'l 
almost the entire labour force of 20,000 men was suddenly withdrawn, 
and for the next two years little was accomplished, but before the end 
of 1862 boats bearing supplies from the Mediterranean reached Lake 
Timsah. The event appealed to the public imagination; it marked 
a definite achievement, and made it easier to obtain labour, even forced 
labour. 

In July 1862 Ismail Pasha, 1 who was on a visit to England, had 
invited a noted English engineer, Mr. (later Sir) John Hawkshaw, 
then President of the Institution of Civil Engineering, to make a 
thorough inspection of the canal. He arrived in November, and sent 
in his report in the February following. He showed that the Company 
had already constructed at a cost of 28,000 or 700,000 francs so 
much of the Fresh- water Canal as extends from Ras al Wadi to Timsah, 
comprising about one million cubic metres. The Company had, partly 

1 Ismail son of Ibrahim Pasha was born in 1830 and educated in Paris, Said Pasha had 
employed him on various diplomatic missions, and in 1861 he had suppressed an insurrec- 
tion in the Sudan. He was the first of the descendants of Muhammad Ali to receive, in 1 867, 
from the Sultan the style and title of Khedive in return for increasing the tribute from 
376,000 to j7 2O >oo, against permission to change the law of succession in favour of 
his direct descendants. In 1 873 the Sultan made him, by Imperial rescript, in many respects 
an independent sovereign. He was a man of large ideas, but his extravagance was his un- 
doing. In 1 879 he was deposed and died at Constantinople in 1 895. 


34 SIR JOHN HAWKSHAW'S REPORT 1863 

by dredging on Lake Menzaleh, partly by excavating between that 
Jake and Lake Timsah, made a channel between the Mediterranean 
and Timsah for light draught flat-bottomed boats. They had begun 
the sea jetty at Port Said and there and elsewhere had built houses and 
provided plant and machinery 'to a large extent', the total cost to 
ist December 1862 being ^1,220,000 or 30,500,000 francs. 

The extension of the Fresh-water Canals (i) from Timsah to Suez 
a distance of 50 miles, and (2) from Ras al Wadi a distance of 56 miles, 
were in hand. 1 The cost of completion was estimated at ^140,000 in 
each case. Of the ship canal between Port Said and Lake Timsah of 
a total of 32 million cubic metres 6 million had been excavated. 

The total cost of the Canal and accessory works, according to the report of the 

International Commission on the plans before them was put at . . 5,7 50,000 
To this was added : 

Expenses of Administration at 2^ per cent. .... 150,000 

i o per cent, for contingencies ...... 580,000 

6,480,000 

For payment of 5 per cent, on the capital during the execution of the work, 
and for the formation of accessory establishments destined to augment 
the profits of the Company ....... 1,520,000 

8,000,000 
or 200 million francs, 
which was the total 
capital of the Company. 

Mr. Hawkshaw put forward revised estimates totalling 9,100,000, 
but suggested that it would be prudent to make provision for certain 
specified works, and for this reason thought that the total expenditure 
might reach 250,000,000 francs or 10,000,000. He concluded by 
stating his conviction that there were no serious engineering difficulties 
involved or likely to be encountered, and that maintenance, at an 
estimated cost of 62,800, would present no difficulty. 

The report created a deep impression, not least on the new Viceroy. 
De Lesseps had not exaggerated, and had not misled his predecessor : 
the very caution displayed by Mr. Hawkshaw, an eminent English 
engineer with an established reputation, was an additional proof that 
Sai'd Pasha's confidence had not been unwisely accorded. 

'Residents in Egypt were more impressed with Mr. Hawkshaw's 
sound and measured judgements than with those of all the other 
engineers ever consulted.' 2 

The British Cabinet began to realize that the canal would be com- 

1 This section passes near rock quarries at Geneffe, whence great quantities of stone were 
conveyed for the jetties and other works at Port Said, more cheaply than from stone brought by 
sea from the quarries of Mex. 2 Proc. Instit. Civil Engineers, vol. cxli, part iii, 1900. 


Chap, in PUBLIC FEELING IN EGYPT 35 

pleted, but there were still those who would not be convinced, and 
continued to voice their doubts in the public press. 

From the beginning of 1865 progress, as will have been gathered 
from the previous chapter, was rapid. De Lesseps had evaded none of 
his difficulties; he had surmounted them triumphantly. Diplomatists 
had ceased from troubling, his finances were assured on the payment 
by the Egyptian Government to the Company of the sum awarded in 
the course of arbitration by Napoleon III. De Lesseps was connected 
by ties of relationship and friendship with very influential circles in 
France, and he enjoyed the enthusiastic patronage of the Empress. It 
became the fashion to possess shares, and it was claimed and not denied 
that de Lesseps owed more to the women of France than to the men. 1 

Public opinion in Egypt was not less favourable than in Europe to de 
Lesseps and his organization. The wages bill was the strongest argu- 
ment in his favour: 'Our fathers never saw such things in a dream,' 
said a Shaikh, as he watched the well-fed fellahin of his village receiving 
their weekly wages in cash. The standard of living in Egypt was 
rapidly rising. The construction of the great canal assisted the process, 
not only by the money it brought into the country, enabling the poorest, 
if able-bodied, to sell their greatest and only asset the labour of their 
hands but by the developments which followed. 

Labourers flocked in from all sides. Doughty learned that as many 
as two hundred men from Al Qasim in Eastern Nejd were at work at 
one time. 

'Ibrahim had seen, in that enterprise, "the peoples of the Nazara" French, 
Italians, Greeks, whom he supposed to speak one language ! Some parcels of the 
canal had been assigned to petty undertakers: Ibrahim wrought in the service of a 
Prankish woman, and the wife-man, he said, with pistols in her belt, was a stern 
over-seer of her work-folk. There was a Babel of nations, a concourse of men of 
every hard and doubtful fortune: and turbid the tide-rips of such an host of 
adventuring spirits on the shoals ! Moslems and Christians especially the fanatical 
Oriental Greeks (er-Rum) were mingled together, and peaceable men were afraid 
to stray from their fellowships. 

'He saw in these natural enmities only a war of religions: "It was the Rum, he 
pretended they had the most arms that set upon the Moslemin". . . . These 
disorders were repressed, Ibrahim said, with impartiality, by the Egyptian soldiery. 
. . Many a night Ibrahim and his mates stole a balk for their cooking and coffee 
fire, which they buried in the day time. When I exclaimed, thief! he responded 
"The Timber, though it cost so much, was no man's, but belonged to the Kom- 

1 The canal seems to have had a fascination for women from the earliest times. There is 
a tradition that one of the Pharaoh's opened the first canal between the Nile and Suez to 
please Sarah, the wife of Abraham, who certainly had influence at court. Cleopatra relied 
on it as a last resource after the battle of Actium, though her design failed owing to a 
shortage of water from the Nile. 


36 PORT SAID 1867 

partial" Ibrahim returned from this moral quagmire after twelve months' labour; 
poorer in human heart, richer by a hundred or two of reals. Though not needy 
at home, he had journeyed seven hundred miles to be a ditcher at Suez! but such 
is the natural poverty of the oasis Arabians. Ibrahim was of the illiberal blood, and 
brother-in-law of Aly the Western traveller. I found their minds yet moved by 
the remembrance of the Suez Canal, and some of them have said to me, "Might 
not there be made a canal through Nejd?" such, they thought, would be for the 
advantage of their country.' 

Port Said took on the appearance of a thriving and populous seaport. 
The mud flats which had formerly surrounded the squalid mat huts 
where de Lesseps and his engineer, in earlier days, took shelter 
from the noonday sun, had been raised by spoil from the great dredgers. 
The huts had given place to lofty buildings designed to catch the sea 
breezes. The population to-day exceeds 100,000. 

The town might, indeed, have been better planned : more use might 
have been made of the sea-front : more open spaces might have been 
provided in the centre of the town. The streets themselves and the 
buildings might have been designed more specifically to give shade 
from the sun and to catch the sea-breezes. The eastern bank of the 
canal might from the outset have been more fully utilized. But these 
matters were not, for the most part, direct responsibilities of the Canal 
Company, but of the Egyptian Government or of private individuals. 
Such was the confusion which reigned in most of the administrative 
departments of the State that, as Dr. Johnson said of the performing 
dog, the marvel is not that it was ill-done but that it was done at all. 

At the intersection of the Fresh-water Canal with the main channel 
another new town sprang into existence called, after the reigning 
Viceroy, Ismailia. Before the canal was opened to traffic the skill of the 
Canal Company's engineers, worthy successors of the great Muslim 
town-planners of past ages, had converted it into a pleasant town of 
six thousand inhabitants. It now boasts of a population nearly ten 
times as great, with avenues of trees and well-kept gardens, of streets, 
boulevards, and squares with spacious offices, a cathedral, a hospital, 
and a large railway station. The Fresh-water Canal, extended to Suez, 
transformed the filthy village which Napoleon had visited seventy years 
before into the present Port Tewfik, an industrious town of some 
25,000 inhabitants, preferred by many residents there to Port Said or 
Ismailia. Rabino thus summarizes the work performed during the last 
two years : 

1867-8 

PORT SAID. Western mole, 2,350 yards completed and 100 yards to water 
edge; eastern mole, 1,830 yards, of which 280 embanked with stone from Plateau 
of Hyenas; Dussaud freres had submerged all but 57,802 blocks of stone, of which 


Chap, in PROGRESS IN 1868-9 37 

33,031 had yet to be made; Borel and Lavalley had dredged in passes and basin 
123,000,000 cubic feet, out of 165,000,000 cubic feet. 

MARITIME CANAL General Works. On the I5th April there still remained 
to be excavated a total of over 1,200,000,000 cubic feet. Monthly work: 

Cubic feet. 

8 elevator dredgers .... 4,300,000 
30 dredgers, with barges .... 21,000,000 
22 long trough dredgers .... 31,000,000 

56,300,000 

22 inclined planes ..... 4,700,000 
7,500 labourers ..... 13,500,000 

74,500,000 

North of Lake Timsah. Couvreux's contract Port Said to Timsah, 5^ miles, 
156,000,000 cubic feet; at El Ferdane, 3| miles, 34,000,000 cubic feet; finished 
six months in advance of contract. Borel and Lavalley Dredgings, 306,000,000 
cubic feet out of 911,000,000; monthly work, January, 1,700,000, April, 
2,400,000. At work 1 6 long trough dredgers, 6 elevator dredgers, 9 dredgers, 
with barges. 

South of Lake Timsah. From Lake Timsah to Bitter Lakes, 160,000,000 out 
of 300,000,000 cubic feet; 1 1 dredgers at work, doing each 882,500 cubic feet 
per month; excavated by hand, 24,500,000 cubic feet, out of 45,600,000; excava- 
tions by hand going on over 21 miles, from Bitter Lakes to Chalouf. There 
remained to be finished 248,000,000 cubic feet. 

SUEZ. Borel and Lavalley; dikes and embankments in roadstead, by I5th 
April, 1,600,000 cubic feet of stone submerged out of 2,300,000. 

1868-9 

Moles finished at the beginning of 1869. Pass in 1868, 21 to 23 feet deep; 
now, 29 to 30 feet deep. 

MARITIME CANAL General Works. From Port Said to Bitter Lakes canal 
open to its full width and length; dredgers at work completing depth. 

North of Lake Timsah. Nil. 

South of Lake Timsah. Flooding of Bitter Lakes commenced in March 1869; 
Bitter Lakes to Red Sea, 22 miles by hand, 3 miles by dredgers. 

SUEZ. Suez pass finished; breakwater, over 1,600 yards of stonework. 

The total excavation work on the canal alone totalled 75 million 
cubic metres, or nearly 2,650 million cubic feet. 

On i gth March 1869, in the presence of the Khedive, the Prince and 
Princess of Wales, and a brilliant company of Egyptian notables and 
foreign visitors, the canal sluices were opened to admit into the Bitter 
Lakes, the ancient Gulf of Heroopolis, several feet below sea-level, the 
waters of the Mediterranean. The filling required fifteen hundred 
million cubic metres of water and was not complete till 24th October. 
Once full, a single barrier beyond Chalouf was all that restrained the 
further progress of the water. Final completion of the canal was now 


38 OPENING CEREMONIES 1869 

in sight, and de Lesseps, whose genius for organization comprehended, 
as will have been gathered from the preceding pages, the use of 
publicity on a grand scale 1 now gave notice that the canal would 
be formally opened on I7th November 1869. For four days the 
vessels would be permitted to pass free of charge and, thereafter, upon 
payment of the published dues. This announcement was supplemented 
by personal invitations to most of the reigning sovereigns of Europe by 
Ismail Pasha, who was making a grand tour of Europe. Never did 
de Lesseps display greater boldness than in fixing this early date for the 
inauguration of the principal work of his life : the unexpected obstacles 
remained till the last moment, but melted before his foresight and 
courage, and before the skill of his executive staff and the devotion of 
the whole corps of labourers. 

On 2nd November between two soundings, taken at a distance of 
130 metres, by means of square shafts holding twelve men, a hard rock 
was discovered, which broke the buckets of the dredger. 2 It was 
5 metres above the bottom of the canal. 'Every one', said de Lesseps 
afterwards, 'began by declaring there was nothing to be done: "Go and 
get powder in Cairo" said I "powder in masses and then, if we 
cannot blow up the rock we will blow ourselves up. The intelligence 
and energy of our workmen saved us. From the beginning of the work 
there was not a tent-keeper who did not consider himself an agent of 
civilization. Hence our success/' 3 

On the night of I5th November a fire broke out at Port Said among 
the fireworks destined for the fetes. They had been placed in a timber- 
yard in the middle of the town. Only the timely arrival of 2,000 
troops saved the town for, buried hard-by in the sand, lay a great 
quantity of gunpowder. 

On the 1 6th an abnormally high tide covered the ground destined 
for the opening ceremony and surrounded the platforms: with diffi- 
culty was dry ground made for the visitors. The same evening the 
Lati/> an Egyptian frigate, ran aground in the canal, thirty kilometres 
from Port Said. All efforts to dislodge her failed. The Viceroy re- 
paired to the scene with 1,000 men. 'We agreed', said de Lesseps, 
'that there were three methods to be employed to float her, to beach 
her on one bank, or "Blow it up", cried the Prince. "Yes, yes, that 's 
it It will be magnificent/' and I embraced him. Next morning I went 

1 In 1 8 57 the Viceroy had paid some 20,000 in order to ensure that the subject of the 
canal should be continuously and favourably discussed in the continental press, apart from 
a sum of some 39,000 francs paid monthly to de Lesseps for similar purposes. 

2 Sir John Hawkshaw had warned them of this danger, declaring that soundings at 
such intervals did not guarantee the absence of rock. 

3 For an amusing account of a somewhat similar incident in later days see The Leisure of 
an Egyptian Official, by Lord Edward Cecil, 1921, pp. 189 sqq. 


Chap, m THE CANAL COMPLETED 39 

on board the Aigle without mentioning the accident. I did not wish to 
change the programme. Logically I was wrong; the results proved me 
right. We must not be doctrinaires. It answers neither in business nor 
in politics. Five minutes only before reaching the scene I learned by 
signal that the canal was free, and the brave little Latif intact.' 

'Within the cabin sat the Empress Eugenie, a prey to the most 
grievous emotions : every moment she thought she saw the Aigle stop, 
the honour of the French flag compromised, our labours lost. Over- 
come by her feelings she left the company, and we overheard her sobs 
sobs which do her honour for it was French patriotism overflowing 
from her heart/ The risk he ran was the measure of his success. 'The 
canal', he said in a lecture in April, 1870, 'was indeed opened on 
I yth November, but not without terrible emotions. I have never seen 
so clearly how near is failure to triumph, but, at the same time, that 
triumph belongs to him who, marching onward, places his confidence 
in God and man.' On i7th November the channel was open, and the 
marriage of the two oceans was celebrated by the slow passage, lasting 
three days, of the Government fleet through the new waterway. 

Sir Ian Malcolm 1 thus describes the scene of de Lesseps' triumph: 

'The little harbour at Port Said was alive with the ships of many nations, bearing 
the most eminent representatives of art and science, of commerce and industry, 
Sovereigns, Princes and Ambassadors, to enjoy the unbounded hospitality of the 
Khedive and to see with their own eyes this great thing that had actually come to 
pass. Already on November I3th, His Highness the Khedive had anchored his 
yacht the Mahroussa outside Port Said to receive his guests, whose arrivals from 
over many seas continued for three days and three nights: the Emperor of Austria, 
the Crown Prince of Prussia, members of other reigning families 2 and finally the 
Empress Eugenie on board the digle. It was a gorgeous and a glittering scene at 
the doorway of the desert, there were fifty men-of-war flying the flags of all 
nations of Europe, firing salutes, playing their bands, whilst the sandy littoral was 
covered with tented Arabs and Beduin from far and near who had come with their 
families, on horseback and camel to join in the greatest festival that Egypt had 
seen since the days of the Ptolemies. On the foreground were erected three large 
pavilions or enclosed terraces; in the centre one were massed the illustrious guests 
of the Khedive; on the right hand was the Muhammadan hierarchy supported by 
its faithful, and on the left an altar for Christian worship and thanksgiving. When 

1 Quarterly Review, January 1930. 

2 Others among the six thousand guests invited were the Grand Duke Michael of 
Russia and the Prince and Princess of Holland, Great Britain was officially represented by 
Mr. Henry Elliott, British Ambassador at the Sublime Porte, supported by several British 
men-of-war. The United States was the only Western nation of any considerable size not 
represented, perhaps because in 1 869 the Alabama question was very actively at issue. The 
principal Christian pontiffs were the Archbishop of Jerusalem, and Monsignor Bauer, the 
Empress's confessor, who delivered an appropriate eulogium from the pulpit after one of 
the Ulama had invoked a blessing on the enterprise and on those present. 


40 DE LESSEPS IN LONDON 1870 

the rites of all the Churches had been duly celebrated and the Canal blessed, the 
Civil opening took place in official form. That evening (i6th November) there 
was a display of fireworks, and festivities were prolonged far into the night. 

'On the following morning at 6 a.m. all the vessels that had the entree to the 
canal were marshalled and paraded. Two hours later the Aigle, bearing the 
Empress of the French and Monsieur de Lesseps, headed the procession and 
passed in dignified array from the Mediterranean Sea into the waters of the Suez 
Canal . . . acclaimed by teeming multitudes crowding the arid banks of the burning 
desert, until they reached Ismailia, the little capital of the canal zone on Lake 
Timsah . . . and the Algle dropped her anchor. . . . 

*On the i gth the journey was renewed, and the Algle with her escort steamed 
on to the Bitter Lakes, where they anchored for the night and continued on the 
following morning to Suez, having done the whole journey in sixteen hours . . . 
without mishap of any kind. The return to Port Said was accomplished in 
fifteen hours by the Algle . . . 

'One of the British vessels in the ceremonial procession was the S.S. Hawk 
bound for Suez with the British Indian Telegraph Company's cable.' 

The festivities were not restricted to the canal zone. The present 
roadway leading between rows of trees from Cairo to the Pyramids 
was built, in the incredibly short time of six weeks, for the convenience 
of the Viceroy's royal guests, by forced labour urged on by the lash. 
Verdi composed an opera, A'ida^ specially for the occasion. It was 
magnificently presented at Cairo: all the jewels worn on the stage, to 
the value of several millions, are reputed to have been real. 

Great Britain, who almost alone of the Great Powers had steadfastly 
obstructed the accomplishment of the project, was not backward in 
offering honourable amends. De Lesseps received at the hands of 
Queen Victoria the Grand Cross of the Star of India. The Lord Mayor 
of London, proposing his health at an official banquet in his honour, 
declared that 'our eminent engineers made a mistake M. de Lesseps 
was right, and the Suez Canal is a living fact'. He was made a freeman 
of the City of London, and the Prince of Wales, in presenting a Gold 
Medal to him at the Crystal Palace, said : 

'Great Britain will never forget that it is to you alone that we owe the success 
of this great achievement. ... I hope that since you have been in our midst, our 
people have shown you how highly they appreciate the advantages that your 
splendid work has bestowed, and will continue to bestow upon our country.' 

The Times apologized for past hostility in a leading article which 
declared that 

'M. de Lesseps has arrived in a country which has done nothing to bring about 
the Suez Canal but has, since its opening, sent through it more ships than all the 
rest of the world. This country will furnish the dividends that the shareholders 
will receive. May they be the compensation for our error.' 

The Editor of The Times, however, could scarcely have foreseen that 


Chap, in FINANCIAL POSITION 41 

the great-grandchildren of his readers would be contributing to pay 
quite such vast sums as have in fact been received, not only by the 
shareholders but by the sleepiest of sleeping partners the Credit 
Foncier and descendants of the holders of 'Founder's Shares'. De 
Lesseps, in the midst of these personal triumphs, retained his dignity, 
his imperturbability, and above all his generosity. He did not 
consider the inauguration of the canal complete until he had acknow- 
ledged his indebtedness to Thomas Waghorn (vide p. 10), by erecting 
at Port Said a large bust, executed by M. Vidal-Dubray, of this apostle 
of the overland route. 

The canal had, including harbour works and approaches at either 
end, a length of over 92 miles. Nowhere was the depth of water less 
than 26 feet or the width at the bottom of the channel less than 72 feet. 
Sidings where ships could bank in and allow others to pass had been 
provided at various points, the whole linked by a system of signals. 
Docking facilities, and facilities for fuel and water-supplies and light- 
houses, had been provided at either end. 

In 1869 the Egyptian Government repurchased the Wady Valley, 
through which the Fresh- water Canal ran, for 10 million francs, and 
the rights of customs, post office, &c., on the Suez Canal for 30 million 
francs. This last sum, raised by loan, was secured by the surrender of 
the right to surplus profits on the 1 77,642 shares in the Company held 
by the Egyptian Government. The sums made available were thus : 

Thousand francs. 

Share Capital ...... 200,000 

1864 Indemnity for corvee labour .... 38,000 

Fresh-water Canal and dues, purchased by Egyptian Government 16,000 

Cultivable Land, do. ..... 30,000 

1 869 Sale of Wady Valley to Egyptian Government (net) . 7,648 

Surrender of Customs &c., do. (net) . . 29,745 

Profits from Investments ... . 20,103 

Receipts from Services (Health, Sec.) . . 6,871 

Loan ...... . 100,000 

Other Receipts .... . 2,807 

Total 45M74 

There were creditors for 7,065,000 francs at the end of 1869. Interest 
at 5 per cent, had been paid from the outset on the share capital. 

In spite of the recommendations of the Select Parliamentary Com- 
mittees, the opening of the Suez Canal did not result in quicker carriage 
for Her Majesty's mails. Bombay still had in 1870 only two mails 
a month, four mails, as before, being carried to Madras and Calcutta 
by the sea-route. 1 Existing mail contracts provided for overland transit 
by the British owned Alexandria-Suez railway, and till 1 8 74 all mail 
* See Hoskins, British Routes to India, 415 sqq. 


42 CONSEQUENTIAL CHANGES 1870-4 

steamers stopped at these ports to drop or pick up mails and such 
passengers as desired to see more of Egypt than they could from the 
deck of a steamer in the canal. Even after 1874 the accelerated mails 
via Brindisi were transported by this route. Not till 1888 were all 
mails carried through the canal. 

Nor did the inauguration of the Suez Canal at once involve the 
abandonment of the Cape of Good Hope route. For technical reasons, 
as well as considerations of cost and safety, the principal shipping lines 
did not and could not at once make the necessary consequential changes 
in their equipment and organization. For some years the channel was 
not of uniform depth : it was very narrow, and groundings were fre- 
quent. Passages were slow, and tended, as traffic increased, to grow 
slower. Separate fleets had been built for the trade east and west of the 
Isthmus, the former required high speeds, and quick journeys between 
adjacent ports, the latter demanded lower speeds, more space for fuel 
and Lascar crews. 

At the same time new and more efficient marine engines were being 
very rapidly developed, and the older vessels were quickly becoming 
obsolete. Shipbuilding concerns were swamped with orders. 

It was at this moment that the canal was opened. The combination 
of circumstances heavily handicapped the established shipping lines 1 
and favoured the growth of new concerns who could build ships 
specially designed to meet the new conditions and in particular to 
navigate the canal. The old mail contracts were a handicap rather than 
an advantage. The P. and O. ceased to make profits: the British India 
Steam Navigation Company was hard hit. Professor Hoskins, in his 
admirable British Routes to India, gives a vivid and lucid description of 
the position during these years. By 1 8 75 the crisis had been successfully 
surmounted. The P. and O. and the B. I. regained and even increased 
their predominance. The canal was French, but 75 per cent, of the 
shipping passing through it was British. This outstanding fact governed 
the policy of the British Government during the years that followed. 

1 Mr. T. H. Farrer of the Board of Trade wrote in 1882 as follows (Parliamentary 
Paper y Dec. 1882): 'The effect of the Canal . . . may not have been on the whole beneficial 
to the ship-owning interests in the U.K. and to some capitalist interests. The shortening of 
the voyage is, pro tanto, a diminution of the demand for shipping. ... If there had been no 
Canal, there would have been more . . . employment of English capital and labour.' The 
exports of oriental products, and British entrep6t trade in general, decreased. As late as 
1880, however, all jute and rice from India reached England via the Cape. See Hallbcrg> 
p. 389. 


43 

BIBLIOGRAPHY 

Calcutta Review ', xxxviii. 1 863 . 

Couridon. Itintraire du Canal de Suez. Port Said, 1875. (Royal Empire Soc. Collection.) 

Denison, Sir W. The Suez Canal.' Proc. Inst. Civil Engineers, vol. xxvi, 1867. 

Doughty. Arabia Deserta. 

Hallberg. Op. cit. 

Hardey, Sir C. 'A Short History of the Engineering Works of the Suez Canal.' Proc. Inst. 

Civil Engineer, vol. cxli, 1900. 
Hoskins. Op. cit. 

Lesseps, F. de. History of the Suez Canal. A personal narrative. London, 1876. 
Malcolm, Sir Ian. Quarterly Review, January 1930. 
Parliamentary Papers. 
Public Record Office. P.O. 78/1951 and P.O. 97/422. Suez Canal, 1860 to 1866 (includes 

Maps and Plans). 
F.O. 78, numbers 2014, 2042, 2095, 2142, 2170, 2188, 2234, 2288. Reports of 

British Consuls at Suez and Correspondence relating to neutralization of Suez Canal. 
Rabino,J. F. Op. cit. 
Steele, John (master mariner). The Suez Canal, its present and future, 1872 (Royal Empire 

Soc. Collection). 

'Will the Suez Canal Company rest content with moderate profits? Temptation to 

extreme exaction is great England may acquiesce in a grievous wrong while others 

. . . may be clamorous for amendment. It is the merchant, not the shipowner, who 

benefits from the canal and, in the long run, pays the dues.' 


CHAPTER IV 

THE ACQUISITION OF THE KHEDIVE'S SHARE- 
HOLDING BY THE BRITISH GOVERNMENT 

Financial difficulties. Difficulties with shareholders. Proposed International Control. 
Turkish objections. Proposed purchase by British interests. British grievances. 
The point of view of the Canal Administration. The consequences of the accession 
of Disraeli to power. Ismail Pasha's debts. Proposed mortgage on or sale of his 
Suez Canal shares. Lord Derby's views. Disraeli's decision. Sir Stafford 
Northcote. Parliamentary Discussions. 

'TpHE Captains and the Kings had scarcely left the scene of de 
-L Lesseps' success when it became clear that the Company was in 
financial difficulties. The cost of the construction proved to be more 
than double the original estimate of 200,000,000 francs: it was stated 
in the balance sheet of 3ist December 1869 at 453,645,000 francs. 1 
Of the total of nearly ^i 8,000,000 subscribed only 826,000 remained 
for working capital. The Company had received from various sources 
over 300,000,000 francs and had to raise a further hundred million. 
They offered 333,333 bonds of 500 francs each, issued at 300 re- 
deemable in fifteen years, and carrying interest at 5 per cent. They were 
not underwritten, and proved unattractive until the French Govern- 
ment agreed to the issue of the remaining two-thirds of the issue 
in the form of obligations a lots. In this form they found a ready market. 
During 1870 the Company failed to pay dividends, or even the 
minimum 5 per cent, on the shares, which fell to 208 francs in 1871, 
A fresh loan of 120,000 'bons trentenaires' was issued at 100 francs, 
at 8 per cent, redeemable in thirty years at 125 francs secured, with 
the consent of the Khedive, by a 'temporary' surtax of one franc a ton. 
This surtax, itself probably illegal, in the absence of the consent of the 
Porte does not appear to have been levied, but the receipts at this time 

1 Thousand francs 

Cost of construction ....... 291,330 

Interest on shares for ii years, 1859-69 .... 66,849 

Sinking Funds on bonds ...... 14,628 

Administrative expenses . . . . . . 14,182 

Expenses of transit, health, telegraphs, &c., services . . 13*338 

Costs of issue of shares and bonds, &c. .... 15,472 

4I5>799 

Plant and other Fixed Assets ...... 17,009 

Cash, investments, and debtors ..... 20,837 

Total 453> 6 45 


Chap, iv DE LESSEPS IN DIFFICULTIES 45 

were far short of requirements. Instead of the expected million net 
tons of shipping the traffic through the canal in 1 870 was only 436,000 
tons and in 1871 only 761,000 tons. Expenses exceeded receipts in 
1870 by 9,590,000 francs, and in 1871 by 2,650,000 francs, sums 
which were carried to the cost of 'premier ^tablissement'. 

De Lesseps' difficulties were heightened by the Franco-German war, 
and a little later, at a meeting of dissatisfied shareholders, just after 
the siege of Paris, a large Communist element clamoured boisterously 
for directors of their own choosing, De Lesseps was saved from 
violence only by the personal courage of his friend Sir Daniel Lange, an 
English director of the canal, who faced a would-be assailant on the 
platform and threatened in broken but intelligible French to knock 
him down. 

Realizing how insecure was his tenure de Lesseps endeavoured, 
on Lange's advice, to transfer control to London. The matter was 
referred in April 1 8 7 1 to Lord Granville, Secretary of State for Foreign 
Affairs, who received it very coldly. In June 1871 de Lesseps himself 
offered to recommend the purchase of the canal by the Maritime 
Powers for twelve million pounds sterling plus a payment of ten 
million francs annually for fifty years to the shareholders, as an alter- 
native to acquisition by the Turkish Government. The Foreign Office, 
supported by the Prime Minister, Mr, Gladstone, 1 were still dis- 
inclined to move, though Lord Derby indicated that he favoured the 
transfer to an International Commission. Lord Farrer, the President 
of the Board of Trade, suggested that the canal should be placed under 
a European Commission for purposes of management on the lines 
of what would now be described as a Public Utility undertaking. 
'Complications and difficulties', he said, later, 'would be endless so 
long as this great highway of nations remains in the hands of a private 
Company.' The experience of the last fifty years, however, gives little 
encouragement to such a proposal to-day. 

The Sublime Porte, on the other hand, could not admit, even in 
principle, the sale of the canal, or the creation of an International 
Administration on its own territory. The Suez Canal Company was~an 
Egyptian company and, as such, subject to the laws and customs of the 
Turkish Empire, and M. de Lesseps, as mandataire of the Viceroy, had 
no right to raise the question. 

The Porte and the Khedive suggested that Great Britain should 
purchase the canal. General Stan ton, then Consul-General at Cairo, 
pressed the Government to agree: the Duke of Argyll, then at the India 

1 Mr. Childers, who later became Secretary of State for War, and between 1 874-80 
was chairman of the Royal Mail Steamship Company, had suggested in 1869 to Mr, 
Gladstone that Great Britain should acquire a large holding. Vide his Life, vol. i, p. 230. 


46 PROPOSED PURCHASE OF CANAL 1870-2 

Office, lent his support. Mr. Gladstone's Cabinet resolutely shut their 
eyes to the larger aspects of the matter. They treated it as a purely 
financial matter and saw no reason why they should 'reimburse the 
shareholders'. De Lesseps came to England to make a bargain. Lord 
Granville refused to discuss terms. 

The canal might, between 1870 and 1872, have been bought by 
a private British, as an alternative to an official international group, but 
proposals to this end, and in particular a combination formed for the 
purpose by the Duke of Sutherland and Mr. Fender, were discouraged 
by the Liberal Government and, though the Board of Trade continued 
to urge international control, no action was taken. Had not France 
been stricken down and impoverished by her great struggle with 
Germany immediately after the canal was completed, the attitude of 
indifference if not of hostility maintained by successive Governments 
might have cost us dear. Our sailors, at any rate, were quick to realize 
the importance of the new waterway. Admiral Richards and General 
Sir Andrew Clarke drew up a report for the Admiralty in 1870, in 
which they recognized its significance for our commerce and for our 
sea-power, and the dangers to both which might arise if it fell into the 
hands of a single State, or even into those of an independent company. 
But these views, being those of naval experts, carried little weight with 
the Government of the day. 

The arrogance of the Suez Canal officials, their claim that the canal 
was theirs and they could do what they liked, the open violation of the 
regulations relating to tonnage measurement, though officially accepted 
by de Lesseps, 1 had not, however, been without its effect on public 
and official opinion. 

Monsieur de Lesseps was still in a state of half-veiled rebellion, 
delaying and obstructing British ships on various excuses, and worrying 
both the Porte and the Khedive with extravagant claims for indemni- 
ties, and menaces of French intervention. He notified the Egyptian 
Government that he declined to recognize their jurisdiction, and that, 
in the event of legal proceedings, he would place himself under the 
protection of France. Everything indicated that the Eastern question 
would shortly be reopened: there were insurrections in Bosnia and 
Herzegovina and Panslavist intrigues in Servia. The Suez Canal might, 
in certain circumstances, become, in very truth, a second Bosphorus. 

It is none the less important, in fairness to the management of 
the canal at this period, to try to understand their point of view. The 

1 In April 1874 he went to the length of addressing formal letters to the Admiralty and 
the Board of Trade notifying them that his agents had received orders 'to enforce the strict 
observance of the passage dues exacted by the Company, and that vessels refusing to pay 
these dues would have to take the old route by the Cape*. 


Chap, iv FRENCH AND BRITISH ATTITUDES 47 

British were the leaders of the agitation against the high canal dues : 
they were also the principal users, and foremost in complaints at the 
slowness and inefficiency of the service. But they had refused to sub- 
scribe either to the original capital of the Company or to subsequent 
loans. France had just suffered defeat at the hands of Germany but 
was rapidly retrieving her position. Germany had demanded and ob- 
tained a crushing indemnity, but no voice or helping hand was raised. 
Great Britain had remained inert, though Gladstone was, in fact, the 
only statesman in high place to urge that Europe should register its 
protest. For twenty years the British Government, in Whitehall and 
through its representatives in every capital of Europe, had opposed by 
every means in their power the inception and completion or a scheme 
which was sincerely and deliberately regarded in England, and often 
represented in the French press, as a menace to our preponderant share 
in Eastern trade. When we accepted the inevitable we did not do so 
with a good grace. We might have officially guaranteed a loan, to be 
raised in England, of the amount necessary for completion. The idea 
was abhorrent to the statesmen of the day under Gladstone, as was the 
suggestion that England should purchase the canal, though it was 
Gladstone who in 1883 proposed to lend the Company 8,000,000 at 
3 \ per cent. We thus forced the Company to meet capital expenditure 
out of revenue ; our opposition had, moreover, already had the effect 
of almost doubling the cost of construction. The French regarded our 
statesmen as perfidious, our financiers as hypocritical, and our shippers 
as unreasonable. 

They had, in the diplomatic sphere, scarcely less reason to complain, 
from their own point of view, of our proceedings. The reputation of 
Great Britain during the years preceding Disraeli's accession to power 
on ist February 1874 had sunk. No longer regarded as a leading 
power in Europe, Great Britain had been ignored at the time of the 
Franco-German war. We had permitted Russia to evade compliance 
with the Black Sea clauses of the Treaty of Paris, and our handling of 
the United States had been maladroit. The reputation of the British 
Government was in 1873 not unlike that of its successor exactly sixty 
years later, for the diplomatic world had only just begun to realize that, 
with Disraeli as First Minister, observance of British treaties, respect 
for British rights, and consideration for British opinion was not only 
expedient but necessary. Only a few months later Disraeli made it 
clear, as his predecessor would never have brought himself to do, that 
a gratuitous resumption by Germany of hostilities on France would not 
be regarded by Great Britain with indifference, the statesmen of Europe 
realized that Great Britain was, for the first time for five years, once 
more a force to be reckoned with. 


48 ISMAIL PASHA IN DIFFICULTIES 1875 

Disraeli, too, had always been interested in the East. His old en- 
thusiasm, which had led him in his early youth to make the acquaintance 
of Muhammad Ali Pasha, the Viceroy of Egypt, at Shubra, and to offer 
the Caliph his services under the command of the Pasha of Janina, at 
once led him to study the condition of the Ottoman Empire. He had 
been borne to the summit of his ambition by a wave of reaction against 
the domestic activities of Mr. Gladstone. Warned thereby against the 
dangers of a policy of activity at home, he was encouraged to seek in 
foreign affairs a diversion for the unspent energies of the nation. In 
May 1875 he had made up his mind to buy up the Canal Company if 
he could, and in that month he sent Baron Lionel de Rothschild to 
Paris to try to reopen the negotiations which Lord Granville had 
refused to entertain. But time is of the essence of financial transactions, 
and the favourable moment had passed. De Lesseps was, indeed, in low 
water, but the tide had turned. In 1872, 1,161,000 net tons of shipping 
had passed through the canal, and a net profit of 2,071,000 francs was 
carried forward. Next year 5,000,000 francs was paid on account of the 
July 1870 coupon and a further 10,000,000 francs was paid in 1874; 
the carry forward for the next two years was 4,556,000 francs and 
2,615,000 francs respectively. In 1874, moreover, the arrears of 
interest were capitalized at 34,000,000 francs in 400,000 bonds of 85 
francs bearing interest at 5 per cent, and redeemable in forty years at 
par. France was already recovering from the shock of defeat, and 
Franco-Russian discussions between the Comte de Chaubordy and 
Prince Gortschakoff at Interlaken in the summer of 1873 ^ a< ^ included 
the defence of French interests in Egypt. 

At this juncture a fresh complication arose. Ismai'l Pasha had bor- 
rowed, on the security of the revenues of Egypt, nearly seven million 
pounds a year for the past thirteen years : the public debt had increased 
during his Viceroyalty from 3,000,000 to over 98,000,000. For 
practical purposes, the whole had been squandered except i 6,000,000 
spent on the Suez Canal. 1 The bankruptcy of the Sultan of Turkey in 
October 1 875 rendered Ismai'1 Pasha's position hopeless. The crash at 
Constantinople was followed by a crisis at Alexandria. Unless he could 
raise a loan and meet the December coupons he would have to tread 
the same path as his Suzerain. Perhaps that would have been the best 
solution, but the word moratorium had scarcely found its way into the 
English language, 2 and international debts were not viewed differently 
from private obligations. The Khedive cared little what he paid pro- 
vided he could meet the needs of the moment. In urgent need of 
money, he planned in November 1875 to se ^ ^ s shares in the Suez 

1 Cromer, i. 1 1 . 

2 The earliest reference in the O.E.D. is 28th September 1 87*; from Belgrade. 


Chap, iv PURCHASE OF KHEDIVE'S HOLDING 49 

Canal to French financiers, or, at least, to use them as security for a 
fresh loan. He required 4 millions on almost any terms. One group 
at least was planning to buy the shares, but no one would, even at 
1 8 per cent., lend him more than 50 million francs, and then only with 
the approval of the French Government, which was not easily obtain- 
able. It was at this time that Mr. Frederick Greenwood, then editor 
of the Pall Mall Gazette, heard on I4th November of the negotiations 
from Mr. Henry Oppenheim, a well-known financier of Austin Friars, 
and one of the proprietors of the Daily News, in which capacity he 
found himself debarred from certain political intimacies which Mr. 
Greenwood fully enjoyed. 1 On i6th November Mr. Greenwood in- 
formed Lord Derby of what was in contemplation. The news reached 
Lord Derby at the Foreign Office on 1 5th November from unofficial 
sources, and the suggestion was made that the British Government 
itself should purchase the shares. Lord Derby was cautious and would 
probably have temporized, but Disraeli thought otherwise, and at his 
instance Lord Derby at once informed the British representative in 
Cairo that Her Majesty's Government would be disposed to purchase 
if satisfactory terms could be arranged. Ismai'l Pasha was approached, 
and protested that he had no intention of selling but only of mortgaging 
the shares. The result would have been the same in either case, and 
General Stanton, the British Consul-General, insisted on a suspension 
of negotiations in order to give his Government an opportunity of 
making a proposal. It was, in effect, from the Khedive's point of view, 
a question of obtaining a loan of ^4 millions, at 5 per cent., on the 
security of the shares of doubtful value, as the right to 4 surplus profits' 
for the next eighteen years had already been discounted and only the 
contractual 5 per cent, interest would be paid up to 1894. The 
political aspect had no interest for him. But he knew what he was 
doing. 'This is the best investment', he remarked, the day after the 
arrangements were completed, 'financially and politically, ever made, 
even by your Government, but a very bad one for us.' 

On 27th November the Cabinet, at the initiative of Disraeli, deter- 
mined in principle to acquire the Khedive's holdings. The decision, 
though unanimous, was taken with reluctance. The Duke of Argyll, 
then at the India Office, was however a strong supporter of the scheme. 

From the moment that it was made clear that Great Britain was 
determined that the shares should not fall into French hands, the 
French Government had to choose between a sale to Great Britain and 
a serious financial crisis in Paris, where money was scarce. They 
allowed matters to take their course, and de Lesseps, of all diplomatists 
the most realistic, hastened to welcome in the most public and official 
1 I have here followed Mr. Lucien Wolf in The Times of 26th December 1905. 


50 DISRAELI'S ACTION APPLAUDED 1875 

manner 'the co-operation of Great Britain in the management of the 
canal'. The phrase indicates the results which de Lesseps anticipated 
from the investment, but it has not been translated into practice, 
though the number of directors was at once raised from twenty-one to 
twenty-four so as to include three British official nominees. 1 The first 
directors so nominated were Col. (later Sir John) Stokes, R.E., Mr. 
(later Sir Charles) Rivers- Wilson, and Mr. E. J. Standen, who was to 
be Resident Director in Paris. 

The coupy for it was instantly recognized as such throughout the 
world, was favourably received. The Crown Princess of Germany 
(later the Empress Frederick) wrote to Queen Victoria, * Everybody is 
pleased here, and wishes it may bring England good. . . .' Willy (i.e. 
Wilhelm II) writes from Cassel, 'Dear Mama, I must write you a line, 
because I know you will be delighted that England has bought the 
Suez Canal. How jolly!' M. de Lesseps looked upon the 'close 
community of interests about to be established between English and 
French capital ... as a most fortunate occurrence'. Prince Bismarck 
congratulated Lord Derby on having 'done the right thing at the right 
moment in regard to the Suez Canal'. He may have regretted that 
he had not demanded, in 1871, payment of part of the French in- 
demnity in Suez Canal shares. He might have done so successfully 
with far-reaching political as well as financial results. The canal 
had then been open only twelve months: the British Government 
would doubtless have demanded certain assurances, but would almost 
certainly not have objected to the transfer. So far as is known the idea 
was not at any time discussed even in Germany; it is one of the 
'might-have-beens' of history. 

Lord Derby, however, had at first grave doubts. He wrote on 1 9th 
November to Lord Lyons, 2 'I sincerely hope we may not be driven to 
that expedient (i.e. to purchase the Khedive's holding). The acquisition 
would be a bad one financially and the affair might involve us in 
disagreeable correspondence both with France and the Porte' a 
typically departmental view. 

The Chancellor of the Exchequer, Sir Stafford Northcote, was at 
first more outspoken: on 26th November he wrote to Disraeli: 'Our 
policy, or our proceedings, with regard to the Canal, has not been such 
as to gain us much credit for magnanimity. We opposed it in its origin, 
we refused to help de Lesseps in his difficulties : we have used it when 
it has succeeded, we have fought the battle of our shipowners very 
stiffly, and now we avail ourselves of our influence with Egypt to get 
a quiet slice of what promises to be a good thing. ... I don't like it.' 3 

1 To qualify them for their posts 300 more shares were purchased. 

2 Lord Newton, LordLyons y ii. 87. 3 Andrew Lang, Life of Sir $. Northcote, ii. 8 5. 


Chap, iv DISRAELI'S ACTION CRITICIZED 51 

By 26th January, however, he had modified his views, and wrote to 
Disraeli, *So far as the purchase of the Suez Canal shares is in question, 
I think our case is perfect. Subsequent events have strengthened, 
rather than weakened, the arguments which induced us to decide on it.* 
I owe to the courtesy of Professor H. W. V. Temperley of Peter- 
house, Cambridge, the following transcripts, which show clearly the 
grounds on which the leaders of the Liberal Opposition party objected 
to the purchase when it was first announced. 

Private Granville MSS. (Record Office) 

W. E. Gladstone to Lord Granville. Nov. 22, 1875. 

You may like to know how it strikes other friends and even what are the 
sentiments of a disembodied spirit like myself. Amid the conflicting statements 
that have appeared I find the meeting point of them all in the version which runs 
as follows: (a] the purchase is immediate, (b) The payment is immediate, (c] For 
a term of years the Khedive guarantees 5 per cent, upon the money: after which 
we get the Dividend yielded by the concern, (d) In some manner it is subject to 
the consent of Parliament; and I imagine they are hardly in a condition to pay the 
four millions themselves outright, though some finance agent may do it on the 
strength of the pledge to apply to Parliament, (e) There is no present sign of an 
intention to summon the two Houses for the purpose. A storm of approbation 
seems to swell, almost to rage, on every side. 

I write in mild language, out of respect such respect as is due to the sense of 
what seems an overwhelming majority. But my opinion on the imperfect informa- 
tion before me is this. If the thing has been done in concert with the other Powers, 
it is an act of folly, fraught with future embarassment. If without such concert, it 
is an act of folly fraught also with personal danger. I am aware of no cause that 
could warrant or excuse it, except its being necessary to prevent the closing of the 
Canal. But that cause I apprehend could not possibly exist. The closing of the 
London and North Western would be about as probable. 

Gladstone to Granville. Nov. 17, 76. 

Is our real, valuable hold over the S[uez] C[anal] in wartime, any other than 
our maritime superiority in the Mediterranean? Would Egypt make any real 
addition to it? If it would not, then the holding of it would be a new military 
responsibility, a burden and an evil. 

Private Granville MSS. 

W. E. Gladstone to Lord Granville. Nov. 22, 1875 (contd.) 

You may remember that in our Cabinet we discussed the neutralization of the 
Canal and the purchase was suggested or named. As far as I recollect, we peremp- 
torily set aside the purchase, and found no reason then to prosecute the neutraliza- 
tion, partly because it was difficult but principally because we found [ ?] 
so well as things are, that there was no motive to desire a change. 

W. E. G. 


52 MR. GLADSTONE'S CRITICISMS 1876 

Idem. Jan. 19, 1876. 

I think Lord Derby's view of the Suez Canal is only relatively the right one: 
right that is in comparison with others that are more and more dangerously wrong. 
What is the harm which has attended or is likely to attend private proprietorship 
in this case? Who can say that joint State proprietorship, which by the very force 
of the terms is all foreign, is either theoretically free from objection, or likely to be 
free from difficulties in practice. 

The Danube Commission is no precedent. There is no joint State enterprise. 

Private Gladstone MSS. (British Museum) 

Lord Granville to Gladstone. Nov. 28, 1875. 

What do you think of the purchase of less than one-third of the Suez Canal 
shares? I presume The Times got the news from the Rothschilds and the Telegraph 
from Derby. 

As regards my first impressions, which I mistrust, it appears to be very foolish. 

I presume it is without precedent (is it not?) that the Government should 
become part shareholder of a private undertaking over which by normal means 
they can have no control. 

Is it not enough of a political measure to induce and justify other countries in 
taking precautionary measures. 

Is it not possible that Lesseps and the Rothschilds have duped the Government 
into giving this great impetus to the value of Suez Canal shares by threatening 
them with a purchase of French capitalists. 

Is it the intention of the Government to buy in the open market another 
100,000 shares at enhanced prices in order to have an effective control? If they 
do so cannot the remaining shareholders still get them into endless difficulties? 
Will it not give rise to all sorts of international difficulties? Is the Canal to remain 
subject to the discretionary powers which we have always maintained belonged 
to the Sultan? Ought so great a responsibility to be taken without immediately 
consulting Parliament? 

Private Granville MSS. 

Lord Lansdowne to Lord Granville. Nov. 28, 1875. 

What do you say to the Canal coup? I should have thought that we did not 
require this new and rather sky-sweeperish locus standi for interference in Eastern 
politics so far as they affect our communication with India: but everyone seems to 
approve and I suppose the result will be to add not inconsiderably to the prestige 
of Government particularly in the commercial world, and at the seaports. 

Yours affectionately, 

L[ANSDOWNE] 
Halifax, Nov. 28. Nov. 29. 

Gladstone is here and in a state of great excitement about the purchase of the 
Suez Canal, which he denounces on'political, financial and all sorts of grounds. 

Berkeley Castle, Gloucester. Lord Hartington to Lord Granville re French 
correspondence in The Times. Harcourt's report 'a fair case for the Government'. 

Dec. 5, 1875. 
According to him the purchase was not made with the intention of ultimately 


Chap. MR. JOHN BRIGHT'S CRITICISMS 53 

acquiring the whole Canal, nor of increasing our influence in Egypt, nor of 
announcing to the world what our interest and policy in the Eastern Question 
would be, but simply to prevent the whole thing falling into French hands. 
Recommends 'the oracular line' at present. 

Brit. Museum F.O. MSS. 38955 Private Layard MSS. (British Museum). 

From Hammond to Layard. Nov. 30, 1875. 

I suppose you will have been as much astonished as the rest of the world. 
... It is certainly a bold experiment (much appreciated). We stand as a nation in 
a curious position, bound to conform to the terms of a concession made by the 
Porte, and in some and that no small degree, exposed to the roguery of the Khedive, 
which we may be called upon inconveniently to counteract. Wonders if The 
Times can quell insurrection. 

Dec. 22. 

Few words from Derby calculated to confirm the suspicion that in purchasing 
the shares our Government leapt in the dark, they could indeed hardly help 
doing so. 

Private Gladstone MSS. G. MSS. 

Lord Hartington to W. E. Gladstone. Dec. n, 1875. 

Rather approves. 

Dec. 13. 

Suggests 'armed neutrality'. 

If the Canal had been made through the Isthmus of Panama, should we have 
allowed America to claim the control of it on the ground that it was (as it would be) 
vital to her coasting trade? 

vide Delanc, vol. ii. 

Private Granville MSS. 

Henry Reeve to Lord Granville. Dec. 1 6, 1875. 

I have obtained from France very full particulars as to the Constitution 
and condition of the Suez Canal Company and the result is that I think the case 
is very strong indeed against the Government for the levity and ignorance of facts 
with which they acted. 

. . . Although I think we have made a very bad bargain and a bad investment, 
and that the political results may be inconvenient, I think it not impossible that 
25 years hence in the next century the country may not be sorry that this purchase 
was made. But it requires a very long sight to see so far. 

Private Granville MSS. 

John Bright to Lord Granville Jan. 5, 1876. 

Birmingham meeting 22nd. 

I agree with you about the 'share' transaction if but 'a share transaction', it 
should not have taken place if anything more if a great political transaction 
then I regard it as the first serious blow at the integrity and independence of the 
Ottoman Empire. Lord Derby's view of the matter in his despatches seems to me 
the right one we ought to invite the 'Powers' to unite in possessing, controlling 
and guarding the canal. Our interests would be safe and there could be no 


54 DISRAELI AND BARON ROTHSCHILD 1876 

jealousy. As it now rests, Russia and Austria are free to do what they like and our 
power even of remonstrance is greatly weakened. I think also our policy in the 
Turkish question 1854 to 1876 has been wrong and is terribly humiliating to us 
as a nation. 

The story of the acquisition, and of all the surrounding circum- 
stances, has been told in detail by Mr. Buckle in his Life of Disraeli 
(vol. v). Professor Hallberg in his valuable book, The Suez Canal, gives 
additional details from the French point of view. Professor Hoskins 
in British Routes to India has also marshalled much relevant evidence. 
Disraeli's success was due, in large measure, to the friendly attitude of 
the French Government, which was unsympathetic, as were the French 
bankers, to the purchase of the Khedive's shares by a French syndicate, 
and anxious to take no steps prejudicial to friendly relations with 
England, whose support was worth more under Disraeli than it had 
been under Gladstone. The time for the option passed, and Disraeli, 
with the assistance of Baron Rothschild, secured the prize. The firm 
of Rothschilds received a commission of 2| per cent, upon the purchase 
price and 5 per cent, interest until the date of repayment. The com- 
mission was large, but not disproportionate to the risk. 1 The with- 
drawal of four millions for an indefinite but considerable period from 
the resources of the firm necessarily entailed a large derangement of 
their business; they had to consider possible fluctuations in the value 
of money and the risk that Parliament would withhold its approval to 
a transaction for which there was no precedent. Disraeli indeed sug- 
gested in the House of Commons 2 that Messrs. Rothschilds had pur- 
chased the shares, for resale to the British Government so soon as 
Parliament had approved the transaction. In fact, however, the British 
Government were the purchasers, with money borrowed from the 
Rothschilds. Disraeli's explanation was a constitutional fiction, but a 
convenient one. 

Some months later, when the Suez Canal (Acquisition of Shares) Bill 
came before Parliament, the principles and methods of a Government 
shareholding in a commercial company were forcibly criticized. The 
intention of Government to purchase the shares had, said Lord Harting- 
ton, as Leader of the Opposition, become known to certain financiers, 
who had made use of the information to their own advantage, and the 
loss of others. 'I do not think', he concluded, 'that we can be proud 

1 The actual cost, as reported to Parliament (aoth June 1882) was as follows: 

Purchase money . . . 3,976,582 

Commission @ 2j per cent. . 99,415 
Expenses . . , . 625 

Total . . . 4,076,622 

2 Hansard, vol. 327, pp. 99-100. 


Chap, iv JURIDICAL ASPECTS OF PURCHASE 55 

of the part which our Government has played on the Stock Exchange 
in Europe: I hope it will be a warning to them to avoid such transac- 
tions in future'. It was not clear to critics then, and it is not clear npw, 
what positive advantages the British Government had gained, though 
it was clearly undesirable that virtually all the shares should be held 
by French subjects, as it would have made it difficult for the French 
Government to resist parliamentary pressure in case of any inter- 
national controversy involving the canal. It would have involved 
France in responsibility for protecting, in case of disturbances in 
Egypt such as those of 1882, a canal which was vital to British 
interests. It was unquestionably to prevent acquisition by France that 
Disraeli was so quick to make the purchase. 

Was there no other means to ensure that the shares so acquired 
should remain in British hands ? That question does not appear to have 
been seriously considered, and the proposal of Sir John Stokes that the 
shares should be vested in 706 trustees, each holding 250 shares and 
thus entitled to 10 votes each and in consequence able to exercise 
control at the Annual General Meeting of Shareholders, was rejected. 

It is often the fate of questions of International Law that action 
precedes deliberation, with the result that the rule or principle is 
adduced to explain or defend the action, rather than the action based 
upon an antecedent inquiry into the extent of the rule of principle. 

Disraeli's action was confessedly taken on grounds of political ex- 
pediency, though he had confidence that it would be justified on com- 
mercial grounds. It was, he said, a fallacy to suppose that an institution 
could not be at once political and commercial : the National Debt, for 
instance, had that double character. The purchase was made for a high 
political purpose, but, when made, the Government was found to take 
every precaution that it should be commercially successful. The 
juridical aspect scarcely received, at the time, any attention. Yet it 
created a precedent of the highest significance. 

The projectors of the inter-oceanic canal across the Isthmus of 
Panama protected themselves as early as 1869 by a treaty concluded 
between the Governments of Colombia and the United States, by 
which it was agreed that the canal was to be under the control of the 
United States, and navigation was to be open to all nations in time of 
peace but closed to belligerents. No such clear-cut stipulations were 
made in regard to the Suez Canal. 

International highways were at this period rapidly developing. The 
German and Italian Governments had a proprietary interest in the 
St. Gothard Tunnel. The Belgian Government had an interest in the 
Rhine Railway. The possibility of the Channel Tunnel was being 
actively canvassed (The Times, loth Jan. 1876). The Sound, whereby 


56 STATUS OF BRITISH GOVERNMENT AS SHAREHOLDER 1876 

ships enter and leave the Baltic, had just, by the Treaty of 1857, be- 
come open to universal navigation. But none of these enterprises had 
anything in common with the Suez Canal. They were the outcome of 
engineering and commercial enterprises to which the doctrines of free 
international intercourse had given free scope, and embodied the recog- 
nition that they were impossible of achievement without the cognizance 
and the patronage of governments, or, in many cases, without the 
consent of the Governments of different States. 

National proprietorship in any foreign commercial enterprise neces- 
sarily differs in its commercial and political consequences from such 
proprietorship on the part of individual persons. In the case of every 
joint-stock enterprise there are at least three local jurisdictions which 
may be concerned. 

(1) That of the legal domicile of the enterprise, which will probably 
determine the court in which the Company itself must be sued by all 
outside persons for alleged injuries or breaches of contract. In the case 
of the Suez Canal Company this domicile is Egyptian. 

(2) That of the domicile of the shareholders of the Company in that 
capacity. This depends on the Statutes, Charter of Incorporation, or 
Articles of Association. It is this jurisdiction to which the shareholders, 
in their litigation with each other, are amenable. In the case of the Suez 
Canal Company this domicile is French. 

(3) That of the domicile of all outside persons, to which those per- 
sons are amenable in the case of their committing a breach of contract 
or an injury against the Company. This may be anywhere. 

The British Government is thus obliged, in its capacity of share- 
holder, to abide by the decision of an Egyptian or a French court, as 
the case may be, and would be so obliged even if owning a majority, 
or the whole, of the shares. The status of the Suez Canal is of vast 
importance not only or principally to Great Britain but to India and 
to the Dominions. In the ultimate resort, Great Britain must rely for 
the defence of her claims on the purity and impartiality of foreign 
Courts of Justice. Circumstances may well arise (as have arisen else- 
where) when she will be tempted to choose between defiance of the 
law, as administered, or peacefully foregoing acquired rights the main- 
tenance of which she believes to be essential to the integrity of the 
British Empire. 

There is, indeed, a Permanent Court of International Justice at The 
Hague, sometimes, but not always, competent to deal with such 
questions, but it would be folly to rely on it, and the conciliation 
procedure of the League of Nations is not adequate on such cases. 

The fact is that a State cannot become a proprietor in a commercial 
enterprise, the seat of which is in the territory of another State, without 


Chap, iv CONFLICTING OBLIGATIONS OF BRITISH GOVERNMENT 57 

incurring the necessity of inventing new securities and guarantees 
which would be superfluous in the case of private subscribers. 

In the case of an enterprise like that of the Suez Canal the main 
object of the national proprietors (the British Government) is strategical 
and political, that of the other shareholders and royalty owners, in- 
cluding the Egyptian Government, is wholly commercial. The interest 
of the British Government is or should be to ensure that the canal does 
not exact more from users than is needed to pay a fair remuneration 
to the shareholders. The interest of the other shareholders is the 
opposite. 

'It is', wrote Mr. Sheldon Amos in 1876, 'the duty and interest of 
England to treat the question of profits as one of no concern whatever 
if a conflict arises/ The admission of a State like Great Britain into 
the body of shareholders is in fact the admission of a member whose 
interests and duties are never identical with and usually opposed to 
those of the other proprietors, and once a State has purchased shares 
they are generally for ever out of the market. 

It was clear from the outset that the canal could not in the interests 
of the world be wholly subject to the sovereignty of a weak nation such 
as Egypt, and its international importance made and still makes exclu- 
sive control by any one power undesirable. Equally objectionable, in a 
world which is striving, however feebly, to remove obstacles to inter- 
national trade, is the continuance of effective and unfettered commercial 
control by a Company whose primary object is to make as large a 
profit as possible out of the movement of commerce between Europe 
and Asia, even at the risk of diverting a large proportion, as at the 
present moment, to the longer routes via the Cape or the Panama 
Canal. 

BIBLIOGRAPHY 

Amos, Sheldon. The Purchase of the Suez Canal Shares and International Law. 1876. 

Arrow, Sir Frederick. J. Roy. Soc. Arts, i ith March 1870. 

Lang, Andrew, Life of Sir Stafford Northcote. 

Magniac, Charles, J. Roy. Soc. Arts, 25th February 1876. 

Newton, Lord, [Life of] Lord Lyons. 

Public Record Office. F.O. 78, numbers 2256, 2257, 2310-19, 2368-73, 2430-2, 2538, 
2 540-4, 2690-3, 292 5-6. Suez Canal, 1870-8, including suit of Messageries Man- 
times against Suez Canal, and Mr. Cave's Mission. 

Wolf, Lucien. 'The Story of the Khedive's Shares.' The Times, 26th December 1905. 


APPENDIX TO CHAPTER IV 

THE BRITISH GOVERNMENT'S SHARE 

In 1875 the British Government bought 176,602 shares from the Khedive for 
^3,976,580. J The 500 fr. shares were later divided into shares of 250 fr. and on 
3ist March 1932 the British Government held 298,526 of an estimated market 
value of 52,947,640 and certificates for the drawn shares in respect of which 
406,977 had been received and applied towards the reduction of the National 
Debt. Until the mortgage on the shares expired in 1 894 only interest at 5 per cent, 
was received 3,833,484 in all. The following table, compiled from the Finance 
Accounts of the United Kingdom, shows the amounts received in interest and 
dividends for each financial year to 3ist March. 


Year. 


Amount. 


Tear. 


Amount. 


Tear. 


Amount. 


Year. 


Amount. 


L 


L 


L 


L 


1894/5 


279,011 


1904/5 


990,199 


1914/15 


1,154,276 


1924/25 


1,090,264 


1895/6 


673*418 


1905/6 


1*053.323 


1915/16 


858,152 


1925/26 


1,115,161 


1896/7 


694,075 


1906/7 


1,054,028 


1916/17 


773*486 


1926/27 


1,099,751 


I 8 97 /8 


698,684 


1907/8 


1,127,821 


1917/18 


524*319 


1927/28 


1,546,272 


1898/9 


678,856 


1908/9 


1*058,374 


1918/19 


617,215 


1928/29 


1,696,932 


i8 99 / 


801,818 


1909/10 


1,056,208 


1919/20 


682,497 


1929/30 


1,834,140 


1900 


1900/1 


814,767 


1910/11 


1,129,260 


1920/21 


798,566 


1930/31 


1,870,697 


1901/2 


847*570 


1911/12 


1*187,935 


1921/22 


1*094*303 


1931/32 


2,238,879 


1902/3 


933*778 


1912/13 


1,318,686 


1922/23 


9 J 9*754 


1903/4 


936,151 


19*3/14 


1,246,370 


1923/24 


878,203 


Altogether, from 1876 to 1932, the British Government has received in dividends 
and interest the sum of 43,206,683. 

1 The Suez Canal (Acquisition of Shares) Bill, 1 876, received the Royal Assent on 1 5th 
Aug. 1876. 


CHAPTER V 
THE QUESTION OF CANAL DUES, 1870-84 

Financial Situation^ 18702. System of Measurement. Gross Tonnage. Net 
Registered Tonnage. Suez Canal Measurement. Decision of International Com- 
mission of 1873, de Lesseps refuses to comply. Sultan insists. Prevarications. 
Principle established. Arabi Pasha 9 s Rebellion. Agitation in 1883 for second 
canal. View of Law Officers. Official Negotiations with de Lesseps. Agreement 
of loth July 1883. View of British Directors. Discussion in Commons. Mr. 
Childers. Mr. Gladstone. Public disapproval. Agreement withdrawn. De 
Lesseps' attitude. Lord Salisbury's views. Mr. Gladstone's announcement. Sir 
Stafford Northcote's arguments. Debate in House of Commons. Conclusions to be 
drawn. De Lesseps resumes negotiations with shipowners. Agreement of 30th 
November 1883. Lord Granville's approval. Attitude of Her Majesty's 
Government^ relations with France. De Lesseps' satisfaction. Appendix (jf) 
Agreement of 3Oth November 1883 and connected correspondence. (B) Summary 
of public discussions^ &>*r., in regard to the Suez Canal^ 1883. 

THE completion of the Suez Canal was the consummation of the 
marriage of the two oceans: it was followed by the birth of a hydra- 
headed brood of problems, political, strategical, commercial, and 
financial. This chapter is devoted solely to the disputes that arose, very 
shortly after the opening of the canal, on the question of dues. 

The financial situation of the Suez Canal Company in 1870 was, as 
will be shown in a later chapter, far from encouraging, and by the 
beginning of 1872 it became clear that, unless means could be found 
for increasing the traffic or the receipts, the Company would be unable 
to pay its way. The first and second concessions had given it the right 
to levy tolls on vessels and on passengers passing through the canal, 
and Article 1 7 (3) of the second concession stipulated that the rate 
charged should not exceed 10 francs 'par tonneau de capacit des 
navires et par tete de passaged. In October 1 868 de Lesseps appointed 
a Commission to examine the question. It reported on I4th November 1 
that the English official tonnage system was the best, but in the 
absence of any uniform systems the Company should accept the ton- 
nage shown on the ship's papers, and their recommendation was 
adopted in the Navigation Rules of I7th August 1869. An additional 
ruling of ist February 1870 declared that dues would be levied on the 
official net tonnage. 

The Company soon realized the evil effects on their finances of this 
ruling, which incidentally involved unfair, if involuntary, discrimina- 

1 Voisin Bey, ii. 58; Roux, ii. 1 1. 


60 QUESTION OF TONNAGE MEASUREMENT 1872 

tion, and appointed an international commission of investigation. Its 
advice was that no attempt should be made to impose a uniform system 
till a test case arose, and that the Company should be prepared to suffer 
a temporary financial loss in order to popularize the canal. The Com- 
pany now petitioned the French Government to negotiate with the 
other Powers. It was a false step; they should have addressed the 
Sultan. In the event, the Franco-Prussian War intervened and de 
Lesseps appointed yet another commission of engineers and repre- 
sentatives of shipping to study the problem. This Commission ad- 
vocated the adoption of the British or Moorsom system ; holding how- 
ever that it allowed too much space for machinery and coal, they 
suggested that 30 per cent, should be added to the gross tonnage, and 
from this new figure 25 per cent, should be deducted to get the net 
tonnage. A ruling to this effect was issued on i8th March 1872, and 
was at first accepted without objection and approved by the British 
and French Governments. It soon transpired that the immediate effect 
of this ruling was to increase tolls on British ships by about 30 per 
cent, at a moment when the canal was rapidly becoming essential ; at 
a moment, also, when it was becoming clear that the Mediterranean 
Powers would before long bring Indian produce direct to their own 
ports under their own flag and not, as formerly, via London. Com- 
plaints poured into the Board of Trade, the first being from the New- 
castle Chamber of Commerce. A French shipping company, the 
Messageries Maritimes, raised the question in the French courts, 
claiming that tolls should be determined by the official tonnage on the 
ship's papers. The case was given against de Lesseps in the Tribunal 
of Commerce, but overruled on appeal. Meanwhile, the controversy 
had aroused great interest in England; it is necessary for our purpose 
to give some account of it here. 

Since the year 1854 England has applied a scientific rule to the 
measurement of ships according to a system established by Captain 
Moorsom, based upon Newton's laws for the measurement of curvili- 
near bodies. The interior capacity of every British ship since 1854 
is accurately measured by this rule in cubic feet. The total capacity 
thus obtained is called the gross tonnage, and from it is deducted the 
space, similarly measured, occupied by the engines and fuel ; the re- 
mainder gives the number of cubic feet utilizable for carrying cargo ; 
this figure divided by 100 gives the net registered tonnage. This is 
the only certain method of ascertaining correctly the 'dead weight' 
cargo capacity of a ship. Some nations had adopted it, others adhered 
to their old plans, which were mostly empirical, having been con- 
verted from some certain basis by a rule of thumb upon no basis at 
all, to suit the exigencies of the moment, the general principle of 


Chap.y CONFERENCE OF MARITIME POWERS 61 

all being to discover some system by which to save port dues by 
enlarging the registered ton upon which they are habitually charged. 

Of all these systems the French was probably the least scientific. 
It affected aristocratic airs of antiquity, professing to date from the 
time of Colbert, and ostensibly was a ton having a cubic measurement 
of 1-44 metres, equal to 51 cubic feet English. 

The Canal Company said that the concession was in French that 
the French ton of 1-44 metres was therefore intended. They added 
that experience showed that, as a rule, the number of tons of this 
magnitude in English ships was equal to the whole contents or gross 
tonnage of the ship before deduction of engine and coal space as 
ascertained by the Moorsom rule, and that, therefore, to save trouble, 
they would charge 10 francs per ton on the gross tonnage. 

The case as thus shown was plausible, but in order to succeed it had 
to be shown that a tonneau de capacite des navires meant something 
definite; otherwise the contention of the Company for a small ton was 
as good as that of the shipowners for a large one. De Lesseps declared 
that the expression meant 'the real capacity of the ship'. The Porte, 
appealed to by de Lesseps, declined to permit the Company to be 
withdrawn from the jurisdiction to which it was amenable by the Act 
of Concession, and invited the principal Maritime Powers to send 
delegates to a conference at Constantinople to consider and settle the 
tonnage question. 

The Commission met and the whole case crumbled away at the 
first touch. An ardent partisan of the Canal Company represented 
France. He stated his case, and it at once appeared that although the 
French legal maritime ton was ascertained by using 42 French feet, or 
1-44 metres as a divisor of the supposed total capacity, the ingenious 
device had been adopted of reducing this total capacity so as to mini- 
mize the product. Instead of ascertaining the real contents of the ship 
by the Moorsom, or some equally correct mode, by the use of an 
arithmetical formula, constructed for the purpose, the bulk of every 
ship was systematically reduced. For instance, by the mode of gross 
measurement, a ship of 60,000 cubic feet was reduced to 44,000, and 
although the ton was apparently one of 1-44 cubic metres, the gross 
capacity was so reduced that the legal ton of capacity actually became 
one of 2- 8 2 metres, or very nearly double the ostensible ton. 

Though put forward as the commercial ton, it was admitted that the 
ton varied in France even according to the ship and the article, the 
French Messageries charging for the ton of I metre, which might with 
equal justice have been put forward. 

The Commission, composed of representatives of twelve countries, 
on 1 8th December, decided by a majority of n to i, the French 


62 RECOMMENDATION OF INTERNATIONAL COMMISSION 1874 

delegate dissenting, that the British or Moorsom system of measuring 
gross tonnage capacity was the best, and that in order to ascertain the 
'useful capacity 1 of a vessel certain deductions should be made, of which 
the chief were crew-space, engine-space, bunkers, and shaft tunnel. All 
closed-in spaces are measured, but the Suez Canal measurement is greater 
than the British net tonnage measurement. One main difference is 
that bridge decks and certain other spaces are liable to dues for the life 
of the vessel if goods have once been carried in them, whether goods are 
subsequently carried in them or not. The Commission also recom- 
mended that, in view of the financial position of the Company, vessels, 
whose capacity had been measured as above, should pay a surtax of 
3 francs and other vessels of 4 francs; when the shipping using the 
canal reached 2,100,000 net tons the surtax was to be reduced to 
3' 50 francs, and further reductions of 50 centimes were to be made 
for every increase of 100,000 tons in traffic, so that the surtax would 
be abolished when the shipping passing through the Canal in a year 
reached 2,600,000 tons. 

The award was accepted by the Porte and made mandatory upon the 
Company by a decree, which was backed by a circular to Turkish 
representatives at foreign courts announcing the decision. 

De Lesseps did not accept the award with good grace. He proposed 
an alternative plan whereby the Company should accept the new 
system of measurement, but that the surtax of 3 francs per ton should 
be maintained till the shareholders had received their arrears, and till 
the net revenue reached 8 per cent. 

The Porte was adamant, and warned de Lesseps that failure to 
comply within three months would involve reversion to the original 
toll of 10 francs, without surtax. De Lesseps declared he would hold 
the Porte responsible for the losses that would ensue, some 700,000 
francs a month. Finding that this made no impression he threatened 
to close and abandon the canal. 1 'I shall oppose', he telegraphed to 
the Porte, 'as President of a Universal Financial Company and as a 
French citizen, an absolute resistance to the violation of a bilateral 
contract accepted and fulfilled by 40,000 French shareholders. In the 
absence of any responsible plaintiff, and of any sentence or judgement 
of the Porte, the Powers have no rights to interfere in our affairs when 
we strictly observe the terms of our contract.' To this telegram no 
reply was sent, but on 29th April 1874, the Khedive, under 
orders from the Porte, sent 10,000 men under an American officer, 
General Stone, who was Chief of Staff of Ismail Pasha's army, 
from Cairo to strategic points on the canal, and a frigate commanded 
by a British officer in Egyptian service to Port Said. De Lesseps, on 
1 The documents are given in full in Fitzgerald, vol. ii. 


Chap, v DECISION OF SUBLIME PORTE 63 

the advice of the French Government, bowed to force and reserved his 
protests for a further hearing. This done he proceeded to put into 
practice new and unlawful devices of measurement. The decisions of the 
Conference were openly ignored and stigmatized in official correspon- 
dence as 'international robbery' and, notwithstanding strong protests 
by the British Ambassador at Constantinople, these illegal exactions 
continued, and a monthly letter of protest and claim for damages was 
sent to the Porte by de Lesseps. Every vessel paying dues on the new 
scale was served with a protest and a claim for the amount due under 
the old scale, couched in offensive language. The high-handed methods 
of the canal officials provoked a demand in Great Britain for a second 
canal which was actively maintained until 1876, when the acquisition 
by Great Britain of the Khedive's holding threw the project, for a time, 
into the shade and was followed by a period of peace. The outcome of 
the controversy was to establish that the Suez Canal Company was 
more than the property of a Company incorporated under a Charter 
of the Viceroy of Egypt with the approval of the Sultan of Turkey. 
De Lesseps was a mandataire rather than a concessionaire^ and had not 
the sole right to interpret the Company's Statutes : those Statutes were 
subject to interpretation and to challenge in the Mixed Courts. The 
Sultan of Turkey had exercised his sovereign right to place his own 
interpretation ex aequo et bono upon the Statutes. He had called into 
consultation the representatives of the Maritime Powers, and had made 
their recommendations mandatory upon the Company. There is no 
reason why, on due cause being shown, the same procedure should not 
be adopted, mutatis mutandis, by the King of Egypt, so far as he is the 
inheritor of the sovereign rights of his suzerain. 

Through the good services of Colonel (afterwards Sir) John Stokes 
the terms of the Commission's recommendations as to dues were modi- 
fied and, with the consent of the British Government, a slower rate of 
reduction was conceded to M. de Lesseps who, in turn, agreed to 
spend a million francs a year in improvements. The normal rate often 
francs was not again reached till 1 884 instead of in 1 880, as originally 
contemplated. This new income, outside the terms of the Concession, 
saved the canal from ruin and made it a profitable concern, all at the 
expense, mainly, of the British shipowner a fact generally forgotten 
to-day. 

In 1878 we leased Cyprus from Turkey, and in the same year over 
8,500 Indian troops and followers passed through the canal on their way 
to Malta. In June 1882 came the military rebellion of Arabi Pasha. 
France and Great Britain had, for the previous six years, worked hand in 
hand to repair the damage caused by the extravagance of Ismail Pasha 
and to restore the finances of Egypt without, however, repudiating any 


64 DE LESSEPS AND ARABI PASHA 1882 

portion of the vast indebtedness of His Highness. France was 
pressed by Great Britain to co-operate in the bombardment of Alex- 
andria and in operations from the banks of the canal at Ismailiyah. She 
declined to do either. The victory of Tel el Kebir followed; Cairo was 
occupied by British troops, and the rebellion was quelled. De Lesseps 
showed himself at this juncture more of a Frenchman and less of a 
diplomatist than was his wont. If not a partisan of Arabi, he displayed 
a confidence in him which is not easy to understand, even in the light 
of Wilfrid Blunt's Secret History. He protested emphatically (his 
language was always vigorous and his outspokenness perhaps his 
greatest diplomatic asset) against the use of the canal as a base of 
military and naval activities, invoking the firmans of 1856 and 1866 
which declared the Canal Zone to be 'neutral'. Great Britain took the 
view that this could not be secured by a unilateral act, and that her 
military and naval activities were in fact in aid of the Civil Power. 
During hostilities the canal services were taken over by the British 
Admiral in command; but only for forty-eight hours, whereafter the 
Company resumed charge. 

DC Lesseps had, however, overplayed his hand, and the agitation in 
England, begun in 1872, for a second canal assumed great prominence. 
British forces had just saved the canal from Arabi Pasha. Nearly four- 
fifths of the traffic through the canal was British, 1 but the management 
was exclusively French, the staff in Egypt French, and the control 
French. There were many complaints against the pilots ; it was claimed 
that they were often inexpert, and that almost no British-born pilots 
were employed. The strict adherence to the letter of the Company's 
regulations, regardless of inconvenience, the autocratic attitude of the 
senior officials, and the absence of any Englishmen in the higher ranks 
of the hierarchy, either in London or in Paris, were made matters of 
loud complaint, both publicly and privately, by shipowners and others. 
In the early 'seventies, transit had been fairly rapid, but as the tonnage 
using the canal increased, so did the time lost in passing. Moreover in 
1883 the canal was available only in daylight, 2 so that the average time 
of transit rose, by the year 1883, to nearly fifty hours, and was fre- 
quently as much as three days. The scheme for a new ship canal under 

1 A Board of Trade inquiry in 1882 showed that a little over 40 per cent, of shipping 
entering British ports from the East and Australia came through the canal: and a little 
under 40 per cent, of vessels clearing for these destinations. Jute, rice, and some cotton still 
came by the Cape. Only 17 per cent, of our imports from and 2 per cent, of our exports to 
Australia came through the canal. In 1887, however, the proportion reached 30 per cent. 
Exports from India, however, doubled between 1870 and 1880, but the Mediterranean 
ports gained more than those of the United Kingdom. 

2 Navigation by electric light was introduced in 1887 simultaneously with lighted buoys 
and other aids to navigation. 


Chap, v PROPOSAL TO DIG SECOND CANAL 65 

purely Egyptian auspices from Alexandria via Cairo to Suez, sponsored 
by Sir John Fowler, chief Engineer to the Khedive, was revived, as 
also a quaint project of one Captain W. Allen, R.N., to cut a channel 
from Haifa, whereby the waters of the Mediterranean would flood the 
Dead Sea valley, raising its level by 1,300 feet, whence traffic would 
continue over the mountains to Akaba. More seriously, demands for 
a second canal under British control, parallel to the existing canal, were 
pressed upon Lord Granville from many directions with the support 1 
of some members of the Cabinet, who in 1882 had maintained that 
Great Britain should take such steps as would enable her to secure an 
effective preponderance in the Council of the Canal Company. De 
Lesseps, on the other hand, asserted that the Act of Concession gave his 
Company the monopoly of canal construction from sea to sea. This 
claim was, somewhat surprisingly, upheld by the Law Officers of the 
Crown, Sir Henry James and Sir Farrer Herschell. It was not un- 
reasonably maintained by many very eminent English lawyers that the 
word 'exclusive' in the concession applied only to the geographical 
limits of the areas conceded to the Company. It was urged that in 
every case of such a grant of exclusive privileges, the grantee is rigor- 
ously confined by all courts of justice to the strict terms of the grant 
which, in case of ambiguity, are not to be construed in his favour to the 
public prejudice; every such grant being in the nature of a monopoly 
was therefore to be construed strictly against the grantee, and the 
greater and more universal the subject matter of the grant, the stricter 
the scrutiny to which its terms should be subject. Sir C. Dilke wrote 
as follows in his diary: 

'On July 4th there was a meeting of Mr. Gladstone, Lord Granville, Childers, 
Chamberlain and myself, as to the Suez Canal, and we decided to ask de Lesseps to 
come over and meet us. Childers had a scheme in regard to the Canal, to which 
only Chamberlain and I in the Cabinet were opposed. 

4 On July i Qth there was another Cabinet, Chamberlain and I tried to get them 
to drop Childers's Canal scheme, but they would not. The Cabinet was adjourned 
to the 23rd, and on Monday the 23rd they dropped it.' 

Childers, on the other hand, when Chancellor of the Exchequer 
(Life> n. 151) wrote to Lord Granville (gth May 1883): 

4 1 am not one of those who believe that we should encourage a second canal; 
although by not snubbing those who promote this project we may in the end 
obtain better terms from M. de Lessep. . . . "We should", he continued, "aim at 
a further reduction of the tariff and equal control with the French, our claim to 
which is very strong." * 

De Lesseps, however, did not adopt a merely negative attitude. He 
empowered his son Charles to enter into negotiations with the British 

1 Life of Sir Charles Dilke,\. 553; Lift of *Mr. Childers^ 151. 

K 


66 PROPOSED AGREEMENT OF 1883 1883 

Directors of the Company, Sir John Stokes and Sir Charles Rivers 
Wilson, and on loth July 1883 they signed an Agreement, 1 subject to 
ratification by Parliament, in the following terms : 

Heads of Agreement between the Representatives of Her Majesty's 
Government and the President of the Suez Canal Company. 

1. The Company to construct a second Canal as far as possible parallel to the 
present Canal, of width and depth sufficient to meet the requirements of maritime 
construction, settled in agreement with the English Directors. 

2. The second Canal to be completed, if possible, by the end of 1888. 

3. The Company to reduce the dues and tolls as follows: 

From the ist Jan., 1 884,ships in ballast to pay 2 fr. per ton less than laden ships. 
After the profits (interest and dividend) have been distributed at the rate of 21 

per cent., half the pilotage dues to be remitted from the following ist January. 
After the profits are 23 per cent., the rest of the pilotage dues to be remitted. 
After the profits, as above, are 25 per cent, the transit dues of 10 fr. per ton to 

be reduced by 50 centimes to 9 fr. 50 c. 

After the profits are 27 \ per cent., a further 50 centimes to be taken off. 
After the profits, as above, are 30 per cent., a further 50 centimes to be taken off. 
For every additional 3 per cent, of distributed profits, 50 centimes to be taken 

off, to a minimum of 5 fr. per ton. 

4. No two reductions of pilotage or transit dues to take place in the same year. 

5. If the distributed profits should fall off, an increase of transit dues to take 
place according to the same scale, but no two increases to take place in one year. 

6. On the first occasion of a vacancy one of the English Directors to be nomi- 
nated by the President for election as Vice-President, and thereafter one of the 
English Directors to be always a Vice-President. 

7. The English Director now acting as honorary member of the Comite de 
Direction to become a regular member when vacancies permit, and thereafter 
one of the English Directors to be always a member of the Comite. 

8. Two of the English Directors to be always on the Finance Commission. 

9. An English officer, selected by Her Majesty's Government, to be appointed 
by the Board Tnspecteur de la Navigation'. His functions to be determined in 
agreement with the English Directors. 

10. The Company to engage, in future, a fair proportion of English pilots. 

1 1. Her Majesty's Government to use their good offices to obtain a Concession 

(a) For the land required for the new Canal and its approaches. 

(b) For the Sweet- water Canal between Ismailia and Port Said, on the basis 
already accepted by Her Majesty's Government. 

(c) For the extension of the term of the original Concession for so many 
years as will make a new term of ninety-nine years from the date of 
the completion of the second Canal. In consideration of such extension the 
Company to pay annually to the Egyptian Treasury i per cent, of the 
total net profits, after the statutory reserve. 

1 Egypt, No. 17, 1883, pp. 44-5. 


Chap, v THE DRAFT AGREEMENT CRITICIZED 67 

12. Her Majesty's Government to lend to the Company, by instalments, as 
required for the construction of the works, including the Sweet-water Canal, not 
more than 8,ooo,ooo/. at 3^ per cent, interest, with a sinking fund calculated to 
repay the capital in fifty years, such sinking fund not to commence until after -the 
completion of the works. 

1 3. These Heads of Agreement to be at once communicated to the House of 
Commons. They will be developed in full detail in a Resolution of the Council of 
Administration of the Company, the terms of which will have been settled in 
accord with Her Majesty's Government. That Resolution will be communicated 
to Her Majesty's Government for formal acceptance. The Agreement, however, 
and the acceptance of the Resolution, will have no effect until the necessary 
authority has been obtained from Parliament. 

Pour le President, 
(Signed) CH. A. DE LESSEPS. 
(Signed) C. RIVERS WILSON. 

J. STOKES. 
London, July loth, 1883. 

The draft Agreement was confirmed by the Board of the Company, 
though not without demur. The French directors disliked the idea 
of a loan, even on such favourable terms, from the British Treasury; 
they resented the stipulations regarding an Inspector of Navigation 
(who was to be an Admiral or post-Captain), and additional British 
pilots. 

In submitting the heads of agreement on i ith July 1883 to Lord 
Granville, the British directors observed, in a letter presented to Parlia- 
ment a few days later, that from i st January 1 8 84 M. de Lesseps would 
have power to charge 10 francs per ton on all vessels, laden or in ballast, 
in addition to pilotage dues, and it was therefore imperative to reach 
an agreement which should embrace a substantial reduction of charges 
from 1888 onwards. M. de L,esseps and his son Charles further agreed 
that pilotage dues should be abolished by 1887, and that dues on ships 
in ballast should continue to be at least 2 francs lower than on laden 
vessels. A sliding scale was clearly desirable: it might be regulated by 
annual tonnage, or by fixed periods, or by a combination or both, but 
neither system was practicable so long as additional capital works had 
to be met from revenue. For this reason de Lesseps proposed, and the 
British directors agreed, that successive reductions should depend 
on the net profits realized by shareholders. The actual scale, as set 
forth, provided for a reduction of tolls to the stipulated minimum toll 
of 5 francs when the shareholders received not less than 5 1 per cent, 
on the par value of their investment. 

As regards the acquisition of a large share of authority on the Board 
of the Company in Paris, a power to which great importance was 
attached in England, the directors (following Mr. Childers's views) 


68 THE DRAFT AGREEMENT DEFENDED 1884 

observed that the addition of more British directors, unless in numbers 
sufficient to secure an actual majority, would weaken rather than in- 
crease the authority of the Government directors, who were already 
consulted in advance on all matters of real importance. 

'if it were stipulated that a certain number of seats were to be reserved for 
Englishmen not having an official status by reason of their nationality alone, we 
cannot but think that the result would be the creation on the Board of separate 
parties, leading to a system of constant voting on the questions presented, with the 
disadvantage to English interests that the English members would be in a minority.' 

The loan would hasten reductions of dues and be of great value to 
British commerce, making possible the immediate construction of a 
second canal. 

The British directors concluded by expressing the belief that short 
of a complete reconstruction of the scheme of management of the 
Company on the basis of an entirely British administration, the ar- 
rangements proposed were adequate to protect British interests. 

The text of the Agreement was communicated on the following day 
to the House of Commons by the Chancellor of the Exchequer (Mr. 
Childers), who emphasized the importance he attached to the fact that 
the Senior British Director was a very distinguished engineer and that 
the works ultimately decided on would be approved by him. It was 
not favourably received, and both Mr. Childers, Mr. Chamberlain 
(President of the Board of Trade), and the Prime Minister, Mr. 
Gladstone, were strongly criticized, and not only by the Opposition. 
It was widely felt that if a second canal were to be constructed it should 
not be under the control of de Lesseps, but of the British Government 
or a British Company. Mr. Gladstone replied that the Law Officers 
of the Crown held M. de Lesseps to be in possession of an exclusive 
right to make a canal through the Isthmus of Suez and that the 
Egyptian Government had been similarly advised. On general grounds 
of equity he agreed with them and had no hesitation in following their 
advice, in preference to that of other lawyers, however eminent for, he 
claimed, our policy from 1875 onwards had been founded on that 
assumption, which formed the basis of all negotiations between M. de 
Lesseps and the British Government. This was energetically contested, 
for the Opposition, by Lord Salisbury, who reminded the House that 
Disraeli's purchase was primarily political, not commercial, and was not 
properly susceptible of such interpretations or deductions. 

It was also felt the provisions as to British pilots 1 were inadequate 
and that the Agreement failed to protect British shipping from exces- 
sive charges. It was suggested that the finances of the Company might 

1 There were at the time in the service of the Canal Company 1 7 sea pilots at Port Said 
and 97 canal pilots. Of the Port Said pilots i ^ were Greek, 2 French, i Maltese, i Austrian, 


Chap, v THE DRAFT AGREEMENT OPPOSED 69 

be so manipulated as to keep surplus divisible profits at a figure which 
would minimize the remissions of tolls due under the agreement. Mr. 
Childers replied that the Founders, the holders of the 1 5 per cent, 
profits purchased from the Egyptian Government, the Directors, and 
the employes, were all interested in dividends being as high as possible 
and naively referred to 'a famous case a good many years ago, when 
a Scotch Company declared dividends below what were earned, were 
convicted of fraud and very severely punished'. 

These and other attempts to commend the Agreement to public 
approval met with little success. That it had so little support, either in 
Parliament or in business circles, was due in part to the manner in which 
it was presented. The Command Papers presented to Parliament were 
incomplete, and did not deal with the main point, viz., the claim of de 
Lesseps to an exclusive right in any new canal that might be made 
from sea to sea. The Prime Minister had the support of the Lord 
Chancellor as well as of the Law Officers, but the Lord Chancellor 
spoke as a member of the Government, and the opinions of the Law 
Officer could not be adduced without creating an undesirable pre- 
cedent. 

The British Directors thereupon approached M. de Lesseps afresh. 
They pointed out that the British Government were bound, if he 
desired, to submit the Agreement to Parliament; the result would, 
however, probably be unfavourable, and to force such an agreement 
through Parliament without more or less general approval was un- 
desirable. De Lesseps, always the gentleman, when thus approached, 
declared that he quite understood the difficulty and would not press 
the matter. He would go ahead with the second canal, raising the 
capital by other means, and he would maintain the proposed reduction 
of dues part passu with increased profits. He addressed his reply, 
dated 2oth July, to the representations of the British Directors not to 
them but to his 'dear and honourable friend* Mr. Gladstone. 

'In France', he wrote, 'public opinion, forgetful of the past, has unanimously 
approved this Agreement; in England, it seems to me that a section of public 
opinion, which has, perhaps, pronounced itself hastily, has not understood the full 
scope of the equitable arrangement arrived at. Unfortunate discussions between 
the two friendly nations have resulted which, I fear, are capable of injuring deeply, 
and for a long period, the necessary sentiments of cordial friendship which united 
the two nations. 

'Personally, I should much regret that the work of peace carried out in Egypt 
by French capital, in the interests of universal commerce, should become a pre- 
text of disunion, and that Europe should witness the development in the Parliament 

i Italian, of whom 8 could make themselves understood in English. Of the canal pilots 
27 were French, 24 Italian, 19 Greek, 17 Austrian, 7 Maltese, 3 English. All could make 
themselves understood in English. 


70 THE DRAFT AGREEMENT OPPOSED 1883 

of England, and under your liberal Ministry, of an error of judgement, leading 
to a failure of justice. 

'In the interests of general peace, in the interests of the Franco-English alliance, 
indispensable to the civilization of the world, I beg you not to consider yourself 
bound, towards the ship-owners and towards myself, by the terms of the Agree- 
ment which we have signed. 

'Our Council of Administration holds, under the Statutes of the Company, 
sufficient powers to decide upon the excavation of a second maritime channel, and 
to settle the tariff to be levied, and our shareholders are in a position to provide us 
with the means of excavating the second Canal. 

'Consequently, I formally declare that if our Agreement should be suspended, 
or even cancelled, the excavation of the second Maritime Canal will be imme- 
diately carried out, and all the reductions of tolls provided for in that Agreement 
will take effect. 

'We shall thus continue peaceably and amicably as heretofore, in agreement 
with the representatives of the Queen's Government on the Council, to carry on 
and improve the Maritime Canal, according to the requirements of a work 
designed to remain freely open and available to the fleets of all nations, without 
exclusion or favour, according to the terms of our Concession.' 

This letter and Mr. Gladstone's acknowledgement were presented 
to Parliament a day or two later, 1 and Lord Granville announced on 
23rd July that Parliament would not be asked to assent to the Agree- 
ment. 

Lord Salisbury, as Leader of the Opposition in the House of Lords, 
in congratulating Lord Granville on the decision, summarized the 
widespread dislike of the proposed arrangement in the following 
language : 

'M. de Lesseps proposed to cut a new Canal without the assistance of the 
British Government, but with the approval of the Egyptian Government, which 
presupposes the consent of the British Government. Upon what terms will that 
consent be given? 

'Shall we be prepared to give M. de Lesseps another Canal without security 
that the passage of British commerce will be more free, the administration more 
impartial, and the facilities more complete than they are now? Shall we accept 
such bad terms as those which have driven the shipping interest to so marked a 
demonstration of dissatisfaction ? 

'[Lord Granville] spoke as if the Company was in some sort a representative 
of France. I cannot admit that doctrine for a single moment. It is a private 
Company, and nothing more, in which England is nearly as large a shareholder 
as France, it is entitled to just, equitable, and considerable treatment, but that does 
not extend to recognition of a monopoly not justified on the surface of the Acts of 
Concession, not assigned by any unanimity of legal opinion, refused to them by 
many distinguished authorities, and obviously inconsistent with the first interests 
of this country. Now the scheme has been abandoned I hope that all those gravely 
1 Egypt, No. 15, 1883, C. 3695. 


Chap, v THE PROPOSED AGREEMENT ABANDONED 71 

imprudent admissions are to be banished from our recollection as if they were a 
dream, and that the admission of that monopoly shall not be held to have been 
established by certain unfortunate expressions of Ministers of the Crown, drawn 
from them only by the exigencies of debate, which appear in this instance to have 
severely compromised the interests of England.' 

At the same hour Mr. Gladstone announced in the Commons that 
Government proposed to take no further action on the Agreement. 

'We think it our duty', he said, 'to do justice, as far as lies in our power, to this 
Great Canal Company, and to its eminent, sagacious and energetic projectors. . . . 
We will not be parties to employing influence which may attach to our temporary 
and exceptional position in Egypt, for the purpose of procuring any abatement of 
any right lawfully enjoyed. . . . We cannot undertake to do any act inconsistent 
with the acknowledgement that the Canal has been made for the benefit of all 
nations at large, and that the rights connected with it are of common European 
interest.' 

'We think', he added later, 'that the Company's methods should be improved; 
that is by no means confined to the Suez Canal, because our methods of manage- 
ment are not quite the same as on the Continent, and wherever we go we are apt 
to think we can improve just a little on the arrangements. . . . We feel that so far 
as this is a commercial question, it is hopeless to expect that it can be dealt with so 
long as it is entangled with political complications. We desire that the commercial 
and shipping interests should have time to consider the question, and arrive at a 
matured conclusion.' 

Sir Stafford Northcote replied for the Opposition : 
'No one can go beyond myself in admiration of the character and energy and 
work of M. de Lesseps, whose friendship I have enjoyed for many years. Every 
respect is due to him, but that is no reason why we should give in to exorbitant 
demands. . . . Lord Granville in 1872 laid down the principle that we could not 
agree that the Company should be the judges or interpreters of their own con- 
cession: so we say here that the Company ought not to be the sole judges, and we 
should be extremely careful not to give colour to those claims beyond what those 
claims can be proved to be.' 

An entry in Sir C. Dilke's diary of 22nd November, 1883, gives an 
insight, unobtainable elsewhere, into the attitude at this moment of the 
Cabinet. 

'Another matter which was active at this moment was the position of Lesseps, 
with whom we had now made peace, and to whom we had given our permission 
for the widening of the first Canal. We supported him against the Turkish 
Government, who wanted to screw money out of him for their assent, and got the 
opinion of the law officers of the Crown to show that no Turkish assent was needed. 
On a former occasion we had contended that his privileges must be construed 
strictly, as he was a monopolist. On this occasion the law officers took a more 
liberal view. The fact is that the questions referred to the law officers for opinions 
by the Foreign Office have very often much more connexion with policy than 
with law, and their opinions are elastic.' 


72 PROPOSED SECOND CANAL 1883 

A few days later, on 3<Dth July, Sir S. Northcote returned to the 
charge. In an exceedingly able speech he quoted from published 
correspondence to show that de Lesseps was not only a concessionaire^ 
but mandataire of the Khedive who was, in the words of de Lesseps, 
'the master of the house', but, in the speaker's view, never intended to 
part with his own power of making a new canal when he gave M. de 
Lesseps authority to form a company for the execution of a particular 
project. Of a monopoly there was no suggestion in any published 
documents, nor was it claimed until September, 1883, ^ was indeed 
supported by the law officers, but rebutted by legal opinions of equal 
weight. He quoted Lord Granville's dispatch to the Porte on 3rd 
March 1873: 

'Her Majesty's Government do not in the slightest degree impugn the right of 

the Porte to increase the dues The Company is, as Her Majesty's Government 

consider, Egyptian, and the rights over it of the Porte are undoubted. Her 
Majesty's Government, however, feel confident that the Turkish Government 
cannot but be sensible of the equitable consideration which is due from the Porte 
to the maritime interests which are concerned in relation to traffic through the 
Canal which has thus become one of the highways of the world, the obstruction 
of which, by the imposition of an excessive toll, would be an injury to commerce, 
. . . against which every nation would be driven to protest.' 

The matter could not be laid at rest as being entirely between the 
Egyptian Government and the Suez Canal Company, irrespective of 
the interests of the maritime nations. The sooner it was cleared up, 
and the less it was trifled with, the better. 

Mr. Norwood, who represented a constituency of merchants and 
shipowners, urged that time should be allowed for misunderstanding 
to be removed, and for mercantile men of both countries to reach a 
solution. He would not willingly follow Sir S. Northcote in challenging 
unnecessarily, except on the clearest reasons, the validity of the Con- 
cession. It was more important to uphold a standard of highest com- 
mercial morality than to secure a temporary advantage over the Suez 
Canal Company. The Government would have done better to consult 
mercantile opinion in the first instance, before negotiating through the 
Government directors, who were better aware of the feelings of de 
Lesseps than of the merchants of this country, who were not without 
hope of reaching a rational and satisfactory agreement. 

Mr. Norwood believed that de Lesseps would admit the British 
Government into full partnership, with one-half of the administration 
and one-half of the responsibility, with alternate French and British 
Presidents after the decease of M. de Lesseps. He reminded the 
House that though four-fifths of the shipping was under the British 
flag, the cargo was very differently owned. 


Chap, v THE DEBATE IN HOUSE OF COMMONS 73 

The debate, which lasted for some ten hours, was continued by 
Mr. Charles Palmer, who pointed out that, whereas the Concession 
required that the nations principally interested should be represented 
on the Board, they were, in fact, excluded. If we paid a bounty to ships 
that went round the Cape we could soon almost empty the canal. The 
matter was ripe for international consideration. 

Baron Henry de Worms considered the principal defect of the 
Agreement was the absence of specific reductions of tolls to take 
effect at definite periods; he regarded the provision of a London Office 
of the Canal Company as another essential condition. Mr. Ashmead 
Bartlett adduced detailed arguments against the monopoly claimed by 
de Lesseps. We were justified, not merely in our own interests, but in 
those of Her Majesty's subjects overseas, in examining thoroughly 
what the Company had obtained in return for benefits conferred. He 
considered that M. de Lesseps and his coadjutors were already 
adequately rewarded without giving them a monopoly of all Suez 
Canals for all time. The more the Government yielded, the more 
they asserted the delicacy and difficulty of the diplomatic issues at 
stake, the bigger would be the demands of France, the greater the 
irritation, and the greater the certainty of future trouble. 

Mr. Arthur Cohen said that it was established by incontestable 
authority that in every grant made by a sovereign there was reserved 
the right of domain, viz. the right of resumption of possession of the 
thing granted on the ground of public utility or expediency. The 
Canal Company could not impose arbitrary terms upon the world. 
M. de Lesseps knew very well that he could not abuse the power 
granted him, and after negotiation he would doubtless yield. 

Mr. T. C. Bruce held that the Act of Concession required the 
Directors of the Company to be chosen from the nationalities prin- 
cipally interested. Had that condition been observed, the interests of 
Great Britain and of other countries would have been adequately 
secured, but it had been ignored and the Company had obstinately 
refused to grant other nationalities their just share in the administration. 
To hand over the traffic of the East to a single company for a hundred 
years would be too dear a price to pay even for M. de Lesseps and his 
French associates, who had contributed only 6 millions against the 
ji6 millions, apart from the forced labour of innumerable peasants, 
contributed by Egypt, which to-day had no financial interest whatever 
in the Company. 

Mr. Horace Davey (later Lord Davey), a lawyer of high repute, 
alluded to the legal considerations already mentioned, which he had 
expounded elsewhere. He deprecated the elaboration of legal argu- 
ments in the House of Commons : if the monopoly of the Company 


74 SINGLE CANAL ADVOCATED 1883 

was challenged, it would be before a judicial tribunal in Egypt, and no 
good could come of a discussion in the Commons. The question did 
not in his view, turn on the nice consideration of the exact mean- 
ing of a curiously worded document, but on business interests to be 
determined by men of business. The best course was not to commit 
ourselves to a particular view, and to resume negotiations with our 
hands free. 

Mr. Giles, member for Southampton, introduced a very practical 
note. Speaking as an engineer, he observed that one canal double the 
present width would be more useful than two narrow ones. The present 
traffic of twelve ships daily and talk of the necessity for two canals was 
idle. The existing canal could be widened for less than half the cost 
of making a new channel. As to tolls, from the Cape to Bombay was 
4,450 miles longer than via Suez equivalent at 10 knots to i8 days. 
Deducting two and a half days the average time taken in making the 
transit between Port Said and Suez, the extra time was reduced to 1 6 
days. The question was one of figures. Traffic was being driven away 
because the tolls often cost more than 16 days' steaming; the sooner 
the Canal Company realized this the better for all concerned. 

On this very practical and prophetic note the debate might well have 
ended. But the Chancellor of the Exchequer replied that the unanimous 
opinion of the mercantile world was in favour of two canals. The 
Government Directors were inclined to the same view, as were, on the 
whole, a majority of the French Directors, headed by M. de Lesseps 
who, on his part, demanded an extension of the concession and financial 
assistance in return for committing himself to so vast an undertaking. 

It was clear that the movement within the Company for a new canal 
was not unaffected by the agitation in England directed to the same 
end, which is summarized in an Appendix to this chapter. The United 
Chamber of Shipping, the General Shipowners' Society, the North 
Shields Shipowners' Society, and the Associated Shipowners' Society 
had, among others, petitioned Government to promote the construction 
(under British control) of a new canal. The petitioners included more 
than half the aggregate tonnage using the canal. It was in the light 
of these representations that de Lesseps and the British directors had 
entered upon their negotiations. The debate culminated in a learned 
duel between two lawyers, Sir Hardinge Giffard and Sir Henry James, 
the Attorney-General, and was wound up in a full house in the early 
hours of the morning by Sir Stafford Northcote, on the Opposition 
side. 282 votes were cast for the Government, and 183 against. 

I have thought it well to give a full summary of this debate, 
firstly, because it is almost the last occasion on which the Suez Canal 
was seriously discussed in Parliament, and many of the arguments 


Chap, v DIRECT NEGOTIATIONS RESUMED 75 

used, on either side, may with equal propriety be employed to-day. 
Secondly, because the debate throws much light upon the sentiments 
entertained in England, both in official and mercantile circles, towards 
the Canal Company. Thirdly, as illustrating the fact that in advocating 
or assuming the necessity for a second canal not only did the British 
Directors, with de Lesseps and the majority of his colleagues, prove to 
be wrong in their estimate of the expediency of widening the existing 
canal, but also the almost unanimous opinion of shipowning circles, 
and of many eminent engineers associated with them, was shown by 
events to be equally erroneous. 

The civil engineers, headed by Robert Stephenson, had been wrong 
in their estimate of the feasibility of the canal in the 'forties and later: 
Lord Palmerston had, perhaps not unwillingly, been misled by them, 
and Disraeli had followed his lead, though mercantile and marine 
opinion had supported de Lesseps. Now, nearly thirty years later, 
almost the only voice raised in favour of the scheme eventually adopted, 
of widening the existing channel, was that of the member for Southamp- 
ton, Mr. Giles. Her Majesty's Government had been induced, on 
expert representations that proved wholly erroneous, to offer no less 
a sum than 8 millions for the execution of an engineering work that 
would, as Major-General Sir Andrew Clarke anticipated and as events 
have shown, have been wholly superfluous. De Lesseps and his col- 
leagues had been likewise misled into sponsoring a scheme which, had it 
been executed, would have been technically unsatisfactory and would 
almost certainly have involved the retention in perpetuity of tolls at the 
maximum permissible level. Both canals would have had to be widened, 
and in later years deepened, to accommodate larger vessels; both in- 
dividually would require almost as much maintenance as a single 
enlarged channel. The British Parliament did a great service to de 
Lesseps, the world, and the British mercantile marine when, in con- 
formity with public opinion, it forced Mr. Gladstone to drop the 
projected Agreement. 

On reconsidering the question in the light of the rebuff he had 
received Mr. Gladstone (vide Childers, Life, ii. 154) took the view that 
the dual character of the British directors, and consequently of the 
Cabinet, as business men and politicians, was fatal to the success of 
such negotiations. He was consequently well pleased when M. de 
Lesseps, accompanied by his son Charles Aim, came on his own 
initiative to London, and a series of interviews between him and Lord 
Granville removed previous misunderstandings. De Lesseps saw that he 
had no alternative but to seek a good understanding with Great Britain, 
and forthwith entered into negotiations with a body consisting of 
British shipowners and others most interested in the navigation or the 


76 'THE LONDON PROGRAMME' 1883 

canal. Under the immediate auspices of Mr. Joseph Chamberlain, 1 
then President of the Board of Trade, a voluntary arrangement was 
drawn up. In addition to the three existing official directors who had 
occupied seats on the Board since the purchase of the Khedive's shares, 
seven new directors, chosen from among English shipowners and 
merchants, were to be admitted to the Board and to the enjoyment of 
emoluments of office. 

Arrangements were made for paying shipping dues in London, and 
for the increase of the number of English-speaking officials (not neces- 
sarily of British birth) employed in the transit service of the Company. 
Above all, it was agreed that transit dues should be at once reduced 
and that all net profits above 25 per cent, should be applied to the 
reduction of dues until such dues fell to 5 francs. This Agreement, 
afterwards known as the 'London Programme', is printed, 2 together 
with relevant correspondence, as an Appendix to this chapter. 

This Agreement was not universally welcomed; the North of Eng- 
land Steam Shipowners Association complained they had been ignored, 
and the Liverpool Chamber of Commerce held that steps should be 
taken to obtain full voting power for the Government shareholding. 
It was further suggested that the agreement was not in fact more than 
'a temporary arrangement, requiring to be completed by considerable 
and indispensable additions before it could be acceptable from a 
national point of view*. It was, however, submitted to and approved by 
Lord Granville in his capacity as Secretary of State for Foreign 
Affairs, but the Foreign Office was at pains to emphasize, in corre- 
spondence simultaneously presented to Parliament, that the arrange- 
ment arrived at was the result of direct negotiations between the 
Association of Steamship Owners trading with the East and M. de 
Lesseps, 'in which Her Majesty's Government took no part'. 

The attitude of Her Majesty's Government at this juncture towards 
all questions affecting the management and finance of the canal appears, 
from the correspondence presented to Parliament, to have been very 
different from that adopted in 1883. In 1883 Gladstone was ready to 
offer de Lesseps a loan of j8 millions at 3^ per cent, to enable the 
Company to build a second canal. Finding public opinion unfavour- 
able to their proposals, the Government of the day proceeded to ab- 
dicate their functions in relation to the canal, and to encourage direct 
negotiations, in which the Government directors officially took no 
part, between de Lesseps and a self-constituted and only partially 
representative body. An arrangement which can scarcely be regarded 
as, and was not in form, a binding contract was reached, and formally 

1 Lord Edmond Fitzmaurice, Life of Granville ^ 1905, ii. 313. See also Garvin, Life 
of Joseph Chamberlain, 1933, i. 432. 2 See Egypt, No. 3, 1884, C. 3850. 


Chap, v ANGLO-FRENCH RELATIONS 77 

approved by Lord Granville. Yet both he and his successors in office 
insisted that, the intervention of Mr. Joseph Chamberlain notwith- 
standing, Her Majesty's Government were not responsible for it. 

The change of attitude was due almost certainly to considerations 
of high policy. The agreement left much to be desired, but it was 
regarded by public opinion as on the whole a fairly satisfactory solution 
of a controversy which was felt to be wearisome. On the other hand, 
the maintenance of good relations with France was becoming daily a 
matter of greater difficulty. 

Admiral Pierre, commanding the French fleet in the East Indies, had 
just attacked Madagascar, and had grossly insulted the British flag in 
the person of Mr. Pakenham, the British Consul, who lay dying in the 
Consulate. He had demanded the consular dispatches, and placed 
sentries on board British mail steamers, and finally arrested and treated 
with indignity and brutality a Nonconformist missionary. The Admiral 
was probably suffering from the incipient stages of the disease of which 
he died before his return to France, 1 but his actions were none the less 
a source of diplomatic embarrassment. There was trouble over French 
adventures in China, friction over French claims in Newfoundland, 
and French enterprise in Central Africa was a further source of anxiety. 
'The Egyptian question*, writes Sir C. Grant Robertson (Bismarck^ 
1 9 1 8, p. 4 1 3), 'with all the embarrassments arising out of the tangle or 
created by ministerial policy in Great Britain, was just what Bismarck 
could have wished. It made Great Britain more dependent on German 
good will and, properly handled with the requisite air of impartiality, 
could separate France and Great Britain/ In the circumstances it may 
readily be understood that the Foreign Office viewed with complacency 
any means whereby even one major issue could be settled out of court 
without official intervention. 

De Lesseps, too, was well pleased. Public opinion in England, 
which had set strongly against him, had been placated. He on his 
part had said, at the annual meeting of the Company in June 1883, 
many hard things of 'this sterile agitation' and of those who were 
responsible for it, but throughout his career de Lesseps successfully 
maintained the dual role of President of the Company and the cham- 
pion of its rights on the one hand, and on the other of an agile and 
pliant negotiator, ever ready to 'agree with his adversary quickly, whiles 
he was in the way with him*. The acrimonious tone of some of the 
speeches delivered in both Houses of Parliament, the violent language 
of the Press on both sides of the Channel, which accurately reflected 
public opinion, were not reflected in the actual conduct of negotiations on 
either side. The discussions were not public, and were not prolonged. 
1 Fitzmaurice, op. cit., ii. 314. 


78 ANGLO-FRENCH RELATIONS 1883 

'Since the signature of "The London Programme",' writes Sir Ian 
Malcolm, 1 'there has been nothing to disturb the harmony that has 
ever since existed in that international board room.' He does not 
mention that this instrument, though formally approved by Her 
Majesty's Government, was gratuitously abrogated, as to its financial 
provisions, in 1 900, but he emphasizes the point that most mattered. 
Seven British merchants had secured directorships, that point once 
conceded, harmony has reigned, though the British directors have 
remained permanently in a minority on the Board. 

The London Agreement met with strong opposition among the 
shareholders of the Company, who wanted their ten francs, and de 
Lesseps only carried his proposals in the General Meeting of I2th 
March 1884 by 843 votes to 761. The opposition still continued. 
He had said at that meeting: 'On a donne & tort & ce document 
le nom de contrat ou de convention. C'est un programme que la 
Compagnie a prpar dans sa pleine ind^pendance, apr&s s'etre assur^e 
qu'il donnait satisfaction aux d^sirs exprim^s par les armateurs.' And 
again 'Ce ne sera que lorsque le revenu aura atteint 25% que ce 
calcul cessera et que la partie de vos b^n^fices sup^rieure 125 francs 
par action servira intgralement de base la reduction de la taxe de 
transit jusqu'au moment ou elle sera descendue 5 francs par tonne.' 
The words de base are important as they seem to infer the possibility 
of a modification. In the Report for 1883, presented at the General 
Meeting on 2gth May 1884 it was specifically said: 

'Le revenu de 125 francs, au dela duquel le surplus acquis servira de base au 
calcul des detaxes, ne sera pas un maximum, puisque ce surplus sera en entier 
distribue" aux actionnaires et que les detaxes ne continueront que si ce surplus se 
produit au bndfice des actionnaires. 

'Le formule du programme peut se simplifier en cette proposition exacte: 
Participation des clients du Canal Maritime aux bn6fices du Canal, sous la 

forme de diminutions de taxe proportionnes a 1'accroissement des recettes, a 

parti r du revenu de 90 francs par action et jusqu'au moment ou la taxe de 

transit se trouvera ramene"e a 5 francs par tonne. 

'Nous vous disions en 1882: " Nous d^clarons hautement que les actionnaires 
du Canal Maritime de Suez ne doivent pas seulement jouir d'un brillant revenu, 
mais qu'ils doivent s'enrichir comme tout industriel en a le droit lorsqu'il a rendu 
au monde un service comparable au percement de Tlsthme egyptien'V 

The truth seems to be that de Lesseps originally thought a maxi- 
mum revenue of 125 francs per share (25 per cent.) to his share- 
holders until the dues were reduced to 5 francs was fair, but had to 
modify his views in deference to the claims of the shareholders, whose 
approval of reduction of dues was necessary, 

1 Quarterly Review, January 193 1. 


Chap, v ENLARGEMENT OF CANAL 79 

On this point it is worthy of note that the preliminary scheme of 
MM. Linant Bey and Mougel Bey, engineers to the Viceroy of Egypt, 
dated 2oth March 1855, contained the following passage: 

'We propose to the Company to have a clause inserted in the Statutes 
by which tariffs shall be lowered as soon as dividends exceed 20 per 
cent. (De Lesseps, The Isthmus of Suez Question, 1855, p. 167). 

The memorial of de Lesseps to Said Pasha of i th November 1 854 
also states that the proposed dues of 10 francs per ton 'might be re- 
duced in proportion to the increase of navigation* (de Lesseps' 
Recollections, i. 174). He appealed in particular to the coal-mining 
interests for support. 

De Lesseps' next step was to summon a second International Con- 
sultative Commission consisting of eight Frenchmen, eight English- 
men, and six members of other nationalities. 1 It met at Paris in 
June 1884 and thereafter sent a Sub-Commission of eight members 
under the presidency of Mr. Dirks to make investigations on the spot, 
and in particular to examine the proposal of the engineer-in-chief of 
the Company, M. Lemasson, for an enlargement of the existing canal, 
as an alternative to the excavation of a new waterway. M. Lemasson 
contended that the channel should be wide enough for two steamers 
in motion to pass anywhere. This meant a channel 230 feet broad at 
the bottom on the straight, 262 feet broad on the curves. For a depth 
of 8 metres (26^ feet) the cost was put at 8,1 18,000; for 9 metres 
(29^ feet) 9,750,000, as against jCi 1,150,000 for a new canal of the 
same size as the existing one. This scheme had from the outset been 
supported by Major-General Sir Andrew Clarke, who was at this time 
Inspector-General of Fortifications at the War Office (vide Childers, 
Life, ii. 154). It was also strongly supported by American engineers. 

This scheme was, with a few modifications, eventually adopted, 
after it had been submitted, with a questionnaire, to nine captains of the 
largest size steamers navigating the canal and to twenty-five of the 

1 The actual composition of the Commission was as follows: 

French. British. Others. 

De Lesseps Maj.-Gen. Sir Andrew Peschek* (Germany) 

Lefebure de Fourcy Clarke Crillanovitch* (Austria- 

Vice-Amiral Jurien de la Sir Charles Hartley* Hungary) 

Graviere Sir John Coode* Saavedra (Spain) 

Pascal Capt. Chitty, R.N. Gioia* (Italy) 

Voisin Bey* Thomas Sutherland Dirks* (Netherlands) 

Laroche James Laing Alexeiff (Russia) 

Tillier* William Mackinnon 

Dupont R. Alexander 

* Members of the sub-committee which visited the canal. 

(Hartley, Proc. Ins tit. Civil Eng., 1900.) 


8o INTERNATIONAL CONSULTATIVE COMMISSION 1884 

most skilful pilots of the Company. The largest steamer which had at 
that time passed through the canal was the Orient Company's s.s. 
Austral which had a length of 456 feet, a beam of 48 feet, gross tonnage 
of 5,665 tons, and a draught of 27 feet when fully loaded. (The 
maximum depth permitted at the time was 24 feet 6 inches.) The sub- 
committee made a careful examination of the revetments and the effect 
thereon of the wash from passing vessels, of the effect of plantations of 
tamarisks, reeds, and similar plants, and of the best type of cross- 
section at various points. They also witnessed experiments then being 
made in the use of electric light. 

A steamer was fitted with a 1,600 candle-light lamp at a height of 
1 8 feet, and lighted buoys were disposed in pairs at intervals of 500 
metres. The trials were inconclusive, and no one ventured to predict 
that in less than five years' time the result of these early experiments 
would have the effect of virtually doubling the carrying capacity of the 
canal. 

It was unanimously agreed that the widening of the canal was 
preferable to the construction of a second waterway. Enlargement 
would be more rapidly accomplished, and shipping would benefit at 
once from the work as it progressed. The greater breadth would 
render possible a greater speed of individual ships when not passing 
each other: the cost of maintenance would be no greater, and it would 
be possible to effect further improvements by increasing the width at 
the curves. 

There was some difference of opinion as to the depth to be aimed at. 
Sir Charles Hartley favoured 3 1 feet (9! metres) to provide for steamers 
of 28 feet: the British delegates as a whole were emphatically in favour 
of 9 metres, to accommodate ships of 27 feet draught. The majority 
of the sub-committee consisting of representatives of nations who 
had no considerable mercantile marine were content with 8 metres. 
The question of depth was, of course, all important, as insufficient 
width could always be met by using the gares or sidings, and it was 
stressed particularly by the German engineers, as the German ship- 
owners were using ships of greater capacity than the English lines. 
The British view eventually prevailed, and the plans and estimates of 
M. Lemasson 1 were accepted almost in their entirety. 

This Commission was reconstituted in 1887 as a Commission Con- 
sultative International des Travaux and has since, with few intermissions, 
met annually in Paris to record its agreement with all important 
proposals for the improvement of the canal. 

From 1885 dues remained at 9.50 fr, per ton Suez Canal measure- 

1 After a residence of nearly thirty years in Egypt M. Lemasson was assassinated in 1 894 
by a discontented workman. He was succeeded by M. Quellenec. 


Chap.v DIVIDENDS AND DISCONTENT 81 

ment and dividends, after a drop in the depression year, 1 886, to 1 5 per 
cent., rose steadily till in 1901 the expected limit of 25 per cent. 
Next year the dividend was at the same rate, and again in 1903, when 
the dues were reduced to 8.50 fr. per ton. At this figure they remained 
for three years, but the dividend was raised to 28.2 per cent. Discontent 
again broke out in the shipping world, and the Chamber of Shipping 
of the United Kingdom stated in their Report for 1905 that: 'lour 
Council dealt in their last three Annual Reports with the varying 
phases of the lengthy controversy in which they have been engaged 
with the Suez Canal Company upon (i) the charging of Suez Canal 
Tonnage Dues on partially enclosed spaces; (2) the unsatisfactory 
nature of the composition of the 'London Committee* of the Suez 
Canal Company, and (3) the increased dividends paid to the share- 
holders of the Suez Canal Company in contravention of the 'London 
Agreement*. Appeals were made to the Foreign Office, and after long 
delays a conclusive reply was received on behalf of Lord Lansdowne, 
showing that in 1900 the London Committee had surrendered what- 
ever control they had over dues and that the Government approved. 
It is probable that the 25 per cent, limit could not have been main- 
tained in face of the opposition of the shareholders; indeed, M. de 
Lesseps showed in 1884 that the limit did not exist. But British 
shipowners did believe it was a reality, and it was a shock to find it 
had been secretly given up. However, indignation was forgotten in 
growing prosperity. 

BIBLIOGRAPHY 

Allen, Capt. W., R.N. The Dead Sea, a new route to India. 1855. 
Gwynn and Tuckwell. Life of Sir C. Dllke. 1917. 
Sargent, A. J. Seaways of the Empire. 1918. 


82 

APPENDIX A 

(Reprinted from Egypt^ No. 3, 1884, C. 3850) 

No. 24. 
Mr. We stray to Earl Granvllle (Received December i.) 

Association of Steam-ship Owners Trading with the East, 
112, Fenchurch Street, London, 

November 30, 1883. 
My Lord, 

REFERRING to the correspondence which has passed between your Lordship and 
this Association, I have now the honour to submit the following statement: 

Sir Julian Pauncefote writing to the Association on your Lordship's behalf, 
under date of the 3<Dth October last, stated that it was indisputable that any 
operations for the construction of the Canal, having their seat in the Isthmus of 
Suez, would be far more cheaply and expcditiously conducted by the present 
Compagnie Universelle than by any other Company, and that the Government, 
therefore, recommended this Association to enter into direct communication with 
the Suez Canal Company, in order to ascertain what prospects there might be of 
obtaining through that medium the necessary facilities for British shipping and 
commerce. As your Lordship is aware, the MM. de Lesseps have recently paid 
a visit to this country for the purpose of ascertaining the views of the different 
shipping and commercial bodies in regard to the present and future position of the 
Suez Canal. Accordingly, several interviews having taken place between these 
gentlemen and the Association, at which the decision was very fully and exhaus- 
tively discussed, I have now the honour to inform your Lordship that certain 
conditions for the future administration of the Canal have been this day agreed 
upon between M. A. Charles de Lesseps and the Committee of this Association, 
and I beg respectfully to hand your Lordship herewith a copy of the particulars in 
question. Your Lordship and Her Majesty's Government will observe that the 
conditions agreed upon provide for important reductions in the charges of the 
Suez Canal Company in the interest of shipping and commerce; also for an 
immediate increase in the number of British Directors on the Board of that 
Company, and for other valuable arrangements, especially such as that of the estab- 
lishment by the Company of an office in London, in which the British Directors 
will form a Comite" Consultatif. 

In transmitting this document, I have, on behalf of the Association, to express 
the hope that Her Majesty's Government will consider that the arrangements 
entered into are satisfactory. 

I have, &c. 
(Signed) J. B. WESTRAY. 

Conditions for the future Administration of the Suez Canal. 

MEETING of the 3Oth November, 1883, at the offices of the Peninsular and 
Oriental Steam Navigation Company; present, the members of the Association of 
Steam-ship Owners engaged in the Eastern trade. Mr. James Laing in the Chair. 


Chap, v, Afp. A LONDON SHIP-OWNERS AND THE CANAL COMPANY 83 

M. Charles Aime* de Lesseps, Vice-President of the Council of Administration 
of the Compagnie Universelle du Canal Maritime de Suez, being also present at 
the meeting, moved from the gentlemen present an expression of their opinion 
upon the matters relating to the Suez Canal, whereupon, a discussion and an 
exchange of views having taken place, it was agreed that the twelve following 
points should constitute the views desirable for the future administration of the 
Suez Canal: 

1. To prevent delays in the transit between the Mediterranean and the Red 
Sea, and vice versa, and also to provide for the expansion of trade, the Company 
shall either sufficiently enlarge the present Canal, or construct a second channel, 
as may be hereafter determined; and that, in order to arrive at a proper decisitin 
as to the course which should be pursued in this respect, a Commission of engineers 
and ship-owners shall be appointed to examine the question, of which not fewer 
than one-half of the members shall consist of English engineers and ship-owners. 

2. In addition to the three Directors designated by the English Government, 
seven new Directors, chosen from amongst English ship-owners and merchants, 
shall at once be admitted as members of the Board. In order to confer upon these 
seven Directors the power of voting which attaches to the present Directors, the 
Administration will propose to the shareholders to modify the Statutes, and to 
revert to the figure at first fixed for the number of Directors, namely, thirty-two. 
In the meantime, and until the necessary formalities shall be accomplished, the 
Administration will invite these seven Directors, as soon as they have been chosen, 
to be present at the meetings of the Board. 

3. A Committee (*Comite ConsultatiF) shall be formed in London, consisting 
of English Directors. The Company will open an office in London. Arrange- 
ments will be made for the payment of dues in London. 

4. In future, appointments in the transit service of the Company will increase 
to a large extent the number of officials speaking English. 

5. It is understood that the last surtax of 50 centimes shall definitely disappear 
from the ist January, 1884. 

6. All expenses resulting from groundings and accidents in the Canal shall, for 
the future, be borne by the Company. From this, however, arc to be excepted 
collisions which may occur between vessels passing through the Canal. The Canal 
Company also except damage which may be caused to the craft and other appli- 
ances of the Canal by ships passing, providing that the ships are to blame for such 
accidents. 

7. That from the ist July, 1884, the Company will entirely extinguish the 
pilotage dues. 

8. From the ist January, 1885, the Company will diminish the transit dues 
by 50 centimes, thus reducing the charge from 10 fr. to 9 fr. 50 centimes, and 
should the dividend for 1883 amount to more than 18 per cent, a further reduc- 
tion in the transit dues over and above the 50 Centimes referred to shall be made 
from the same date, namely, the ist January, 1 885, on the basis of one-half of such 
dividend above 1 8 per cent. That the Company will thereafter divide with the ship- 
owners on every succeeding ist January to the extent of half the profits, whatever 
the amount of such profits may be in excess of the amount of profit last previously 
divided with the ship-owners, which moiety is to be applied to a reduction of dues 


84 LONDON SHIP-OWNERS AND THE CANAL COMPANY 1883 

determined upon the basis of the tonnage which has passed through the Canal in 
the year for which such profit is ascertained. For example, if the accounts for 

1 884 show profits at the rate of 20 per cent, the ship-owners would be entitled to 
a reduction in the Tariff equal to the net profits of the Company corresponding to 
I per cent, (about 2,800,000 fr.) for the year commencing the ist January, 1886, 
over and above the previous reduction. And, again, if the profit on the revenue of 

1885 should be 21 per cent., a half-share of the difference between 20 per cent, 
and 21 per cent., viz., J per cent. say, in round figures, 1,400,000 fr. will go 
towards the reduction of dues from the ist January, 1887, over and above the 
previous reduction, and this division, by moieties, will continue until a profit of 
25 per cent, is reached; above such profit of 25 per cent, all the net profits of the 
Company shall be applied to the reduction of dues until such dues are reduced to 

5 fr - 

9. It is understood that in the foregoing clauses the profit on which the reduc- 
tion of dues is to be calculated shall include the 5 per cent, paid in the first instance 
to the shareholders. 

JO. The reduction already agreed to in favour of ships in ballast is to be con- 
firmed. 

11. As to the statutory reserve, the Council of the Suez Canal Company will 
propose that when such reserve shall have reached the sum of 5,000,000 fr., the 
deductions thereafter to be made from the net profits for the benefit of such 
reserve, and which are now at the rate of 5 per cent., shall in no case exceed a 
maximum of 3 per cent, on such net profits. 

1 2. It is understood that the calculations on which the afore-mentioned reduc- 
tions in the Tariff are to be arranged are based upon the present capital of 
200,000,000 fr. In the event of any change being made in the amount of such 
share capital the basis for the reduction of dues shall be readjusted, so that the 
diminution in the Tariff shall not be adversely affected. 

(Signed) JAMES LAING, Chairman. 

THOMAS SUTHERLAND, Chairman of the 
Peninsular and Oriental Steam Naviga- 
tion Company. 

WILLIAM MACKINNON, Chairman of the 
British India Steam Navigation Com- 
pany. 

J. G. S. ANDERSON, Orient Steam Naviga- 
tion Company, Limited. 

J. B. WESTRAY, Honorary Secretary of 
the Association of Steam-ship Owners, 
trading with the East, and (by authority) 
for the City Line, the Hall, the Clan, 
the Glen, the Shire, the Harrison and 
Ducal Line. 

JOHN GLOVER 

R. S. DONKIN. 

CH. A. DE LESSEPS. 
The foregoing points having been agreed upon with M. Charles A. de Lesseps, 


THE TIMES REGISTER OF EVENTS 85 

the Committee expressed the opinion that the shares held by the British Govern- 
ment should be made to carry adequate voting power at the meetings of the share- 
holders, to which M. Charles A. de Lesseps, whilst reserving his opinion upon this 
question in its legal aspect, and as regards the principles on which the Suez Canal 
Company has been constituted, replied that he is not in a position to share this 
point of view. 

(Signed) JAMES LAING, Chairman. 

Earl Granville to the British Suez Canal Directors. 

Foreign Office, 

January 15, 1884. 
Gentlemen, 

HER Majesty's Government have had under consideration the proposed condi- 
tions for the future administration of the Suez Canal, as agreed to on the 30th 
November last between the Association of Steam-ship Owners trading with the 
East and M. de Lesseps. 

These conditions were laid down in twelve Articles, the execution of which 
will no doubt confer great benefits on British shipping and commerce. 

With reference, however, to the ist Article, under which a Commission is to 
be appointed for the purpose of advising the Company as to the changes necessary 
for the improvement of the transit, Her Majesty's Government are of opinion 
that nautical men experienced in the navigation of the Canal should be admitted 
as members of the Commission on the recommendation of Her Majesty's 
Government. 

They are also of opinion that the official Directors appointed by Her Majesty's 
Government should be members of the London Consultative Committee provided 
in Article 3. 

Her Majesty's Government, who possess as shareholders a very large interest 
in the undertaking, consider that the Agreement affords a satisfactory solution of 
the differences which have arisen between the Company and its customers; and 
on the understanding that no difficulty will be made with regard to the two points 
above-mentioned, they approve of the scheme of proposed measures as putting an 
end to the differences which have arisen, and insuring the development of the 
undertaking in the interest of the trade of the world. 

I authorize you to communicate a copy of this despatch to M. de Lesseps. 

I am, &c. 
(Signed) GRANVILLE. 

APPENDIX B 

SUMMARY OF PUBLIC DISCUSSIONS ETC. WITH REGARD TO THE 

SUEZ CANAL, 1883 

(From The Times Register of Event s^ 1883) 

France, May nth. M. de Lesseps, speaking at the annual banquet of the Suez 
Canal Company, said there was no need for apprehensions from a second canal. 
Meeting of Shipowners at the Cannon Street Hotel on the proposed new 
Suez Canal. Resolutions adopted in favour of it. 
Leader in The Times on the projected Suez Canal. 


86 PUBLIC DISCUSSIONS REGARDING CANAL COMPANY 1883 

May 22nd. The projected Suez Canal. Text of opinion of the Egyptian Judicial 

Committee published. 

May 24th. Leader in The Times on Egypt. 

June 2nd. Meeting of Dutch Shipowners declared their confidence in M. de 
Lesseps and his Suez Canal policy. 

Leader in The Times on the Suez Canal. 
June 5th. France. The Suez Canal Company held their Annual Meeting in 

Paris. M. de Lesseps spoke, reviewing the general situation. 
June 6th. The Suez Canal. Text of the Shipowners' Memorial to Lord Gran- 

ville published. 

July loth. Leader in The Times on the Suez Canal. 
July 1 2th. Leader in The Times on the Suez Canal. 

July 1 3th. The Suez Canal Directors approved of the new Canal arrangement. 
The second Suez Canal Conference of industrial representatives in Aldgate. 
Meeting of merchants and shipowners in the City, and Meeting of the Council 
of London Chamber of Commerce. 

Leader in The Times on the New Suez Canal. 

July 1 4th. House of Commons. At morning sitting numerous questions asked in 
reference to the New Suez Canal. Strong expression of public opinion against 
the New Suez Canal scheme. Meeting of merchants, &c., at Lloyd's. Deputa- 
tion of Associated Chambers of Commerce to Mr. Childers. 

Leader in The Times on the Suez Canal. 

July 1 6th. Leader in The Times on the Ministry and the Canal scheme. 
July 1 7th. Turkey. Strong representations made by the Porte that no change can 
be made in the status of the Suez Canal without its consent. 

House of Commons. Many questions on the Suez Canal scheme, most of 
which the Ministry declined to answer at present. 

July 1 8th. House of Lords. After several questions had been discussed, Lord 
Granville made a statement on the Suez Canal negotiations. Lord Salisbury 
and the Lord Chancellor also spoke. 

House of Commons. Questions on Suez Canal Company. Leader in The 
Times on the Suez Canal Agreement. 
July 1 9th. The Suez Canal. Meeting of the London Chamber of Commerce; 

resolutions passed condemning the Agreement. 

July 2Oth. House of Commons. A number of questions asked on the Suez Canal 
scheme. 

Leader in The Times on the Government and the Session. 
July 2 ist. France. The Suez Canal Company's Managing Committee had a 

special meeting. 

July 23rd. Egypt. Mr. Royle drew up an indictment against the Suez Canal 
Company. 

Leader in The Times on the Suez Canal Convention. 

July 24th. House of Lords. Lord Granville announced the abandonment of the 
Suez Canal Agreement. 

House of Commons. Mr. Gladstone made his statement on the Suez Canal 
Agreement. 

Leader in The Times on the abandoned Agreement. 


Chap, v, App. B PUBLIC DISCUSSIONS REGARDING CANAL COMPANY 87 

July 25th. House of Commons. Several questions on the Suez Canal negotiations. 

Leader in The Times on the Government and the Canal question. 
July 26th. Mr. Gibson spoke at Portsmouth on the Suez Canal question. 

Leader in The Times on England, Egypt and the Canal. 
July 27th. Leader in The Times on the Suez Canal question. 
July 3 1 st. France. M. de Lesseps had a long interview with M. Ferry. 

House of Commons. Debate on Sir S. Northcote's motion on the Suez 
Canal. Mr. Gladstone, Mr. T. Bruce, Mr. Davey, Sir H. Giffard, the Attorney- 
General, and others spoke. The motion was rejected by 282 to 183, and Mr. 
Norwood's amendment agreed to. The House adjourned at 4.40 a.m. 

Leader in The Times on the Suez Canal Debate. 
August 4th. House of Lords. Lord de la Warr moved for papers on the new 

Suez Canal. 

August 7th. House of Lords. Lord Stratheden reviewed the Egyptian question, 
and moved for papers. Lord Granville replied. 

House of Commons. Mr. Gladstone made a long reply to questions as to the 
occupation of Egypt. 

Leader in The Times on England and Egypt. 

August 8th. France. French papers criticize British Rule in Egypt. 
August Qth. France. The Suez Canal Company held their Monthly Meeting, 

M. de Lesseps and the three English members being present. 
September 1 2th. Leader in The Times on Egypt. 
September 2Oth. Leader in The Times on the Suez Canal. 
September 27th. Leader in The Times on Egypt. 
October 4th. Associated Chamber of Commerce, Autumn Session, opened at 

Derby. Discussion on the Suez Canal. 
October loth. Leader in The Times on Egypt. 
October I2th. Professor Leone Levi delivered a lecture at King's College on the 

Suez Canal and the Channel Tunnel. 

November 6th. Leader in The Times on M. de Lesseps in England. 
November loth. At the Guildhall Banquet Mr. Gladstone, M. Waddington, and 
M. de Lesseps made speeches. 

Leaders in The Times on the speeches at Guildhall and on Frenchmen at 
Guildhall. 

November i5th. Trinity House Corporation entertained Mr. Chamberlain and 
M. de Lesseps. 

Leader in The Times on the Trinity House Banquet. 
November i6th. M. de Lesseps visited Liverpool. 

November 1 7th. M. de Lesseps, at a meeting of Liverpool Merchants, spoke on 
the Suez Canal. 

Leader in The Times on the Suez Canal. 

November iQth. Egypt. The Government sent a note to the English Govern- 
ment asserting its right to be heard in any negotiations on the Suez Canal 
question. 

M. de Lesseps addressed meetings at Manchester on the Suez Canal. He was 
entertained at luncheon by the Mayor. 
November 2Oth. M. de Lesseps and his sons visited Newcastle. 


88 PUBLIC DISCUSSIONS REGARDING CANAL COMPANY 1883 

November 2ist. M. de Lesseps addressed a meeting of the Newcastle Chamber 

of Commerce, and also spoke at a banquet given in his honour in Newcastle. 

Leader in The Times on M. de Lesseps. 

November 22nd. M. de Lesseps spoke at a banquet in his honour at Jarrow. 
November 25th. M. de Lesseps had an interview with the London Chamber of 

Commerce on the Suez Canal question. 
November 26th. The Shipowners' Association held a meeting on the Suez Canal 

scheme. MM. Waddington and de Lesseps spoke. Lord Northbrook received 

a deputation in connexion with the movement to raise a memorial to the late 

Lieutenant Waghorn, the pioneer of the Overland Route. 

Leader in The Times on the situation in Egypt. 

November 3Oth. M. Charles de Lesseps had a long interview with the Ship- 
owners' Association on the Suez Canal question. 
December ist. At a meeting of the Shipowners' Association an agreement was 

settled with M. Charles de Lesseps as desirable for the future administration 

of the Suez Canal. 

Leader in The Times on the Suez Canal. 
December 4th. France. Box sent by post containing dynamite to M. de Lesseps. 

No one injured, M. de Lesseps having been warned in time. 
December 1 2th. The North of England Steamship Owners' Association declines 

to accept the Suez Canal agreement conducted in London. 
December I3th. Leader in The Times on Egypt. 
December I5th. Leader in The Times on Egyptian affairs. 
December igth. Lord R. Churchill, in a speech at Edinburgh, attacked the 

Egyptian policy of the Government. 
December 2ist. The Times officially contradicts the statement that Government 

had ordered increase of British troops in Egypt. 
December 22nd. The Hull Chamber of Shipping passed a Resolution condemning 

the Suez Canal Agreement. 
December 24th. Leader in The Times on the Egyptian question. 


CHAPTER VI 
THE NEUTRALIZATION OF THE SUEZ CANAL 

Origin of idea. Definition of term. Status of neutrality. Proposals ofAfettemich and 
de Lesseps. Events of 1882. Proposals of British Government. Proposed Con- 
ference at Cairo. Convention of Constantinople^ 1889. Tests of Convention in 
1904. Anglo-French Agreement of i go 6. 

THE democratization of Western Governments during the past 
century has often made it necessary for statesmen and publicists, in 
order to win popular approval, to epitomize their policies in words and 
phrases marked less by lucidity than by brevity. The battle is half 
won if an epigrammatic label can be devised, and popularized. The 
word 'neutralization' was, until quite recently, such a label and, in its 
application to the Suez Canal, it was broad enough to hide the true facts 
of the situation and to shelter much fallacious reasoning. 

Hallberg, whose treatment of the subject of this chapter in his Suez 
Canal 'is both comprehensive and lucid, ascribes the genesis of the idea 
of 'neutralizing' the Suez Canal to Prince Metternich, who suggested 
it to Muhammad AH in 1838, and in a more definite form in 1841. 
The word itself appears for the first time in French in 1797, in a 
political sense not in English until 1875. The definition of the term 
is important. 'Lord Granville', writes Cromer (ii. 384), 'was evidently 
apprehensive lest the mere use of the word "neutrality" should carry 
him farther than he intended/ With commendable prudence there- 
fore, he directed that, in dealing with this subject, its use should be 
avoided, and that the words 'freedom' or 'free navigation' should be 
substituted in its place. 

A status of neutrality can only be conferred by international agree- 
ment, not by a unilateral act, and the fact that Article 14 of the second 
Act of Concession states that the canal shall always be open as a neutral 
passage has, of itself, no juridical validity. 

De Lesseps submitted in 1856 to the Congress of Paris a formula 
whereby the signatory Powers guaranteed the neutrality of the canal, 
and agreed that no vessel could be seized therein or within four leagues 
of either end, nor could foreign troops be stationed on its banks 
without the consent of the territorial government. It was opposed by 
Lord Clarendon, and dropped. 

Prince Metternich then suggested that the Viceroy of Egypt should 
himself propose a conference at Constantinople to provide for the 
neutrality of the canal. The Viceroy would not hear of it, regarding 


9 o NEUTRALIZATION PROPOSED 1885 

the proposal as dangerous to Egyptian interests. De Lesseps returned 
to the charge eight years later, suggesting an international agreement 
which should: 

1. Proclaim the complete neutrality of the canal and freedom of 
passage for all merchant vessels at all times. 

2. Prohibit war vessels not specially authorized by the territorial 
Power. 

3. Prohibit the landing of troops in the Isthmus by ships passing 
through the canal, and the erection by the Company of any 
fortifications. 

Nothing came at the time of this proposal, but the French Government 
raised it again in 1869, as did also an International Trade Conference 
at Cairo and in 1870, during the Franco-Prussian War, the Admiralty 
expressed a belief in the need for international agreement in the matter 
of neutrality. 1 No action was however taken. 

In 1 8 73, at the Tonnage Conference, a declaration (dated I4th Dec.) 
was adopted which recognized the right of warships and transports to 
employ the canal. What might happen to merchant vessels in case 
Turkey was at war was not discussed, but the principle that the naviga- 
tion of the canal was under the protection of all Europe was, in 
principle, admitted. But this fell far short of 'neutralization'. In 1877 
war broke out between Russia and Turkey: Russia would legally have 
been justified in landing troops on the Isthmus, as being Turkish 
territory. Lord Derby warned Russia that any attempt on the part of 
either belligerent to blockade or interfere with the canal would be 
inconsistent with the maintenance by the British Government of an 
attitude of passive neutrality. The Russian Government gave the 
desired undertaking, but the question remained open, and the Institute 
of International Law in 1878 and 1879 urged that the navigation of 
the canal 'should be placed by an international Act outside of all 
hostile acts during the war'. Nothing was done. 

In 1882 the revolt of Arabi Pasha against the Khedive of Egypt im- 
perilled the safety of the canal. During the period which preceded the 
battle of Tel-el-Kebir Lord Wolseley used the canal as his base of 
operations. Troops were landed at Suez and Port Said, and strong 
naval forces were stationed at Port Said under Admiral Hewett. 
Kantara, Ismailiya, and other stations on the canal were occupied. All 
ships in the canal or entering Suez were stopped : the entrance to the 
Fresh-water Canal was held and access to the railway and telegraph 
lines prevented. For three days the canal was in British hands, the 
staff of the canal having been ordered by de Lesseps to abandon their 

1 The presence of French warships at the approaches of the canal was the cause of their 
anxiety. 


Chap, vi INTERNATIONALIZATION PROPOSED 91 

work, though all these actions were based upon a decree of the 
Khedive, dated 1 5th August, which recognized 'the military occupa- 
tion charged to re-establish order in Egypt, and authorized them to 
occupy all the points necessary*. The occupation of the canal secured 
the closing of the campaign and of the war (see Nourse, p. 127). De 
Lesseps protested, but vainly, for British troops were in fact in Egypt 
for the benefit of and at the invitation of the territorial power of which 
de Lesseps was merely a subordinate mandataire. In 1883, after some 
preliminary conversations, the British Government suggested 1 to the 
principal European Powers that 

1. The canal should be free for the passage of all ships in any circumstances. 

2. In time of war, a limitation of time as to ships of war of a belligerent remain- 
ing in the canal should be fixed, and no troops or munitions of war should be 
disembarked in the canal. 

3. No hostilities should take place in the canal or its approaches, or elsewhere 
in the territorial waters of Egypt, even in the event of Turkey being one of 
the belligerents. 

4. (2) and (3) above not to apply to measures necessary for the defence of Egypt. 

5. Any Power whose vessels of war happen to do any damage to the canal 
should be bound to bear the cost of its immediate repair. 

6. Egypt to take all measures within its power to enforce the conditions 
imposed on the transit of belligerent vessels through the canal in time of war. 

7. No fortifications should be erected on the canal or in its vicinity. 

8. Nothing in the agreement shall be deemed to abridge or affect the territorial 
rights of Egypt further than is therein expressly provided. 

Two years passed and nothing was done. Then, in February 1885, 
the French Government suggested a conference at Cairo. Lord Gran- 
ville described the proposed conference as 'a useless excrescence 1 , but 
agreed to a Committee of Experts to draft an agreement on the basis 
of the Circular. The British representatives were Sir Julian Pauncefote 
and Sir C. Rivers Wilson: they held that Lord Granville's Circular 
was the sole basis of the conference. The French delegates, with 
Russian and German support, propounded an alternative scheme for 
an International Commission to secure the protection of the canal a 
method which really entailed its internationalization. 

The Proceedings of the Conference 2 (covering over 300 foolscap 
closely printed pages) dragged on for over ten weeks and ended without 
agreement on I3th June. A draft Treaty was however elaborated, 
subject however to a general reservation by the British Delegation, 'as 
to the application of its provisions in so far as they would not be com- 
patible with the present transitory and exceptional condition of Egypt, 

1 Dispatch dated 3rd January 1883. Egypt, No. 10, 1883, C. 4305. 

2 Egypt, No. 19, 1885. 


92 SUEZ CANAL CONVENTION CONCLUDED 1904 

and might fetter the liberty of action of Her Majesty's Government 
during the occupation of Egypt by the forces of Her Britannic 
Majesty'. 

A few days later Mr. Gladstone's Government fell, and the question 
of neutralizing the canal was put aside for a time. Till 1887, when the 
question of free navigation of the canal was raised at Constantinople 
by Sir Henry Drummond Wolff, and a Convention drafted which 
embodied the views which had been maintained two years earlier by 
Sir Julian Pauncefote. This Convention was not ratified by the Sultan 
owing to strong protests from several Great Powers. Lord Salisbury, 
however, returned to the charge, and after lengthy negotiations a Con- 
vention 1 was signed at Constantinople on 29th October 1888, subject 
to the proviso, among others, that it was not to become effective during 
the British occupation of Egypt. 

But the canal was not Neutralized' rather was it 'universalized'. 
The Convention forbade acts of hostility within its waters, but made it 
a corridor for all belligerents. As in the case of the Panama Canal, a 
single Power remains responsible for the protection of the Suez Canal, 
and that the Power interested more than any other in keeping it open. 
The first serious test of the British attitude was in 1904, when 
Russian warships passed through the canal on their way to fight 
Japan, then our ally, and one of the Russian vessels grossly violated 
the 'Egyptian Rules regarding coaling by belligerent warships in the 
Suez Canal'. Exceptio probat legem. The position was strengthened by 
our passivity on this occasion. 

Nothing further was done in this matter until 1904. Under the 
Anglo-French Agreement, signed on 8th April of that year, the British 
Government agreed to give effect to the Suez Canal Convention of 
1888 with the exception of those portions which established a Local 
International Board at Cairo to watch over the execution of the Con- 
vention. The relevant provision reads as follows: 2 

'In order to insure the free passage of the Suez Canal, H.B.M.'s Government 
declare that they adhere to the stipulations of the Treaty of 2gth Oct. 1888, and 
that they agree to their being put into force. The free passage of the Canal being 
thus guaranteed, the execution of the last sentence of paragraph i as well as para- 
graph 2 of Article VIII of that Treaty will remain in abeyance.' 

Lord Cromer adds : 3 'The actual working of the Canal Convention was 
put to the test during the Russo-Japanese war. On the whole it may 
be said that it worked well but, as usually happens in such cases, 

1 Commercial No. 2, 1889,0. 3623. 

2 Treaty Series, 1911, No. 24, Cd. 5969. See also British Documents on the Origins of 
the War, vol. ii, p. 333, quoted by Hallberg, p. 307. 

3 Modern Egypt, ii. 387. 


Chap, vi EFFECT OF CONVENTION OF 1904 93 

a number of questions of detail arose in respect to which the wording 
of the Convention was wanting in precision. It would be desirable that 
an opportunity should be taken to revise the Convention by the light 
of the experience which has now been gained/ 

The actual effect of the Agreement of 1 904 made no real difference 
to the status of Great Britain in relation to the canal or to Egypt. The 
authority conferred upon the Egyptian Government by Article IX of 
the Convention of 1888, to take the necessary measures for ensuring 
the execution of the said Treaty, necessarily entailed a delegation of 
this duty to Great Britain, whose relation thereto differs but little from 
that of the United States in the case of the Panama Canal, though in 
practice it is so unobtrusive as to be unobservable in time of peace. 

The happy issue of the Algeciras Conference in January 1 906 was 
followed by a sharp crisis in which Mr. Asquith's Cabinet had to show 
its teeth to the Turkish Government which had occupied a key position 
in the Gulf of Akabah whence it would be easy to bring the Turkish 
frontier up to the eastern bank of the Suez Canal. The measures 
adopted by the Cabinet were prompt, warlike, and effective, and 
resulted in an early settlement, and the present eastern frontier of 
Egypt follows the line then laid down. 'Some members of the Cabinet', 
writes Mr. Spender (op. cit. i. 1 80), 'were doubtful what their colleagues 
might say . . .', but where Abdul Hamid was concerned there was 
unanimity that force, or the threat of it, was the right remedy. The 
wisdom of the attitude adopted in 1907 was vindicated by the events 
of 1914. Abdul Hamid is dead, but his spirit lives on. 'Force is no 
remedy,' said Trevelyan; but Lyall comments, 'Had he lived in the 
East, he would have learned that it is sometimes the only remedy.' 

BIBLIOGRAPHY 

Hallberg. Op. cit. 

Lawrence, T. J. Principles of International Law, 1910, pp. 198 sqq. 

Parliamentary Papers. See volumes quoted supra in footnotes. 

Public Record Office. F.O. 78/2170, 1869 to 1870. Neutralization of Suez Canal. 

Spender, J. A., Life of Lord Asquith. 

Zetland, The Marquess of, Life of Lord Cromer, 1932. 


CHAPTER VII 

THE SUEZ CANAL FROM 1889 TO 1914, AND THE 
ATTEMPT TO RENEW THE CONCESSION IN 1910 

Growth of Prosperity: Increase of Traffic. Application for renewal of Concession. 
Sir Edward Grey's view. Sir Eldon Gorst's attitude. Preliminary discussion in 
the General Assembly of Egypt. Assassination of Boutros Pasha Ghali. Committee 
of Assembly recommends rejection of project. Discussion of Report. Zagh/ul 
Pasha's views. Sidky Pasha's support. Rejection of Egyptian Government's 
proposals. Hostility to Great Britain. Discussion in House of Commons. Mr.G.y. 
Sandys. Sir E. Grey. Anomalous position of British Government. 

'"pHE conclusion of the Convention of 1 888 removed the Suez Canal 
J- from the list of unsettled international questions. The Suez Canal 
Company itself, little affected by the diplomatic problems which it had 
created, continued a now well-established career of prosperity. The 
passenger traffic, which in 1 8 8 i had been 90,000, was doubled by 
1889, and trebled by 1911, though subject to wide fluctuations dur- 
ing intervening years. The number of transits, 2,727, in 1881, was 
doubled by 1912 (5,373), and in the same year the total net tonnage of 
5! millions in 1881 reached 2oJ millions. The proportion of British 
tonnage averaged about 78-6 per cent, during the five years 1881-5, 
but tended to fall slowly, and by 1912 was only 63-5 per cent.: 
it was, however, still four times as great as that of Germany, which held 
second place with 2-f million tons, the Netherlands being third with 
i J million tons, and France fourth on the list with 800,000 tons. The 
increase in British tonnage was, however, between the years 1875 anc ^ 
1905, 37 per cent, greater than that of all other flags put together. 
Between 1908 and 1913 the number of ships bound for Australia and 
New Zealand more than doubled, and amounted in 1913 to nearly 
10 per cent, of the total traffic through the canal. Ships bound for 
Europe from Australia, New Zealand, were, however, in 1908 more 
than twice as numerous as those bound in the opposite direction : this 
proportion has tended to increase, and over 75 per cent, of the outward 
bound shipping from Europe to Australia now goes via the Cape, as 
the saving of 1,000 miles between London and Melbourne is more than 
outweighed by the burden of canal dues. 

The period with which this chapter deals was one of increasing com- 
mercial prosperity in almost every country in the world. The Canal 
Company's gross receipts rose from 55 million francs in 1 88 I to nearly 
140 million francs in 1 9 1 2, and the market price of the 5oo-franc shares 


Chap, vn INCREASING PROSPERITY 95 

rose from about 2,000 francs in 1881 to 2,600 francs in 1891, 3,700 
francs in 1901, and 6, 100 francs in 1912. During the same period the 
Canal Company greatly improved its properties, widened and deepened 
the canal, and shortened the time taken in transit. Most efficient 
bunkering and repair services grew up under private enterprise, and 
shipowners were thus encouraged to acquire a subsidiary and indirect 
interest in the working of the canal. The position of the British 
directors, whether appointed by Government or nominated by the 
London Committee, in the proportion that it became more remunerative, 
became less responsible, and Sir John Stokes and Sir Charles Rivers 
Wilson, a former Consul-General at Alexandria, were succeeded by 
men whose distinction in official life was greater than their qualifica- 
tions to represent His Majesty's Treasury or the British Empire on the 
board of a great commercial concern. When a Government director- 
ship became vacant by death the Government of the day nominated 
men 1 whose past services it was desired to recognize by the grant of 
a substantial old-age pension. 

In 1 909 the Suez Canal Company applied to the Egyptian Govern- 
ment for an extension of their concession for a further period of forty 
years, from 1968 to 2008. Their proposal, in the form finally put 
forward, 2 provided for the payment by the Company of a capital sum 
of jE 4 millions and a share of the annual receipts rising from 4 per 
cent, in 1922 to 12 per cent, in 1961. From 1968 onwards the profits 
were to be shared equally by the Company and the Egyptian Govern- 
ment. The Egyptian Government would nominate a maximum of 
three directors to the Board. 

The proposal was undoubtedly profitable to Egypt, but it was even 
more profitable to the Company. The Company's title to charge as 
much as the traffic would bear, subject to a maximum of 10 francs per 
ton plus pilotage and other charges, was not to be restricted. The right 
of the 'fondateurs ou ayant droit' (M. de Lesseps' descendants or 
coadjutors) to 10 per cent, of the profits was to be perpetuated, as also 
that of the directors to 2 per cent, of the profits. (Their individual 
share would not have been appreciably diminished by the addition of 
three Egyptians to their number.) The Concession was to be textually 
renewed, without revision, though both in substance and in form it 
was, as was to be expected after a lapse of over forty years, defective 
and ambiguous, and in many respects obsolete. No attempt was to be 
made to revise the statutes 01 the Company in conformity with 
generally accepted models, or to define the Company's responsibilities, 

1 See Appendix B to this chapter. 

2 The draft concession and the note attached thereto, as submitted to the General 
Assembly in Egypt, are reproduced in full as Appendix A to this chapter. 


96 NEGOTIATIONS FOR RENEWAL OF CONCESSION 1910 

liabilities, and immunities in the light of modern conditions. The 
status of the Company as holders till 1968 of the right conferred on 
them by the Territorial Power in 1854 to levy, for services rendered, 
sums sufficient to yield a dividend of 100 per cent, per annum or so 
would remain inviolate; 1 the interests of international commerce were 
at no time publicly mentioned, nor, as far as can be ascertained from 
published records, even officially discussed. 

The great Maritime Powers do not seem to have realized the magnitude 
of the issues at stake: and, so far as is known, made no representations 
to the British or Egyptian Governments on the subject in 1909 when 
the question was first raised. Sir Edward Grey, as Secretary of State 
for Foreign Affairs, announced in Parliament on 4th November 1 909 
that the proposed extension of the Suez Canal Company's concession 
would be brought before the General Assembly in Egypt, and that in 
the meantime it was inadvisable that any discussion should take place. 
On 25th November he definitely refused facilities for a discussion. 
Even after the project had been laid before the General Assembly he 
declined to lay papers on the subject before Parliament, 'as the question 
was not under the control of His Majesty's Government*. Though Sir 
Eldon Gorst, the British Agent and Consul-General at Cairo, had 
described it as 'of exceptional importance to present and future genera- 
tions' [of Egyptians] it was not considered proper to permit the House 
of Commons, representing a nation under whose flag 70 per cent, of 
the shipping using the canal sailed, to express any opinion on the sub- 
ject of the extension of the Concession until the General Assembly of 
Egypt had approved, or rejected it that is to say until it was too late 
to take effective action. The immediate domestic interests of Egypt 
alone carried weight. 

The proposal was submitted on the morning of 9th February 1910 
to the General Assembly in its second session by the Khedive Abbas 
Hilmi with an explanatory memorandum and a note 2 which indicated 
the alterations demanded by the Egyptian Government and accepted 
by the Company. 

These documents included a long explanatory memorandum which 
expressed the fear that the eventual interests of Egypt in the canal, and 
its potential value, might be affected by the following factors : 

(1) a reduction of the canal dues to 5 francs, 'in conformity with 
an undertaking given by the Company* (no such clause appears 
in the Convention), 

(2) the known intention of the Company to reduce the dues before 

1 Zaghlul Pasha's admissions on this subject (see p. 99) are of particular interest. 

2 Vide appendix to this chapter. I have not reproduced the note of the British Adviser, 
which was marked * Confidential*. 


Chap, vn DISCUSSIONS IN EGYPTIAN ASSEMBLY 97 

the end of the Concession in a manner designed to damage the 
interests of the Egyptian Government, in the event of failure to 
agree upon terms of renewal, 

(3) competition of the Panama Canal (see Chap. X), 

(4) diminished importance of the canal as a result of scientific dis- 
coveries and the creation of new ways and means of communica- 
tion, 

(5) the possibility that when the canal reverted to the Egyptian 
Government it might be compelled to permit ships to pass 
through the canal free of charge or at a greatly reduced rate. 

It is scarcely a matter of surprise that a proposal, however financially 
advantageous, supported by such arguments should have been 
examined in a spirit of criticism, and ultimately rejected with con- 
tumely. 

In recommending the project for acceptance the Khedive observed 
that the General Assembly had been convened for the sole purpose of 
considering the proposed agreement with the Suez Canal Company. 
Although the matter did not come within the category of questions 
which should be submitted to the Assembly for advice, yet, owing to its 
exceptional importance to present as well as future generations, the 
Council of Ministers had decided to withhold ratification, pending 
consideration by the Assembly, of the project, which was recommended 
by their financial advisers, headed by Sir Paul Harvey. 

Having thus spoken the Khedive left the Chamber, amidst the cheers 
of the Deputies led, as President of the Assembly, by his uncle H.H. 
Prince Husain Kamal, the present King, and business was adjourned 
till the afternoon of the same day, when Muhammad Shawarby Pasha 
and Amin el Shamsy Pasha pressed for the appointment of a com- 
mittee to investigate the project. Abdu Latif Bey el Sufany, on the 
other hand, proposed to adjourn the discussion till the following day: 
this was approved. 

On loth February the debate was resumed by Amin el Shamsy 
Pasha, who commenced to speak on lines unfavourable to the Agree- 
ment. He was, however, cut short, and a committee 1 was appointed to 
consider the documents laid before them by the Khedive. 

This done a Deputy (Ismail Pasha Abaza) asked whether the de- 
cision of the General Assembly would be conclusive or regarded 

1 The Committee consisted of nineteen members of whom four, shown in brackets, 
resigned: [Mohammed Eloui Pasha, Ahmed Afify Pasha, Morcos Semaika Bey Pasha, 
Tolba Seudi Pasha], Mahmoud Soliman Pasha (Chairman) Ismail Abaza Pasha, Hassan 
Madkur Pasha, Ibrahim Murad Pasha, Ahmed Yehya Pasha, Aly Sha'rawy Pasha, Mah- 
moud Bey Abd El Ghaffar, Hassan Bey Bakry, Fathallah Barakat Bey Pasha, Abdel Latif 
El-Sufany Bey, Gad Moustapha Bey, Saad Makram, Diab EfFendi Mohammed Selim, 
Amin Bey El-Aaref, and Ismail Effendi Kerim. 


98 ASSASSINATION OF EGYPTIAN PREMIER 1910 

merely as advisory. The Premier, Boutros Pasha Ghali, evaded the 
question by declaring that Government could add nothing to the 
khedivial speech and, though strongly pressed by Abdul Latif Bey 
Sufany and Ismail Abaza Pasha, declined to commit his Government. 
The debate, which became heated, lasted a little more than an hour and 
was adjourned by the President. On 2 1 st February, before the discus- 
sion could be resumed, the Premier was murdered on the steps of the 
Ministry of Justice as he stepped into his carriage. The crime was 
purely political. The assassin, a young Egyptian, possessed just the 
kind of character to be influenced by the violent tirades in the Cairo 
press against 'the betrayal of the Nation in the interests of the Canal 
Company's shareholders'. He had just completed a medical course 
in London and did the deed under the direct instructions of certain 
men who were never brought to justice. Boutros Pasha Ghali was 
an able and upright Egyptian, devoted to the interests of his country. 
He was also a Coptic Christian: as such, and as the Prime Minister 
of a Government which had, on the unanimous recommendation of its 
British advisers, urged acceptance of the Convention, he was a natural 
target for the arrows of fanaticism. He had, moreover, been com- 
pelled in 1906 by Lord Cromer to sit as a member of the Special 
Tribunal which tried the Denshawi case, though he was wholly 
without judicial experience. 

The decision to refer the matter to the General Assembly, which 
thus cost the Premier his life, was, of course, taken at the instance of 
Sir Eldon Gorst, who misjudged its probable attitude and rated too 
highly the influence that the Khedive and his Ministers could exercise. 
Lord Cromer would scarcely have fallen into such a trap; he would 
have scented the strength of the opposition (as in the case of his pro- 
posed reform of the Capitulations) and dropped the scheme. 

On 1 5th March the Committee submitted its report to the General 
Assembly, advising rejection of the scheme on the following grounds: 

(1) The scheme should not have been submitted to the General 
Assembly till approved by the Company's shareholders. 

(2) The Assembly had no power to modify the scheme. 

(3) It would entail upon Egypt a loss of over 130 millions. 

(4) The fears of the Government as to possible scientific discoveries 
and inventions in methods of transit and the establishment of 
overland routes, &c., were not well-founded, and the Company 
might in the future be inclined to offer better terms. 

(5) Theresas no urgent financial necessity for renewing the Con- 
cession in consideration of a cash payment. To do so was to 
mortgage the future to the detriment of posterity. 

(6) There was no provision for financial control of the Company. 


Chap, vn ZAGHLUL PASHA'S ADVOCACY 99 

On 4th April the General Assembly met to receive and consider 
this Report. The visitors' galleries were crowded to overflowing. All 
the Ministers were present and two Under-Secretaries of State, Fsithy 
Zaghlul Pasha Zaghlul's brother and Sidky Pasha sat behind the 
members of the Assembly. Public interest had been aroused, and a crowd 
had already assembled to watch the arrival of leading political figures. 

Mohammed Said Pasha, the new Prime Minister, began by re- 
capitulating the history of the project which the Government had 
modified after careful study; before taking a decision it was desired to 
ascertain the views of the Assembly, which had accordingly been con- 
voked, although this was not legally necessary. The Assembly had 
heard the proposal and memorandum of the Financial Adviser on the 
question and had appointed a Committee which had duly reported. 
On its report the Government had made certain observations which 
were commended to the consideration of the Assembly by the Prime 
Minister, who concluded by announcing that the decision of the As- 
sembly would, without creating a precedent, be regarded as final and 
binding. The announcement was loudly applauded. 

Saad Zaghlul Pasha, Minister of Justice, followed in support of the 
scheme. He expounded the memorandum in detail, emphasizing that 
the scheme was purely financial and non-political. It did not entail the 
loss of the canal, but was merely an extension of an already existing 
lease which could in no way affect the future status of Egypt. Zaghlul 
Pasha then proceeded to make comment in detail on the Report of the 
Committee. After speaking for an hour he showed signs of fatigue 
and asked his colleague Sirry Pasha to read a certain part of his remarks 
which were based on a printed memorandum. After some time he 
resumed his speech, explaining at great length that Egypt would in all 
probability be forced to make the passage in the canal free when it 
reverted to her; unless the administration was conducted by a com- 
mercial company it would be impossible to induce the Powers to submit 
to the continued imposition of dues on a scale sufficient to yield large 
commercial profits. The proposals of the Company entailed a large 
cash payment which could be used for various projects. Sirry Pasha 
here read a statement on irrigation and drainage schemes, involving 
the expenditure of ^E 16,000,000, destined to bring under the plough 
no less than 1,600,000 acres of desert or lake. 

Zaghlul Pasha concluded his great speech by urging acceptance of 
the scheme. He deprecated the idea of rejection on the ground that the 
nation had no control over public expenditure; it was wrong to refuse 
benefits merely because Egypt had as yet no Constitution. 

Abaza Pasha and Sufany Bey expressed satisfaction at the intention 
of the Government to accept the decision of the Assembly, but urged 


ioo ZAGHLUL PASHA SHOUTED DOWN 1910 

rejection in speeches of considerable length. After other speeches the 
discussion was adjourned to Thursday, 7th April. 

When the Assembly resumed its deliberations the debate was 
opened by Abaza Pasha, who reiterated his conviction that the Govern- 
ment had not proved its case. He was followed by Zaghlul's nephew, 
Barakat Bey, who announced that the Committee of General Assembly 
had prepared a reply to the Government. He moved that it be read 
and the vote of the Assembly taken afterwards. 

The reply of the Committee was duly read: though couched in 
sympathetic terms it again advised the rejection of the scheme. It was 
loudly applauded from the public galleries, crowded with boys of all 
ages between 5 and 20 years. About 50 members of the Assembly 
then rose in their seats and declared amidst wild applause that they 
would reject the canal scheme. Zaghlul Pasha, the spokesman of the 
Ministry, who had been taking notes and shaking his head dis- 
approvingly during the reading of the Committee's reply, rose to speak; 
it was some time before his voice could be heard. But he had hardly 
began to speak when Abaza Pasha rose to ask him why he wished to 
continue the debate. 

Zaghlul Pasha answered that he wished to comment on the last 
statement of the Committee, but Abaza Pasha declared that the debate 
on the subject had been finally closed and that the vote should be taken 
at once. Zaghlul refused indignantly to submit to the behest of any 
private member and insisted upon his right to answer for the Govern- 
ment. Abaza Pasha again interrupted, claiming that the Assembly 
having accepted the motion of Barakat Bey there should be no further 
discussion. 

Some forty or fifty members of the Assembly supported Abaza 
Pasha in his endeavour to silence Zaghlul; who at last managed to 
make his voice heard. 'Why do you interrupt me?' he shouted, 'By 
what right do you endeavour to prevent a member of the Government 
from making his statement ? Have I no right to speak here, and is this 
how you mean to carry future motions or conduct serious affairs? 
Gentlemen, you are acting against fair play and right, and also against 
your best interests by trying to silence me; the very procedure you are 
now employing against me will be used against you yourselves. It is 
clear that you wish to make this grave decision without hearing the 
explanation of the Government, which has given it most careful study! 
I deeply regret the fact, for it has always been my desire to see your 
opinion respected; that is possible only when you make your decisions 
after hearing all that can be said on the subject. You are committing 
a great error, as the Government is not your enemy and we are not the 
other party in a lawsuit. We, the members of the Government and the 


Chap, vn THE DRAFT CONVENTION DEFEATED 101 

members of your Assembly, are one and the same company working 
for one and the same end. We are members of the same body and no 
member has the right to enforce silence upon another member. We are 
here to act upon the principle of liberty, not to stifle and oppose liberty 
of speech.' 

Abaza Pasha retorted, at great length, that every discussion should 
end somewhere. If they were to allow the Government now to study 
this last report and make a new statement in reply, there would be no 
end to the matter, and the present Suez Canal concession would have 
expired before the last word was said. (Cheers.) 

Zaghlul Pasha urged that a reply by the Government was imperative 
seeing that the report in question had been kept secret to the last 
minute. 'Before entering this hall', declared the Minister, 'I asked the 
President about this new report, and he said that he had not seen it. 
I am therefore asking to make my observations on a document which 
I had no means of seeing before this moment. Why should you try to 
silence me ? By vindicating the principle of the liberty of speech in 
your Assembly, I am serving you better than those who pretend to be 
the advocates of your rights/ 

Several members here tried to speak on either side, but were not 
heard in the general uproar. 

At last the Minister abandoned his attempt to speak; the discussion 
was closed, and the whole Assembly, with the exception of the 
Ministers and Semaika Bey, 1 thereupon voted for the summary rejec- 
tion of the scheme amidst deafening applause. 

Members, visitors, employees of the Assembly, journalists, and 
others were seen embracing one another and exchanging congratula- 
tions on the outcome of the debate, while a crowd of some 1 5,000 
persons, mostly youths of school age, proceeded to parade the town 
with music and banners. For almost the first time the streets of Cairo 
resounded with the cry of 'Down with the Army of Occupation' and 
'Down with England*. 

The opinion was widely expressed at the time that the scheme, thus 
unequivocally condemned, had been inadequately studied and had 
never received impartial consideration at the hands of experts. It is 
difficult to resist the conclusion that the General Assembly decided 
rightly in rejecting the Convention although, in fact, the vote was in- 
tended to be an indication of hostility to Great Britain, and of the 
intention of the Notables to condemn every scheme, irrespective of its 
merits, proposed by the Government. It was, however, as observed 

1 Semaika Bey's acceptance of the project was subject to certain conditions which he 
had expounded and distributed to all members in pamphlet form, doubtless with a view to 
inclusion in the proces-verbal of this momentous Assembly. 


102 DISCUSSIONS IN COMMONS 1910 

twenty years later by Abbas Hilmi II, 1 greatly to be regretted that no 
counter proposition was put forward. 

Some months later the matter was raised again in the House of 
Commons when Sir J. D. Rees asked the Secretary of State for Foreign 
Affairs whether measures would be taken to support the British 
financial and commercial interests adversely affected by the rejection 
of the proposed extension of the Suez Canal Company's concession 
which, he said, was stigmatized by Sir E. Gorst as displaying an entire 
lack of confidence in the intentions and good faith of the Government 
on the part of the Egyptian General Assembly. Sir E. Grey replied 
that it was a matter which primarily concerned the Egyptian Govern- 
ment and the Suez Canal Company. There was no reason for interven- 
tion in British interests; if His Majesty's Government did exert their 
influence in Egypt in a case of this kind, it must be from the point of 
view of the Egyptian interests. He had no knowledge of any corre- 
spondence that had passed between the Company and Sir E. Gorst, or 
between Sir E. Gorst and the Egyptian Government, nor did he possess 
copies of correspondence between the Company and the Government 
of Egypt. ^ 

A fortnight later the question of the Suez Canal Convention was 
raised, on 2ist July, by Capt. G. J. Sandys (M.P. for Wells), who 
regretted that no discussion on the subject in the Commons had been 
permitted until the matter had been settled one way or another. *I have 
come to the conclusion', he said, 'that there has been a tendency to 
treat this matter as one concerning Egypt alone, in which the people 
of this country are not deeply interested. ... In view of the attitude 
adopted by the Government, we should insist on the fact that the Suez 
Canal is of great national importance to us as well as to Egypt. . . . 
Anything that effects its future must be of the greatest importance to 
this country and to the Empire.' The proposed extension of the Con- 
cession, he continued, to 2008 was, as Sir E. Gorst said, a satisfactory 
bargain from the Egyptian point of view, but on the subject of British 
representation on the board of directors, and on the matter of canal 
dues, the Report was silent. He considered that any extension of the 
Convention should provide for representation more in keeping with 
our shareholding. As to canal dues, he observed that the Agreement 
of 1883 had not been kept, though dividends reached 28 per cent, in 
1909, dues were still 7*75 francs, instead of 5 francs. 

- Sir Edward Grey replied that he regarded the question as one for 
the Egyptian Government, which should have a free hand in dealing 
with the Suez Canal Company, to make the best bargain in the in- 
terests of Egypt. The bargain having been made, it was for the British 

1 A few Words on the Anglo-Egyptian Settlement, 1930. 


Chap, vn SIR EDWARD GREY'S VIEWS 103 

Government to review the proposed Convention to see whether, 
regarded impartially, it was a good bargain or not in the interests of 
Egypt. If not, we should point out in what respect it required amend- 
ment, otherwise, he was bound to let the Egyptian Government 
proceed, and keep the matter of British interests for separate con- 
sideration. He believed it to have been a good bargain, but it was not 
essential to Egypt that the Concession should be renewed. 
Continuing, Sir E. Grey said: 

4 We have also to look at any question of the extension of the Suez Canal Con- 
cession from the point of view of British interests. That, I think, we ought to 
reserve, and we did partly reserve, for discussion between the British directors and 
their colleagues on the Board of Directors. That was the natural place for us to 
bring forward our interests, and, as a matter of fact, considerable discussion took 
place. First of all, there is the point of view of the shareholders, which is the 
Treasury point of view, and then there is the point of view of the shipowners, 
which the Board of Trade had carefully to consider. We had to consider these 
great interests, and they were very carefully considered by the Treasury and the 
Board of Trade, as well as by the Foreign Office, in conjunction with those two 
Departments, and in consultation, too, with the official directors of the Suez Canal 
Company. Our directors on the Board of the Company are, and always have been, 
on terms of the utmost cordiality with their colleagues on the Board, and the dis- 
cussions which took place between them would, I believe, have resulted in such 
conclusions with regard to the future administration of the Company, that the 
prolongation of the Concession might well have been recommended to this country 
from the point of view of British interests. But a good deal more had to be dis- 
cussed. There was the question of representation on the Suez Canal Board which 
has been under discussion here for many years. It has been carefully considered 
by the Board of Trade. Considerable difficulties attach to it. 

'Then, again, there is the question of the reduction of the Canal dues. These 
are matters of the utmost importance, and had the negotiations proceeded, un- 
doubtedly the prolongation of the Suez Canal Concession would have been dis- 
cussed and criticized from both those points in this House. But in my opinion 
these are matters to be considered by the Treasury and the Board of Trade when 
the question of the extension of the Concession again comes up, both from the 
point of view of the reduction of the dues and that of representation on the Board. 
Undoubtedly, if the negotiations are resumed and reach a conclusion, the question 
will be discussed in this House, and the Government of the day will have to put 
before the House the considerations which guided them in instructing the official 
directors as to the vote they may give either for or against the prolongation of the 
Concession. From the point of view of British interests I think it is our duty to 
put these matters before the Company through our official directors, although, of 
course, in any future action the Government of the day will be responsible for the 
instructions given to and votes given by the official directors. I trust I have made 
this complicated question somewhat clearer than it was when the Debate first 
began. It is extremely difficult for any one in my position to deal with this 
question, having both points of view to consider; I have endeavoured to steer a 


io4 EMPIRE INTERESTS IGNORED 1910 

perfectly straight course and to be fair to the interests of Egypt, while giving due 
consideration at the same time to British interests. . . . The question of the Suez 
Canal concession is a complicated matter, and requires to be elucidated.' 

On this note the debate concluded. The interests of the British 
Empire were scarcely mentioned in the debate ; the interests of the 
other great Maritime Powers were not discussed, nor the inevitable 
repercussions of the Panama Canal, the completion of which was by 
this time assured. No papers were laid on the table: a question on 
which, thirty years earlier, voluminous papers had been presented to 
Parliament was declared to be 'not under the control of His Majesty's 
Government', which was, as in Mr. Gladstone's day, deeply embar- 
rassed by the anomalous position in which it was placed as 

(1) owner of 46 per cent, of the shares, 

(2) guardian of the interests of Egypt, 

(3) protector of the Canal Zone in the event of war, 

(4) guardian of the interests of British shipping then constituting 
70 per cent, of the total canal traffic, 

(5) responsible for instructing its three directors on the Board 
whose existence made it convenient and indeed necessary that 
the views of the British Government should be made through 
them, though they had no power to enforce their views. 

British shipping interests seem to have taken little or no interest in the 
matter. The view generally taken was that 'the Company could do 
what it liked and no one could say anything' in any event it was use- 
less to expect the British Government to move, as they held nearly 
half the shares and wanted to make as big a profit as possible. It was 
the first instance of participation on a large scale by the British Govern- 
ment in commercial undertakings on foreign soil: financial success 
obscured the political and commercial evils entailed. 

BIBLIOGRAPHY 

Abbas Hilmi II. A few words on the Anglo-Egyptian Settlement. 1930. 
M.TraversSymons. T he Riddle of Egyft. (n.d.) 
Official Publications of Egyptian Government. 1910. 

Contemporary journals published in Cairo during 1910, and the files of The Times , have 
also been consulted. 


io 5 
APPENDIX A 

The French official Texts of the Draft Convention with the Suez Canal 
Company for the Prolongation of its Concession and the Note attached 
thereto^ as submitted to the General Assembly of the Egyptian Government 
and read during the debate of Wednesday > yth February 1910. 

NOTE 

A L'Assemblee G^n^rale relative au Project de Convention avec la Compagnie 
du Canal de Suez. 

La Compagnie du Canal de Suez a fait au Gouvernement des propositions pour 
la prolongation de sa concession. Apres de longs pourparlers, le project de conven- 
tion ci-annexe fut redige* et soumis au Conseil des Ministres. Le Conseil en sa 
stance du jeudi 27 Janvier 1910, preside* par S. A. le Khedive, a unanimement 6te* 
d'avis que le projet en question en sa forme primitive devrait tre e*carte"} qu'il 
pourrait toutefois etre accepte* a condition que les modifications suivantes y soient 
apporte*es: 

i La garantie de Frs. 50,000,000 par an accorde*e a la Compagnie pour la 
periode de la prolongation d'apres Tart. 1 1. Elle doit tre entierement supprime*e$ 
en d'autres termes le partage des be'ne'rlces de 1969 a 2008 devra s'effectuer absolu- 
ment par moities, sans aucun pre*levement privilegie* de la Compagnie. 

2 La participation de 50% ainsi assuree au Gouvernement doit commencer 
non pas a partir du ler Janvier 1969, mais bien a partir du 17 novembre 1968, 
point de depart de la prolongation. 

3 L'art. 8, aux termes duquel le Gouvernement devrait assumer la charge des 
pensions, retraites et secours des employe's de la Compagnie, a partir du 2009, date 
de 1'expi ration de la concession, doit etre supprime*. 

Toutefois comme c'est uniquement en raison de la charge des pensions et de 
retraites assumee par le Gouvernement egyptien que la Compagnie acceptait de 
payer a ce dernier la somme de 90,000 stipules a Tart. 9 du projet, et comme 
d'autre part le Gouvernement e*gyptien se trouvera exone*re de la charge ci-dessus, 
le Conseil des Ministres serait dispose" a faire, par contre, abandon de la dite somme 
de 90,000. 

Le Conseil serait egalement dispose* a regler a cette occasion la question soulevee 
par la Compagnie de Tattribution des terrains qui viendraient a tre eventuellement 
conquis sur la mer a Port Said par suite de 1'execution de travaux que la Compagnie 
effectuerait a ses frais. 

Le Conseil n'est pas d'avis d'attribuer des terrains a la Compagnie, mais accep- 
terait de stipuler qu'ils soient consignes au Domaine Commun. 

PROJET DE CONVENTION 
Article Premier 

La concession de la Compagnie Universelle du Canal Maritime de Suez qui 
devait, a dfaut d'entente entre le Gouvernement Egyptien et la Compagnie, 
expirerle 17 d&embre, 1968 est prolong^e jusqu'au 31 decembre, 2008. 


106 TEXT OF DRAFT CONVENTION 

Article 2 

Pour la periode comprise entre le ler Janvier 1969 et le 31 decembre 2008, le 
partage des produits nets ou benefices annuels de Pentreprise sera effectue a 
raison de 50% attribu& au Gouvernement egyptien et 50% a la Compagnie, 
sous reserve des stipulations ci-apres: 

I Au cas oil le montant des produits nets ou be*ne*fices serait, pour une annee 
quelconque de la dite periode, inferieur a cent millions de francs, la Compagnie 
prleverait par privilege une somme de cinquante millions et le Gouvernement 
e*gyptien ne recevrait que le surplus. 

2 S'il advenait que le montant des produits nets ou be*ne*fices fut, pour une 
anne quelconque, egal ou inferieur a cinquante millions de francs, la total! te de 
ces produits nets ou bdnefices de Pexercice serait attribute a la Compagnie. 

La participation ainsi reserve'e au Gouvernement egyptien implique 1'abandon 
par lui, a partir du ler Janvier 1969, des 15 % qui lui sont attribues aux termes de 
Particle 63 des Statuts de la Compagnie. 

Art. 3 

En exchange de la prolongation de la concession, la Compagnie s'engage a verser 
au Gouvernement egyptien, au Caire, une somme de 4,000,000 (Frs. 
103,694,000) en quatre termes egaux payables les 15 decembre 1910, 15 decembre 
1911, 15 decembre 1912, et 15 decembre 1913. 

Art. 4 

La Compagnie s'engage en outre a operer au profit du Gouvernement egyptien, 
sur les produits nets ou benefices de Pentreprise, un prelevement, qui commencera 
a s'exercer a compter de Pexercice 1921 et dont les taux sont fixes d'apres Pechelle 

de 4% de 1921 k 1930 de 6% de 1931 a 1940 

de 8% de 1941 a 1950 de 10% de 1951 a 1960 

de 12% de 1961 a 1968 

La part de la be"ne*fice ainsi attribute au Gouvernement egyptien sera determinee 
dans les mmes conditions que le dividende des actionnaires et sans distinction 
d'aucune sortej elle sera paye*e aux me 1 me dates. 

La Socie"te* civile be'neficiaire jusqu'au 17 novembre 1968 du I5%attribueau 
Gouvernement par Part. 1 8 de Pacte de concession du 5 Janvier 1856, ne devra pas 
participer aux charges resultant pour la Compagnie de Part. 3 ci-dessus ainsi que 
du preient article. 

Art. 5 

Dans le reglement des comptes des exercices posterieurs a 1968 pour la deter- 
mination de la part revenant au Gouvernement en vertu des stipulations de 
Particle 2 de la pr&ente convention, les seuls emprunts dont les charges entreront 
en ligne de compte seront ceux contracted posterieurement a 1910, en vue des 
travaux d'amelioration du Canal et de ses ports d'acces exe*cut& a partir de 1911, 
sous reserve que les charges d'interts et Pamortissement soient re"partis a Paide 
d'une annuit^ e*gale sur toute la duree de ces emprunts. 


Chap, vn TEXT OF DRAFT CONVENTION 107 

La part revenant au Gouvernement sera determinee dans les mmes conditions 
que le dividende des actionnaires, mais seulement tout autant qu'il n'y aura pas lieu 
de faire des applications des reserves contenues a Paline*a pre*ce*dent. 

Elle sera dans tous les cas payee aux me'mes dates. 

Art. 6 

II est specific que la participation du Gouvernement s'6cercera, dans la propor- 
tion de 50 %, la fin de la concession sur tout reliquat de Tactif social apres retour 
au Gouvernement du Canal Maritime dans les conditions prvues par 1'acte de 
concession du 5 Janvier 1856. 

Art. j 

La Compagnie admet qu'il y aura lieu, a partir de 1969, d'assurer la repr&enta- 
tion des intere'ts egyptiens au sein du Conseil d' Administration, en raison de la 
participation importante qui sera alors reservee au Gouvernement dans les bnfices 
de 1'entreprise. 

II est des a present stipule qu'k la demande du Gouvernement egyptien, trois 
sieges, au maximum, seront attribue*s a des administrateurs d&igns par lui, 
presentes par le Conseil d'Administration et nomms par I'assemble'e Generate 
dans les formes usitees. 

Art. 8 

A la demande de la Compagnie, le Gouvernement accepte d'assumer, lorsque 
la concession prendra fin, la charge du service de retraites, pensions et secours, tel 
qu'il resultera de 1'application des reglements actuellement en vigueur concernant 
les employes, pilotes et ouvriers, reglements dont des exemplaires ont e*te remis 
au Gouvernement. 

Art. 9 

La Compagnie s'engage, pour Tavern r, k executer elle-meme et a ses frais les 
travaux d'entretien et d'amelioration qu'elle jugera utiles pour maintenir en bonne 
condition les acces du Canal Maritime de la cote de Suez. Elle accepte en outre de 
prendre a sa charge, jusqu'a concurrence de 90,000 (Frs. 2,333,070) la 
depense des dragages en cours dans la rade de Suez, entreprise par le Gouvernement 
egyptien pour Tapprofondissement de la passe donnant acces au Canal. 

Art. 10 

II est specific que dans tous les actes, Conventions ou Accords intervenus 
anterieurement entre le Gouvernement et la Compagnie, les dispositions se 
rapportant directement ou indirectement a la duree ou s'appliquant a la dure*e ou 
a 1'expi ration de la concession telle quelle seront prolongees par la pr&ente 
Convention. 

Art. ii 

La presente Convention ne sera definitive et ne produira ses effets que lorsqu'elle 
aura ete ratifiee par TAssemblee G6n^rale des Actionnaires de la Compagnie. 


io8 

APPENDIX B 
LIST OF BRITISH DIRECTORS 

Representing His Majesty's Government 

rColonel (afterwards Sir) John Stokes, R.E. 
i876<j (Sir) C. Rivers Wilson, K.C.B. 

LE. J. Standen 

1891 (Sir) Henry Austin Lee vice E. J. Standen. 
1896 Sir C. W. Fremantle Sir C. Rivers Wilson. 


1902 General Sir John Ardagh 

1903 H. T. Anstruther 
1917 Sir W. Garstin 

1919 Lord Downham 

1920 Sir Ian Malcolm 
192* SirJ. T.Davies 
1926 EarlofCromer 


Sir John Stokes. 
Sir C. W. Fremantle. 
Sir John Ardagh. 
Sir W. Garstin. 1 
Sir H. A. Lee. 
Lord Downham. 
H. T. Anstruther. 


1884^ 


Nominated by 'The London Committee* 

Robert Alexander 
(Sir) James Laing 
(Sir) Wm. Mackinnon, M.P. 


C. J. Monk, M.P. 
Sir C. M. Palmer, M.P. 
John Stagg, M.P. 
Sir) Thomas Sutherland, M.P. 


Lord Brassey 
R. S. Donkin 
Sir E. S. Dawes 
Sir Henry Calcraft 
Lord Rath more 
Sir Fred. Greene 
J. B. Westray 
Sir J. L. Mackay 
(Lord Inchcape) 
J. W. Hughes. 
Oswald Sanderson. 
Lord Kylsant. 
Sir Aubrey Brocklebank. 
7\ Harrison Hughes y vice-chairman. 
Sir Alan Anderson. 
Sir John Cadman. 
Sir Robert Horne y M.P. 
Sir Thomas Royden. 
Sir E. Wyldbore-Smith. 
Sir A. Cayzer. 
NOTE. Those in italics were in office in October 1933. 

1 A question was asked in Parliament in 1919, but never 
answered, as to the circumstances attending the involuntary 
resignation of Sir William Garstin and his replacement by 
Lord Downham, who, as Mr. Hayes Fisher, was President 
of the Local Government Board from 1917-19 and later 
Chairman of the L.C.C. With this exception all Govern- 
ment directorships have been for life. 


CHAPTER VIII 
THE FINANCES OF THE SUEZ CANAL COMPANY 

First allotment of profits in l8j$. Financial situation, 1870-83. Cost of improve- 
ments. Increase of traffic. Dues levied, 1884-1913. Dividends, 1883-1903. 
Dividends, 190413. Cost of improvements, 1884-1913. Loans in 1887. Suez 
Canal Accounts, 1884-1914. Surplus profits, 1884-1913. Causes of variation 
in traffic figures. Suez Canal Traffic, 18901912. Cargoes, 191113. 

Canal traffic receipts, 191431. Fluctuations during war period. Suez Canal 
Accounts, 191419. Surplus profits, 191419. Traffic variations. Suez Canal 
Accounts, 19207. Surplus profits, 1920-7. Dividends, 1920-7. Suez Canal 
Accounts, 192831. Surplus profits, 1928-31. Remuneration of Directors. 
Cost of improvements, 191419. How met. Summary of Balance Sheet of 3 1st 
December 1931. Summary of net profits, 18701931, and discussion of principles. 
Dues and goods, comparative figures: classes of goods carried: incidence of dues of 
various commodities and per cargo ton. 

Table I. Suez Canal Receipts. Table II. Suez Canal Payments. Table III. 
Suez Canal Division of Surplus Profits. Table IF. Suez Canal Traffic by 
Nationalities. Table V. Traffic through Suez Canal with countries east and 
south. 

AFTER the increase in dues and the funding of arrears of interest 
-^-the Company began to pay its way, and the first allotment of 
'surplus profits' was made in 1875. According to the Statutes, after 
meeting the general and administrative expenses of the canal, the 
service of the bonds, and 5 per cent, (plus 0-04 per cent, sinking fund) 
on the unredeemed capital, 5 per cent, was to be allotted to the 
statutory reserve till it reached 5 million francs, and the remainder 
was to be distributed as follows: 71 per cent, to the original shares, 
redeemed or not, 15 per cent, to the Egyptian Government, 10 per 
cent, to the holders of founders' shares (originally 100 of no par value, 
then divided into 1,000 for 18769 and then into 100,000), 2 per 
cent, to the directors, and 2 per cent, to the staff (for pensions, &c.). 
'Actes de jouissance* are issued in respect of redeemed shares, and 
different rates are paid on these and the other shares according as they 
are 'to bearer' or not, and tax is deducted. In 1880 the Egyptian 
Government share was transferred to the Credit Foncier de France in 
part satisfaction of debt, and was by them sold to a French Soci&d 
Civile (administered by the Comptoir National d'Escompte) for 22 
million francs. 

The financial situation of the Company from the beginning of 1 8 70 
to the end of 1883 may be summarized as follows: 


no 


SUEZ CANAL ACCOUNTS 


RECEIPTS 


Dues: Shipping . 
Passenger . 
Other 

Total 

Investments, &c. . 
Estates 
Other Receipts . 


Thousand 
francs. 
409-142 


452-216 

8-34i 
9-502 

10-247 


480-306 


PAYMENTS 


Administration . 
Transit 
Maintenance 
Lands, water, &c. 
Bond Interest, &c. x 
Shares: Dividend, &c. . 
Reserve 
Surplus Profit 

Total . 

Charged to Capital 
Account (1870/1) . 

Carried forward 'en fonds 
special* . 


1870-83 

Thousand 
francs. 

I5-254 
23-489 

3'974 

13-320 

161-088 

121-547 

6-235 

118-483 

490-390 

12-232 
478-158 

2-148 
480-306 


The surplus profit was distributed as follows : 


Shareholders 
Egyptian Government 
Founders' shares 
Directors 
Staff 

Total 


Thousand 


francs. 


71 per cent. 


84,122 


15 


17,774 


10 


11,847 


2 


2,370 


2 


2,370 


118,483 


The surplus profits distributed to shareholders started with 1-88 frs. 
per share in 1875 an( ^ reac hed 63-657 frs. in 1883, or 12-73 P er cent - 
in addition to the 5 per cent, of statutory dividend. Taken over the 
whole fourteen years from 1870, the shareholders' portion of 'surplus' 
profits averaged 6,008,000 frs. annually or 15 frs. per share, say 3 per 
cent., making 8 per cent, in all, but up till 1880 they drew but little 
over 5 per cent, from an undertaking which at its inception was un- 
doubtedly risky. The directors also in 1883 could have drawn about 
30,000 frs., say 1,200 for each of the twenty-four, but 1882 was the 
first year in which a director could have drawn more than 1,000 
a year, and up till 1881 their drawings were meagre. 

In 1871-6 about 6,010,000 frs. were spent in completing the canal 
and in improvements, and in the next seven years, 1877-83, about 

1 Includes besides bond interest a few other small items. A further loan of 27 million 
francs at 3 per cent, was raised in 1880, bringing up the share and bond capital to 373 
million francs. 


Ill 


Ctap.vm SUEZ CANAL DUES, 1869-84 

8,320,000 frs. were spent in improvements rather more than the 
million francs annually for which Sir John Stokes had stipulated. In 
addition 7,011,000 frs. were spent on the Fresh-water Canal, writing 
off plant, &c., and, in 1883, plant, &c., for new works was purchased 
to the value of 2,366,000 frs. 

The traffic through the canal was only 437,000 net tons in 1870, it 
exceeded a million tons net in 1872 (1,161,000 tons), and successive 
additions of a million were reached in 1875 (2,010,000 tons), in 1880 
(3,057,000 tons), in 1881 (4,137,000 tons), and in 1882 (5,075,000 
tons), while in 1883 the aggregate was 5,776,000 tons. British tonnage 
was 66-4 per cent. (289,000 tons) in 1870, but was 71-8 per cent, in 
1871, and grew regularly till it reached 82*9 per cent. (3,430,000 tons) 
in 1 88 1; there was an increase to 4,126,000 tons in 1882, but the 
percentage fell to 81-3; in 1883 the tonnage was 4,406,000 tons and 
the percentage 76-3. Particularly rapid was the growth in shipping 
from Australia 46,000 tons in 1878, 489,000 tons in 1883. 

1884-1913 

Up to 1884 ^e management of the canal had been entirely in the 
hands of the French Company and changes in dues had been nego- 
tiated with it by the British Government, as the largest shareholder, 
after a basis had been imposed by an International Commission and 
the Sublime Porte. The changes in the dues on ships with cargo 
(a rebate of 2*50 frs. being allowed on vessels in ballast) were as under: 


15 Nov. 1869 
5 July 1872 

20 Apr. 1874 
i Jan. 1877 
i Jan. 1879 
i Jan. 1881 
i Jan. 1882 
i Jan. 1883 
i Jan. 1884 


10 fr. per net ton 

10 fr. per gross ton 
1 3 fr. per net ton 
i2-5ofr 

12 fr. 

11-50 fr. per net ton 

11 fr. 
io-5ofr. 
lofr. 


The rates of dividends (including the statutory 5% and share of 
surplus profits) and dues during the next thirty years, free of tax 
in all cases, was as under: 


rear. 


DIVIDENDS 


DUES 


Per Share 
francs. 


Per cent. 


Francs per net ton. 


1883 
1884 
1885 
1886 
1887 


88-657 
87-252 
85-405 

75*335 
78-325 


I773I 
17-450 
17-081 
15-067 
15-665 


10-50 
10-00 
9-50 


112 


SUEZ CANAL DIVIDENDS 


1883-1913 


Tear. 


DIVIDENDS 


DUES 


Per Share 
francs. 


Per cent. 


Francs per net ton. 


I888 1 


84-478 


16*896 


9*50 


1889 


85-894 


17*179 


1890 


86-751 


17-350 


1891 


87-150 


17*430 


1892 


92*366 


18*473 


1893 


9*373 


18*075 


1894 


90*000 


18*000 


,, 


1895 


92*500 


18*500 


> 


1896 


92*500 


18*500 


> 


1897 


90*000 


18*000 


1898 


100*000 


20*000 


1899 


108*000 


2I-600 


1900 


108-000 


2I-600 


, 


1901 


125*000 


25-000 


j 


1902 


125*000 


25-000 


y 


I93 


126*000 


25*000 


8*50 


In 1900 it was clear that the dividends payable by the Company 
would reach the figure of 25 per cent., thus bringing into force the 
provisions of * The London Programme' of 1883 whereby all further 
surplus profits were to be devoted to lowering dues, until these reached 
the minimum figure of five francs. The President of the Suez Canal 
Company thereupon approached the London Committee, the other 
party to 'The London Programme* in the settlement of which, according 
to the official view, Her Majesty's Government took no part. The 
London Committee were asked and agreed to waive the stipulation 
mentioned above, as being unduly onerous, and in its place to agree 
that 'every fresh reduction of tariff should be preceded by an increase 
of dividend*. A mistake was made, as in 1883, in not following the 
precedent created in 1876 by Sir John Stokes when he stipulated for 
a minimum annual expenditure on improvements, the necessity for 
which was apparently the reason which induced the London Com- 
mittee to accept with such complacence this unilateral abrogation of an 
important condition in the agreement of 1883. Their decision was 
apparently taken on the ground that it afforded 'an incentive to the 
Company, which would not have existed under the original arrange- 
ment, to make such improvements as will tend to increase the tonnage 
passing through the Canal'. The figures given on page 115, 
however, show that the average sums spent annually on improvements 
from 1904 to 1913 were less than between 1884 and 1893: they also 

1 See Appendix. 


Chap, vni SUEZ CANAL ACCOUNTS 1884-1913 113 

show that reductions in dues did not, in fact, follow the same course 
as dividends. The improvements did not tend to increase the tonnage 
passing through the canal; they were necessary if the canal was to 
continue to serve the purpose for which it had been constructed. 

In the years following, the London Chamber of Shipping, who 
appear to have been unaware of the action of the London Committee, 
were frequently pressed to take action in matters relating to the Suez 
Canal Company. The Report of the Chamber for 1 905 states, 'Your 
Council dealt in their last three Annual Reports with the varying 
phases of the lengthy controversy in which they have been engaged 
with the Suez Canal Company upon (i) the charging of Suez Canal 
tonnage Dues on partially enclosed spaces; (2) the unsatisfactory 
nature of the composition of the 'London Committee* of the Suez 
Canal Company; and (3) the increased dividends paid to the share- 
holders of the Suez Canal Company in contravention of the 'London 
Agreement' which was entered into in the year 1883 between M. 
Charles de Lesseps and British Shipowners'. The Chamber had 
already pointed out to the Board of Trade, in a letter dated 1 5th March 
1 904, that circumstances had materially altered since 1 8 8 3 . They said : 
'In the year 1883 the proportion of Suez Canal Dues to the freight 
earned was very much less than it is at the present time. A vessel taking 
coal to ports east of the Suez Canal may now have to pay about one- 
half of her outward earnings and one-fourth of her homeward earnings 
in Canal dues alone'. An interview was secured with Lord Lansdowne, 
the Foreign Secretary, on 9th February 1 905, but it was not till nearly 
ten months later and only after much pressing that a definite reply 
was given to the representations of the shipowners. The material 
parts of the Foreign Office letter of 3Oth November 1905 were as 
follows : 

'With regard to the appropriation of Canal profits to the reduction of dues, I am 
to state that the London Agreement or London Programme of 3Oth November 
1883, in the settlement of which Her Majesty's Government took no part, con- 
sists of a series of proposed concessions on the part of Monsieur de Lesseps, and 
the preamble shows that the twelve points which form the substance of the arrange- 
ment were merely to "constitute the views desirable for the future administration 
of the Suez Canal". 

'Whatever the character of this understanding may have been, the London 
Committee were consulted in 1900 by the President of the Suez Canal Company, 
both committee and president being the representatives of the original parties to 
the understanding, and they were unanimous in considering that such an onerous 
condition as that contained in Article 8 of that arrangement viz., that all net 
profits above 25 per cent, should be applied to the reduction of dues till the latter 
were reduced to 5 frs. a ton could not reasonably be maintained. 

'The solution accepted by the British directors was that every fresh reduction 


ii4 SUEZ CANAL ACCOUNTS 1904-13 

of tariff should be preceded by an increase of dividend. Lord Lansdowne is not 
prepared to hold that this solution was disadvantageous to British interests, for it 
affords an incentive to the Company, which would not have existed under the 
original arrangement, to make such improvements as will tend to increase the 
tonnage passing through the Canal.' 

The Chamber was thus forced to admit that the 'London Programme' 
was at best a 'gentlemen's agreement', and that the legal position is 
that the Canal Company are entitled to charge 10 francs a ton, though 
it is to be noted that the Concession specifies 'francs' only without 
saying whether they are gold, silver, or paper, and that the words 'not 
exceeding' suggest the possibility of reductions. M. de Lesseps, in 
fact, always declared that his policy was to reduce rates with increasing 
traffic. The Chamber has had, therefore, to proceed very diplomatically 
in negotiating with the Company whenever it considered a reduction 
of dues to be necessary, for any 'agitation' in the United Kingdom (as 
in 1873, *883, 1904, and 1931) has always aroused much suspicion 
and resentment among the French shareholders. 

The Chamber had from 1883 been critical of the representative 
character of the London Committee, and in the letter quoted above 
'Lord Lansdowne agrees that the London Committee is not as closely 
in touch as might be desirable with the various branches of the shipping 
interests'. 

How far this is true to-day is a matter on which I have no material 
to express an opinion. 

From 1 903 to the outbreak of the World War dividends and dues 
moved as follows : 


DIVIDENDS 


DUES 


Per Share 


Tear. 


francs. 


Per Cent. 


Francs per ton. 


1904 


141 


28-2 


8-50 


1905 


141 


28-2 


8-50 


1906 


141 


28-2 


775 


1907 


141 


28-2 


775 


1908 


141 


28-2 


775 


1909 


150 


30-0 


775 


1910 


158 


3i-6 


775 


1911 


165 


33-o 


7-25 


1912 


165 


33-0 


675 


1913 


165 


33 . 


6-25 


While dividends were being increased and dues decreased, though 
not by any means simultaneously or in the same ratio, the canal 


Chap, vin *SUEZ CANAL ACCOUNTS 1884-1913 115 

itself was being constantly improved, as shown by the following 
figures : 

Aggregate Yearly Average 

thousand francs, thousand francs. 

( 1884-93 94,655 9,465 

Cost of improvements to Canal I 1894-1903 32,697 3,270 

11904-13 82,515 8,252 

In 1887 two loans of 73,026 and 238,964 bonds were issued at 
various rates for constructional purposes and produced 127 million 
francs. The 'ditch* which in 1870 was from 7 to 8 metres deep, 
22 metres wide at the bottom, and 54 to 100 metres broad between 
banks, was 9 metres deep and 37 metres wide at 8 metres depth in 
1905, and in 1923 was 1 1 to 13 metres deep, 45 to 100 metres wide 
at bottom, and 100 to 160 metres between banks. Electric lighting 
of ships had also been introduced in 1 886 to allow traffic to pass through 
the canal by night through part of its length and in 1887 * or the whole 
canal. Between 1909 and 1914 the canal was deepened from 28 to 
36 feet throughout, and widened in proportion. There was also 
heavy outlay on new docks at Port Said. These developments were 
a necessary consequence of the growth of shipping and the increasing 
size of vessels. They increased the earning power of the canal but, if 
not undertaken, it would have soon been abandoned by shipping. 

The following statement summarizes the financial accounts of the 
Company for the three decades before the outbreak of the World War. 

Including the 5 per cent, interest and drawings of shares shown in 
the first table the shareholders received in the thirty years 1 ,52 7,6 1 7,000 
francs for their original investment of 200 million francs say 
60,560,000, or over 2,000,000 a year. The division of the directors' 
shares of the surplus profits is not shown in the accounts, but altogether 
the 32 directors (for to that number had the Board been increased in 
1883) drew 1,310,000 in the thirty years under review, and if the 
principle of equal distribution had been adopted they might each have 
drawn about 920 a year in the first decade, about 1,260 a year in 
the second decade, and about 1,930 a year in the period from 1894 
to 1913. 

The increase of traffic through the canal did not proceed without 
interruption. It grew to 6,336,000 net tons in 1885 and then, in the 
world depression of 1886, fell away to 5,768,000 tons, a smaller figure 
than in any of the three preceding years. Recovery was prompt and 
another steady rise followed, culminating in a total of 8,699,000 tons 
in 1891, a figure which was not to be surpassed till 1898. According 
to an article by A. Sauerbeck on 'Prices of Commodities in 1903'* the 

1 Journal of the Royal Statistical Society, 1904, Part I, p. 92. 


Suez Canal Accounts 1884-1913 


Particulars. 


1884-93. 


1894-1903. 


1904-13. 


Receipts: 


In thousand francs 


Dues: Shipping .... 


645^45 


853,093 


1,177,610 


Passengers .... 


18,090 


22,954 


25*183 


Other 


5,809 


4*697 


8,656 


Investments, Exchange, &c. 


13*129 


16,054 


22,439 


Estates ...... 


9*249 


2,872 


2,722 


Other receipts .... 


4,821 


8*337 


8,54i 


Total 


696,443 


908,007 


1,245,151 


Brought forward .... 


. . 


. . 


287 


Taken from Reserve .... 


1,236 


1,598 


14,300 


697,679 


909,605 


1*259*738 


Payments: 


Administration .... 


15,898 


16,125 


21,320 


Transit ..... 


27,535 


30,525 


35*695 


Maintenance ..... 


21,101 


3o* 8 39 


53*989 


Lands, water, &c. .... 


12,655 


13,106 


12,704 


Total .... 


77*^9 


9>595 


123,708 


Bond interest, Sec. 1 .... 


131,984 


160,610 


154*177 


Shares, 5 per cent. Dividend 


118,006 


118,166 


118,805 


Reserves (statutory, special, depreciation, &c.) 


37,296 


84,532 


Surplus profit ..... 


370,500 


502,651 


778,456 


Carried forward .... 


287 


60 


Total 


697,679 


909,605 


1*259,738 


The division of the Surplus Profits was as follows : 
Surplus Profits^ 1884-1913 


Classes. 


1884-93. 


1894-1903.! 1904-13. 


1884-1913 
aggregate. 


Shareholders . 
'Egyptian Govern- 
ment' (i.e. Credit 
Foncier) 
Founders' shares 
Directors 
Staff 


15 

10 
2 
2 


263,053 

55*574 

37*049 
7,412 


In thous 
356,883 

75*39 6 

50,267 
10,053 
10,052 


and francs 
552,704 
116,769 

77*843 

I C - C 7G 
I c r 7Q 


1,172,640 
247*739 

165,159 
33*035 
33*034 


Total . 


IOO 


370,500 


502,651 


778,456 


1,651/607 


1 Including pension (120,000 fr.) to de Lesseps' family; Egyptian Supervision 
(30,000 fr.) 


Chap.vm TRADE FLUCTUATIONS 117 

low points in the volume of British trade (imports plus exports) were 
in 1 8 85 and 1893 and the high points in 1884, 1889, and 1903. The 
low points for wholesale prices were in 1887 and 1896, and the high 
points in 1883, 1889/1891, and 1900; after 1896 the effects of the 
Rand gold output became observable. There were, of course, special 
causes producing variations in Suez Canal traffic, apart from the 
changes produced by alterations in world prosperity. The year 1891 
saw the start in the trade in fresh fruit from Australia and also the 
introduction of oil tankers to the canal route; an innovation to which 
other shipowners, fearing the risk to their ships, were opposed, but 
the British Government refused to intervene. In the same year began 
the 'colonization* of Africa and the building of railways in Japan and 
Siam. The year 1893 was marked by the coal strike in England, by 
the Australian financial crisis, and by bad foreign trade in the United 
Kingdom and France, especially in wheat, rice, and wool which were 
to a large extent carried via the canal. In 1895 ^ was reported 
(Manchester Guardian^ iyth June) that 'the Czar's Government have 
determined to devote nearly 20 millions during the next three or 
four years for the purchase of any large parcels of Suez Canal shares 
coming into the market. No information is available as to what, if 
any, action was taken in this direction. The Australian situation im- 
proved in the following year and the opening of more Chinese ports 
improved trade with that country, but 1896 and 1897 saw famine and 
plague in India and in the latter year drought in Australia. With 
decreasing crop exports from India British exports to that country also 
fell off; e.g. in 1895 about 1,297,000 tons of coal were exported to 
India, but in 1897 only 598,000 tons. Cargoes being scarce and 
shipping plentiful, freight rates fell heavily; e.g. the homeward freight 
rate from Bombay fell by 74 per cent, between 1891 and 1897. The 
dependence of canal traffic on the weather in India is shown by the 
increase in the exports of wheat from India from 29,000 tons in 1897 
to 484,000 tons in 1898, with a corresponding increase in the exports 
of coal to India from 598,000 tons to 666,000 tons. The year 1898 
with a canal traffic of 9,238,000 tons marked the beginning of a 
prolonged development which continued with only minor fluctuations 
till 20,275,000 tons were reached in 1912. The exploitation of 
China, the South African War, the Russo-Japanese War and its 
sequelae of repatriation of troops (1903-6), the growth in the trade 
in manganese from India and soya-beans from Manchuria, were 
all 'bull' factors for canal traffic, just as droughts in India in 1900 
and 1 908 were depressing influences. The reaction from the trade 
boom which reached its height in 1913 began to show itself in 
various directions before the end of the year, but it was anticipated 


ii8 TRAFFIC AND CARGOES 1890-1913 

in the Suez Canal traffic which as a whole was 1-2 per cent, less than 
in 1912. 

The following table shows the net tonnage of ships using the canal 
and trading inwards or outwards with countries east of Suez, beginning 
with 1890. 

The Indian trade was 56-41 per cent, of the whole in 1891, and though 
by 1912 it had increased by 98-88 per cent, it was only 48-13 per cent, 
of the whole in the latter year. This relative decline was due to the 
great increase in the traffic with China, Japan, and Cochin-China. The 
Australian trade maintained its relative position and improved in 
volume by a slightly larger percentage than the whole traffic. British 
shipping formed 75-1 per cent, of the whole in 1891-5; 65-0 per cent, 
in 18961900; 62-2 per cent, in 19015; 62-5 per cent, in 190610; 
62-4 per cent, in 191113. In 1913 the United Kingdom had 60-2 
per cent, of the traffic; Germany 16-7, Netherlands 6-4, France 4-6, 
Russia 1-7, Japan 1-7, and Italy 1-5. 

Suez Canal Traffic, 1890-1912 


Straits, 


Cochin- 


Siam, 


China, 


Dutch 


China, 


Other 


Tear. 


E. Africa. 


W. India. 


E. India. 


E. Indies. 


Japan. 


Australia. 


Areas. 


Total. 


In thousand net tons 


1890 


149 


1,988 


1,882 


879 


928 


716 


348 


6,890 


1891 


219 


2,610 


2,297 


1,113 


1,167 


799 


494 


8,699 


1893 


172 


2,239 


1,833 


1,028 


1,234 


798 


355 


7,659 


1896 


269 


1,649 


2,411 


1,085 


1,578 


871 


697 


8,560 


1897 


303 


1,269 


2,419 


i,033 


1,705 


845 


325 


7,899 


1901 


382 


i,675 


3,106 


i,54 


2,710 


972 


475 


10,824 


1905 


482 


2,623 


3,722 


1,671 


2,943 


995 


698 


13,134 


1910 


510 


3,359 


4,300 


1,987 


3,977 


1,704 


745 


16,582 


1912 


747 


4,812 


4,947 


2,435 


4,202 


2,037 


1,095 


20,275 


Percentages 


1891 


2-52 


30-00 


26-41 


1279 


13-42 


9-18 


5-68 


100-00 


1901 


3-53 


15-47 


28-70 


13-90 


25-04 


8-98 


4-38 


roo-oo 


1912 


3-68 


23'73 


24-40 


12-01 


20-73 


10-05 


5-40 


100-00 


1912 


as% 


of 


1891 


341-11 


184-37 


215-37 


2I8-78 


360-07 


254-94 


221-66 


233-07 


Particulars of the weight of cargoes carried are not available for the 
earlier years, but in the three years 1911-13 the chief classes were as 
shown below: 


Chap, vin TRAFFIC AND CARGOES 119 

Weight of Cargoes passing through Suez Cana/ y 1911-13. 


Particulars. 


ign. 


1912. 


1913- 


Particulars. 


ign. 


1912. 


J9*3- 


Outward 


In thousand tons 


Inward 


In thousand tons 


Coal . 


1,091 


967 


1,192 


Wheat 


1,643 


J ,9 2 5 


1,490 


Iron and steel 


1,320 


2,035 


2,898 


Rice . 


1,628 


1,702 


2,061 


Salt . 


455 


432 


449 


Sugar 


798 


400 


53 


Petroleum 


485 


465 


510 


Copra 


654 


587 


537 


Other . 


6,145 


5,883 


6,271 


Oil seeds . 


1,481 


1,293 


i,394 


Tea . 


487 


398 


393 


Jute . 


730 


886 


840 


Wool 


392 


3H 


309 


Cotton 


305 


188 


294 


Manganese 


561 


623 


869 


Benzine. 


235 


271 


291 


Other 


6,138 


7,075 


5,924 


Total . 


9,49 6 


9,782 


11,320 


Total 


15,052 


15,662 


H,455 


1914-31 

The War naturally affected canal traffic and receipts profoundly, as 
the following table shows : 


^i 


1, 


2 

H 


* g 


*?s' 


Dividend. 


Ifs 


I 5 ! 
s?? 
^ bs 


|l* 

p* < 


||| 


8M 

^ 


Per Share. 


Tear. 


^S 


0, 


^ g 


^ 


5i 


Francs. 


Per Cent. 


1911-13 


Average 


19,545 


275 


128,985 


2,635 


6-75 


165 


33* 


1914 


19,409 


392 


117,307 


3,735 


6-25 


120 


24-0 


1915 


15,266 


211 


90,281 


2,005 


6-25 


I 2O 


24-0 


1916 


12,325 


283 


76,120 


2,802 


6-75 


9 


18-0 


(i Apr.) 


7-25 


(rSept.) 


1917 


8,369 


142 


61,076 


1,415 


775 


65 


13-0 


(i Jan.) 


8-50 


IOO 


1918 


9,252 


1 06 


79,34 


1,050 


8-50 


192 


20-0 


1919 


16,014 


528 


136,970 


5,164 


8-50 


3 8-4 (paper) 


28-6 (gold) 1 


Regular traffic fell to low levels and the canal was largely dependent on 
the passage of troops and of war supplies, though the traffic was only 
interrupted for one day. The year 1919 showed a very large 'passenger' 

1 Francs in 1919 averaged 74.61 per cent, of gold parity. 


120 TRAFFIC FIGURES 1920-31 

movement due to the repatriation of soldiers. The transit dues were 
restored to the level of 1903/5 or the return to the shareholders would 
have been much worse; even so it was 21-7 per cent, (gold) on the 
average of the six years 19 141 9. In addition 252,655 new 5 per cent, 
bonds were issued in 191518, producing 1 19,514,000 francs, and in 
the period 191419 over 63-7 million francs were spent in improve- 
ments. The finance accounts of the canal in these six years, stated 
in gold francs, are as follows: 

Suez Canal, 191419 


Receipts. 


Payments. 


Thous. 


gold francs 


Thous. 


gold francs 


Dues: Shipping . 


561,094 


Administration . 


17,683 


Passenger . 


16,171 


Transit .... 


32,258 


Other 


11,889 


Maintenance 

T J 4. 


/ 


Total . 
Investments, Exchange, &c. . 


5 !w* 


Lands, water, &c. 
Bond: interest, &c. 
Shares: dividend, &c. . 


1 1, no 
110,605 
84,278 


Estates .... 
Other receipts 
From Special Reserve . 
Brought forward 


i53 
12,492 
6,500 
60 


Reserve (housing, &c.) 
Surplus profit 
Carried forward 


27,000 

350,433 
508 


Total 


668,650 


Total . 


668,650 


The paper franc was at a discount on gold during this period and profits 
were made on the remission of funds from Egypt, amounting in 1919 
to 29,278,000 francs. 

Surplus Profits were divided as follows : 


Shareholders 
Egyptian Government 
Founders' shares . 
Directors 
Staff . 

Total 


71 per cent, 

15 

10 

2 


100 


Thous. francs 

248,808 

52,565 

35>45 

7,008 

7,oo7 
350,433 


The world went through a re-stocking boom in the second half of 
1919 and the first half of 1 920 ; over-hasty speculation was followed by 
a depression from which most countries did not begin to emerge till 
some time in 1923. Good trade followed till it was brought to an end 
by the American crash in the autumn of 1929, when the present 
universal depression set in. Traffic through the canal changed with 
changing trade, as the following figures of tonnage using the canal 
show: 


Chap, vin 


TRAFFIC FIGURES 


121 


Year. 


Total. 


British. 


Tear. 


Total. 


British. 


Th. net tons 


Th. net tons 


Th. net tons 


Th. net tons 


1920 


17,575 


10,838 


1927 


28,963 


i6,534 


1921 


18,119 


n,397 


1928 


31,906 


18,124 


1922 


20,743 


13,383 


1929 


33,466 


19,114 


1923 


22,730 


14,264 


1930 


31,669 


17,600 


1924 


25,110 


H,995 


1931 


30,028 


16,624 


1925 


26,762 


16,016 


1932 


28,340 


15,721 


1926 


26,060 


14,969 


The tonnage using the canal in 1931 was very nearly one-half 
greater than that passing in 1912, and in 1 929 it was over 65 per cent, 
larger, but in 1932 there was a fall of 15*3 per cent, from 1929. 

In considering the accounts of this period the depreciation of the 
franc must be borne in mind. Receipts and expenses were recorded in 
gold francs and the profits on remissions of funds were then brought 
in for distribution as profits. This course was adopted up to the 
stabilization of the franc, and from 1928 the accounts are in new 
francs. This makes it advisable to consider 19207 separately. The 
average annual sterling-franc and dollar-franc exchange rates were as 
below : 


Exchange. 


Par. 


1920. 


I<)21. 


IQ22. 


1923. 

7^66 
6-07 

31-46 


1924. 


1925- 
102-51 

4-77 

24-72 


1926. 


7927. 


Francs to 
Cents to franc . 
Franc in per cent, 
of gold parity 


25-225 
19-293 

100-00 


52-78 
6-71 

34-80 


5I-90 
7-46 

38-66 


54-60 
8-19 

42-45 


85-27 
5-23 

27-11 


152-76 
3-25 

16-81 


123-86 
3.92 

20-32 


Suez Canal Accounts, 19207 


Receipts. 


1920-3. 


1924-7- 


Payments. 


1920-3. 


1924-7- 


Dues: Shipping . 
Passenger . 
Other 

Total . 

Investments 
Estates 
Other receipts . 
Conversion of 
Funds . 
Brought forward 


Thous. 
francs 
623,663 
12,305 
7,858 


Thous. 
francs 

759,833 
10,752 

6,135 


Administration 
Transit 
Maintenance 
Estates, water, &c. 
Bonds: interest, &c. 
Shares: dividends, 
&c. 
Reserves (statutory, 
special, deprecia- 
tion, Sec.) 
Surplus profit 
Carried forward . 


Thous. 
francs 
30,891 
50,625 
66,010 
21,199 
69,814 

57,9 10 

203,000 
749,627 

3,735 


Thous. 
francs 
47,368 
52,552 

67,043 
25,280 
67,542 

40,324 

294,000 
2,054,879 
3,152 


643,826 
42,054 
4^94 
7,59 s 

554,731 
508 


776,720 
85,248 
4,454 
7,513 

1,774,470 
3,735 


Total 


1,252,811 


2,652,140 


Total . 


1,252,811 


2,652,140 


122 DIVISION OF SURPLUS PROFITS 1920-32 

The Surplus Profits were divided as under: 

1920-3 1924-7 

Ikons, francs Thous. francs 

Shareholders .... 71 per cent. 532,235 1,458,963 

Egyptian Government . . .15 , 112,445 308,231 

Founders' shares . . . .10,, 74,962 205,488 

Directors 2 H,993 41,098 

Staff 2 H99 2 41,099 

749,627 2,054,879 

From 1924 onwards the 5oofranc shares were divided into two 
of 250 francs each. After converting the dividends declared (in- 
cluding the original 5 per cent.) on shares at the average discount 
on gold for the year, so as to obtain amounts in gold francs for 
comparison with previous year, we can compare dividends and 
transit dues. 


Year. 


Dividends. 


Transit Dues. 


In Current 
Francs. 


in Gold 
Francs. 


Per Cent, 
(in gold). 


Francs (gold) 
per net ton. 


1920 


243-851 


84-8 


16-96 


8-50 
8-25(1 Oct.) 


1921 


245 


947 


18-94 


8-00 (i Oct.) 


1922 


320 


135-8 


27-16 


8-00 


1923 


430 


135-3 


27-06 


7-75 (r Mar.) 


1924 


265 


71-8 


28-72 


7-50 (r Jan.) 


1925 


300 


74'2 


29-68 


7-25 (i Apr.) 


1926 


420 


70-7 


28-28 


7-25 


1927 


455 


92-5 


37-00 


7-25 


After the franc was devalued so that 4*925 new francs were equal to 
one gold franc (or i new franc = 3*918 cents, or ji 124/213 new 
francs) the accounts of the Company were kept in new francs from 
1928 onwards. The interest on the outstanding bonds was still paid 
in gold francs, so that it was given a 'majoration' of 662 million new 
francs. The 5 per cent, dividend on shares was paid in new francs 
till 1931 when, in consequence of a lawsuit decided in the Egyptian 
courts on 1 8 June and 10 December of that year, it had to be paid 
in gold; amortised shares were, therefore, also paid in gold. The 
accounts for the five years 1928-32 are summarized in the following 
table: 


Chap, vin 


SUEZ CANAL ACCOUNTS 
Suez Canal Accounts ^ 1928-32 


123 


Receipts. 


Payments. 


In thousands of new francs 


Dues: Shipping . 


4,882,707 


Administration ..... 


177,207 


Passenger . 


66,983 


Transit ...... 


351,325 


Other 


35,551 


Maintenance ..... 


372,085 


Total . 


4,985,241 


Estates, water, &c. 
Bonds: interest, Sec. .... 


167,274 
415,720 


Investments 


I76>937 


Shares: dividend, &c. .... 


129,520 


Exchange profits . 
Estates 


26,761 
29,600 


Reserves (statutory, special, depreciation, &c.) 
Surplus profit ..... 


431,000 
3,285,592 


Other receipts . 


51,114 


Carried forward ..... 


4>53i 


From Reserve 


61,449 


Brought forward . 


Total . 


5,334,254 


Total . . 5,334,254 


Surplus Profits were divided as follows : TAgttSanJ newfrancs 

Shareholders .... 71 per cent. 2,332,771 
Egyptian Government . . 15 

Founders' Shares . . . .10,, 
Directors ..... 2 
Staff 2 


492,839 

328,558 
65,712 
65,712 


100 


3,285,592 

The remuneration received by the directors was about 529,000 in 
the five years or nearly 3,300 a year for each director. 

The first two years were highly profitable and the transit dues were 
reduced in 1928 by 25 centimes to 7 francs (gold) per ton and in 1929 
to 6-90 francs. A further reduction to 6-65 francs was made as from 
ist September 1930, and the dues on vessels in ballast were fixed for 
the future at half the cargo rate instead of the rebate of 2-50 francs. 
As the world depression deepened and the complaints of shipowners 
grew, a further reduction to 6 francs was made as from i^th 
November 1931, but as 'a temporary measure only', and at present 
the regulations state that it 'will remain in force until December 3ist 
I 933 > - The relation between dividends and dues is shown below: 


Tear. 


Dividends. 


Transit Dues. 


Paper francs. 


Gold francs. 


Per cent. 


Gold francs per net ton. 


1928 


510 


103-55 


41-42 


17-25 
1 7-00 (i Apr.) 


1929 


530 


107-61 


43-04 


6-90 (i Jan.) 


1930 


545' 6 7 


no-8o 


44-32 


6-65 (i Sept.) 


1931 


466-64 


9475 


37'9 


6-00 (i 5 Nov.) 


1932 


389*01 


78-99 


31*60 


6*00 


124 COST OF IMPROVEMENTS 1932 

Up to the end of 1919 nearly 743-3 million gold francs had been spent 
on the original cost (29 1-3 million frs.) and in improvements to the canal. 
In 1920-7 a further sum of 140-9 million francs was expended and in 
1928-32, 294-5 million new francs (equivalent to 59-8 million gold 
francs). The total cost of 944 million gold francs has been met as follows : 


Tear. 


Redeemable by Drawings. 


Outstanding 
31.12.32 

Number. 


Total 
mill, 
gold francs. 


Shares, 800,000 at 250 fr., 5% in 99 years 


667,204 


200-0 


Bonds, 400,000 at 85 fr., 5% (for arrears 


of interest) 1882/1922 . 


none 


34-0 


1867/8 


Bonds, 333,333 at 3 fr- 5% at 5 fr- m 


1868/1918 


none 


100-0 


1871 


Bonds, 120,000 at 100 fr., 3% at 125 fr. in 


1873/1902 


none 


12-0 


1880 


Bonds, 73,026^ (3%, 1880/1930 


7>97 


27-0 


1887 


a 964 different 3% 


189,143 


1 00-0 


56,001 


30-5 


1915-18 


' 252^655] rates (5% 


156,296 


119-5 


623-0 


1 864/9 


Indemnities, sales, Sec. ..... 


121-4 


To 1870 


Other receipts from canal services .... 


29-8 


1870-1932 


169-8 


944-0 


The following is a summary of the Balance Sheet on 3ist December 
1932: 

Balance Sheet ^ 31 December 1932 


Assets. 


Head Office, Paris . 

Buildings, Egypt 

Plant and machinery in use: 
On Works . . 338-9 
On Water-supply . 89-1 
Other . . 20- 1 

Material in store 
Material in process . 
Buildings being erected 
Cash, &c. 


mill. frs. 
7-0 


448-1 

49*9 

20-5 
19-0 

63-5 


Liabilities. 


mill. frs. 

Statutory Reserve .... 200-0 

Insurance Fund, &c. . . . 9-7 

Improvements Fund . . . 36-4 

Depreciation, &c., of plant . . 546*6 

Depreciation of buildings . . . 292-4 

Special Building Fund . . . 14-5 

Total Reserve and other funds . . 1,099-6 

Interest, &c., due . . . . 30-2 

Staff share of profits: Capital Fund . 69-4 

Sundry creditors and bills payable . 95-3 


Investments 
Bills receivable 
creditors 

Total . 


and sundry 


659-8 

II2-2 


Total 
Net profits from 
Carry forward 

Total 


1932 Account . 


55'3 
4'5 


1,804-3 


. 1,804-3 


Chap.vm SUMMARY OF BALANCE SHEET 125 

The following summary of net profits 1870-1932 is interesting: x 

Million Million 

gold francs. sterling. 

Shareholders .... 2,467-1 97-8 

Egyptian Government . . . 521-2 20-6 

Founders' shares .... 347- 5 13-8 

Directors ..... 69-5 2-8 

Staff 69-5 2-8 

3,474-8 137-8 

Sterling exchange is taken at the old par (25-225 francs 1). 

In addition the shareholders have received 5 per cent, on shares not 
amortised. The receipts of the shareholders should not, however, be 
attributed entirely as a reward for the investment of their original 
200 million francs. Considered as an undertaking the canal is a vastly 
improved construction compared with its condition when opened, and 
about 653 million francs (gold) say ^26 million have been spent 
in extensions and improvements. Funds were raised by loans which 
were paid off out of the profits as they accrued ; this is equivalent to the 
familiar factory practice of putting profits back into the business for 
extensions, and if no fresh issue of shares is made the dividend falling 
to the small nominal capital from additional capital applications may 
become very large and raise the market value of the shares to a great 
height. The share of the Egyptian Government was intended as com- 
pensation for the restriction of sovereign rights consequent on the con- 
cession and for the sums which they had to pay for the recovery of 
some of those rights and for the cancellation of corvde labour. It is not 
the fault of the Company that the Khedive parted with this valuable 
property in 1 880 in order to satisfy his creditors. The founders' shares 
were awarded to M. de Lesseps, partly as his personal reward 
which no one would grudge and partly to persons of influence 
who had helped him; 1 the character of the payment depends on the 
nature of the services rendered. The 2 per cent, falling to the staff 
for pensions, &c., and the directors' share of the same amount are 
in a different category. There are valid objections to making either 
the pensions and other provident funds, or the salaries of directors 
of an international public utility or a monopoly, dependent upon 
profits. 

1 It has been stated that when the founders' shares were distributed by de Lesseps many 
people to whom they were offered refused them as valueless. 


126 ANALYSIS OF CARGOES 1904-32 

Dues and Goods 
The quantity of goods carried at different periods is shown below: 


Year. 


Inward. 


1904 


9,960 


I 


1905 


9,980 


1911 


15,050 


1912 


15,660 


1913 


H>45 


1927 


18,440 


1928 


20,660 


1929 


21,620 


1930 


19,080 


! 93 X 


17,950 


Outward. 


Total. 


In thousand tons 


8,240 

7,840 


18,200 
17,820 


9,500 
9,780 


24550 
25440 


11,320 
r 1,080 
1 1,960 


25,770 
29,520 
32,620 


12,900 

9>43 
7,380 


34,520 
28,510 
25,330' 


The principal classes of goods carried in 1929-31 were: 


Inward. 


7929. 


J9jo. 


1931- 


Qutward. 


7929. 


J9jo. 


1931- 


Million tons 


Million tons 


Mineral oils 


4-90 


4-06 


3*3^ 


Metals and 


Vegetable oils, oil-seeds, 


machinery 


3'59 


2-61 


1-90 


nuts 


371 


3-87 


4-12 


Fertilisers 


0-89 


0-68 


0-70 


Cereals 


2-61 


2-15 


2-84 


Cement . 


0-77 


0-55 


o-34 


Textiles . 


2'45 


2-12 


1-82 Coal 


0-77 


0-45 


0*30 


Minerals . 


2-30 


2-09 


1-32 


Railway material 


0-64 0-43 


0-23 


Other 


5-65 


479 


4'54 


Other . 


6-24 


4-71 


3-9 1 


Total 


21-62 


19-08 


17-95 Total 


12-90 


9'43 


7-38 


The burden of transit dues on particular classes of goods varies ac- 
cording to circumstances. The dues are levied on the whole usable 
space of a cargo vessel whether it is all occupied or not, and a ship may 
be 'down to her marks' with space unused; if a ship goes outwards in 
ballast and comes back with cargo the ballast dues have obviously to 
be borne by the inward cargo. In the case of a passenger-cargo liner 
it is a question whether the transit dues on passenger-space as well as 
the passenger-tax should be charged against passenger- fares or whether 
all transit dues should be charged against freights and only the pas- 
senger-tax against fares. No accurate account of the burden of dues on 
cargo can, therefore, be rendered. The following short statement 
summarizes the aggregate figures for each of the four years 1929, 
1930, 1931, and 1932: 

1 1932: 23,632,000 tons. 


Chap, vin 


ANALYSIS OF PROFITS 


127 


Dues 

/>/?* 


Dues 

hst* 


Surplus 
Profits per 


per 


per 


Net 


Canal 


'Surplus 


net 


cargo 


net 


cargo 


Year. 


Vessels. 


Tonnage. 


Cargo. 


Dues. 


Profits. 9 


ton. 


ton. 


ton. 


ton. 


Mill. 


Mill. 


Mill. 


Mill. 


No. 


tons 


tons 


frs. 


frs. 


frs. 


frs. 


frs. 


frs. 


1929 


6,274 


33-47 


34-52 


1,100 


737 


32-88 


31-88 


22-04 


21-36 


1930 


57 61 


31-67 


28-51 


1,023 


718 


32-30 


35-88 


22-68 


25-20 


5,366 


30-03 


25-33 


918 


612 


30-58 


36-26 


20-39 


24-17 


1932 


532 


28-34 


23-63 


784 


55 


27-65 


33' 16 


17-83 


21-36 


Taking the average exchange of each year we get the following ap- 
proximate sterling equivalents: 


Dues per 


Surplus Profits per 


Net ton. 


Cargo ton. 


Net ton. 


Cargo ton. 


s. d. 


s. d. 


s. d. 


s. d. 


1929 


5 3-6 


5 1-7 


3 3*7 


3 5'3 


1930 


5 2-6 


5 9*5 


3 7-9 


4 0-8 


1931 


5 3-5 


6 3-3 


3 6-3 


4 2-2 


1932 


6 2-4 


7 4-8 


4 o-o 


4 9'5 


Since the United Kingdom went off the gold standard the burden of 
dues paid in gold is naturally much heavier. The tax of 6 francs gold 
or 29-55 paper francs per net ton was at 89-195 francs to the (the 
average exchange in 1932) equivalent to 6s. 7'5^/. per net ton, Suez 
Canal measurement, was about a fifth heavier than the tax of 6-90 
francs in 1929, equivalent on the average of that year to 5^. 5-8^. per 
net ton. The Canal Company had remarked in its Report for 1931, 
issued in June 1932, 'la depreciation de la livre sterling venait 
infliger a la majorite des armateurs clients du Canal une aggravation 
peut-etre temporaire, mais assurdment importante, de la charge que 
constitutent les droits de transit'. For this reason and on account of the 
depression in shipping the reduction from 6-65 frs. to 6-00 frs. was 
made as from I5th November 1931, but, as appears from what is 
said above, the reduction was not equivalent to the depreciation of 
sterling. 

The calculations as to rates per ton of cargo made in the table in the 
preceding paragraph were based on the assumption that all the transit 
dues were attributable to cargo, whereas, as has already been said, that 
may not be the case. Coal, however, is a typical full cargo commodity, 
and if we take a collier of 2,900 net tons and approximately 3,700 tons, 
Suez Canal measurement, the transit dues on such a steamer in 1929 
would have been 25,530 francs gold or 1,012 at par, which on a 


128 


INCIDENCE OF DUES ON CARGOES 


1929-32 

cargo of 7,120 tons would be equal to 2s. lod. per ton. At 6 francs 
a ton in 1932 the dues would have been 22,200 francs, or 1,226 at 
the average exchange of that year; this is equivalent to about 35. 5-3^. 
per ton of cargo for a transit of 100 miles. In 1929 about 1 12,000 
tons of coal were shipped from the United Kingdom to Ceylon and 
in 1932 about 37,000 tons, the f.o.b. value being in each case about 
iqs. %d. per ton; canal dues alone added to that value about a seventh 
in 1929 and over a sixth in 1932. 

In 1931 the 30,028,000 net tons (Suez Canal measurement) passing 
through the Suez Canal were in gross measurement 41,743,000 tons, 
or 100 Suez Canal tons to 139 gross tons; taking 100 gross tons as 
equivalent to about 60-7 tons of British registered tonnage, 100 net 
tons are raised to 1 1 8-5 by Suez Canal measurement. 1 The rate of 6 frs. 
per Suez Canal ton now current is thus equivalent to 7- 1 1 frs. per British 
net ton, or, at the average exchange for 1932, about js. lod. per net 
ton British registry. Taking this as the average rate for occupied 
space (neglecting unoccupied cargo space and passenger space) the 
rates per cargo ton on certain British imports and exports is shown 
below, the average stowage space for each class of goods being taken. 


Commodity. 


Stowage per 
ton weight. 


Transit Dues 
per ton weight. 


Value per ton, 1932. 


cubic feet 


s. d. 


' d. 


Australian wheat 


50-53 


4 5 


662 c.i.f. 


wool . 


240 


18 9 | 


83 10 9 


butter 


52-55 


4 *i 


95 H i 


frozen beef . 


95-98 


7 6| 


29 12 7 


Oil-seeds . 


58-75 


5 4 


740 


Jute 


60-64 


4 ii 


18 4 2 


Copra 


80-120 


7 10 


14 14 9 


Rails 


I 2-1 8 


I 2 


906 f.o.b. 


Cotton piece goods 


80-84 


6 5 


227 19 o , 


Woollen piece goods . 


80-84 


6 5 


627 14 10 , 


Textile machinery 


IOO-I2O 


8 1\ 


87 7 8 , 


Outward cargoes through the canal are from one-half to two-thirds 
the average annual cargo carried inward, so that unoccupied space 
materially increases the above rates in British exports. Moreover, 
some types of steamer are heavily hit by the Suez Canal measurement, 
which may be a third more than British net tonnage instead of the 
1 8-5 per cent, used above. 

1 'Roughly speaking, the maritime world imposes charges on 61 per cent, of a ship's 
gross tonnage; the Suez Canal management on 72 per cent.' B. Olney Hough,7^ American 
Exporter , 1914, p. 20: 'The American rules produce a net tonnage averaging 66 per cent, 
of the gross tonnage' (idem. p. 23). 


Chap, vin INCIDENCE OF DUES ON SHIPPING 129 

The Report of the Liverpool Steam Ship Owners' Association for 
1930 remarked (p. 14) that 'a considerable amount of tonnage* had 
been diverted 'to the Panama Canal', and even after the reduction of 
dues in 1931 the Report for 1932 asserted (p. 19) that 'it is notorious 
that the present cost is keeping shipping away from the [Suez] Canal'. 
Comparing 1931 with 1929 the number of ships passing through the 
Suez Canal fell off by 14-5 per cent., the net tonnage by 10-3 per 
cent., and the cargo carried by 26*6 per cent. As dues are charged 
on space they only fell off by 16-5 per cent., but freight is charged 
on cargo, and as world trade has declined heavily it has not been 
possible to pass on the cost of running lightly laden ships to the 
owners of such cargo as was carried. The grumbles of 1930 were 
natural, but the directors of the Canal Company lent a deaf ear 
and, as they said in their Report for 1931, 'nous nous refusions 
absolument \ cder & la pression de reclamations formulas i regard 
de la Compagnie sous une forme agressive'. This somewhat haughty 
attitude had to be modified as trade got worse, and the retreat 
was covered by the assertion that Tagitation soulev^e contre la Com- 
pagnie avait compl&tement pris fin et les excellentes relations qui 
avaient r&gn6 pendant tant d'anndes entre votre entreprise et ses 
clients taient r&ablies'. Unfortunately, the shipowners were not able 
to retain for themselves the benefit of the concession, so great was the 
superfluity of shipping and so limited the co-operation between owners. 

It will be recalled that in 1883 a possible reduction of transit dues 
to 5 francs per ton was contemplated. In 1929 when the dues were 
6-90 francs gold the average per net ton was 6-676 gold francs; on 
this basis a rate of 5 francs would have reduced the earnings by 
about 303 million francs and the shareholders' total dividend to about 
26 per cent, (in gold) instead of about 43 per cent.; similarly it is 
likely that the dividend in 1931 on a ^-franc basis would have been 
about 26 per cent, instead of 31-6. On the one hand, it is possible 
that a reduction to 5 francs would not have benefited the shipowners, 
for they would have been forced to pass it on to the shippers, thus, in 
any case, by lowering costs, stimulating the interchange of goods ; on 
the other hand, it is at least debatable whether the 1 904 ideal of a 
dividend in excess of 25 per cent, (which was realized for ten years) 
should still be regarded as attainable in gold in a world where all values 
have been completely transmuted. The Liverpool Steam Ship Owners' 
Association estimated that the canal dues 'amount to upwards of 14 
per cent, of the gross freights' in 1931, and the average freight rate in 
1932 was about 5 per cent, below the average for 1931, so that the 
burden has increased. The Association, supported by the Chamber of 
Shipping, sought to have the basic rate reduced to the 5 francs gold 


1 30 THE DIVIDENDS OF A MONOPOLY 1931 

contemplated in 1883, but Lord Inchcape, as Chairman of the Canal 
Company, replied (The Times, 13 May 1931): 'Since 1883 the increase 
in dividends has given the shareholders 59,000,000, while the reduc- 
tion in dues has given the shipowners 60,000,000. Since 1920 the 
shareholders have received an increase in dividends of 13,700,000 
and the shipowners have gained i 1,700,000 by reduction of dues; 
but since 1913 the shareholders have received 2,400,000 less in 
dividends than if the 1913 dividend had been maintained.' But the 
dividend in 191 1-13 was 33 per cent., and the real question remains 
unanswered. Is a monopolist company entitled to distribute huge 
dividends at the expense of those who make use of its services and of 
those whom its clients serve ? 

TABLE I 

SUEZ CANAL RECEIPTS 


Tear. 


Transit and Navigation. 


Invest- 
ments, &c. 


Estates. 


Other 
Receipts. 1 


Total. 


Ships. 


Passengers. 


Pilotage, 
&c. 1 Total. 


In million francs 


1870 


4'3S 


0-26 


II 


5-72 


O-22 


0-29 


3-042 


9-27 


1871 


7-60 


0-46 


19 


9-25 


0-08 


1-07 


2-88 


13-28 


1872 


H'34 


0-68 


57 


16-59 


0-46 


i -06 


0-21 


18-32 


1873 


20-83 


0-73 


64 


23-20 


0-45 


0-98 


O-2O 


24-83 


1874 


22*65 


0-74 


72 


25-11 


0-48 


0-50 


0-64 


26-73 


1875 


26-43 


0-84 


85 


29-12 


0-63 


0-85 


0-25 


30-85 


1876 


27-63 


0-72 


80 


30-15 


0-29 


0-54 


0-19 


31-17 


1877 


30-18 


o-73 


2-04 


3 2 '95 


0-25 


0-54 


0-24 


33-98 


1878 


28-34 


0-99 


-96 


31-29 


0-44 


0-52 


0-25 


32-50 


1879 


27-13 


0-85 


90 


29-88 


o-35 


0-44 


0-28 


30-95 


1880 


36-49 


I-OI 


2-49 


39*99 


0-56 


0-55 


072 


41-82 


1881 


47-19 


0-91 


3-64 


5i-74 


1-91 


0-55 


0-48 


54-68 


1882 


SS'43 


1-31 


4-34 


6 1 -08 


'3 1 


0-54 


0-48 


63-41 


1883 


60-55 


1-19 


4.40 


66-14 


0-91 


1-09 


0-38 


68-52 


1884 


58-63 


1-52 


2-49 


62-64 


0-94 


1*43 


0-40 


65-41 


1885 


60-06 


2-06 


0-36 


62-48 


0-98 


1-18 


0-41 


65-05 


1886 


54*77 


1-71 


0-32 


56-80 


I -00 


0-69 


o-53 


59-02 


1887 


55-99 


i-83 


0-30 


58-12 


0-92 


0-84 


0-63 


60-51 


1888 


63-04 


1-84 


0-36 


65-24 


1-15 


0-83 


0-48 


67-70 


1889 


64-41 


1-81 


0-37 


66-59 


1-40 


1-29 


0-48 


69-76 


1890 


65-43 


i-6r 


0-39 


67-43 


1-67 


0-89 


0-47 


70-46 


1 Including receipts for previous years. 

2 Recettes d'ordre 2,674,000 frs. 


SUEZ CANAL RECEIPTS 


Tear. 


Transit and Navigation. 


Invest- 
ments, 
&fc. 


Estates. 


Other 
Receipts. 


Brought 
Forward. 


From 
Reserve. 


total. 


Ships. 


Passengers. 


Other 
Dues. 


Total 


In million francs 


1891 


81-54 i'95 


0-46 


83-95 


82 


0-63 


0-47 


86-87 


1892 


72-61 


1-90 


0-38 


74-89 


-69 


0-78 


0-45 


77-81 


1893 


68-86 


1-87 


0-38 


71-11 


55 


0-69 


0-49 


2-74 


76-58 


1894 


72-12 


1-66 


'35 


74- 13 


38 


0'53 


0-91 


76-95 


1895 


75'93 


2-17 


0-32 


78-42 


i5 


0-29 


0-84 


80-70 


1896 


76-49 


3-08 


0-39 


79.96 


19 


0-32 


o-75 


82-22 


1897 


70-92 


1-91 


0-38 


73-21 


29 


o-33 


0-77 


1-60 


77-20 


1898 


82-66 


2-2O 


0-47 


85-33 


40 


0-25 


0-93 


87-91 


1899 


88-70 


2-21 


0-45 


91-36 


92 


0-16 


0-88 


94*3 2 


1900 


87-28 


2-8 3 


0-60 


90-71 


68 


0-13 


0-93 


0-99 


94-44 


1901 


97-04 


2-70 


0-60 


100-34 


61 


0-16 


I-OI 


o-35 


103-47 


1902 


101-03 


2-23 


0-44 


103-70 


2-OI 


0-42 


0-72 


o-oi 


106-86 


1903 


100-94 


1-96 


0-69 


103-59 


2-42 


0-26 


0-61 


1-24 


108-12 


1904 


113-18 


2-II 


0-68 


II5-97 


2-33 


0-27 


0-61 


0-28 


119-46 


1905 


110-62 


2'53 


0-72 


113-87 


2-46 


0-33 


0-65 


0-15 


117-46 


1906 


103-70 


3'54 


0-86 


108-10 


2-70 


0-45 


0-74 


O-O2 


3-80 


115-81 


1907 


112-80 


2-44 


0-84 


116-08 


2-76 


0-49 


0-79 


0-O6 


120-18 


1908 


105-40 


2-19 


0-85 


108-44 


1-86 


0-30 


0-89 


O-O5 


7-00 


118-54 


1909 


117-76 


2-13 


0-80 


120-69 


1-61 


0-24 


0-94 


0-18 


123-66 


1910 


127-20 


2'34 


0-86 


130-40 


2-07 


0-25 


0-98 


0-40 


i34-io 


1911 


131-04 


2-75 


0-97 


I34-76 


2-23 


0-16 


0-89 


O-22 


138-26 


1912 


132-93 


2-50 


I-OO 


I36-43 


2-34 


0-13 


i -02 


0-34 


140-26 


1913 


122-99 


2-65 


1-04 


126-68 


2-09 


o-io 


i -06 


0-47 


3-50 


133-9 


1914 


117-31 


3*73 


I-IO 


122-14 


1-70 


0-07 


I-2I 


0-06 


125-18 


1915 


90-28 


2-01 


1-67 


93'9 6 


2-66 


0-08 


i-53 


18-70 


116-93 


1916 


76-12 


2-80 


1-56 


80-48 


6-80 


0-07 


1-70 


11-45 


100-50 


1917 


61-08 


I-4I 


1-59 


64-08 


5-66 


O-II 


2-18 


10-34 


82-36 


Transit and Navigation. 


So 


I 


1. 


^ 


-si 


v 


K 


Year. 


1- 


V 


4$ 


| 


H w 


| 


ts 


Jt 


1 1 


Total. 


3? 


OQ 


E-s 


^5 


^ fit 


^ 


o Q$ 


^ < 


In million francs 


1918 


79*34 


1-05 


3-01 


83-40 


5-92 


0-40 


0-13 


3-12 


3*98 


6-50 


103-45 


1919 


136-97 


5-16 


2-96 


145-09 


7-38 


28-88 


0-58 


2-78 


o-53 


185-24 


1920 


I44-59 


4-75 


2-58 


151-92 


10-88 


101-77 


I-OO 


1-89 


0-51 


267-97 


1921 


144-49 


2'73 


2-07 


149-29 


9-05 


98-61 


I-OI 


2-17 


0-32 


260-45 


1922 


162-61 


2-55 


-69 


166-85 


9-55 


126-17 


I -06 


1-83 


0-95 


306-41 


T 9 2 3 


171-96 


2-28 


53 


175-77 


12-59 


228-17 


1-02 


1-70 


2-n 


421-36 


1924 


182-57 


2-45 


47 


186-49 


4-80 


314-60 


0-96 


1-74 


3'73 


512-32 


1925 


189-43 


2-49 


54 


193-46 


27-41 


384-80 


I-I4 


1-87 


2-50 


. 


611-18 


1926 


183-87 


2-64 


58 


188-09 


24-22 


531-08 


I-2I 


1-95 


2-07 


. 


748-62 


1927 


203-97 


3*17 


55 


208-69 


28-82 


543-99 


I-I4 


1-95 


0-92 


785-51 


1928 


1,057-52 


14-25 


7-62 


1,079*39 


44.18 


26-76 


6-04 


10-74 


3-15 


1,170-26 


1929 


1,100-34 


14-84 


9-29 


1,124-47 


49-05 


5-66 


10-77 


4-11 


1,194-06 


1930 


1,022-96 


13-84 


7-32 


1,044-12 


37-97 


5-84 


10-62 


5-26 


1,103-81 


193 1 


918-38 


12-24 


6-42 


937-04 


26-08 


6-14 


10-61 


1-44 


50-00 


1,031-31 


1932 


783-50 


11-82 


4-89 


800-2I 


19-66 


5-92 


8-37 


3-90 


11-45 


849-51 


NOTE. From 1928 amounts arc in new francs, 4-925 of which arc equal to one gold franc. 


132 

TABLE II 
SUEZ CANAL PAYMENTS 


Tear. 


Administration. 


Transit. 


Maintenance. 


Estates, 
Water, &c. 


Interest and 
Drawings. 


Reserve. 


Total. 


Bono's. 


Shares and 
Consol. 
Coupons. 


In million francs 


1870 


1-07 


22 


276 3-27 


10-54 


\ 


18-86 


1871 


0*96 


72 


i -80 | 0-88 


10-56 


15-92 


1872 


0-90 


61 


i'57 i o-75 


11-42 


16-25 


1873 


0-92 


53 


2-31 


0-86 


"73 


5-001 


22-35 


1874. 


0-94 


5i 


3'4 


0-80 


12-38 


IO-OO 1 


28-67 


1875 


0-97 


58 


2-83 


0-98 


11-58 


12-25* 


0-06 


30-25 


1876 


i -06 


56 


2-30 


071 


11-64 


1179 


o-n 


29-17 


1877 


1-14 


62 


2-28 


076 


n-66 


n- 7 8 


0-24 


29.48 


1878 


1-17 


60 


1-87 


0-64 


11-62 


1178 


0-19 


28-87 


1879 


1-07 


'54 


178 


0-48 


11-41 


11-78 


0-14 


28-20 


1880 


1-14 


56 


2-08 


0-69 


"'59 


11-78 


0*65 


29-49 


1881 


1-14 


67 


1-97 


0-54 


1 1 -60 


11-78 


1-30 


30-00 


1882 


1-28 


2'43 


2-14 i 079 


11-63 


11-80 


1-67 


3 X '74 


1883 


1-49 


2*34 


2-24 -17 


"'73 


11-80 


1-89 


32-66 


1884 


1-44 


2-28 


1-90 -oo 


11-92 


11-80 


3'34 


1885 


1-41 


2 '43 


2-06 


23 


12-09 


11-80 


31-02 


1886 


'45 


2-27 


2-10 


80 


12-24 


11-80 


30-66 


1887 


1-42 


2-41 


i-54 


15 


I2'2O 


1 1 -80 


30-52 


1888 


1-54 


2-61 


1-99 


29 


12-20 


1 1 -80 


3i'43 


1889 


i-73 


2-82 


2'34 


62 


12-24 


1 1 -80 


32-55 


1890 


1-58 


2-89 


2-42 


45 


12-19 


11-80 


32-33 


1891 


1-66 


3'24 


2-50 


78 


15-30 


n-8o 


1-50 


37-78 


1892 


1-82 


3*27 


2-09 


25 


15-85 


11-80 


36-08 


1893 


1-85 


3'30 


2-16 


09 


1576 


11-80 


35-96 


1894 


i'S3 


3'i2 


2-07 


32 


I5-99 


n-8o 


o-75 


36-58 


1895 


1-47 


3-03 


3-48 


52 


16-14 


11-80 


1-29 


38-73 


1896 


1-46 


3-oo 


3'8o 


48 


16-17 


n-8o 


2-23 


39'94 


1897 


1*46 


2-92 


2-58 


26 


16-27 


11-80 


36-29 


1898 


1-64 


2-84 


2'34 


'44 


16-21 


n-8o 


5-02 


41-29 


Reserves. 


1 


Interest and 


Statutory, 


Estates, 


Drawings. 


Special, 


Carried 


Tear. 


Administration . 


Transit. 


Maintenance. 


Water, &c. 


Bonds. 


Shares. 


tion, &c. 


Forward. 


Total. 


In million francs 


1899 


1-79 


3-18 


2-47 


20 


16-22 


11-80 


5-13 0-99 


4278 


1900 


1-63 


3-21 


3'03 


15 


16-62 


11-80 


5-08 | 0-35 


42-87 


1901 


1-62 


3-16 


3'35 


22 


16-39 


1 1 -80 


4-59 i o-oi 


42-14 


1902 


172 


3-02 


3'75 


20 


15-31 n-88 


7-24 


1-24 


45-36 


1903 


1-81 


3'4 


3.96 


31 


15-30 


n-88 


5'97 


0-28 


43'55 


1904 


1-86 


3-^5 


3'93 


0-92 


15-30 


n-88 


"'34 


0-15 


48-53 


1905 


1-86 


3-07 


3V2 


O-9I 


15-29 


n-88 


9'54 


0-02 


46-29 


1906 


2-04 


3-26 


4-69 


0-98 


15-28 


n-88 


6-24 


0-06 


44-43 


1907 


2-04 


3*45 


5-41 


I-09 


15-27 


u-88 


9-60 


0-05 


48-79 


1908 


2-21 


3.50 


6-70 


I-2O 


15-26 


n-88 


6-16 


0-18 


47-09 


1 July 1870, Coupon. 

2 Including 466,000 Sinking Fund, 1870-4. 


133 
SUEZ CANAL PAYMENTS (cont) 


Reserves. 


Interest and 


Statutory, 


Estates, 


Drawings. 


Special, 


Carried 


Tear. 


Administra tion . 


Transit. 


Maintenance. 


Water, &fc. 


Bonds. 


Shares. 


tion, &c. 


Forward. 


Total. 


In million francs 


1909 


2-09 j 3-51 


5-03 


1-38 


15-49 I "'88 


6-40 


0-40 


46-18 


1910 


2-27 3-61 


4-86 


i'55 


15-58 


n-88 


1 1-70 


0-22 


51-67 


1911 


2*30 4-01 


573 


i'55 


15-58 


11-88 


979 


o-34 


51-18 


1912 


2*29 4-10 


6-30 


1-59 


15-57 


n-88 


10-77 


0-47 


52-97 


'9H 


2-36 4-03 


7-60 1-55 


15-56 


n-88 


3'OO 


0-06 


46-04 


1914 


2-61 4-10 


5-63 


1-45 


16-15 


u-88 


3-00 


18-70 


63-52 


1915 


2-32 4-54 


4-37 


i-39 


16-41 


n-88 


3-00 


11-45 


55'3 6 


1916 


2-38 4-63 


5-15 1-62 19-79 


n-88 


I -00 


10-34 


56-79 


1917 


2-59 478 


4-82 


1-74 


23-21 


n-88 


3-98 


53-00 


1918 


3-10 5-97 


4*39 


2-OI 


19-15 


16-38 


2-OO 


o-53 


53-53 


1919 


4-69 


8-24 


10-40 


2-90 


15-90 


20-37 


1 8 -oo 


0-51 


81-01 


1920 


6-29 


11-40 


16-65 


4-13 


18-14 


19-38 


48-00 


0-32 


124-31 


1921 


7-71 


13-05 


i7-3i 


5-8 9 


17-91 18-37 


30-00 


0-95 


111-19 


1922 


8-35 12-93 


17-68 


5-6 9 


16-93 10-08 


40-00 


2-II 


11377 


i9 2 3 


8-54- i3- 2 5 


I4-37 


5-49 


16-84 1 I0 *8 


85-00 


3-73 


157-30 


1924 


11-29 n-24 


13-07 


5'79 


16-78 10-08 


85,00 


2-50 


157-75 


1925 


10-01 


I3-I5 


18-09 


6-09 


16-92 10-08 


70-00 


2-07 


146-41 


1926 


13-22 


13-16 


20-04 


6-39 


16-92 10-08 


69-00 


0-92 


H973 


1927 


12-86 


13-01 


15-84 


7-01 


16-92 | 10-08 


70*00 


3-15 


148-87 


1928 


31*20 


66-63 


77-52 


35-37 


83-16 | 10-08 


1 50-00 


4-1 1 


458-07 


1929 


34*77 


76-38 


80-67 


36-33 


83-09 


10-08 


130-00 


5-26 


456-58 


1930 


38-12 


73-65 


83-05 


36-00 


83-16 


10-08 


60-00 


1-44 


385'5o 


I93 1 


38'73 


73'37 


66-32 


33-88 


83-15 49-64 


70-00 


3.90 


418-99 


'93 2 


3^38 


61-30 


64-52 


2570 


83-16 49-64 


2I'OO 


4-53 


344 >2 3 


NOTE. From 1928 amounts are in new francs, 4*925 of which equal one gold franc. 

TABLE III 
SUEZ CANAL DIVISION OF SURPLUS PROFITS 


Tear. 


Total. 


Shareholders. 
7*% 


Egyptian 
Government. 
/5% 


Founders' 
Shares. 
10% 


Directors. Staff. 

^% \ *% 


In million francs 


1870 
1871 


~~9[59 1 Deficit carried to 'premier e*tablis8ement'. 


1872 


2-07 


Profit carried forward to next year. 


1873 


4-55 


1874 


2-61 


1875 


2-15 


'en fond 8 special*. 


1875 


i -06 


075 


0-16 


o-n 


O'O2 


0-02 


1876 


2-OO 


1-42 


0-30 


0*20 


O-O4 


0-04 


1877 


4-50 


3-20 


0-67 


o45 


O-O9 


0-09 


1878 


3-63 


2-58 


o-55 


0-36 


O-O7 


0-07 


1879 


275 


1-95 


0-41 


0-27 


O-O6 


0-06 


1880 


12-33 


8-75 


1-85 


1-23 


0-25 


0-25 


1881 


24-68 


17-52 


370 


2-47 


0*50 


0-49 


1882 


31*67 


22-49 


4-75 


3-17 


0-63 


0-63 


1883 


35-86 


25-46 


5-38 


3-58 


0'72 


0-72 


1884 


35'7 


24-90 


5-26 


3-5i 


0-70 


0-70 


1885 


34-03 


24-16 


5-10 


3-4i 


o68 


0-68 


134 
TABLE III (cent.) 


Tear. 


Total 


Shareholders. 

71% 


Egyptian 
Government. 
i5% 


Founders' 
Shares. 
10% 


Directors. 
2% 


Staff. 

2% 


In million franc 


8 


1886 


28-36 


20-13 


4-25 


2-84 


0-57 


o-57 


1887 


29-99 


21-29 


4-50 


3-oo 


0-60 


0-60 


1888 


36-27 


25-75 


5-44 


3-63 


0-72 


o-73 


1889 


37-21 


26-42 


5-58 


3-72 


o-74 


0-75 


1890 


38-13 


27-07 


5-72 


3-81 


0-77 


0-76 


1891 


49-09 


34-86 


7-36 


4-91 


0-98 


0-98 


1892 


4i'73 


29-63 


6-26 


4-17 


0-84 


0-83 


1893 


40-62 


28-84 


6-09 


4-06 


0-81 


0-82 


1894 


40'37 


28-66 


6-06 


4-03 


0-81 


0-81 


1895 


41-97 


29-80 


6-30 


4-20 


0-84 


0-83 


1896 


42-28 


30-02 


6-34 


4-23 


0-84 


0-85 


1897 


40-91 


29-05 


6-14 


4-09 


0-82 


0-81 


1898 


46-62 


33-io 


6-99 


4-67 


-93 


o-93 


1899 


51-54 


36-60 


7-73 


5-'5 


03 


03 


1900 


5^57 


36-61 


7-74 


5-16 


*3 


03 


1901 


61-33 


43*54 


9-20 


6-13 


-23 


23 


1902 


61-50 


43-66 


9-23 


6-15 


-23 


23 


1903 


64-57 


45-84 


9-69 


6-46 


29 


29 


1904 


70'93 


50-36 


10-64 


7-09 


42 


42 


1905 


71-17 


50-53 


10-67 


7-12 


42 


43 


1906 


71-38 


50-68 


10-71 


7-14 


'43 


42 


1907 


71-39 


50-68 


10-71 


7-14 


'43 


'43 


1908 


71-45 


50-73 


10-72 


7-14 


'43 


'43 


1909 


77-48 


55-01 


11-62 


7-75 


55 


55 


1910 


82-43 


58-53 


12-36 


8-24 


65 


-65 


1911 


87-08 


61-83 


13-06 


8-71 


74 


74 


1912 


87-29 


61-98 


13-09 


8-73 


75 


74 


*9 J 3 


87-86 


62-38 


13-18 


8-79 


75 


-76 


1914 


61-66 


43-78 


9-25 


6-17 


23 


23 


1915 


61-57 


43-71 


9-24 


6-16 


23 


23 


1916 


43-71 


31-03 


6-56 


4-37 


0-88 


0-87 


1917 


29-36 


20-84 


4-40 


2-94 


0-59 


o-59 


1918 


49-92 


35-44 


7-49 


4*99 


i-oo 


I -00 


1919 


104-23 


74-00 


15-64 


10-43 


2-08 


2-08 


1920 


143-66 


IO2-OO 


2i-55 


H'37 


2-87 


2-87 


1921 


149-26 


105-98 


22-39 


H'93 


2-98 


2-98 


1922 


192-64 


136-78 


28-90 


19-26 


3-85 


3-85 


1923 


264-06 


187-48 


39-61 


26-41 


5-28 


5-28 


1924 


354-57 


25I-75 


53-19 


35-45 


7-09 


7-09 


1925 


464-77 


329-99 


69-71 


46-47 


9-30 


9-30 


1926 


598-89 


425-2I 


89-83 


59-89 


11-98 


11-98 


1927 


636-64 


452-02 


95-50 


63-66 


12-73 


12-73 


1928 


712-19 


505-66 


106-83 


71-22 


14-24 


14-24 


1929 


737-48 


523-61 


110-62 


73-75 


14-75 


H-75 


1930 


718-31 


5IO-OO 


107-75 


71-83 


14-36 


14-37 


I93 1 


612*32 


434-75 


91-85 


61-23 


12-25 


12-24 


*93 2 


505-28 


358-75 


75-79 


50-53 


10-10 


IO-II 


NOTE. Distribution was made in gold francs to 1919 and then in current francs up to the stabilization 
of the franc in May 1928 j thereafter in new francs 4-925 of which equal one gold franc. 


'35 

TABLE IV 

SUEZ CANAL TRAFFIC BY NATIONALITIES 

The British Government directors began in 1 884 to report to the Foreign Office 
(Commercial, No. 25/1884) the nationalities and 4 net tonnage' of ships passing 
through the Suez Canal. Prior to that year gross tonnage was recorded, except 
that from 1881 an 'official' tonnage was given in the statistical reports published 
by the Egyptian Ministry of the Interior which did not correspond with the net 
tonnage; e.g., for 1881 the gross tonnage was 5,794,000 tons in the Canal 
accounts and 5,823,000 tons in the Egyptian bluebook, while the 'net tonnage' 
was 4, 1 37,000 tons, and the 'official' tonnage 3,216,000 tons, so that the 'official' 
would appear to be British net tonnage and the 4,137,000 tons 'Suez Canal 
measurement'. Particulars of the movement of ships of the leading nationalities 
are given in the following table. During the War the A ustro- Hungarian flag 
disappeared, and since 1915 Denmark has been substituted in the Table. 


i' 


<3 


4 

5 -5 

bi* 


i 
France. 1 

i ! 


I i 
Netherlands. 


6 

1 


f 

K? 


Austria- \ 
Hungary. \ 


i 


6 

J? 


.J3 

1 


k 


Is 

J 5 

b 


In 


thousand 


tons 


1870 


436 


289 


85 


6 


19 


i 


I 


1871 


7 6l 


546 


8 9 


7 


2 


27 


39 


3 


I 


5 


4 


1872 


L4-39 


i, 060 


163 


26 


12 


48 


53 


8 


4 


3 


i 


1873 


2,085 


1,500 


222 


73 


36 


59 


91 


3 1 


9 


H 


i 


2 


1874 


2,424 


L797 


223 


106 


40 


63 


84 


50 


'3 


12 


i 


1875 


2,941 


2,181 


226 


HI 


46 


80 


92 


44 


21 


25 


i 


5 


1876 


3. 72 


2.344 


237 


H7 


41 


82 


76 


55 


21 


24 


i 


1877 


34i9 


2,698 


234 


156 


57 


86 


73 


5' 


21 


3 


1878 


3,291 


2,630 


251 


151 


3 1 


65 


64 


56 


8 


9 


3 


i8 79 


3.237 


2,506 


262 


159 


22 


94 


7' 


65 


9 


9 


2 


2 


1880 


4376 


3,461 


275 


'73 


54 


105 


116 


86 


II 


47 


I 


I 


1881 


5.823 


4,832 


290 


188 


61 


116 


127 


102 


H 


49 


I 


1882 


5.75 


4,126 


286 


188 


127 


108 


88 


57 


26 


23 


. . 


1883 


5.776 


4,406 


557 


229 


157 


n 2 


99 


107 


24 


28 


4 


I 


1884 


5,872 


4.467 


568 


264 


169 


114 


103 


96 


24 


30 


13 


5 


1885 


6,336 


4.864 


574 


252 


199 


159 


1 20 


59 


38 


47 


4 


3 


1886 


5,768 


4.437 


476 


230 


2IO 


125 


'37 


62 


35 


36 


5 


6 


1887 


5.93 


4.517 


384 


221 


220 


252 


141 


65 


36 


34 


3 


i 


1888 


6,641 


5,223 


387 


218 


238 


267 


'23 


63 


49 


28 


6 


i 


1889 


6,783 


5.353 


362 


262 


289 


187 


117 


72 


66 


34 


4 


2 


1890 


6,890 


5.33i 


366 


249 


4 9 I 


144 


118 


70 


57 


35 


4 


I 


1891 


8,699 


6,838 


407 


269 


596 


1 80 


112 


69 


84 


39 


8 


1892 


77i2 


5.827 


416 


320 


554 


128 


125 


69 


108 


44 


4 


I 


1893 


7.659 


5.753 


461 


327 


556 


1 20 


I6 7 


7i 


89 


54 


i 


3 


1894 


8,039 


5.997 


467 


357 


626 


119 


188 


82 


68 


77 


12 


3 


1895 


8,448 


6,063 


673 


366 


694 


146 


1 66 


96 


109 


87 


2 


2 


1896 


8,560 


5.8 1 8 


532 


380 


806 


392 


158 


182 


74 


'34 


3 


1897 


7.899 


5.139 


520 


382 


859 


129 


184 


138 


87 


144 


114 


4 


1898 


9 2 39 


6,298 


572 


382 


970 


137 


213 


149 


8r 


153 


183 


2 


1899 


9,896 


6,586 


599 


419 


1,071 


133 


266 


114 


124 


172 


225 


68 


1900 


9.738 


5,605 


752 


507 


1,466 


'59 


34i 


no 


68 


307 


246 


54 


1901 


10,823 


6,253 


757 


509 


1.763 


176 


409' 


113 


76 


364 


237 


45 


1902 


11,248 


6,773 


769 


520 


1,707 


167 


418 


96 


75 


329 


232 


47 


1903 


11,907 


7404 


78i 


549 


i773 


149 


407 


87 


7i 


349 


221 


24 


1 At about this time the Austro-Hungarian Government repaid to ships flying the 
national flag all Canal Dues paid by them (see Hansard, 1 1.6.07). 


1 36 
TABLE IV (*/.) 


J_ 


1 


-4 - ? 

il i i 


i 


^. 

<3 

; 


Austria- 
Hungary. 


i 


^ 

1 


1 


i 


IS 

33 
b$ 


In thousand tons 


1904 


13,402 


8,834 


778 


583 


1,970 


205 455 


88 


146 


154 


21 


24 


1905 


U' I 34 


8,357 


884 


578 


2,113 


190 


458 


75 


116 


177 


J 3 


1906 


13,446 


8,300 


856 


5 6l 


2,156 


181 


483 


81 


80 


330 


H7 


68 


1907 


14.728 


9,496 


807 


6 3 2 


2,254 


202 


440 


75 


54 


239 


259 


X 3 


1908 


i3633 


8,302 


815 


744 


2,311 


190 


388 


78 


62 


252 


286 


1909 


15,408 


9,592 


802 


80 1 


2,382 


208 


520 


76 


77 


222 


358 


1910 


16,582 


10,424 


833 


55 


2,564 


218 


643 


7i 


46 


288 


35i 


9 


1911 


18,325 


11,716 


820 


971 


2,791 


2O 2 


622 


72 


60 


3 11 


362 


2 


1912 


20,275 


12,848 


799 


1,240 


2,825 


368 


814 


73 


9i 


363 


320 


3 


19*3 


20,034 


12,052 


928 


1,287 


3,35 2 


2 9 I 


846 


76 


93 


34i 


343 


7 


1914 


19,409 


12,910 


800 


1,389 


2,119 


369 


632 


72 


97 


200 


354 


3 


Denmark 


*9 J 5 


15,266 


11,656 


666 


i,334 


363 


166 


73 


136 


60 


566 


3 


1916 


i2,3 2 5 


9,788 


774 


643 


439 


H5 


66 


167 


27 


70 


35 


1917 


8,369 


6,164 


579 


126 


778 


35 


21 


66 


I 


155 


28 


1918 


9,252 


7,356 


380 


3 


477 


26 


83 


502 


8 


1919 


1 6,0 1 4 1 


n,355 


475 


755 


317 


3'5 


98 


257 


55 


1,450 


168 


1920 


IM75 1 


10,838 


775 


1,426 


15 


606 


230 


72 


172 


46 


1,601 


724 


1921 


18,119 


n,397 


968 


2,032 


171 


934 


232 


31 


259 


12 


1,042 


672 


1922 


20,743 


13,383 


997 


2,161 


735 


858 


280 


46 


309 


41 


928 


668 


1923 


22,730 


14,264 


1,294 


2,178 


1,214 


1,043 


300 


37 


33i 


74 


986 


614 


1924 


25,110 


H,995 


i,497 


2,488 


1,647 


1,483 


345 


S 2 


367 


62 


872 


795 


1925 


26,762 


1 6,0 1 6 


1,628 


2,699 


i,79! 


1,416 


360 


68 


372 


35 


1,067 


812 


1926 


26,060 


14,969 


i,736 


2,859 


2,154 


1,348 


33i 


49 


452 


44 


946 


710 


1927 


28,962 


i6,534 


1,807 


3,025 


2,764 


i,5H 


292 


30 


662 


59 


914 


682 


1928 


31,906 


18,124 


1,927 


3,33 


3,300 


1,650 


354 


18 


687 


68 


940 


729 


1929 


33,466 


I9,'H 


2,166 


3,544 


3,455 


1,525 


404 


18 


702 


104 


952 


705 


1930 


31,669 


17,600 


2,002 


3,3i3 


3,389 


i,53 


432 


9 


966 


130 


939 


670 


i93i 


30,028 


16,624 


2,084 


2,848 


3,3 i 5 


1,424 


366 


746 


175 


M53 


625 


1932 


28,340 


15,721 


2,037 


2,364 


2,506 


1,609 


438 


861 


274 


1,440 


526 


1 Including 317,000 tons in 1919 and 526,000 tons in 1920 described as 'Inter- Allied*. 


BIBLIOGRAPHY 

Julien (Raymond): Le Traffic du Canal de Suez. Conjoncture ficonomique et Pre- 
visions. Preface by M. George Edgar-Bonnet, Directeur adjoint de la Compagnie 
du Canal Maritime de Suez. 

This book, published in October 1933, appeared too late to be utilized, or ana- 
lysed, in this chapter. 

Foreign Office: Annual Returns of Shipping and Tonnage. 


137 

TABLE V 

TRAFFIC THROUGH SUEZ CANAL 
WITH COUNTRIES EAST AND SOUTH 

The Reports of the Suez Canal Company give for 1 890 and subsequent years 
the particulars set out in the following table: 


C ! ^ 


Indta. 


v; 


tf 


,fc 


" 


1 


| 


| 


^ 


C 


1 ! I 


\ 


^ 


2 


1 


"a i o 


1 


1 


1 


^ 


$> 


1 


( \ '^ 


T 


1 


Q 


^r> 


. 


| 


i; 


^ -i 


! 


vEL 


<3 


|? 


Q 


.^-^ 


^ 


c 


1 

s 


4 


t* IS 

^ 


i i 


3c! 


II 


I 


II 


it 


00 


In thousand net tons 


1890 


6,890 


149 


1,988 


1,882 


879 


716 


928 


348 


1891 8,699 


219 


2,610 


2,297 


1,113 


799 


1,167 


494 


1892 7,712 


232 


2,083 


2,152 


966 


795 


1,105 


379 


1893 7,659 


172 


2,239 


1,833 


1,028 


798 


1,234 


355 


1894 8,039 


193 


2,106 


2,242 


970 


798 


i,347 


383 


1895 i 8,448 


357 


2,015 


2,417 


1,003 


840 


1,400 


416 


1896 8,560 


269 


1,649 


2,411 


1,085 


871 


1,578 


697 


1897 7,899 


303 


1,269 


2,419 


1,033 


845 


1,705 


325 


1898 


9,238 


34 1 


2,034 


2,652 


1,048 


820 


1,851 


492 


1899 


9,896 


378 


1,846 


2,892 


1,265 


922 


2,175 


418 


1900 


9,738 


404 


1,128 


2,763 


1,372 


864 


2,756 


1901 


10,824 


382 


i,675 


3,106 


1,504 


972 


2,710 


475 


1902 


11,248 


397 


1,962 


3,478 


i,539 


981 


2,486 


405 


1903 


11,907 


477 


2,405 


3,481 


926 


2,665 


518 


1904 


13,402 


450 


3,033 


4,006 


1,722 


924 


2,665 


602 


1905 


482 


2,623 


3,722 


1,671 


995 


2,943 


698 


1906 


13,445 


484 


2,557 


3,817 


i,537 


,155 


3,299 


596 


1907 


14,728 


454 


3,329 


3,823 


1,708 


,318 


3,375 


716 


1908 


13,633 


436 


2,193 


3,769 


i,945 


,234 


3,489 


567 


1909 


454 


3,114 


4,214 


1,655 


,544 


3,874 


552 


1910 


16^582 


510 


3,359 


4,300 


1,987 


,704 


3,977 


745 


1911 


18,325 


710 


3,723 


4,639 


2,331 


,94 


4,060 


958 


1912 


20,275 


747 


4,812 


4,947 


2,435 


2,037 


4,202 


1,095 


1913 


20,034 


816 \ .. 


4,129 


5,058 


2,383 


2,104 


4,548 


996 


1914 


1915 


1916 


Not published 


1917 


1918 


1919 


16,014 


84 


,372 


646 


2,604 


3,289 


265 


2,144 


2,595 


2,615 


400 


1920 


17,575 


141 


,586 


666 


2,986 


3,753 


403 


2,523 


i,359 


3,796 


362 


1921 


18,119 


526 


893 


1,253 


2,802 


3,786 


625 


2,398 


2,097 


3,699 


40 


1922 


20,743 


489 


841 


1,956 


3,436 


4,338 


270 


2,455 


2,406 


4,472 


80 


1923 


22,730 


554 


,051 


2,301 


3,709 


4,399 


500 


2,587 


2,477 


4,979 


173 


1924 


25,110 


512 


,123 


2,607 


4,1 1 6 


5,016 


480 


2,693 


2,529 


5,671 


363 


26,762 


456 


,33 


2,960 


3,6io 


5,460 


614 


2,802 


3,388 


5,709 


460 


1926 


26,060 


400 


,475 


3,384 


2,819 


4,932 


598 


2,847 


3,163 


5,888 


554 


1927 


28,963 


530 


,682 


3,399 


5,619 


694 


3,094 


3,473 


6,383 


474 


1928 


31,906 


507 


,832 


3*876 


3,659 


5,970 


901 


3,955 


3,435 


7,186 


585 


1929 


33,466 


680 


,928 


4,190 


5,925 


854 


4,475 


3,942 


7,669 


482 


1930 


31,669 


502 


,875 


4,517 


2,988 


5,588 


827 


3,9i2 


3,703 


7,350 


407 


30,028 


355 


,750 


4,326 


2,951 


5,280 


864 


3,214 


36oi 


7,243 


444 


1932 


28,340 


599 


,624 


4,589 


2,445 


4,486 


875 


2,863 


3,334 


7,102 


423 


CHAPTER IX 
THE SUEZ CANAL DURING THE GREAT WAR 

Position on outbreak of war. Enemy merchant ships. Declaration of War by Turkey. 
Canal defended. Activity of spies. Sir John Maxwell takes command. Defensive 
system. Attacks by the Turks. Mines placed in canal. Advanced line of defence 
organized. Effect of abandonment of Gallipoli. Sir A. Murray succeeds Sir John 
Maxwell. Ocean wharves constructed at Qantara: railway developments. 
Lt.-Gol. Elgood's comments. 

' I *HE Suez Canal had always been regarded in Germany as the 
-L 'jugular vein' of the British Empire: its somewhat anomalous, even 
dubious, status in international law tended to obscure the realities of 
strategical and political action even to the canal officials who were, on 
the outbreak of war in 1914, somewhat uncertain as to their proper 
duties and sphere. The immediate result was serious delay to many 
ships consequent on the inability of the owners to pay dues in Paris 
in the usual way, 1 and the British Government had to intervene to 
induce the Suez Canal Company to delegate authority to the London 
Office to accept payment of dues in London. It was a bad beginning, 
but the matter was adjusted, though not before much resentment had 
been aroused. 

Great Britain's first care was aperire terram gentibus, to keep open and 
protect the Suez Canal, in terms of the Convention of 1 888, as applied 
by the Anglo-French Agreement of 1904. To do this it was necessary 
to occupy strategic points on the Canal Zone, which may be regarded 
as a technical but excusable breach of the Convention of 1888. 

Soon after the declaration of war a number of enemy merchant 
ships took refuge at Port Said and Suez in order to avoid capture : they 
were allowed to do so, and it was not until several masters of enemy 
ships were found to be using their wireless apparatus for illegitimate 
purposes that the Company went so far as to dismantle the apparatus. 
Sir J. Maxwell records that in September a German sailor swam round 
a British warship waving a German flag and shouting abuse without 
being molested, and there were other incidents even more serious and 
more grotesque. Neither the troops nor the ships of war at Port Said 
and Suez were there to forbid the right of passage, but to ensure it. 
The Canal Company was, in the words of the Official History of the 
War, 'sensitive', and was not consoled even by the fact that the British 
Mediterranean Fleet was under the orders of the French Commander- 

1 Hansard, 6th Aug. 1914. 


Chap, in DEFENCE OF CANAL ZONE 139 

in-Chief, whilst several British cruisers were at the southern end to 
assure the safety of the canal. Not until Turkey declared war were 
their doubts removed and their difficulties solved. It was soon decided 
that there was no right of asylum in the canal, and the Egyptian 
Government called on the enemy ships that had taken refuge to leave 
its waters, escorting them with Egyptian gunboats beyond the three- 
mile limit, where captors awaited them. 

Precautions were taken to prevent damage to the canal : the Egyptian 
Camel Corps patrolled either bank: the Bikanir Camel Corps from 
India arrived next, followed by the Divisions from India which replaced 
the British Garrison, the armed forces in Egypt being under the control 
of Major-General Sir John Maxwell, whose experience of Egypt dated 
from Tel-el-Kebir in 1882. 

In October a German, an officer of the Alexandria Police, was 
arrested : in his possession were maps of the Suez Canal, and large 
numbers of detonators as well as a secret code. He was a Turkish 
emissary. Egypt was full of enemy subjects at least 6OO 1 apart from 
200 men interned from captured ships. Many of the Suez Canal pilots 
were Austrians, some of whom were apparently still in the service of 
the Suez Canal Company in i<)i6. 2 It is difficult to know whether to 
praise the Company for retaining in its service men in whom it felt 
complete confidence, regardless of nationality, or to blame it for 
subjecting the divided loyalty of such men to so severe a test. The 
Company, however, declared their services to be indispensable, and 
guaranteed their devotion to the service of the Canal: the result 
justified their confidence. 

Sir John Maxwell took over charge in September; most of the troops 
under his command arrived in October: by December the defence of 
the canal had been organized. It was divided into three sectors for 
defence : Suez to the Bitter Lakes ; Deversoir, north of the Great Bitter 
Lake, to El Ferdan ; El Ferdan to Port Said. Force head-quarters and 
the general reserve were at Ismailia. Small detachments guarded the 
Sweet-water Canal and supply depots. In January 1915 a camel 
transport corps was formed. Old French and British warships were 
permanently stationed in the canal in berths, sometimes specially 
dredged, prepared to act as floating batteries, and there were a few 
British and French aircraft. The line of defence was, at first, the canal 
itself the main line of communication of the British Empire thus 
becoming an obstacle in front of a fire trench. It was thus liable to 
interruption, which might be serious, but no other scheme was, in the 
first instance, practicable. 

1 There were 70,000 Turkish nationals: of these but a few were potentially dangerous. 

2 Hansard, 6th Jan. 1916. 


I 4 o TURKISH ATTACKS ON CANAL 1916 

The Canal Company's fleet of small and large craft, its engineers 
and their local knowledge were placed at the disposal of the Defence 
Force: large areas on the east bank of the canal were flooded, thus 
narrowing the area to be defended. 

More rain fell that winter than usual, and in January 1 9 1 5 a force 
of some 5,000 Turks were within striking distance of the canal, relying 
for victory on a rising of Egyptian Nationalists, which was to syn- 
chronize with the attack on the canal and to be ushered on by the 
murder of leading Europeans. The presence of Australians in the 
capital discouraged such manifestations. 

The attack, gallantly delivered on 3rd February between Lake 
Timsah and Great Bitter Lake, failed, though three Turkish pontoons 
contrived to cross the canal. A Turkish 15 cm. Howitzer battery 
nearly succeeded, by accurate shooting at 9,200 metres, in sinking one 
of His Majesty's ships the Hardinge a R.I.M. transport vessel, in 
the fairway, and a French battleship, the Requin. On a British ship, 
the C//0, the Turks did 'some remarkably pretty shooting'. 1 

The attack was not repeated. The canal traffic, which was sus- 
pended for a few nights and for the daylight hours of 3rd February, 
was resumed. One civilian was wounded a pilot of the Canal Com- 
pany, Mr. George Carew, who, though he had a leg shot oflf and an arm 
broken, brought the Hardinge safely into the Timsah. He was awarded 
the Legion of Honour. 

The immediate menace to the canal was thus removed, but the threat 
to the canal, though more distant, remained, for some 30,000 Turkish 
troops were at Beersheba and there were indications that a fresh attack 
was in contemplation whilst mines were being laid in the Red Sea and 
Gulf of Suez by Turkish vessels operating from Akaba. Ample rains 
had fallen in Sinai, facilitating every movement and, in March, fresh 
attacks were made and repulsed. On 8th April a hostile patrol ap- 
peared near Kantara: its tracks were followed eastward for 15 miles, 
where a large packing-case was found among the dunes. The canal 
was then dragged and the mine brought up on the night of the loth. 
Several ships had passed over the spot in the time intervening. On 
28th April fresh attacks were made near the Ismailia ferry post, and 
repulsed. On 3Oth May fresh activity developed. A party was detected 
approaching the canal; they retreated, but not till they had buried a 
mine, destined for the canal, in the sand, three quarters of a mile from 
the east bank, where it was discovered. On 3Oth June the Holt liner 
Teiresias struck a mine in the Little Bitter Lake, despite the fact that 
the lake had been regularly patrolled by three armed launches, manned 
by naval ratings. The ship swung across the channel, blocking it 

1 Official History, i. 45. 


Chap, ix DEFENCE OF CANAL 141 

completely, but the Canal Company was able to reopen it for traffic 
that night. 

The Turks now abandoned, for the time, further efforts in this 
field. Their principal efforts were being made in the Dardanelles, and 
thither most of the regular troops who had opposed us in the Sinai 
peninsula were transferred. The abandonment of Gallipoli was already 
under consideration and the British Government now had to decide, 
in communication with the French, how best to secure for the future 
the safety of the canal. Action in the Gulf of Alexandretta, to cut the 
railway to Palestine, was considered, and abandoned. A scheme of 
defence on a line 12,000 yards east of the canal over a distance of 87 
miles was worked out, it was considered to require five mounted and 
eight infantry divisions, with 1 9 batteries of siege and heavy artillery, 
armoured cars and additional aircraft, with war material, wire, tele- 
phonic and cable communication, water arrangements and light rail- 
ways. This plan was, eventually, rejected, but it serves to show both 
the difficulty of, and the importance attached to, the defence of the canal. 

The abandonment of Gallipoli in December 1915 made the Suez 
Canal once more an important potential theatre of war, and it was to 
Egypt that the troops withdrawn from Gallipoli were sent. Lord 
Kitchener was deeply impressed by the danger in store for the country 
when the hands of the Turks were freed. He knew Egypt, and like 
General Maxwell was not inclined to count upon the goodwill of the 
people if once a powerful Turkish force appeared within striking 
distance of the canal ; it was estimated that by April, 1916, the Turks 
could mass 1 30,000 men against us in this theatre. 

The commands in the Mediterranean were reorganized, and re- 
sponsibility for the defence of Suez Canal was vested in Lt.-General Sir 
Archibald Murray. Arriving on gth January, 'He found' in the words 
of the Official History (i. 95) 

'the Canal a scene of great activity. Fleets of dahabiehs had been brought from the 
Nile to the Canal and were carrying stone and railway material to the termini of 
the roads and railways on the east bank, and pipes for the pipe-lines which were to 
run out into the desert at right angles to the line of the Canal. Light railways in 
the Delta had been picked up and transferred to the Canal Zone. Hundreds of 
dahabiehs sailed each day from Port Said with hurdles, unloaded these at various 
points, then went on to Suez to fetch road-metal. The pipes came in the first 
place from India, about 130 miles of piping being obtained from this source. 
Thereafter it had to be purchased in the United States, and its arrival was awaited 
with anxiety. A single submarine might at this stage throw all plans out of gear 
and delay progress for many weeks. 

4 It was fortunate that the foundations of the new scheme of defence had been 
laid by Sir J. Maxwell. It demanded a great effort from all departments of the 
Government, intimate knowledge of men, of resources, of procedure, and the tact 


142 DEVELOPMENT OF KANTARA 1915 

which only experience can fully develop. A new commander and staff would have 
found it a matter of extreme difficulty to set in motion this complicated machinery; 
they certainly could not have achieved so much in the time with all the good will 
in the world.' 

The force under Sir A. Murray's command was now regarded as an 
Imperial Strategic Reserve. No more suitable spot could have been 
chosen from a geographical point of view, and few ports were better 
fitted for the purpose of receiving and dispatching military units than 
Port Said. The work of embarkation and disembarkation, of refitting 
and of refuelling both naval and military units involved the closest co- 
operation with the officials of the Company, who never failed us. It was 
done without any considerable delay to the vast commercial traffic 
which continued to pass through the Canal in almost undiminished 
volume, and the dividends of the shareholders remained unaffected. 

Ocean wharves were constructed, with the consent of the Company, 
at Kantara, which has been connected by rail with the Egyptian railway 
system and was also the terminus of the military railway system on the 
east bank. From Kantara 600,000 gallons of fresh water were pumped 
daily through the pipe-lines which ran eastwards into the desert, where 
an elaborate system of more distant defence was constructed, designed 
to prevent the enemy from bringing the canal under gun-fire. 

From March 1916 to October 1917 the ration strength of the 
British force in Egypt ran from 1 50,000 to 200,000 and probably at 
least as large a number of Egyptians were being paid from Army 
Funds. 

In June 1917 Sir A. Murray was replaced by General Sir E. 
Allenby, and the British advance was continued to El Arish. Sinai was 
clear of the enemy and all danger to the Suez Canal was removed. 

Lt.-Col. P. G. Elgood, who was on duty at Port Said during 1915 
and 1916, writes as follows of the services rendered during this period 
by the Canal Company to the British Expeditionary Forces : 

'During the years of the military occupation of the Suez Canal, rarely a day 
passed that British commanders were not in communication with the Company. 
They had, thus, ample occasion to form their own judgement upon its methods 
of business, and a more single-minded associate in a common cause they hardly 
could hope to meet. Its wealth of plant and efficiency of personnel filled naval 
and military officers with constant wonder and admiration: and fortunate it was 
for the defenders of the Canal that the Company had so great resources at com- 
mand. It was a poor return for the open-handed manner in which these resources 
were placed later at the disposal of the British military authorities, that frequently 
the latter would borrow plant and omit to acknowledge receipt, despite a promise 
that a formal letter would be sent. Instances occurred again and again in the early 
days of the military occupation of the Canal, when senior officers hurriedly would 
descend upon Port Said, borrow craft from the Company, and forget later to 


Chap, ix TRIBUTES TO SUEZ CANAL COMPANY 143 

perform their own part of the contract. Such omissions were the more repre- 
hensible since the Canal Company made no charge but actual out of pocket 
expenses for the use of plant. So frequent were these cases that in the spring of 
1916 the Company declined to allow any further loan of craft or stores from Port 
Said, unless the military authority of that area signed the demand. 

Throughout the War the attitude of the Canal Company towards the military 
was distinguished by great generosity. For the use of quays, warehouses, and so 
on, not a penny of rent ever was asked. It is true that from August 1914 to 
December 1916 the troops were engaged directly in protecting the property of 
the lender, and, since no suggestion was made that the latter should contribute 
towards the heavy expenditure incurred on the defence, the Company might be 
well expected to place its resources at the British Commander's disposal without 
charge. But from 1917 onwards a new situation arose. The Expeditionary Force 
was well into Palestine, and the Suez Canal relieved from danger of further attack. 
If the Company had pressed from that date for payment from the military, it is 
difficult to perceive how such a claim could be resisted. But no such demand ever 
was preferred. Many months after the Armistice, indeed, the Army was con- 
tinuing to occupy extensive storage areas, to the injury of the Company's revenue; 
and doubtless would be there to this day had not the Company finally, and in self- 
defence, fixed a definite date when the troops either must evacuate the ground or 
pay for the use of it.' 

The writer of these words does, perhaps, less than justice to the 
military officers whose conduct he criticizes ; but his testimony to the 
honourable part played by the Canal Company's officials is well 
deserved, and was confirmed by Sir John Maxwell in his dispatch of 
the 1 6th February 1915 in the following words : 

4 I take this opportunity of bringing to the notice of the Secretary of State for 
War the great services rendered by the Comte de Serionne and the officials of the 
Suez Canal Company j they have one and all been most helpful, and have un- 
reservedly placed their own personal service and the entire resources of the 
Company at my disposal. The success of our defence was greatly assisted by their 
cordial co-operation.' 


BIBLIOGRAPHY 

Official History of the War. 

Malcolm, Sir Ian. 'The Suez Canal', National Review, May 192 1 ; 2nd edition, May 1923 ; 
3rd edition, June 1924. 

MAPS 

Map of the Suez Canal. Scale i : 250,000. G.S.G.S. No. 3753. War Office, 1925. 
Canal Maritime de Suez. Plan General. Scale I : 50,000. Compagnie Universelle du 

Canal Maritime de Suez. [Paris], 1920. 4 sheets. 
Monumenta Cartographica. Africae et Aegypti. Par Youssouf Kamal. Tome deuxi&me, 

fascicule iv. Adas Antiquus et Index, 1933. 


CHAPTER X 
THE PANAMA CANAL: A RIVAL ROUTE 

The Panama and Suez Canals compared. Tolls. Transits. Tonnage. Receipts. 
Expenses. Deficits. Nationality of Shipping. Effect on Trade of U.S. A. Relative 
distances via Suez and Panama. 

THE Suez Canal was opened to traffic in 1869; the Panama Canal 
in 1914. Unlike the Suez Canal, the Panama Canal is owned and 
controlled by the Government of the United States, who constructed 
it at the cost of the State and who maintain and operate it in virtue of 
a series of international treaties. The Suez Canal is about a hundred, 
the Panama Canal fifty, miles long. The Suez Canal runs at sea-level 
the Mediterranean tide being negligible, and that of the Red Sea only 
some 5 feet. The Panama Canal rises by three locks at each end to 
a height of 85 feet above sea-level. The Suez Canal cost, in all, ^30 
millions to build, the Panama Canal 75 millions, and the cost of 
maintenance and operation is in about the same proportion. The ends 
of both canals are joined by a railway. The Suez Canal is unfortified, 
is open to the commerce of all nations in peace or in war, provided 
they can reach it, on payment of the authorized dues. The Panama 
Canal is a fortified zone under the military occupation of the forces of 
the United States Government an imperium in imperio or enclave 
within the body of the Republic of Panama. The Panama Canal zone 
is governed by an official appointed by the President of the United 
States, and is subject to American law. The governor's salary is ^2,500 
a year or so ($ 1 0,000) less than that of any of the thirty-two directors 
of the Suez Canal. The Suez Canal zone is only administered by the 
Canal Company so far as necessary for the purposes of its business, 
and is an integral part of Egypt. 

Tolls. The Hay-Pauncefote Treaty of 1 90 1 , between Great Britain 
and the United States, provided that the canal should be free and open 
to the vessels of commerce and of war of all nations, on terms of entire 
equality without discrimination as to conditions or charges on traffic. 
The same applies to the Suez Canal. 

Panama Canal tolls are one dollar per net ton and sixty cents per 
net ton for vessels in ballast, net tonnage being fixed by special Panama 
Canal Rules of Measurement. 1 Suez Canal tolls are now six and three 
gold francs, respectively, per net ton, fixed by Suez Canal Rules. 

1 'Taking freight vessels as they run, the net tonnage as determined by British rules 
is about 6 1 per cent, of the gross. The American rules produce a net tonnage averaging 
66 per cent, of the gross, while the Suez Canal rules make the average net tonnage of all 


Chap, x PANAMA AND SUEZ DUES COMPARED 145 

Dealing with the period before Great Britain was forced off the gold 
standard, and converting dollars and francs into sterling at the average 
rates for 1929, 1930, and the first half of 1931, we get the following 
comparison between the Suez Canal and the Panama Canal dues : 


Per net ton of Shipping. 


Per ton of Cargo. 


Suez Canal 
Panama Canal 


1929 
1930 

I93i 
1929-30 
1930-1 
1931-2 


5-302 Shi /lings. 

5-215 
5-289 

3-716 

3-649 
4-176 


5-140 S 'hillings. 

5*793 
6-271 
3-712 
4-045 
4-982 


Approximately the Suez Canal dues were higher in 1931 than the 
Panama Canal's by more than 25 per cent, per net ton of shipping 
passing, and by about 30 per cent, per ton or cargo carried; the exact 
figures are not shown in the accounts. 

'The Suez Canal dues', says the Liverpool Steam Ship Owners' 
Association in their Report for 1930 (p. 14), 'compare very unfavour- 
ably with those of the Panama Canal ; the net tonnage as calculated by 
the Suez Canal Company is considerably greater than the British regis- 
tered net tonnage, whereas on the Panama Canal basis of calculation it is 
less. . . . The effect of this difference in tolls has been to divert a con- 
siderable amount of tonnage to the Panama Canal. Further, trade with 
the East from the Atlantic coast of America proceeds through the Panama 
Canal and has the advantage of the lower charges, whilst such trade from 
Japan, India, and the Pacific coast of America has no such expenditure 
at all to bear. The result is that British trade to the East is saddled with 
a heavy burden from which its competitors are in whole or in part free.' 

The following table gives a few of the leading particulars relating 
to traffic through the Panama Canal ; the years quoted are of twelve 
months to 3Oth June: 


Particulars. 


Unit. 


7929-30. 


I930-I. 


I93I-2. 


Transits, paying toll 


Number 


6,185 


5,529 


4,506 


Transits, free (U.S Govt. 


vessels) . 


Number 


600 


568 


473 


Net tonnage 


Th. net tons 


29,981 


27,792 


23,625 


Cargo carried 


Th. tons 


30,030 


25,083 


19,808 


Receipts from tolls 


Th. dollars 


27,077 


24,645 


20,707 


Tolls per net ton 


Dollars 


0-903 


0-887 


0-876 


Tolls per ton of cargo 


Dollars 


0-902 


0-983 


1-045 


For the Suez Canal the corresponding figures, as far as I have been 
able to obtain them, for twelve months ending 3ist December are: 

vessels using that canal 72 per cent, of the gross.' (Professor Emery Johnson, Report to 
Congress on Panama Canal Traffic, 1914.) 


FINANCES OF PANAMA CANAL 


1929-32 


Particulars. \ Units. 


7929. 


1930. 


I93I- 


1932. 


Transits, paying toll 


Number 


6,274 


576i 


5,366 


Transits, free 


. . 


Nil 


Nil 


Nil 


Nil 


New tonnage 


Thousand tons 


33-47 


31-67 


30-03 


28-34 


Receipts from tolls. 


Millions of 


1,100 


1,023 


918 


784 


francs paper 


Tolls per net ton . 


Frs. paper 


32-88 


32-30 


30-58 


27-65 


Tolls per ton of cargo 


Frs. paper 


31-88 


35-88 


36-26 


33'i6 


The drop in dues per ton of shipping reflects the increase in ballast 
traffic; the increases in dues, per ton of cargo, show that in the last 
two years vessels were more lightly laden than before. 

The financial results of the Panama Canal may be summarized as 
follows : 


Particulars. 


7929-50. 


1930-1. 


1931-2. 


Aggregate 1914-32. 


In million dollars. 


Tolls 


27-1 


24-6 


20-7 292-6 


Licences, fees, &c. . 


0-3 


0-4 


0-3 


4-5 


Total canal receipts . 


27-4 


25-0 


21*0 


297-1 


Net canal expenses . 


9'3 


10-4 


9-8 


143-0 


Net revenue .... 


18-1 


14-6 


n-2 I 54" 1 


Fixed capital charge . 


15-2 


15-2 


I5-I ; 174-2 


Deficit on all transactions (canal, 


railway, business, &c.) . 


* 


0-8 


4-2 


I3 . 3 i 


* Profit 2-7 million dollars. 

The particulars of Panama Canal expenses in 1 93 12 were as follows : 

Particulars. 


Expenses. 


Earnings. 


Net Expenses. 


In thousand dollars. 


672-4 


238-5 


433-9 


572-0 


373*4 


198-6 


284-7 


40-4 


244-3 


1,383-2 


90-6 


1,292-6 


1,648-3 


8737 


774-6 


231-8 


131-6 


100-2 


375-9 


169-9 


206-0 


1,456-0 


6l2-5 


I >53 1 ' 1 


12-4 


I,5l8-7 


2,502-5 


97-1 


2,405-4 


224-9 


224-9 


i,827-6 2 


I,827-6 


12,710-4 


2,871-1 


9> 8 39'3 


Executive department . 
Accounting department 
Washington office 
Civil Government 
Health department 
Technical divisions 
Public buildings 
Marine division . 
Locks operation, &c. . 
Dredging division 
Municipal expenses 
Miscellaneous . 

Total 

1 After allowing for business profits aggregating 9-3 million dollars. 

2 Depreciation of fixed property $ i ,006,000 ; Annuity to Panama Republic $ 2 50,000 ; 


Proportion of general stores expenses $300,000, 


Chap.ji PANAMA AND SUEZ REVENUES COMPARED 147 

Thus in the 18 years that have elapsed since i5th August 1914, 
when the canal was opened, till 3<Dth June 1932 the total revenue has 
been 297-1 million dollars, of which 292-6 million dollars were derived 
from tolls. Net canal expenses were 143 million dollars, leaving a net 
revenue of 154-1 million dollars. About 174-2 million have been paid 
in interest at 3 per cent, on capital, and after allowing for business 
profits, &c., the computed loss is about 13*3 million dollars or about 
2,730,000 at par. In the first 18 years of the Suez Canal receipts 
were 730-3 million gold francs, of which 692-3 million francs were 
from transit and navigation dues; expenses were 97*7 million francs 
(after deducting deficits for 1870 and 1871 12-2 million francs 
carried to capital account), leaving a net revenue of 632-6 million 
francs. After paying about 209-6 million francs in interest at 3 per 
cent, on bonds, 168-7 million francs in a 5 per cent, dividend on shares, 
and placing 8-4 million francs to reserves, there remained 245-9 
million francs (about 9,750,000 at par), which was divided between 
the shareholders, the Egyptian Government, the founders, the direc- 
tors, and the staff. 

Over the whole period the net canal expenses of the Panama Canal 
were over 48 per cent, of the canal revenue, while for the Suez Canal 
gross expenses (excluding bond interest) were under 13 \ per cent., 
but leaving out the loans of 1887, about 39 million francs were raised 
in bonds for improving the Suez Canal. For the last ten account years 
Panama Canal net expenses were under 37 per cent, of receipts, while 
Suez Canal gross expenses (excluding bond interest) were about 16-8 
per cent, of receipts. But out of a total of $9,839,000 for net canal 
expenses in 1931-2, about $4,055,000 were in respect of civil govern- 
ment, health, and other services not strictly belonging to the running 
of the canal. If these sums be deducted, canal expenses were about 
27 per cent, of canal and business receipts for 1931-2, as compared 
with 20-2 per cent, for the Suez Canal in 1931 and 22*3 percent, in 
1932. Still in 19312 there was a total deficit of $4,162,000 in the 
Panama Canal accounts. 

In 1928-9, out of 9,882,000 tons of cargo passing from east to 
west through the Panama Canal, 2,350,000 tons were iron and steel, 
whereas in 1929 there passed eastwards through Suez 3,590,000 tons 
of metals and machinery and 640,000 tons of railway material out of 
a total of 12,900,000 tons. Iron and steel goods, such as rails, are 
close-stowing and dues would be of little importance, but in the case 
of machinery, especially of the finer kinds, 100 to 120 cubic feet or 
more per ton weight would be needed, and dues become important 
as an element in shipping cost even if they are low in proportion to the 
value of the goods. With heavy low-value goods like cement (37*. 3^. 


148 PANAMA AND SUEZ TRANSITS COMPARED 1929-32 

per ton f.o.b. ex-United Kingdom in 1932) and salt (495. yd. per ton f.o.b.) 
dues might be the deciding factor. Over a fifth (4,900,000 tons out 
of 21,620,000 tons) of the cargo coming westwards through the Suez 
Canal in 1929 consisted of mineral oils, and it fell to 3,310,000 tons 
out of 17,950,000 tons in 1931. In 19289 about 807,000 tons of 
mineral oil passed from east to west and 5,198,000 tons from west to 
east through the Panama Canal out of totals of 9,883,000 tons and 
20,780,000 tons respectively; in 19312 westward-bound oil was 
5 1 8,000 tons out of 5,635,000 tons, and eastward-bound oil 3,1 17,000 
tons out of 14,173,000 tons. Oil carriage is more important to the 
Panama Canal than to the Suez Canal, and in 19289, tankers paid 
1 8* 9 per cent, of the Panama Canal tolls and in 19312, 15-4 per cent.; 
of course much of this traffic is between the east and west coasts of 
the United States. 

Owing to the different periods for which the accounts are kept, close 
comparison cannot be made between the working of the two canals, 
but the figures below are significant. 


Suex Canal, 


Panama Canal. 


Calendar Tears. 


Tears to 30^ June. 


1929. 


1930. 


I93I- 


1932. 


1930. 


I93I- 


1932. 


1933- 


Shipping using canal 


(thousand net tons) 


33466 


31,669 


30,028 


28,340 


29>98i 


27,792 


23,625 


Cargo carried (thous- 


and tons) 


34520 


28,510 


25330 


23,630 


30,030 


25,083 


19,808 


Cargo per hundred net 


tons . 


103-14 


90*02 


84-35 


83-36 


100-17 


90-25 


83-84 


Dues per net ton (canal 


Francs. 


Francs. 


Francs. 


Francs. 


Cents. 


Cents. 


Cents. 


measurement) 


32-88 


32-30 


30-58 


27-65 


91-76 


88-68 


87-65 


Dues per ton of cargo . 


31-88 


35-88 


36-26 


33-i 6 


90-16 


98-26 


104-54 


At average exchange of period. 


Dues per net ton (canal 


s. d. 


s. d. 


S. d. 


s. d. 


s. d. 


s. d. 


s. d. 


measurement ) 


S 3'6 


5 2-6 


5 3'5 


6 2-4 


3 9'3 


3 7'8 


4 6-8 


Dues per ton of cargo. 


5 i'7 


5 9'5 


6 3-3 


7 5' 2 


3 6-0 


4 0-8 


5 4'4 


Panama Canal dues are 120 cents per net ton, Panama Canal 
measurement, for vessels with cargo, and 72 cents per ton for vessels 
in ballast, subject to the condition that these dues must not be more 
than 125 cents per net ton United States measurement nor less than 
75 cents per ton. As Panama Canal measurement is about 35 per cent, 
greater than United States measurement, the latter is chosen at the 
higher rate. United States measurement is very nearly the same as 
British measurement; it may be about three-quarters of one per cent, 
less on the average, differing according to the type of ship. Panama 
Canal dues may thus be taken at 126 cents per British net ton or 
js. i\d. per British ton, compared with js. lod. per British net ton 
for Suez Canal dues, francs and dollars being converted to sterling at 


Chap, x PANAMA AND SUEZ ROUTES COMPARED 149 

the average rates of 1932. At par and per British net ton the Suez 
Canal dues of 6 francs would be equivalent to 55. 96</., while the 
Panama Canal dues of 126 cents would equal 5^. i*id. The Suez 
Canal dues of 6-90 francs in 1929 were equivalent to 6s. 5-8^. per 
British net ton, the Panama dues being then still between $s. id. and 
5,?. %d. These calculations relate to the maximum Panama Canal rate. 
The actual average charge in 1931-2 was 87-65 cents per canal net 
ton, equal to 1 19 cents per British net ton, or 6s. i- $d. at the average 
exchange of the 12 months. Suez Canal dues in 1931 were 30-58 
francs per Suez Canal ton, or 36-24 francs per British net ton, or 
6s. 3'2^/. The corresponding rates per ton of cargo are shown in 
the table p. 148. The drop in the value of the dollar relatively to 
sterling is likely to have the effect, unless counterbalanced by a corre- 
sponding reduction in Suez Canal dues, of encouraging shipping via 
Panama in preference to via Suez. During the week ended 6th August, 
1933, for example, the average exchange value of the was $4-497 
or 84-76 fr., and on these values the maximum charge per British net 
registered ton would be about 8j. 3^. by the Suez Canal and about 
55. yd. by the Panama Canal. 

There are, of course, other factors than tolls. The cost of fuel, the 
cargo available at intermediate ports, and weather are of great im- 
portance. The distance from Liverpool to Sydney via Suez is less by 
150 miles than via Panama; to New Zealand is longer by 1,000 miles. 
Hongkong is nearer New York by Panama than by Suez, Singapore 
is nearer via Suez. Yokohama is only 700 miles nearer to Liverpool 
by Suez than Panama. Shanghai is almost exactly as far from New 
York via Panama as from Liverpool via Suez. Thus the eastern sea- 
board of North America is on an equality with western Europe as 
regards its intercourse with the mainland of Eastern Asia, whilst in 
the case of Japan it has a slight advantage. Oil fuel is at present cheaper 
at Panama than at Suez. The all-important factor is still the amount 
of available cargo, but the next most important is the incidence of 
canal dues. In the total expenses of modern ships, running expenses 
have a much smaller, and harbour and canal dues a larger, proportion 
than formerly. Hence the importance that attaches to a comparison 
between Suez and Panama Canal rates. 

The Panama Canal has, as was anticipated, had a very beneficial 
effect upon the trade of the United States. Before the war, the United 
States purchased 48 per cent, of its imports in Europe and 16 per cent, 
in Asia. In 1924 it purchased 29 per cent, in Europe and 31 per cent, 
in Asia. 1 China, Japan, and Australia have bought more in North 
America and less in Europe since the canal was opened. 
1 League of Nations Memo., 1927. 


150 PANAMA AND SUEZ ROUTES COMPARED 1929-32 

Japan sent 23 per cent, of its exports to Europe in 1914, and only 
6 per cent, in 1924, a point which is not without significance at the 
present moment. 

On the other hand, the Suez Canal route normally offers better 
prospects of continuous freight earning and keeping ships at sea with 
full cargoes. 

The maximum traffic passing through the canal was shown in 1 929- 
30 when the total was 29,981,000 tons Panama Canal measurement; 
in 1931-2 the aggregate fell to 23,625,000 tons, the lowest figure 
since 1924-5. The tonnage of the principal flags in the two years was 
as follows: 

1929-30. 1931-32. 

In thousand tons Canal measurement. 

United States . . . . J4>534 10*791 

United Kingdom . . . 8,007 5>96 

Norway 1,660 1,530 

Germany I >433 1,281 

Japan 803 980 

Netherlands .... 671 553 

France 628 455 

Sweden 572 539 

Italy 429 479 

Denmark 382 561 

Tanker steamships have been the mainstay of both canals. In 1924 
oil tankers were nearly 40 per cent, of the Panama traffic; in 1928 only 
20 per cent. Tankers are at present some 1 5 per cent, of the total 
Suez Canal traffic, but with the completion of the Iraq pipe-line this 
will probably be reduced; it is already falling, as tankers are going 
round the Cape to avoid dues. 

The following table, taken from Hallberg's very useful study of 
the subject, shows the relative advantages of the two routes in point 
of mileage. 

Saving via Suez Saving via Panama 

over Panama over Suez 

(in marine miles). (in marine miles). 

London to Fremantle . . 5>2io 


New York to Fremantle 
London to Melbourne 
New York to Melbourne 
London to Sidney 
New York to Sidney . 
London to Wellington 
New York to Wellington 
London to Calcutta 
New York to Calcutta 
London to Singapore . 
New York to Singapore 


593 
1,803 

28 


9,310 

4>79 
7,339 
2,819 


2,294 

2,460 

1,077 
4>597 


Chap.* PANAMA CANAL AS AN ECONOMIC WEAPON 151 

Saving via Suez Saving via Panama 

over Panama over Suez 

(in marine miles). (in marine miles). 

London to Manila .... 4>?oo 

New York to Manila .... 180 

London to Hongkong .... 4>?29 

New York to Hongkong ... 219 

London to Shanghai .... 4*989 

New York to Shanghai ... .. 1,081 

London to Yokohama . . . . *>748 

New York to Yokohama ... . . 2,772 

London to Coronel .... . . 837 

New York to Coronel. ... .. 3,118 

London to Valparaiso . ... .. i>4 T 7 

New York to Valparaiso ... .. 3732 

London to San Francisco . . . . . 5>538 

New York to San Francisco ... . . 7>8$3 

The dividing line in the East between the two routes would seem to be somewhere 
from Hongkong to Manila. For European trade with Eastern Asia, including Australia 
but not New Zealand, the Panama Canal offers no competition with Suez. The only points 
where the Panama Canal can compete with Suez are north-eastern Asia, eastern Australia, 
New Zealand, and the west coasts of North and South America. 

It is clear that the Panama Canal is a powerful instrument in the 
hands of the President of the United States : he cannot, it is true, give 
financial preferences to American ships, but the lower the dues, the 
easier for American shipping to compete with that of Europe. Much 
of the trade of Asia has, as a consequence of the Panama Canal, been 
diverted to the United States from Europe; of that we have no right 
to complain. This tendency has been accentuated by the increasing 
disparity between Suez and Panama Canal rates, which unless cor- 
rected will have serious results for Europe. 


CHAPTER XI 
COMMENTS, CRITICISMS, AND REPLIES, 1931-3 

Post-War Decline in Shipping. Protests of Liverpool Shipowners. Reply of Suez 
Canal Company. Protest of British Shipping and Commercial interests. Reply 
of Lord Inchcape. Rejoinder of Liverpool Steamship Owners 9 Association. 
Questions and Answers in Parliament. The question re-opened in March 1933. 
Views expressed to Royal Central Asian Society. Reply of the Marquis de Vogue. 
Further addresses. Articles in 'Nineteenth Century and After . 

THE progressive decline in the prosperity of shipping which started 
in 1920 inevitably led shipowners and others to scrutinize closely 
all overhead charges. International and national agreements regulating 
seamen's wages, port and light dues were all in turn examined with a 
view to securing some relief: attempts were made to eliminate com- 
petitive services, to fix freights at a remunerative level, however low, 
and to replace the older ships by new vessels of economical design. 
Ships do not indeed create traffic, they only carry it, on margins of 
profit so slender that relatively small fixed charges, such as canal and 
port dues, may be decisive factors in competitive trade. Price is the 
one and only common language of the world of commerce. Four-fifths 
of the world's international commerce by value and probably a larger 
proportion by weight is sea-borne. Transportation services are the 
servants of trade, and are subject to the influence of the general 
economic situation: competition between different services is subject 
not only, or in these days even principally, to factors controllable by 
those who direct them, but to the influence of shipping subsidies, 
preferential harbour lighting and port dues and flag discriminations of 
various countries. 

It was for these reasons that the Versailles Treaty (Art. 23 (e] ) 
pledged the signatories 'to make provision to secure and maintain free- 
dom of communications and of transit and equitable treatment for the 
commerce of all Members of the League', and it was in these circum- 
stances inevitable that the dues levied by the Suez Canal Company 
should come under examination. It was not, however, until 1931 that 
criticism became vocal in various quarters. On 23rd March the ques- 
tion was raised at a meeting of Liverpool shipowners by Mr. F. J. 
Marquis and Major Leonard Cripps, a director of the Holt Line. 

'The British Government', said Mr. Marquis, 1 'owned 44 per cent, of the 
shares in the Suez Canal Company. Those shares had earned 36,000,000 in 

1 The Times, 24 March 1931. 


ii COMPLAINTS OF SHIPOWNERS 153 

dividends, but it was not for the purpose of making dividends that they were 
bought. They were bought to protect British interests. We in Lancashire 
think the time has arrived to ask the British Government whether they have 
forgotten the purpose for which they acquired this financial interest in the 
canal. We know that this Government, and Mr. Graham in particular, have 
very strong views on the subject of the exploitation of monopoly values. Is the 
British Government quite certain that, as the principal shareholder in the Suez 
Canal, it is exercising the control that lies within its power in dealing with this 
monopoly, the Suez Canal ? . . . 

'The Company passed in 1929 a dividend at the rate of 267 per cent, after 
making very adequate provision for the costs of maintaining the canal. It is 
administered in Paris, and the people of that capital take a dominant part in the 
control of the finances of the company. The French nation is not a ship-owning 
nation. It is not primarily interested in the export of goods to the Far East. It 
has during the last decade exhibited considerable powers of financial conservation. 
We find ourselves in this country meeting the cost of much of that conserva- 
tion, and the general sentiment of business men here is that we have carried 
financial consideration of the position in France to a quixotic extent. The time 
has come to urge the British Government to assert its rights, recognize its obliga- 
tions, and secure that representations should be made to Paris to make it clear 
that the Suez Canal rates at present charged constitute a serious exploitation of 
a monopoly, at once bad for trade and repellent to the modern social conscience.' 

'The dividend of 1929', added Major Leonard Cripps, 'even on the basis of 
the current exchange, stood at over 50 per cent., yet the dues were still 
6-65 gold francs per ton. It was only by the intervention of the British 
Government, as the largest shareholder in the company, that shipping owners 
could expect to get fair play and recognition of the obligations of the London 
agreement. To go on as at present was to damage British trade and to bring into 
disrepute the manner in which the British Government discharged its inter- 
national obligations as the chief shareholder in a world highway.' 

Councillor R. J. Hall emphasized the greater seriousness of the burden of the 
Suez Canal dues for the trade and commerce of the North of England, with its 
weaving industries and low-priced commodities, as compared with the higher- 
priced commodities and lighter weights sent from the Southern ports. A shilling 
a ton or 31. a ton placed on iron and steel, or coal or galvanized sheets, meant a 
complete block on trade and the loss of markets to the Northern industries. 

The Suez Canal Company replied a few days later in an official 
statement from which the following is an extract: 

'For the great bulk of goods passing through the Canal the dues represent but 
a fraction i or 2 per cent. of their value. Therefore the effect of the dues on 
the total commerce passing through the Canal is negligible, and may indeed be 
dismissed as practically nil so far as the Europe-bound traffic from countries beyond 
Suez is concerned. 

Tn reality, then, even if it be admitted that a reduction would favour certain 
branches of traffic forming only a minor proportion of the whole, its only general 
effect would, in the present economic conditions, be to impose a sacrifice on the 


154 PANAMA AND SUEZ DUES COMPARED 1931 

company's shareholders which, without benefiting commerce as a whole, would 
not be offset by any appreciable increase in traffic. . . . 

'It is certainly true that, as compared with 1928, commerce in 1929 between 
Great Britain and the principal markets of the Far East showed a diminution, and 
that the fall in British exports to the Far East was particularly marked. For the 
rest of Europe, on the other hand, this commerce increased, from which it is 
evident that the diminution referred to above is in no way attributable to the canal 
dues, but rather to the difference between the British costs of production and those 
of the other countries. 

4 The events of 1930 confirm this conclusion. While British exports to the 
Far East showed a greater reduction than those from America, the American 
trade, in its turn, diminished to an appreciably greater extent than those of 
Germany. There are thus other and more important causes of all these commercial 
movements and their variations than the Suez Canal dues, and they must be sought 
either in the exporting countries or those to whom their goods are consigned. 

4 It has also been alleged that a part of the Suez Canal traffic has been diverted 
to the Panama Canal. But an analysis of commercial movements shows clearly 
that traffic for which the two canals may compete is of little importance compared 
with the total traffic of the Suez Canal. Moreover, it is instructive to note that 
although the Panama Canal dues are a little lower than those of the Suez Canal 
the traffic figures for both show a remarkable similarity in their variations.' 

Some comment on this exchange of views is necessary. The Suez 
Canal Company's views as to the 'negligible effect* of a levy of I or 2 
per cent, on the value of goods passing through the canal (the actual 
figures vary from an average of 3 per cent, to as much as 30 per cent, 
in certain cases) is wholly untenable. So keen is competition in world 
markets that, as Councillor F. J. Hall remarked, great contracts are 
lost or won, and industries maintained, or the reverse, on a margin of 
no more than a shilling a ton. 

The statement that Panama Canal dues were 'a little lower' than 
those of the Suez Canal was seldom true: they have never been less than 
20 per cent, lower and are now about 33 per cent, lower than those of the 
Company. 1 The relative steadiness of German exports in 1 930 was due 
to internal stresses, of Italian commerce to the fact among others that 
all canal dues on Italian vessels were paid by the Italian Government. 
To argue that the Suez Canal dues are a negligible factor is not con- 
sistent with known facts, for it was common knowledge even in 1931 
that molasses tankers from Java and the Philippines and oil tankers 
from the Persian Gulf were reaching Europe via the Cape, and that 

1 The present Suez Canal dues of 6 francs per Suez Canal ton, at the average exchange 
value of the for the week ending 6th August (84-76 francs or 4-497 dollars), works out 
at 8j. 3</. per British net registered ton. The dues levied in the Panama Canal are about 
$s. jJ.j when allowance is made for certain fixed charges levied in the Suez Canal and not 
at Panama, the Panama Canal dues on any given ship are two-thirds, or even a little less, of 
those levied at Port Said. 


Chap, xi LORD INCHCAPE'S DEFENCE 155 

cargoes of grain from Melbourne were reaching Trieste and Alexandria 
via Gibraltar. 

A month later, on 22nd April, a deputation, stated to represent the 
whole of the shipping and commercial interests of the United King- 
dom, was received by the late Lord Inchcape, chairman of the London 
Committee of the Suez Canal Company. The Government directors 
were not present. The deputation urged that the Company should 
take immediate steps to reduce the dues, and that an understanding 
as to the future should be reached. Lord Inchcape undertook that his 
British colleagues and he would lay the views of the deputation before 
the Board at their next meeting in Paris in May, and expressed the 
hope that, in the meantime, the Associations concerned would suspend 
criticism of a company which had rendered, and was rendering, public 
services of the greatest value to trade and commerce. The deputation 
expressed their appreciation of the undertaking which Lord Inchcape 
had given, and agreed to await the result of the May meeting. 

On 1 3th May he published a copy of a letter which he had sent on 
nth May, with the entire concurrence of his French and British 
colleagues, to the Secretary of the Liverpool Steamship Owners' 
Association. After a lengthy disquisition on the past history of the 
canal and of the numerous improvements effected (without which the 
canal would have ceased to earn any dividends at all) he stated that no 
further immediate reduction of dues was possible in view of the actual 
and prospective falling off both in tonnage and receipts. 

'Interested in shipping as the majority of the British directors are, 
they must at the same time as directors of the company have regard 
to all the interests involved. The last reduction in September was 
obtained at the instance of the British directors, whose representations 
were met in a spirit of acquiescence on the part of their French 
colleagues. The question of further diminutions was, by agreement of 
both sides, left to be raised as circumstances justified. The dues are 
never a closed question and negotiations are always open. Machinery 
is in existence for laying before the Board, as occasion requires, 
suggestions as to the scale of charges in relation to the earnings of the 
company. Working on these lines, I am assured that some further 
reduction will be agreed to by the Board to take effect as soon as the 
appropriate circumstances arise. An agitation by the shipowners, 
however, to get an immediate reduction in dues, carrying with it a 
reduction in the dividend, will have the effect of alienating the French 
shareholders, who are aware that the concession from the Egyptian 
Government comes to an end in 1968. The shareholders must there- 
fore provide practically the whole of their own amortization. 

4 It was pointed out to us that the transit dues represent a very 


156 SHIPOWNERS' REPLY TO LORD INCHCAPE 1931 

insignificant amount on the value of the commodities passing through 
the canal, only about i to 2 per cent., and on the south to north traffic 
not so much as this. The dues to-day, it was pointed out, are two- 
thirds of the maximum provided by the Act of Concession. Since 1883 
the increase in dividends has given the shareholders 59,000,000, 
while the reduction in dues has given the shipowners 60,000,000. 
Since 1920 the shareholders have received an increase in dividends 
of 13,700,000, and the shipowners have gained 11,700,000 by 
reduction in dues; but since 1913 the shareholders have received 
2,400,000 less in dividends than if the 1913 dividend had been 
maintained. The dividend for 1930 will have to be slightly reduced 
from that paid in 1929, and the proposed dividend, even at the reduced 
rate, can only be paid by decreasing amortization for depreciation of 
plant, &c. 

'Considering the reductions in dues in the last ten years, some 
soreness was expressed by our French colleagues that the present 
agitation should have been started. What I have ventured to put 
before the Liverpool Steamship Owners' Association in this letter may 
not altogether satisfy them; but in the interests both of the shipping 
and of the trade of Great Britain I do most sincerely hope that the 
agitation against the directors of the Suez Canal Company and its 
shareholders may be discontinued, as the effect otherwise will be 
unfortunate and the end in view may be retarded/ 

The Association replied on i6th May that they were bitterly dis- 
appointed with his letter, which was no answer to their request for 
a reduction in the dues. 

'They contemplate with growing concern a monopolistic company, 
which can with modesty describe its results as "brilliant", paying divi- 
dends year after year out of earnings of which every penny has been 
contributed by the shipping industry during a period of unparalleled 
trade depression. The Association feel that it is not unreasonable to 
request that some small sacrifice of that prosperity should be made by 
the company to mitigate the hardships now being suffered by every 
one of its clients. 

'The Association have not criticized the efficiency of the Canal 
service, nor have they suggested that the Canal staff" are anything but 
courteous and obliging at all times, but that your Lordship should have 
been requested to draw attention to these matters would appear, in the 
opinion of the Association, to show a complete lack of appreciation, on 
the part of the Board, of the vital importance of the point at issue. 

'Your Lordship is concerned with the fact that, as the concession 
expires in 1968, the investors in the company must provide practically 
the whole of their own amortization with this end in view. But what in 


Chap.xi SHIPOWNERS' REPLY TO LORD INCHCAPE 157 

fact does this amount to ? If the case of the British Government's holding 
be considered, the true position of the original shareholders is clear 
beyond dispute. In 1875 Mr. Disraeli purchased on behalf of the 
British Government 44 per cent, of the shares in the company. The 
purchase price of these shares was ^4,000,000, but since the date on 
which they were purchased the British Government have received in 
dividends and interest the sum of ^38,000,000. If no more than i per 
cent, of the purchase price had been put aside annually the whole sum 
would have been amortized twenty years ago. 

'Can it be said, therefore, that those fortunate investors who pur- 
chased the original shares of the company have reasonable grounds for 
complaint if a reduction in the dues be made ? On the other hand, have 
those who purchased the shares in the open market by way of invest- 
ment or speculation the right to expect that the profits of the company 
should be maintained at their present rate merely because the con- 
cession is due to expire in 1968 a fact which they must have known 
when they purchased the shares and which must assuredly at all times 
influence the market price of the shares? 

'The Association note that the small percentage which the transit 
dues bear to the value of the commodities passing through is again 
brought forward as an argument, but, apart from the fact that even the 
smallest relief is of great importance to trade in present circumstances, 
their statement that the dues amount to upwards of 14 per cent, of the 
gross freights remains unchallenged. 

'The Association desire me to emphasize also the fact that, while the 
total amount which is to be distributed in dividends for the year 1930 
shows a decrease when compared with that which was distributed for 
the year 1929, nevertheless the Ordinary shareholders are to receive 
for each 250 fr. share a dividend at an increased rate namely, 577 fr. 
for the year 1930, as compared with 530 fr. for the year 1929. 

'With regard to the comparison made in your Lordship's letter 
between the increase since 1883 of ^59,000,000 in the dividend and 
the reduction since 1883 of ^60,000,000 in dues, the Association 
would point out that the greater part of the reduction was made in 
accordance with the London Agreement of that year, the terms of 
which obliged the Canal Company to allocate part of the surplus profits 
after payment of a 25 per cent, dividend to reducing the dues until the 
transit rate reached a level of 5 fr. (gold) per ton. The Association 
would be more disposed to attach importance to the comparison if 
to-day the dues were 5 fr. (gold) and not 6-65 fr. (gold) and the rate 
of the dividend 25 per cent, and not 46 per cent/ 

On 1 5th November the dues were 'temporarily' reduced from 
6-65 francs gold to 6-00 francs gold; as however. Great Britain had 


i 5 8 FUNCTIONS OF BRITISH DIRECTORS 1931 

meanwhile been forced off the gold standard the actual incidence of 
the dues on laden vessels was over one shilling per Suez Canal ton 
higher than before. 

On loth December 1931 Mr. J. R. Robinson, M.P., asked 
whether His Majesty's Government would take the necessary steps to 
subdivide its holding so as to use its maximum voting power at future 
meetings of the Suez Canal in favour of an investigation into the 
management of the company in order to bring about a reduction in the 
expenses of management and a reduction of the Canal Tolls. 

He also asked whether His Majesty's Government would use its 
shareholding power to urge a reduction of costs of management includ- 
ing directors' fees. 

Mr. Neville Chamberlain replied that His Majesty's Government 
had recently received an assurance from the Company that all possible 
economies consistent with efficiency have been carried out 1 both as 
regards work and personnel. The diminution of traffic and recent 
reduction of dues would entail considerable reduction in amount of 
directors' fees. No useful purpose would be served by proposing an 
investigation into the management of the Company. 

Some months later (i4th June 1932), the Financial Secretary to 
the Treasury, in reply to a question in Parliament, observed that the 
existing incidence and possible reduction of Suez Canal dues was not 
the concern of the British Government but of the Suez Canal Company. 
It is not easy to reconcile this attitude of mind with the claim of Disraeli, 
and of a long line of statesmen after him, that the purchase of shares 
by the British Government was made with a political rather than a 
commercial object and has in fact been justified by results on political 
rather than commercial grounds. Nor is it easy to gather from ques- 
tions and answers in Parliament, over many years, what purpose is 
served by the British Government Directors on the Board of the Suez 
Canal. The Prime Minister on i6th June 1925 referred to two of 
them as 'equipped to be of assistance to the general business of the 
Board by their knowledge of public affairs gained by long service in 
the House of Commons and in various Departments of State. The 
third Director (Sir John Davies) was a member of the Civil Service'. 
He added that the 'purely shipping and commercial activities of the 
Company, so far as they concern the British Empire and His Majesty's 
Government as principal shareholder, are carefully watched by the 
non-official British members, all of them experts in these matters'. 

It will be noted that this reply suggests that the British Government 
Directors, as retired Parliamentarians or Civil Servants, can assist the 

1 Notwithstanding the Company's assurance that all possible economies had already 
been made, further large reductions were, in fact, effected in 1932 and 1933. 


Chap, xi INTERNATIONAL PROTESTS 159 

Board of the Suez Canal Company, whilst the interests of the British 
Empire and of His Majesty's Government are safe in the hands of the 
non-official directors, who are not nominated by His Majesty's 
Government, but by particular interests amongst which those of the 
British Dominions Overseas are not included. Truly, in the words of 
Sir Edward Grey, the 'question of the Suez Canal is very complicated 
and requires to be elucidated'. 

In March 1933 I took it on myself to re-open the question at 
a public luncheon. After complaining of the meagre information on 
the subject furnished to Parliament and setting forth figures, on the 
lines of Chapter VIII of this work, I described the Suez Canal as 
'a vital artery, tenanted by growths once beneficent, but now parasitic 
upon the life-stream of overseas commerce*. The increase of dividends 
paid of recent years was proportionate to the decrease in the net 
earnings of shipping companies. The mercantile marine of every 
maritime nation had increased since 1918 except that of Great Britain, 
which had suffered a decrease of 20 per cent. We alone of the Great 
Powers did not subsidize merchant vessels : no less than 30 millions 
was thus spent in 1931, of which two-thirds went to support lines 
competing directly with British enterprise. 

I reminded my hearers that when in 1931 the shipowners of Liver- 
pool appealed for a reduction of rates, the Suez Canal Company 
announced that 'repeated requests render the company less inclined to 
reduce their charges'. Such was the language of monopolists all over 
the world, and it was not surprising that six of the great maritime 
powers had protested unofficially to Mr. Henderson in 1931 against 
the high level of dues charged or that Sir Arthur Michael Samuel 
should have felt compelled to observe, in the House of Commons, that 
'the methods of the Canal Company are fast becoming a cause of 
international friction'. 

Egypt and the Suez Canal Company could look after themselves : the 
British Empire needed more forceful advocacy. The Imperial Shipping 
Committee had had the matter on its agenda at least once. It was time 
to raise it again and to ensure that British official representation on the 
Board was not principally confined to retired private secretaries, how- 
ever eminent and that, in one way or another, India, the Dominions, 
and the Crown Colonies should have representation. 

During the next few weeks I received some forty or fifty communica- 
tions including many from persons who now hold, or were holding, 
positions of great responsibility in political, diplomatic, consular, and 
commercial life both in this country and abroad, urging me to develop 
this thesis and to bring it prominently to public notice. I thereupon 
delivered an address on the subject to members of the Royal Central 


160 SUMMARY OF CRITICISMS 1931 

Asian Society (^th April), in the hope that some rejoinder or criticism 
might be elicited from the Company's side. In these addresses 
I developed the view, set forth at length in this work : 

(1) that the events of 1873 (vide Chap. V) established the method 
whereby the maritime powers could, if aggrieved at the system 
whereby tolls were levied by the Company, appeal to the 
sovereign power, then Turkey, now Egypt, which had power 
to impose its will; 

(2) that this incident produced a general agreement among the 
Powers that, while the canal was an artificial channel, it was 
essentially a narrow strait between two bodies of open sea, and 
as such was a matter of international concern. It also elicited 
from the Powers an admission that the Canal Company had the 
right to levy tolls, though subject to the concessions issued by 
the Khedive of Egypt and confirmed by the Sultan, and in 
keeping with the international usage as to measurements of 
vessels. At the same time the operation of the canal practically, 
even if not formally, became subject to international law, since 
various Powers entered into direct negotiations with the 
Company, giving that body a quasi-international status; 

(3) that the grant of a concession does not derogate from the 'right 
of eminent domain' on the part of the sovereign power, i.e. from 
the inherent duty, and consequently the right, to modify or even 
to revoke the grant should the interest of the nation, or of the 
world, demand such a step, subject of course to due com- 
pensation ; 

(4) that the Government of Egypt might reasonably be urged, on 
grounds of general expediency, to require, and if need be to 
impose upon the Company, such modification of its Statutes as 
will bring them into accord with modern views as to the manage- 
ment of public utilities and the administration of private 
companies. There is no precedent in the domain of municipal 
or international law for many provisions of the Company's 
Statutes in their present form; 

(5) that the present constitution of the Board of the Company 
21 French citizens, 10 British, and i Dutch subject 
was inconsistent with the specific provisions of the Statutes and 
constituted a breach of the terms of the concession. In this 
connexion I quoted the observations of a French writer, 
Monsieur Mimaut: 1 

'The Board rather resembles', wrote Lesage in 1905, 'a diplomatic conference 
on which the nations whose flag floats most frequently above the calm waters of 
1 Les Corporations Interitatistes, 1929. 


Chap, xi REPLY OF THE MARQUIS DE VOGUfi 161 

the canal are represented Great Britain, France, Germany, and Holland/ 
Lesage recounts with satisfaction the diplomatic titles of some of the French 
administrators. The recital would be even more appropriate to-day; the successors 
of the former attaches of embassies are Ambassadors, or former Foreign Ministers, 
or former Presidents of the Council (or, he might have added, former Presidents 
of the Republic). 

'The British, on the other hand', he says, 'are represented mainly by men of 
business, whilst the French shareholders are represented by political figures whose 
connexion with the French State is in no way hidden. 

'France has lost none of the moral prestige which she reaped from the tenacity 
and success of de Lesseps, which English courtesy has done nothing to diminish. 
The Company's Ambassador with the Egyptian Government is French. All the 
superior staff of the Canal are Frenchmen. A French Bishop occupies the epis- 
copal seat recently instituted in the Governments of the Canal. 

'As to Egypt, one is tempted to say that Anglo-French solidarity and the pros- 
perity of the Canal Company have been secured at her expense. Still, the sale of 
the Khedive's shareholding saved her from bankruptcy, and perhaps even from 
greater dangers. Her interest was not limited to the Khedive's holding. The 
Egyptian Government's share of profits appears in the annual balance sheet, but 
here again Egypt has had to part with her rights. . . . 

'The Company has, however, brought fresh life to Egypt, and at the end of the 
concession the ownership of the Canal will revert to her. . . . 

'A conjunction of political and financial circumstances has brought about a state 
of affairs which represents but imperfectly the international status envisaged by 
de Lesseps and dreamed of by Lord Derby. But the present regime satisfies three 
main conditions necessary for the well-being of a great business of universal 
interest. 

Tt is a business concern, supported by the political influence of the Great Powers, 
and if by her own fault Germany is eliminated from the Council, the latter is still 
international^ for three of the principal maritime powers are represented thereon, 
and can watch their own interests and those of world navigation.' 

These essays elicited early in June 1933 from the Marquis de 
Vogii, chairman of the Suez Canal Company, a spirited memorandum 
the principal portions of which are reproduced below, with my own 
comments subjoined in the form of footnotes. Cross-headings have 
been inserted. 

'Mandataire* or 'Concessionaire' 

'The Suez Canal Company is stated to be a "mandataire" of the 
Egyptian Government. It may have been possible, strictly speaking, 
to describe Ferdinand de Lesseps personally as a "mandataire" of the 
Viceroy when he was granted "exclusive power to set up and assume 
the management of a Universal Company for the cutting of the Isthmus 
of Suez". But once that Company was formed as formed it was 
in accordance with the Viceroy of Egypt's intentions (for its articles 


1 62 REPLY OF THE MARQUIS DE VOGt)fi 1933 

of association were approved by the deed of concession in 1856), it 
was in the nature of a private concessionary company/ 1 

Right of Eminent Domain 

More serious is any suggestion that it is open to a Government to 
amend or even to repeal in an arbitrary and one-sided manner a con- 
tract entered into with a private company, even although that company 
may have complied in the strictest way with the terms of its Act of 
Concession, which is emphatically the case in the present instance. 
Such a course is still considered in civilized countries as sheer robbery. 

No such right of amendment or repeal was ever claimed by the 
Viceroy, either for himself or for his successors. 2 

Modification and Modernization of Concession and Statutes 
'Our critic has in mind an intervention on the part of certain Great 
Powers, and more particularly Great Britain, upon whom he considers 
a special role to devolve owing to the fact that, for sundry political and 
strategical reasons, Great Britain has undertaken the responsibility of 
protecting the great Suez waterway. 

'Here, again, there is a confusion of thought. The question of the 
strategical protection of the canal has been settled by the Powers who 
decided on the neutrality of the canal. Questions of strategy have 
nothing to do with the technical operation of the canal or the manage- 
ment of the company/ 3 

1 Article 20 of the concession of 5th January 1856 describes de Lesseps as 'mandataire' 
(vide App. II). The Statutes, duly approved by the Khedive, were annexed to this docu- 
ment, which is the very basis of the Company's concession. 

2 There are good reasons for holding that the terms of the Act of Concession and the 
provisions of the Statutes have not in fact been complied with, notably as to the composition 
of the Board (Statutes XXIV) which is not now representative of the principal nationalities 
interested in the enterprise as users of the Canal and as to the provision (Article 2, Concess 
sion of 3Oth November 1854) that the Chairman of the Company should be chosen, a- 
far as possible from among the shareholders most interested in the enterprise (App. I). 
The right of amendment or repeal of a concession, subject to compensation, is the inherent 
right of a sovereign State. It has been repeatedly exercised in recent years and is recognized 
by Article 19 of the Covenant of the League of Nations which empowers the Assembly 
from time to time to advise the reconsideration by Members of the League of Treaties that 
have become inapplicable, and the consideration of international conditions whose con- 
tinuance might endanger the peace of the world. 

As Lord Derby wrote to Sir H. Elliot on yth July 1874: Such being the high inter- 
national importance of the Canal, its administrators have not the right to consider an infrac- 
tion of the provisions of instrument governing the conditions of its administration, so far as 
they affect international rights, to be a matter for simply judicial action. 

3 The question of strategical protection of the canal was not settled by the Powers, but 
by the ineluctable fact of the position occupied in Asia by Great Britain and the British 
Empire. The title of the Company to levy exorbitant dues cannot be treated in vacuo with- 
out reference to the wider interests of world commerce. 


Chap, xi REPLY OF THE MARQUIS DE VOGttfi 163 

Proposed Division of British Government Shareholding 

In her dealings with the Company, Great Britain can only act in the 
capacity of a shareholder. This the British Government has always 
thoroughly understood. Under Article LI of the articles of association, 
one and the same shareholder is only entitled to command ten votes 
at the general meeting. This provision common to many leading 
concerns is obviously due to the desire to avoid the unrestricted 
preponderance of what are frequently called 'the big shareholders'. 

Lesseps wanted a universal company of which no State, no one body, 
no individual magnate could possibly become the sole chief. The 
British Government, by purchasing the shares belonging to the 
Khedive, strictly inherited the rights of that ruler, whose approval of 
the articles of association had sanctioned the restriction specified in 
Article LL Failing such restrictions, the preponderance of some one 
partner was to be feared a particularly grave risk in the case of the 
operation of a great sea route. 

By 'cornering* the shares, any one Government not necessarily the 
British Government, might have acquired exclusive control of the 
concern, contrary to the wishes both of the Viceroy of Egypt and 
the founder of the Company. The limitation of the power to vote is, 
in the present instance, conformable to the general interest, and surely 
any infringement of Article LI inadmissible in law and dangerous in 
fact would not fail to give rise to sharp diplomatic reactions. 

All such considerations are lost sight of by those who ingenuously 
suggest that the British Government should divide up their shares 
among 706 mandatories, forgetting that, under Articles XLIV and 
XLV of the articles of association, the general meeting is made up by 
all the shareholders owning at least 25 shares, and that no one is 
entitled to represent a shareholder at the meeting unless he is himself 
a member. Neither directly nor indirectly can the statutory maximum 
often votes be exceeded. 1 

Dividend Payments 

'Though during the war, when faced with the sudden falling off in 
traffic, the Company raised the canal transit dues, it did so with extreme 
moderation, and to an extent that was far from making up for the de- 
cline in the maritime traffic. For several years thereafter it experienced 
a sharp loss of revenue; in spite of which, almost immediately after 

1 This statement does not challenge but rather confirms the view that the British 
Government could legally divest itself of its shareholding, by disposing of them in parcels 
of 250 shares at current market rates to some 700 holders, individuals or corporate bodies 
interested in the traffic through the Canal who could, if they voted in agreement with each 
other, exercise through their 7,000 votes a controlling voice at General Meetings. 


1 64 REPLY OF THE MARQUIS DE VOGUtf 1933 

the war, it again proceeded to cut down its tariffs long before the 
receipts returned to the 1913 level, and at a time when most of the 
navigation companies were making substantial profits. 

'Not before the financial year 1925 did the gross dividend, expressed 
in pre-War gold francs, once more reach the value it had in 1913, and 
even to-day the shareholders find that their increased dividends barely 
make up for the reductions suffered during the war/ 1 

Rate of Net Dividends 

'Our critic would appear to have based his calculations on the average 
net returns distributed to the shareholders for the financial periods 
1928 to 1931 namely, 495 French francs and to have compared 
this figure with the nominal value of the shares, 1,250 francs, in round 
figures. This, indeed, is the only method whereby the percentage of 
income he quotes can be approximately arrived at. 

'It is not with the nominal capital alone of a concern that the divi- 
dend paid should be compared, but with the whole of the capital 
actually invested in the concern that is to say, in the case of the Suez 
Canal, with the original capital, to which should be added the propor- 
tion of profits spent on construction and improvements. Now on 
3ist December 1932 the capital actually invested amounted to 
Frs. 2,560,268,600. Thus the gross dividend distributed for 1932 
represents 15-6 per cent. 

'Moreover, any comparison of a dividend with the original nominal 
capital, or even with a capital actually invested, is necessarily devoid 
of significance/ 2 

1 Dividends during the six years 1914-19 averaged 22-9 per cent, (see page 115) as 
compared with 33 per cent, for the years 191113. Transit dues were raised from 6*25 
francs in 1914 to 8-50 francs in 1918. At no time, however, during or after the war were 
shipowners in general making profits on this scale. It is scarcely reasonable to suggest that 
Suez Canal shareholders are entitled to make good at the expense of world shipping 'the 
reductions suffered during the war'. 

2 The Company rightly claims that it has kept the Canal in good order and that it has 
spent over 2,200 million francs, the total of *les sommes distraites chaque annee des bene- 
fices pour les travaux d'amelioration*. In the first place, such expenditure was only sound 
business, and, secondly, it is folly to think that any large part thereof could have been 
distributed as profits. Part of Sir John Stokes's settlement was an agreement to spend an 
annual sum on improvements, and in 1883 the complaint of shipowners of all nationa- 
lities was that the Canal was insufficient for traffic. Improvement of facilities and limitation 
of dividends was then forced on the Company by the threat of applying to the Sultan for 
a concession for a new Canal. It is true that the British Law Officers held that M. de Lesseps 
had been granted a monopoly, but that opinion was never put to the only sound test. The 
real point is that the cost of the improvements, no less than the high dividends, came out 
of shipowners' pockets. One might say with truth that the old Canal has long ago, and 
several times, disappeared, and that the Canal of to-day has been built with the money 
of shipowners and their clients. Among the economies which have contributed to the 


Chap, xi REPLY OF THE MARQUIS DE VOGUfi 165 

Treatment of Shipowners 

'From the carrying into effect of the London programme down to 
and including the financial year 1932 on the one hand, the total 
amount of increased dividends paid to the shareholders, and, on the 
other hand, the total amount of the sums made over to the shipowners 
by way of successive abatements, it will be found that the shipowners' 
share exceeds that of the shareholders/ 

'In consequence of the abatements granted by the Suez Canal Com- 
pany since ist January 1921, the British Government is the poorer by 
^6,238,000, which means that the British taxpayer has had his taxes 
increased proportionately. Every abatement of Frs. 50 costs the British 
taxpayer 250,000, on the basis of the tonnage that passed through the 
canal in 1932, and reckoning the pound sterling at Frs. 8 7- 50.'* 

maintenance of a still handsome rate of dividend is, according to the Annual Report, 'la 
suppression presque totale de nouveaux travaux d'amelioration et le ralentissement de ceux 
qui sont en voie d'achevement'. The reduction of the grant for such works to the 'chiffre 
exceptionellement bas de 10 millions' (of francs) is doubtful policy. 

1 'The public mind is greatly concerned at the concentration of the control, in a few hands, 
of widely distributed wealth through prevailing forms of corporate organization and manage- 
ment. A corporation exists by authority of law, and there is no reason why such huge aggre- 
gations of capital should not be as closely supervised by government, either federal or state, 
as are life insurance companies and banks.' (Nicholas Murray Butler, February 1933). 

Writing on this subject in the Annual Report of the Company for 1932 the Marquis de 
Vogue says that the shareholders are entitled to 'une remuneration substantielle', that they 
have had in increasing degree up to the last few years except for the war period. He asks, 
'Celle d'aujourd'hui est elle excessive?' and answers 'No !' His reasons are, first, the addi- 
tional value given to the original capital by improvements, which has been considered 
above. Secondly, he says: 

'II faut aussi tenir compte de ce que les actionnaires d'aujourd'hui ne sont pas ceux du 
debut. La valeur de 1'entreprise s'etant accrue peu a peu, par 1'effet des travaux qui y 
furent efFectues, la valeur des titres a progresse meme pas. Ceux qui les ont rec.us en 
heritage ont vu, a chaque succession, augmenter leur estimation et les taxes correspondantes. 
Ceux qui les ont achetes de leur deniers, on sait quel prix, pouvaient compter sur la 
continuation de la politique qui avait amene ces plus-values. Ce serait me*connaitre les 
droits acquis par les uns et les autres que d'incriminer maintenant leur dividendes, et ce 
serait tromper leur confiance que de changer cette politique.' That is at least frank, but it 
is an extreme capitalist point of view which will not receive general acceptance. M. de 
Lesseps in previous years had to protest against the greed of speculators in Canal shares, and 
the widest public opinion is not likely to regard as tolerable in a private Company a policy 
of economic die-hardism that would be attacked in a Bon Marche*. In a time of world 
depression, companies which control raw materials or monopolize ways of transport should 
not, and seldom do, exploit their customers. Now in the last four years the total remunera- 
tion earned by each 25O-franc share was as follows: 

francs. francs. 

1929 .... 667 1931 . . . . 605 

1930 .... 650 1932 .... 510 

June 1931 and 1932 dividends were paid with the help of 50 million and ii million 


166 FURTHER REPLY BY MARQUIS DE VOGUfi 1933 

Purchases of Plant by Canal Company 

'Nothing could be calculated to mislead British opinion more com- 
pletely than the statement that our plant, our service fleet, &c., are 
almost entirely built in France. 

*For the last ten years our purchases of machinery or raw materials 
made in France amount to Frs. 200,000,000, those made in Great 
Britain to Frs. 1 60,000,000.'* 

Management of the Canal Company 

'The Company has been taxed with extravagant management. As 
a matter of fact, in the course of the last two financial years it has 
effected an all-round saving of Frs. 67,000,000 that is, 25 per cent. 
cutting down its expenses on personnel by 27 per cent, and reducing 
the number of its agents or operatives by 22 per cent.' 2 

A few days later, on I2th June, the Proceedings of the Annual 
General Meeting of the Suez Canal Company were enlivened by a 
further apologia on the part of the President, couched in terms more 
suitable to a French audience, to which it was delivered, than to the 
British public to whom the memorandum of 9th June was addressed. 
He denounced *un copieux memoire, monument d'erreur et de malveill- 
ance' and, after haughtily declaring 'nous pouvionstenir pour negligeables 
ces attaques ridicules', asserted that 'leur auteur prouve, a tout le moins, 
qu'il ignore les choses dont il parle ou qu'il ne les comprend pas, ou 
qu'une mauvaise querelle peut devenir un bon tremplin electoral'. 3 

francs respectively, withdrawn from the Special Reserve which had been well fattened 
with surplus profits in earlier years. An average dividend exceeding 24 per cent, in four 
years of unparalleled depression may well excite envy and comment. If it be replied that 
these rates are paid in depreciated francs worth only one-fifth of a pre-War franc, one may 
answer by asking why, when the French Government devalued the franc in the national 
interest, the Suez Canal Company should expect to retain the advantages of the old 
economy. Accounts must be made up in the currencies of the world of to-day, not in 
those of a world that is dead and gone. One might ask, further, whether gold or silver 
francs predominated in France in the 'sixties. 

1 I am glad to give the fullest publicity to these figures, which have never before been 
published; queries in the House of Commons failed to elicit the information, and Sir Ian 
Malcolm, in his numerous contributions to the press, never mentioned them, nor, apparently, 
was the Department of Overseas Trade in possession of the facts. It is not, however, dis- 
puted that very few British-born subjects find employment with the Company. 

2 Here again I am particularly glad to be able to give publicity to the figures. They are 
the more satisfactory in that Sir Ian Malcolm's article in The National Review showed in 
successive editions (it appears to have been reprinted as a tract by the Suez Canal Company) 
a steady increase in the number of employees in post- War years, and the Chancellor of the 
Exchequer stated in December 1931 that the Company had already at that time done all 
that it possibly could to reduce expenditure. 

3 I yield to none in my respect for the discrimination, sagacity, and public spirit of the 
electors of North and West Hertfordshire, but I must on their behalf disclaim the suggestion 


Chap, xi FURTHER REPLY BY MARQUIS DE VOGOtf 167 

His defence of the Company began as usual by a reference to the 
early days when M. de Lesseps had to struggle against British opposi- 
tion and by his fervour succeeded in inspiring French capitalists, large 
and small, to provide the capital for an enterprise which every one 
thought was extraordinarily risky. Does not such audacity, such faith, 
it was asked, deserve a rich reward? We may indeed grant all that 
has been alleged against British statesmen. We must wholeheartedly 
admire the genius of Ferdinand de Lesseps and the courage of the 
French investor. It still remains true that in the middle 'seventies the 
Company was on the verge of financial collapse and arbitrarily altered 
the basis on which dues were charged in a manner which brought it 
into conflict with the shipowners of Europe and with the Sublime 
Porte, the author of the concession. It was an Englishman, Colonel 
John Stokes, R.E., who negotiated with the British and Turkish 
Governments terms of a voluntary settlement which enabled the 
Company to improve the Canal and put its finances on a sound basis. 
Those terms included a temporary surtax of 3 francs per net ton, 
Suez Canal measurement, in addition to the 10 francs specified in the 
Concession as a maximum. The surtax was reduced at a very gradual 
rate, 10 francs not being again reached until 1884. During the ten 
years 1874-83 British tonnage averaged 78-3 per cent, of the total 
tonnage using the Canal, so that the surtax was no mere 'gesture' but 
a very solid contribution on the part of British shipowners, which 
might now that the passions of the 'fifties and 'sixties have had time 
to die down be regarded as offsetting former shortcomings. 

The President of the Company further maintained that 

*En ce qui concerne Tincidcnce de notre tarif sur les prix de marchandises, il est 
facile d'etablir par de statistiques indiscutables, qu'elle est tres faible. C'est ainsi 
que pour Tannee 1932, ou les prix ont ete particulierement bas, elle n'a que tres 
exceptionellement depasse 3 pour cent. Une detaxe, si importante qu'on puisse la 
supposer, n'aurait done pas sur les prix un effet appreciable; combien ils sont plus 
lourdement frappes par les droits de douane et par la guerre de monnaies.' 

One would wish to see these indisputable statistics'; practising stati- 
cians rarely see them. In any case a general rate of 3 per cent., or 
any other figure, is valueless, for every one knows that bulky goods 
of small value cannot stand even a low rate whereas valuable goods of 
relatively small bulk can easily bear a high rate. In time of depression 
every charge becomes burdensome though in prosperity it is little felt. 

of the Marquis de Vogue* that my views on the Suez Canal had any effect on their recent 
decision, or that, in making public in March 1933 my considered opinions on the subject, 
I had in mind the possibility of an electoral campaign consequent on the lamented death of 
Lord Knebworth some months later. 


168 FURTHER REPLY BY MARQUIS DE VOGt) 1933 

M. de Vogue might have addressed the remark about customs dues 
to his own government; my object was rather to bring the force of 
public opinion to bear on a private corporation. 

It was further maintained that the Canal Dues had not injured 
international trade, for Vil est vrai que les envois de TEurope vers le 
Japon ont baisse de moitie, ceux du Japon vers TEurope ont triple; 
le droit de transit n'y est pour rien'. On the contrary, even in ordinary 
times vessels outward from Europe through the Canal are always more 
lightly laden than those coming inwards, and in these latter years when 
the exports of manufacturing countries have been falling off, for well- 
known reasons, the excess of empty cargo space has raised the burden 
of rates on the weight of cargo and on its diminishing value to 
heights which may easily be unbearable. Japan's exports, on the other 
hand, have been helped by currency depreciation and by other factors. 

'D'autre part', the defence goes on : 

'Le Board of Trade etablit que, dc 1931 k 1932, les importations anglaises de 
toute provenance ont diminue de 18-4 pour cent.; en provenance des pays au dela 
de Suez, de 3-8 pour cent seulemcnt. Pendant la meme periode, les exportations 
anglaises ont flechi, dans rensemble, de 6-6 pour cent. ; vers les pays au dela de Suez, 
elles ont augmente de 4-6 pour cent. Ou est done 1'influence deprimante de notre 
tarif?' 

The argument may be described as an example of the fallacy of the 
single cause. It would only be valid if all goods of whatever kind or of 
whatever origin were on every occasion subject to the same price move- 
ments. As a further contribution to the discussion the following figures 
(in net tons) from the 'Accounts relating to Trade and Navigation of 
the United Kingdom* for December of 1931 and 1932 regarding 
movement of British and Foreign shipping at British ports are 
submitted : 


Entere 
1929. 


d from 
1932. 


Cleat 
1929. 


-ed at 
1932. 


E. Africa, Persian Gulf, India .... 
Eastern Asia, Pacific Islands .... 

Countries beyond Suez ..... 

Australia and New Zealand .... 
All Areas ....... 


3> 6 *5 
2,430 


3> I 5 I 
2,323 


2,943 
i974 


2,310 
1,827 


6,055 

2,263 
62,701 


5474 

2,732 
56,060 


4,917 


4,137 


2,059 
68,680 


i>532 
53*39 


This gives quite a different picture from that painted in values, but it 
is just as untrustworthy as a measure of magnitude of trade. Entrances 
from East Africa and Asia may be presumed to have used the canal, 
and between 1929 and 1932 they declined by 9-6 per cent., whereas 
entrances from all areas fell off by 10-6 per cent.; similarly the reduc- 


Chap, xi FURTHER REPLY BY MARQUIS DE VOGt)fi 169 

tions in clearances were 15-9 per cent, and 22*4 per cent, respectively. 
All that one can conclude is that in other areas than Asia and East 
Africa there were stronger forces making for the reduction of trade, 
strong enough to outweigh the advantages of not having to pay canal 
dues. 

When he had to consider trade with the Antipodes M. de Vogue 
had to admit a reduction in canal traffic; in and out it was 3,942,000 
net tons in 1929, 3,601,000 net tons in 1931, and 3,334,000 tons in 
1932. But he boldly converted this disagreeable fact into an argument 
in defence of the canal : 

'Qu'ellc ait un monopole, il est un peu pueril de pretendre, puisqu'il y a d'autres 
voies sur les mers, et qu'une fraction de notre clientele, indiffdrente a la longueur 
du temps, prefere passer par le Cap de Bonne-Esperance'. 

In the Report it was stated that Australian wheat and Java sugar had 
gone by the Cape route 'dans une proportion beaucoup plus large que 
de coutume'. The explanation given was 'en p^riode de depression 
economique, en effet, le gain de temps que procure le passage par le 
Canal presente moins d'int^ret pour Tarmateur'. Precisely; the heavier 
steaming expenses by the longer route are then less important to the 
shipowner and shipper than the canal dues, showing that the latter 
are relatively heavy, which is just what the critics have maintained. 
On the other hand, there was an increase from 3,310,000 tons in 1931 
to 3,823,000 tons of mineral oil in 1932 'les petr6les du Golfe 
Persique grace au retour via Suez d'un grand nombre de navires- 
citernes qui, en 1931, avaient deserte cette route pour utiliser celle 
du Cap'. No explanation is given of this change. 

On i gth May, 1 I read before the Royal Society of Arts a paper on 
'The Suez and Panama Canals a comparison*, the substance of 
which is reproduced in the foregoing chapter. On ist June, The 
Nineteenth Century and After published an article under my signature 
entitled 'The Suez Canal barrier or highway ?' in which I briefly 
summarized some of the views expressed in this book. To this article 
no reply has yet (October 1933) appeared. I am far from suggesting 
that any valid arguments can or should be drawn from this circum- 
stance. I merely record the fact. 

1 Published on 9th June 1933, vol. Ixxxi, No. 4203. 


CHAPTER XII 
CONCLUSIONS 

IT now remains to gather together the several threads of argument 
in the foregoing pages, in which I have dealt at some length with 
'the seed-bed of the past'. The trees that were planted seventy or 
eighty years ago by diplomatists and engineers, soldiers and financiers, 
have borne fruit, and the result, taken as a whole, is worthy of 
their labours. But the time has come to make changes: in some 
directions pruning is required, both of branches and of roots, as 
in an orchard when trees are making wood and leaf at the expense of 
the fruit. 

The canal itself is a product of the imagination, the pertinacity, and 
the diplomatic and financial foresight of one man Ferdinand de 
Lesseps though all these qualities were in some degree shared by 
the Khedives who supported and befriended him. It is the product 
of French technical and administrative skill, and of Egyptian and 
French capital. It has proved highly profitable to the shareholders, 
who except for a very brief period indeed have never been without the 
certainty of adequate dividends. It has almost the features of a mono- 
poly, and the owners charge, in practice, as much as, and sometimes, 
as I have suggested, more than all the traffic will bear. 

The possession by the British Government of nearly 46 per cent, 
of the shares, without corresponding voting power or representation 
on the Board, has not had the effects anticipated by Disraeli, and I have 
therefore proposed that the shares now held by Government should be 
sold, at current prices, in blocks of 250 shares, to persons or bodies 
corporate owning allegiance to His Majesty, who could thus, by their 
collective action as shareholders, acquire control of the Company. 
Such a course would, no doubt, as anticipated by the Marquis de Vogud, 
provoke sharp diplomatic reactions, whence might arise in due course 
a solution consistent with the interests of world shipping and trade 
between Europe and Asia. The total volume of world trade continues 
to decrease, and the immediate outlook for shipping, insurance, banking, 
and harbour interests, which are predominantly British, is not favour- 
able. To counteract the tendency of all countries to adopt, at whatever 
cost, a policy of national self-sufficiency, every channel of trade must be 
cleared of obstructions. One of the greatest of such channels is beyond 
all question the Suez Canal. One of the greatest of obstructions is, if 
the arguments set forth in this book are tenable, the present level of 
Suez Canal dues. 


n METHODS OF REVISION 171 

Other methods of securing a revision of the existing level of dues 
have indeed been propounded. Recourse might be had to Article 1 9 
of the League of Nations Covenant, but that procedure has never yet 
been seriously attempted and the omens are not favourable, for were 
it once applied with success the flood-gates of peaceful revision would 
be opened, to the discomfiture of many. 

It has been suggested that the question might be dealt with by the 
Communications and Transit Commission of the League, but neither 
the achievements nor the composition of that body give prospects of 
success in handling such a problem. It has also been suggested that 
the question might be placed on the agenda of the World Economic 
Conference when it next meets. It is however clear that, in the language 
of the stable, that horse will not run. 

The Egyptian Government itself might raise the question by means 
of a circular letter to the Maritime Powers, as did Turkey in 1873, 
but the international status of Egypt and its peculiar relationship with 
Great Britain make it doubtful whether such a procedure would be 
helpful. 

Lastly, the question may be left, so far as concerns official action 
by the maritime powers, to solve itself. In favour of this policy it is 
argued that if canal dues are too high, fewer ships will use the canal, 
more will go via Panama or the Cape, and the Company will be com- 
pelled to lower dues or to levy them on some simple ad valorem basis, 
depending on the nature and quantities of cargo in each ship. This 
remedy is in the hands of shippers and shipowners, and it is not un- 
attractive. Longer sea journeys mean more ships at sea, and more 
employment for crews. Shipping is better so employed than lying in 
harbour, and would constitute a mobile reserve ready for use in other 
directions when needed. If all cargo (not passenger) ships between 
Great Britain and Asia found it desirable to go round the Cape the 
result might, on balance, be beneficial to this country, but for the exist- 
ence, in certain markets, of American competition via Panama. This 
proposal, however, ignores the possibility that the Canal Companymight 
seek to recoup themselves by charging heavier dues on that portion of 
the traffic which is compelled to use the canal at whatever cost, viz. 
passenger ships and those to or from Indian ports and Ceylon. 

All these solutions are temporary, in that they neither take into 
account the retrocession of the canal to Egypt in 1968, nor pro- 
vide a basis for the renewal of the Concession on lines which, by 
limiting profits, will safeguard the interests of international trade, whilst 
securing to Egypt a fixed sum, by way of quit-rent, in consideration 
of the administrative and other responsibilities imposed on her by the 
existence of the canal. This involves negotiations between Great 


172 NEED FOR REVISION 1933 

Britain and France. The sooner such discussions are undertaken, the 
greater the prospects of success, and of satisfaction for all parties. 
Canal traffic is falling to a point which forecasts the Golden Age, when, 
as Virgil wrote in the fourth Eclogue, 

No more shall men in tall ships cross the seas, 

Nor merchandise be carried in the same: 

All countries then all good things shall produce. 

The legal position and system of administration of the canal has 
existed unaltered since 1854: it is no longer suited to the needs of the 
world. It is an anachronism. Unchanging political or commercial 
organizations are no more possible than unchanging species. What 
is living is subject to change; what is stationary has lost the power of 
adaptation and in a changing world must die, and in the process affect 
many other interests. 

The task before us is to introduce into the control and administra- 
tion of the Suez Canal the changes necessary to enable it to play in the 
future the important role which it has occupied in the past. In writing 
this book I have had before me no other object than to stimulate action 
on these lines. 


APPENDICES 

No. i 

Acte de Concession du Vice-Rot d'Egypte pour la Construction et V Exploita- 
tion du Canal Maritime de Suez et Dependances entre la Mer Mediter- 
rannee et la Mer Rouge. Caire, le 30 Novembre, 1854.* 

NOTRE ami M. Ferdinand dc Lesseps ayant appele notrc attention sur les avantages 
qui resulteraient pour 1'Egypte de la jonction de la Mer Medi terra nee et de la 
Mer Rouge par une voie navigable pour les grands navires, et nous ayant fait con- 
naitre la possibilite de constituer, a cet effet, une Compagnie formee de capitalistes 
de toutes les nations, nous avons accueilli les combinaisons qu'il nous a soumises, 
et lui avons donne, par ces presentes, pouvoir exclusif de constituer et de diriger 
une Compagnie Universelle pour le percement de 1'Isthme de Suez et 1'exploita- 
tion d'un Canal entre les deux mers, avec faculte d'entreprendre ou de faire 
entreprendre tous travaux et constructions, a la charge par la Compagnie de dormer 
prealablement toute indemnite aux particuliers en cas d'expropriation pour cause 
d'utilite publique; le tout dans les limites et avec les conditions et charges dter- 
minees dans les Articles qui suivent. 

Article i er . M. Ferdinand de Lesseps constituera une Compagnie, dont nous 
lui confions la direction, sous le nom de Compagnie Universelle du Canal Maritime 
de Suez, pour le percement de 1'Isthme de Suez, 1'exploitation d'un passage propre 
a la grande navigation, la fondation ou 1'appropriation de deux entrees suffisantes, 
1'une sur la Mediterranee, 1'autre sur la Mer Rouge, et 1'etablissement d'un ou de 
deux ports. 

Art. 2. Le Directeur de la Compagnie sera toujours nommc par le Gouverne- 
ment figyptien, et choisi, autant que possible, parmi les actionnaires les plus 
interesses dans 1'entreprise. 

Art. 3. La duree de la Concession est de quatre-vingt-dix-neuf ans, a partir du 
jour de 1'ouverture du Canal des deux mers. 

Art. 4. Les travaux seront executes aux frais exclusifs de la Compagnie, a 
laquelle tous les terrains necessaires n'appartenant pas a des particuliers seront 
concedes a titre gratuit. Les fortifications que le Gouvernement jugera a propos 
d'etablir ne seront point a la charge de la Compagnie. 

Art. 5. Le Gouvernment figyptien recevra annuellement de la Compagnie 
15 pour cent des benefices nets resultant du bilan de la Socie'te', sans prejudice des 
interets et dividendes revenant aux actions qu'il se reserve de prendre pour son 
compte lors de leur emission et sans aucune garantie de sa part dans l'excution 
des travaux ni dans les operations de la Compagnie. Le reste des benefices nets 
sera reparti ainsi qu'il suit: 

75 pour cent au profit de la Compagnie; 

10 pour cent au profit des membres fondateurs. 

Art. 6. Les tarifs des droits de passage du Canal de Suez, concertes entre la 
1 From Command Paper, C. 3805. 1883. 


174 TEXT OF FIRST CONCESSION 1854 

Compagnie et le Vice-Roi d'Egypte et per^us par les agents de la Compagnie, 
seront toujours egaux pour toutes les nations, aucun avantage particulier ne pou- 
vant jamais tre stipule au profit exclusif d'aucune d'elles. 

Art. j. 1 Dans le cas oil la Compagnie jugerait necessaire de rattacher par 
une voie navigable le Nil au passage direct de Tlsthme, et dans celui ou le Canal 
Maritime suivrait un trace indirect desservi par Feau du Nil, le Gouvernement 
gyptien abandonnerait a la Compagnie les terrains du domaine public aujourd'hui 
incultes qui seraient arroses et cultives a ses frais ou par ses soins. 

La Compagnie jouira, sans impots, des dits terrains pendant dix ans, a partir 
du jour de Touverture du Canal; durant les quatre-vingt-neuf ans qui resteront a 
s'ecouler jusqu'k Texpiration de la Concession, elle payera la dime au Gouverne- 
ment figyptien; apres quoi, elie ne pourra continuer k jouir des terrains ci-dessus 
mentionnes qu'autant qu'elle payera au dit Gouvernement un impot egal a celui 
qui sera affecte aux terrains de meme nature. 

Art. 8. 1 Pour eviter toute difficulte au sujet des terrains qui seront abandonnes 
a la Compagnie concessionnaire, un plan dresse par M. Linant Bey, notre Com- 
missaire Inge*nieur aupres de la Compagnie, indiquera les terrains concedes, tant 
pour la traversee, et les etablissements du Canal Maritime et du Canal d'Alimenta- 
tion derive du Nil, que pour les exploitations de culture, conformement aux 
stipulations de 1'Article 7. 

II est, en outre, entendu que toute speculation est, des a present, interdite sur les 
terrains du domaine public & conceder, et que les terrains appartenant anterieure- 
ment a des particuliers, et que les proprietaires voudront plus tard faire arroser par 
les eaux du Canal d'Alimentation execute aux frais de la Compagnie, payeront une 
redevance de . . . par feddan cultive 2 (ou une redevance fixee amiablement entre 
le Gouvernement figyptien et la Compagnie). 

Art. 9. II est enfin accorde a la Compagnie concessionnaire la faculte d'extraire 
des mines et carrieres appartenant au domaine public, sans payer de droits, tous les 
mat^riaux necessaires aux travaux du Canal et aux constructions qui en dependront, 
de meme qu'elle jouira de la libre entree de toutes les machines et materiaux qu'elle 
fera venir de I'dtranger pour Pexploitation de sa Concession. 

Art. 10. A Texpiration de la Concession, le Gouvernement figyptien sera 
substitue a la Compagnie, jouira sans reserve de tous ses droits et entrera en pleine 
possession du Canal des deux mers et de tous les etablissements qui en dependront. 
Un arrangement amiable ou par arbitrage determinera 1'indemnite & allouer a la 
Compagnie pour 1'abandon de son materiel et des objets mobiliers. 

Art. II. Les Statuts de la Societe* nous seront ulterieurement soumis par le 
Directeur de la Compagnie et devront etre revetus de notre approbation. Les 
modifications qui pourraient etrc introduites plus tard devront prealablement 
recevoir notre sanction. Les dits Statuts mentionneront les noms des fondateurs, 
dont nous nous reservons d'approuver la liste. Cette liste comprendra les personnes 
dont les travaux, les Etudes, les soins ou les capitaux auront anterieurement con- 
tribue a 1'execution de la grande entreprise du Canal de Suez. 

Art. 12. Nous promettons enfin notre bon et loyal concours et celui de tous 

1 Abrogated by Art. 3 of Convention of 22nd February, 1866 (Hertslet's State Papers, 
vol. Ivi, p. 279). 

2 Le feddan dgyptien correspond a peu pres a un demi-hectare. 


Jpp.i TEXT OF SECOND CONCESSION 175 

les fonctionnaires de 1'Egypte pour faciliter Pexecution et 1'exploitation des presents 
pouvoirs. 

Caire^ le 30 Novembre^ 1854. 

A mon devoue ami, de haute naissance et de rang <leve, M. Ferdinand de Lesseps. 
La Concession accordee a la Compagnie Universelle du Canal de Suez devant 
tre ratifiee par Sa Majeste Imperiale le Sultan, je vous remets cette copie pour que 
vous la conserviez par devers vous. Quant aux travaux relatifs au creusement du 
Canal de Suez, ils ne seront commences qu'apres rautorisation de la Sublime Porte. 

(Cachet du Vice-Roi.) 
Le 3 Ramadan^ 1274. 

Appendix 2 

Acte de Concession du Vice-Roi d'Egypte^ et Cahier des Charges^ -pour la 
Construction et T Exploitation du C anal Maritime de Suez etDependances. 
Alexandrie, le 5 Janvier, 1856. 

Nous, Mahomed Said Pacha, Vice-Roi d'figypte, 

Vu notre Acte de Concession, en date du 30 Novembre, 1 854, 1 par lequel nous 
avons donne a notre ami, M. Ferdinand de Lesseps, pouvoir exclusif a Peffet de 
constituer et diriger une Compagnie Universelle pour le percement de PIsthme 
de Suez, Pexploitation d'un passage propre a la grande navigation, la fondation ou 
Pappropriation de deux entrees suffisantes, Pune sur la Mediterranec, Pautre sur la 
Mer Rouge, et Petablissement d'un ou deux ports: 

M. Ferdinand de Lesseps nous ayant represente que, pour constituer la Com- 
pagnie susindiquee dans les formes et conditions generalement adopters pour les 
Societes de cette nature, il est utile de stipuler d'avance, dans un acte plus detaille 
et plus complet, d'une part, les charges, obligations, et redevances auxquelles cette 
Societe sera soumise; d'autre part, les concessions, immunites, et avantages aux- 
quels elle aura droit, ainsi que les facilites qui lui seront accord^es pour son 
administration, 

Avons arretc comme suit les conditions de la Concession qui fait Pobjet des 
pr&entes: 

I. Charges. 

Article i er . La Societe fondee par notre ami M. Ferdinand de Lesseps, en vertu 
de notre Concession du 30 Novembre, 1854, devra executer ses frais, risques, et 
perils, tous les travaux et constructions ne"cessaires pour Petablissement: 

1. D'un Canal approprie k la grande navigation maritime, entre Suez, dans la 
Mer Rouge, et le Golfe de Peluse, dans la Mer Mediterranee; 

2. D'un Canal d'irrigation, et approprie a la navigation fluviale du Nil, joignant 
le fleuve au Canal Maritime susmentionne ; 

3. De deux branches d'irrigation et d'ali mentation derive'es du precedent Canal,, 
et portant leurs eaux dans les deux directions de Suez et de Peluse; 

1 No. i. 


176 TEXT OF SECOND CONCESSION 1856 

Les travaux seront conduits de maniere a etre termines dans un delai de six 
anne*es, sauf les empchements et retards provenant de force majeure. 

Art. 2. La Compagnie aura la faculte d'executer les travaux dont elle est 
charged par elle-mdme et en regie, ou de les faire executer par des entrepreneurs 
au moyen d 'adjudications ou de marches a forfait. Dans tons les cas, les quatre 
cinqutimes au moins des ouvriers employes a ces travaux seront Egyptlens. 1 

Art. 3. Le Canal approprie a la grande navigation maritime sera creuse a la 
profondeur et a la largeur fixees par le programme de la Commission Scientifique 
Internationale. 

Conformement a ce programme, il prendra son origine au port meme de Suez; 
il empruntera le bassin dit les Lacs Amers et le Lac Timsah; il viendra deboucher 
dans la Mediterranee en un point du Golfe de Peluse qui sera determine dans les 
projets definitifs a dresser par les Ingenieurs de la Compagnie. 

Art. 4. Le Canal d'irrigation approprie a la navigation fluviale dans les condi- 
tions du dit programme, prendra naissance a proximite de la ville du Caire, suivra 
la vallee ('ouadee') Toumilat (ancienne terre de Gessen), et debouchera dans le 
Grand Canal Maritime au Lac Timsah. 

Art. 5. Les derivations du Canal precedent s'en detacheront en amont du 
debouche dans le Lac Timsah; de ce point elles seront dirigees, d'un cote sur Suez, 
de Tautre cote sur Peluse, parallelement au Grand Canal Maritime. 

Art. 6. Le Lac Timsah sera converti en un port interieur propre a recevoir des 
batiments du plus fort tonnage. 

La Compagnie sera tenue, en outre, si cela est necessaire: (i) de construire un 
port d'abri a Pentree du Canal Maritime dans le Golfe de Peluse; (2) d'ameliorer 
le port et la rade de Suez, de maniere a ce que les navires y soient egalement abrites. 

Art. 7. Le Canal Maritime, les ports en dependant, ainsi que le Canal de 
jonction du Nil et le Canal de derivation, seront constamment entretenus en bon 
e"tat par la Compagnie et a ses frais. 

Art. 8. Les proprietaires riverains qui voudront faire arroser leurs terres au 
moyen de prises d'eau tirees des Canaux construits par la Compagnie, pourront en 
obtenir d'elle la concession moyennant le pavement d'une indemnite ou d'une 
redevance dont le chiffre sera fixe dans les conditions de 1' Article 1 7 ci-pres. 

Art. 9. Nous nous reservons de deleguer, au siege administratif de la Com- 
pagnie, un Commissaire Special dont le traitement sera paye par elle, et qui 
representera, pres de son Administration, les droits et les interets du Gouverne- 
ment figyptien pour Texecution des dispositions du present. 

Si le siege administratif de la Societe est etablie ailleurs qu'en figypte, la com- 
pagnie sera tenue de se faire representer a Alexandrie par un Agent Superieur 
nanti de tous les pouvoirs necessaires pour assurer la bonne marche du service et 
les rapports de la Compagnie avec notre Gouvernement. 

2. Concessions. 

Art. io. 2 Pour la construction des Canaux et dependances mentionnes dans les 
Articles qui prc&dent, le Gouvernement Egyptien abandonne a la Compagnie, 

1 Abrogated by Art. i of Convention of 22nd February, 1866 (Hertslet's State Papers, 
vol. Ivi, p. 276). 

2 Abrogated by Art. 3 of Convention of 22nd February, 1866 (ibid., vol. Ivi, p. 279). 


Afp. 2 TEXT OF SECOND CONCESSION 177 

sans aucun impot ni redevance, la jouissance de tous les terrains n'appartenant pas 
a des particuliers, qui pourront etre necessaires. 

II lui abandonne egalement la jouissance de tous les terrains aujourd'hui incultes 
n'appartenant pas a des particuliers, qui seront arrose"s et mis en culture par ses 
soins et a ses frais, avec cette difference: (i) que les terrains compris dans cette 
derniere categoric seront exempts de tout impot pendant dix ans seulement, a dater 
de leur mise en rapport; (2) que passe ce terme, ils seront soumis, pendant le reste 
de la Concession, aux obligations et aux impots auxquels seront assujetties, dans 
les memes circonstances, les terres des autres provinces de 1'figypte; (3) que la 
Compagnie pourra ensuite, par elle-meme ou par ses ayants-droit, conserver la 
jouissance de ces terrains et des prises d'eau necessaires a leur fertilisation, a charge 
de payer au Gouvernement figyptien les impots etablis sur les terres dans les m^rnes 
conditions. 

Art. ii. 1 Pour determiner Fetendu et les limites des terrains concds a la 
Compagnie, dans les conditions du i et du 2 de 1'Article 10 qui precede, il est 
refere aux plans ci-annexes; etant explique qu'aux dits plans les terrains concedes 
pour la construction des Canaux et dependances, sans impot ni redevance, con- 
formement au I, son teintes en noir, et que les terrains concedes pour ctre mis en 
culture en payant certains droits, conformement au 2, sont teintes en bleu. 

Sera considere comme nul tout act fait posterieurement a notre acte du 
30 Novembre, 1854, qui aurait pour consequence de creer a des particuliers, 
contre la Compagnie, ou des droits a indemnite qui n'existaient pas alors sur les 
terrains, ou des droits a indemnite plus considerables que ceux auxquels ils auraient 
pu pretendre a cette epoque. 

Art. I2. 1 Le Gouvernement figyptien livrera, s'il y a lieu, a la Compagnie, les 
terrains de propriete particuliere dont la possession sera necessaire a Fex^cution 
des travaux et a 1 'exploitation de la Concession, a charge par elle de payer aux 
ayants-droit de justes indemnites. 

Les indemnites d'occupation temporaire ou d'expropriation definitive seront, 
autant que possible, reglees amiablement; en cas de disaccord, elles seront fixes 
par un Tribunal Arbitral procedant sommairement et compose: (i) d'un arbitre 
choisi par la Compagnie; (2) d'un arbitre choisi par les interesses; (3) d'un tiers 
arbitre designe par nous. 

Les decisions du Tribunal Arbitral seront ex^cutoires immediatement et sans 


Art. 1 3. 2 Le Gouvernement Egyptien accorde a la Compagnie concessionaire, 
pour toute la duree de la Concession, la faculte d'extraire des mines et carrieres 
appartenant au domaine public, sans payer aucun droit, impot ni indemnite, tous 
les materiaux necessaires aux travaux de construction et d'entretien des ouvrages 
et etablissements dependant de Tentreprise. 

II exonere, en outre, la Compagnie de tous droits de Douane, d'entree et autres, 
pour 1'introduction en figypte de toutes machines et matieres quelconques qu'elle 
fera venir de Fetranger pour les besoins de ses divers services en cours de construc- 
tion ou d'exploitation. 

1 Abrogated by Art. 3 of Convention of 22nd February, 1866 (Hertslet's State Papers 
vol. Ivi, p. 279). 

2 Abrogated by Art. i of Convention of 2jrd April, 1869. 


178 TEXT OF SECOND CONCESSION 1856 

Art. 14. Nous declarons solennellement, pour nous et nos successeurs, sous la 
reserve de la ratification de Sa Majeste Imperiale le Sultan, le Grand Canal Mari- 
time de Suez a Pluse et les ports en dependant, ouverts a toujours, comme passages 
neutres, tout navire de commerce traversant d'une mer a Pautre, sans aucune 
distinction, exclusion, ni preference de personnes ou de nationalites, moyennant le 
payement des droits et Pexcution des reglements etablis par la Compagnie 
Universelle concessionnaire pour Pusage du dit Canal et dependances. 

Art. 1 5. En consequence du principe pose dans PArticle precedent, la Compagnie 
Universelle concessionnaire ne pourra, dans aucun cas, accorder a aucun navire, 
Compagnie, ou particulier, aucuns avantages ou faveurs qui ne soient accordes 
a tous autres navires, Compagnies ou particuliers, dans les memes conditions. 

Art. 1 6. La duree de la Societe est fixee k quatre-vingt-dix-neuf annees, a 
compter de Pachevement des travaux et de Pouverture du Canal Maritime a la 
grande navigation. 

A Pexpiration de cette periode, le Governement figyptien rentrera en possession 
du Canal Maritime construit par la Compagnie, a charge par lui, dans ce cas, de 
reprendre tout le materiel et les approvisionnements affectes au service maritime 
de Pentreprise et d'en payer a la Compagnie la valeur telle qu'elle sera fixee, soit 
amiablement, soit a dire d'experts. 

Neanmoins, si la Compagnie conservait la Concession par periodes successives 
de quatre-vingt-dix-neuf annees, le prelevement stipule au profit du Gouvernement 
figyptien par PArticle 18 ci-apres serait porte pour la seconde periode a 20 pour 
cent, pour la troisieme periode a 25 pour cent et ainsi de suite, k raison de 5 pour 
cent d'augmentation pour chaque periode, sans que toutefois ce prelevement 
puisse jamais depasser 35 pour cent des produits nets de Pentreprise. 

Art. 17. Pour indemniser la Compagnie des depenses de construction, d'entre- 
tien, et d'exploitation qui sont mises a sa charge par les presentes, nous Pautorisons, 
des k present, et pendant toute la duree de sa jouissance, telle qu'elle est determined 
par les paragraphes I et 3 de PArticle precedent, a etablir et percevoir, pour le 
passage dans les Canaux et les ports en dependant, des droits de navigation, de 
pilotage, de remorquage, de halage, ou de stationnement, suivant des tarifs qu'elle 
pourra modifier a toute epoque, sous la condition expresse: 

1. De percevoir ces droits, sans aucune exception ni faveur, sur tous les navires, 
dans des conditions identiques; 

2. De publier les tarifs, trois mois avant la mise en vigueur, dans les capitales 
et les principaux ports de commerce des pays interesses; 

3. De ne pas exceder, pour le droit special de navigation, le chiffre maximum 
de 10 fr. par tonneau de capacite des navires et par tte de passager. 

La Compagnie pourra egalement, pour toutes les prises d'eau accordees a la 
demande de particuliers, en vertu de PArticle 8 ci-dessus, percevoir, d'apres des 
tarifs qu'elle fixera, un droit proportionnel a la quantite d'eau absorbee et a 
P6tendue des terrains arroses. 

Art. 1 8. Toutefois, en raison des concessions de terrains et autres avantages 
accordes a la Compagnie par les Articles qui precedent, nous reservons, au profit 
du Gouvernement figyptien, un prelevement de 15 pour cent sur les benefices 
nets de chaque anne"e, arre'tes et repartis par PAssemblee Generale des Actionnaires. 

Art. 19. La liste de membres fondateurs qui ont concouru par leurs travaux, 


Aft. 2 STATUTES OF SUEZ CANAL COMPANY 179 

leurs etudes, et leurs capitaux, a la realisation de Tentreprise avant la fondation dc 
la Soci^te", sera arretee par nous. 

Apres le prelevement stipule au profit du Gouvernement figyptien par 1'Article 
1 8 ci-dessus, il sera attribue, dans les produits nets annuels de Pentreprise, une part 
de 10 pour cent aux membres fondateurs ou a leurs Rentiers ou ayants-cause. 

Art. 20. Independamment du temps necessaire a Pexecution des travaux, notre 
ami et mandataire M. Ferdinand de Lesseps presidera et dirigera la Socie'te' comme 
premier fondateur, pendant dix ans a partir du jour ou s'ouvrira la peYiode de jouis- 
sance de la Concession de quatre-vingt-dix-neuf annees, aux termes de PArtide 16 
ci-dessus. 

Art. 21. Sont approuves les Status ci-annexes de la Societe cre"e sous la 
denomination de Compagnie Universelle du Canal Maritime de Suez, la presente 
approbation valant autorisation de constitution, dans la forme des Socidtds 
anonymes, a dater du jour ou le capital social sera entierement souscrit. 

Art. 22. Comme temoignage de Pinteret que nous attachons au succes de 
Pentreprise nous promettons a la Compagnie le loyal concours du Gouvernement 
figyptien, et nous invitons expressement par les prcsentes les fonctionnaires et 
agents de tous les services de nos Administrations a lui donner en toute circon- 
stance aide et protection. 

Nos Ingenieurs, Linant Bey et Mougel Bey, que nous mettons a la disposition 
de la Compagnie pour la direction et la conduite des travaux ordonns par elle, 
auront la surveillance superieure des ouvriers et seront charges de Texecution des 
Reglements qui conccrneront la mise en ceuvre des travaux. 

Art. 23. Sont rapportees toutes dispositions de notre Ordonnance du 30 Novem- 
bre, 1854, et autres qui se trouveraient en opposition avec les clauses et conditions 
du present Cahier des Charges, lequel fera seul loi pour la Concession a laquelle 
il s'applique. 

Fait a Alexandrie, le 5 Janvier ^ 1856. 

A mon devoue ami de haute naissance et de rang eleve, M. Ferdinand de Lesseps. 

La Concession accordee a la Compagnie Universelle du Canal de Suez devant 
etre ratifiee par Sa Majeste Imperiale le Sultan, je vous remets cette copie authen- 
tique, arm que vous puissiez constituer la dite Compagnie financiere. 

Quant aux travaux relatifs au percement de Tisthme, elle pourra les exporter 
elle-meme des que 1'autorisation de la Sublime Porte m'aura t accordee. 
Alexandrie^ le 26 Rebt-ul-Akher^ 1272 (5 Janvier^ 1856). 

(Cachet de Son Altesse le Vice-Roi.) 

Appendix 3 

Statuts de la Compagnie Universelle du Canal Maritime de Suez. 
Alexandrie^ le 5 Janvier, 1856. 

TITRE I. Formation et Objet de la Societe. Denomination. Siege. Durte. 

Article i er . II est forme*, entre les souscripteurs et proprtetaires des actions 
crees ci-apres, une Societe" anonyme sous la denomination de Compagnie Uni- 
verselle du Canal Maritime de Suez. 


180 STATUTES OF SUEZ CANAL COMPANY 1856 

Art. 2. Cette Societ a pour objet: 

1. La construction d'un Canal Maritime de grande navigation entre la Mer 
Rouge et la M6diterranee, de Suez au Golfe de Peluse. 

2. La construction d'un Canal de navigation fluviale et d'irrigation joignant le 
Nil au Canal Maritime, du Caire au Lac Timsah; 

3. La construction de deux Canaux de derivation, se detachant du precedent 
en amont de son d6bouch dans le Lac Timsah, et amenant ses eaux dans les deux 
directions de Suez et de Peluse; 

4. L'exploitation des dits Canaux et des entreprises diverses qui s'y attachent. 

5. Et 1'exploitation des terrains concedes. 

Le tout aux clauses et conditions de la Concession telle qu'elle resulte des 
Ordonnances de Son Altesse le Vice-Roi d'figypte, en date du 30 Novembre, 
1854,* et du 5 Janvier, 1856:* la premiere donnant pouvoir special et exclusif a 
M. de Lesseps de constituer et diriger, comrne premier fondateur President, une 
Soci&6 en vue de ces entreprises; la seconde portant Concession des dits Canaux 
et de leurs dependances a cette Societe, avec toutes les charges et obligations, tous 
les droits et avantages qui y sont attaches par le Gouvernement Egyptien. 

Art. 3. La Societe a son siege a Alexandrie et son domicile administratif a 
Paris. 

Art. 4. La Societe commence a dater du jour de la signature de Pacte social, 
portant souscription de la totalite des actions. Sa duree est egale a la duree de la 
Concession. 

Art. 5. Les comptes des d6penses faites anterieurement a la constitution de la 
Socit, soit par Son Altesse le Vice-Roi d'figypte, soit par M. Ferdinand de 
Lesseps agissant en vertu des pouvoirs dont il etait investi pour arriver a la realisa- 
tion de Tenterprise, seront regies par le Conseil d' Administration, qui en autorisera 
le remboursement a qui de droit. 

TITRE II. Fonds Social. Actions. Versements. 

Art. 6. Le fonds social est fixe a 200,000,000 fr., representes par 400,000 
actions, a raison de 500 fr. chacune. 

Art. 7. Les titres d'actions et d'obligations, dont le Conseil d'Administration 
determine la forme et le modele, sont li belles en langues Turque, Allemande, 
Anglaise, Fran^aise, et Italienne. 

Art. 8. Le montant de chaque action est payable en especes, dans la Caisse 
Sociale ou chez les representants de la Compagnie a Alexandrie, Amsterdam, 
Constantinople, Londres, New York, Paris, Saint Petersbourg, Vienne, Genes, 
Barcelone, et autres villes qui seraient designees par le Conseil d'Administration, 
au cours du change, soit sur Paris, soit sur Alexandrie, au choix de la Compagnie. 

Art. 9. Les versements s'operent conformement aux appels faits par le Conseil 
au moyen d'annonces publiees deux mois a Tavance par Tinsertion dans deux 
journaux, et a defaut de journaux, par Taffichage a la Bourse, dans les villes 
d&ignees a TArticle 8 ci-dessus. 

Art. 10. Si le Conseil juge qu'il n'y a pas lieu d'appeler, au moment de la 
souscription, le versement imm^diat de la parti e de capital necessaire, aux termes 

1 No. i. 2 No. 2. 


App. 3 STATUTES OF THE SUEZ CANAL COMPANY 181 

de P Article 1 2 ci-apres, pour remission des titres au porteur, le premier versement 
peut etre constate par la delivrance de certificats nominatifs provisoires. 

Ces certificats portent un numero d'ordre; ils sont detaches d'un registre a 
souche et timbres du timbre sec de la Compagnie. Ils sont signed par deux 
Administrateurs et un delegue du Conseil d'Administration. 

Art. ii. Les certificats nominatifs peuvent etre negocies, au moyen d'un 
transfert sign par le cedant et le cessionnaire et inscrit sur les registres etablis 
dans les bureaux de la Compagnie ou de ceux de ses representants designed a cet 
effet par le Conseil, partout ou besoin sera. 

Mention est faite du transfert au dos des titres par un Administrates ou par 
agent a ce commis. 

La Compagnie peut exiger que la signature des parties soit dument certified. 

Art. 12. Les souscripteurs primitifs et leurs cessionnaires restent soiidairement 
engages jusqu 'a u payement integral de 30 pour cent sur le montant de chaque action. 

Apres le versement de 30 pour cent sur le montant de chaque action, les 
certificats nominatifs peuvent etre echanges contre des titres au porteur provisoires. 

Art. 1 3. Chaque versement effectue est inscrit sur les titres auxquels il s 'applique. 

Apres liberation integrate operee, il est delivre aux porteurs des actions 
definitives. 

Art. 14. A defaut de versement aux epoques determiners Tinteret est du pour 
chaque jour de retard a raison de 5 pour cent par an. 

La Societe peut, en outre, faire vendre les actions dont les versements sont en 
retard. 

A cet effet, les numeros de ces actions sont publics, conformement aux prescrip- 
tions de 1'Article 9 ci-dessus pour les appels de fonds, avec indication des conse*- 
quences du retard apporte dans les versements. 

Deux mois apres cette publication, la Societe, sans mise en demeure et sans 
autre formalite ulterieure, a le droit de faire proceder a la vente des dites actions 
pour le compte et aux risques et perils des retardataires. 

Cette vente est faite sur duplicata, en une ou plusieurs fois, a la Bourse de 
Paris ou a celle de Londres, par le ministere d'un agent de change. 

Les titres anterieurs des actions ainsi vendues deviennent nuls de plein droit, 
par le fait meme de la vente; il est delivre aux acquereurs des titres nouveaux qui 
portent les memes numeros et qui sont seuls valables. 

En consequence, tout titre qui ne porte pas la mention reguliere des versements 
exigibles cesse d'etre negotiable. 

Les mesures qui font 1'objet du present Article n'excluent pas 1'exercice 
simultan par la Societe, si elle le juge utile, des moyens ordinaires de droit contre 
les actionnaires en retard. 

Art. 15. Les sommes provenant des ventes effectuees en vertu de 1'Article 
precedent, deduction faite des frais et des interns, sont impute~es, dans les termes de 
droit, sur ce qui est du par 1'actionnaire exproprie" ou par ces cedants, qui restent 
responsables de la difference, s'il y a deficit, et qui b^neficient de Fexc&ient, 
si excedent il y a. 

Art. 1 6. Les actions definitives sont au porteur; la cession s'en opere par la 
simple tradition du titre. 

Les actions definitives sont extraites d'un registre a souche, numrotees et 


1 82 STATUTES OF SUEZ CANAL COMPANY 1856 

revenues de la signature de deux Administrateurs, ou d'un Administrateur et d'un 
delegue du Conseil d' Administration. 

Elles portent le timbre sec de la Compagnie. 

Art. 17. Le Conseil d' Administration peut autoriser le depot et la conservation 
des litres au porteur dans la Caisse Sociale. II determine, dans ce cas, la forme des 
certificats nominatifs de depot, les conditions de leur delivrance et les garanties dont 
Pexcution de cette mesure doit etre entouree dans Finteret de la Societe et des 
actionnaires. 

Art. 1 8. Chaque action donne droit a une part proportionnelle dans la propriete 
de 1'actif social. 

Art. 19. Toute action est indivisible. La Socie"te ne reconnait qu'un proprie- 
taire pour chaque action. 

Art. 20. Les droits et les obligations attaches a Faction suivent le titre dans 
les mains oil il se trouve. 

La possession d'une action emporte de plein droit adhesion aux Statuts de la 
Societe" et aux resolutions de PAssemblee Generale des Actionnaires. 

Art. 21. Les heritiers ou creanciers d'un actionnaire ne peuvent, sous quelque 
pretexte que ce soit, provoquer Papposition des scelles sur les biens, valeurs, ou 
revenus de la Societe, en demander le partage ou la licitation, ni s'immiscer en 
aucune maniere dans son administration. Us doivent, pour Fexercice de leurs 
droits, s'en rapporter aux inventaires sociaux et aux comptes annuels approuves par 
PAssemblee Generale des Actionnaires. 

Art. 22. Les actionnaires ne sont engages que jusqu'a concurrence du capital 
de leurs actions, au-dela duquel tout appel de fonds est interdit. 

Art. 23. Le Conseil peut autoriser la liberation anticipee des actions, mais 
seulement par mesure generale applicable a tous les actionnaires. 

TITRE III. Conseil d 1 'Administration. 

Art. 24. La Societe est administree par un Conseil compose de trente-deux 
membres repr6sentant les principales nationalites interessees a Pentreprise. 

Un Comite, choisi dans son sein, est specialement charge de la direction et de 
la gestion des affaires de la Societe. 

Art. 25. Les Administrateurs ne contractent en raison de leurs fonctions, 
aucune obligation personnelle ou solidaire. Us ne repondent que de Pexecution de 
leur mandat. 

Art. 26. Les Administrateurs sont nommes par PAssemblee Generale des 
Actionnaires pour huit annees. 

Le Conseil se renouvelle, en consequence, chaque annee, par huitieme. Jusqu'a 
ce que Pentier renouvellement du Conseil ait etabli Pordre de roulement, les 
membres sortants sont designes annuellement par le sort. 

Les Administrateurs sortants peuvent toujours etre reelus. 

Art. 27. En cas de vacances provenant de demissions ou de deces, il est pourvu 
provisoirement au remplacement par le Conseil d' Administration jusqu'a la 
prochaine Assembl^e Gerie'rale des Actionnaires. 

Les Administrateurs ainsi nommes ne demeurent en fonctions que pendant le 
temps restant a courir pour Pexercice de leurs pre*decesseurs. 


App. 3 STATUTES OF THE SUEZ CANAL COMPANY 183 

Art. 28. Chaque Administrateur doit etre proprietaire de 100 actions, qui sont 
inalienables et restent deposees dans la Caisse Sociale pendant toute la dure"e de ces 
fonctions. 

Art. 29. Une part de 3 pour cent dans les benefices net (sic) annuels est attribute 
aux Administrateurs en raison de leurs peines et soins. 

Pendant la duree des travaux, et au besoin pendant les premieres annees qui 
suivront 1'ouverture du Canal Maritime a la grande navigation, il est attribue" au 
Conseil, pour tenir lieu de la part de 3 pour cent stipulee ci-dessus, une allocation 
annuelle qui sera comprise dans les frais d'administration, et dont le montant sera 
fixe par la premiere Assemblee Generale des Actionnaires. 

Le Conseil d'Administration determine 1'attribution particuliere qui doit tre 
faite sur cette somme ou sur les 3 pour cent dans les benefices aux membres du 
Comite de Direction. 

Art. 30. Le Conseil d'Administration nomme chaque annee, parrni ses mem- 
bres, un President et trois Vice-Presidents. 

Le President et les Vice-Presidents peuvent toujours etre reelus. 

En cas d'absence du President et des Vice-Presidents, le Conseil designe, k 
chaque seance, celui de ses membres qui doit en remplir les fonctions. 

Art. 31. Le Conseil d'Administration se reunit au moins une fois par mois. 
II se reunit, en outre, sur la convocation du President, aussi souvent que 1'exigent 
les interts de la Societe. 

Les decisions sont prises a la majorite des voix des membres presents. 

En cas de partage, la voix du President est preponderante. 

Sept Administrateurs au moins doivent etre presents pour valider les delibera- 
tions du Conseil. 

Lorsque sept Administrateurs seulement sont presents, les decisions, pour tre 
valables, doivent etres prises a la majorite de cinq voix. 

Art. 32. Le Secretaire-General de la Compagnie assiste aux seances du Conseil 
d'Administration avec voix consultative. 

Art. 33. Les deliberations du Conseil d'Administration sont constat6es par des 
proces-verbaux signes par le President et 1'un des membres presents a la seance. 

Les copies ou extraits de ces proces-verbaux doivent, pour etre produits 
valablement en justice ou ailleurs, 6tre certifies par le Secretaire-General de la 
Compagnie. 

Un extrait des decisions rendues a chaque seance, dument certifie, est envoye", 
dans les huit jours qui suivent la reunion, a chaque Administrateur absent. 

Art. 34. Le Conseil d'Administration est investi des pouvoirs les plus etendus 
pour 1'administration des affaires de la Societe. 

II arrete les propositions a soumettre a 1'Assemblee Generale des Actionnaires 
en vertu de 1' Article 16 (sic 36?) ci-apres. 

II statue sur les propositions du Comite de Direction concernant les objets 
suivants, savoir: 

1. Nomination et revocation des fonctionnaires et Agents Superieurs de la 
Compagnie; fixation de leurs attributions et de leur traitement; 

2. Placements temporaires des fonds disponibles; 

3. fitudes et projets, plans et devis pour l'excution des travaux; 

4. Marches a forfait; 


1 84 STATUTES OF THE SUEZ CANAL COMPANY 1856 

5. Acquisitions, ventes et echanges d'immeubles, achats de navires ou de 
machines ne*cessaires pour Pexecution des travaux et Pexploitation de 1'entreprise; 

6. Budgets annuels ; 

7. Fixation et modification des droits de toute nature a percevoir en vertu de 
la Concession; conditions et mode de perception des tarifs; 

8. Disposition du fonds de reserve; 

9. Disposition du fonds de retraite, de secours et d 'encouragement pour les 
employes ; 

10. Re'glementation de la Caisse des Depots pour les actions et obligations de la 
Societe. 

Art. 35. Le Conseil nomme ceux de ses membres qui doivent faire partie du 
Comite de Direction. 

II peut deleguer a un ou a plusieurs Administrateurs, aux fonctionnaires, 
employe's de la Compagnie ou autres, tout ou partie de ses pouvoirs par un mandat 
special et pour une ou plusieurs affaires ou objets determines. 

Art. 36. Nul ne peut voter dans le Conseil par procuration. 

Lorsque le Conseil doit deliberer sur des modifications a apporter dans les tarifs 
ou dans les Statuts, sur des emprunts ou augmentations de capital social, sur des 
demandes de concessions nouvelles, des traites de fusion avec d 'autres entreprises, 
sur la dissolution et la liquidation de la Societe, les Administrateurs absents doivent, 
un mois a 1'avance, etre informes de 1'objet de la deliberation et invites a venir 
prendre part au vote, ou a adresser leur opinion par ecrit au President, qui en 
donne lecture en seance; apres quoi les decisions sont prises a la majorite des voix 
des membres presents. 

TITRE IV. Comite de Direction. 

Art. 37. Le Comite de Direction, constitue en vertu des dispositions de 1'Article 
24 ci-dessus, est compose du President du Conseil d'Administration et de quatre 
Administrateurs specialement delegues. 

Art. 38. Le Comite de Direction se reunit, a la convocation du President, 
autant de fois que cela est necessaire pour la bonne marche du service et au moins 
une fois par semaine. 

Art. 39. II est tenu proces-verbal des seances du Comite de Direction. Ces 
proces-verbaux sont signes par un des Administrateurs presents a la seance. 

Les extraits de ces proces-verbaux, pour etre valablement produits en justice 
ou ailleurs, doivent etre vises par le President et certifies par le Secretaire-General 
de la Compagnie. 

Art. 40. Le Comite de Direction est investi de tous pouvoirs pour la gestion des 
affaires de la Societe. 

II pourvoit a Pexecution tant des obligations imposees par le Cahier des Charges 
et les Statuts, que des resolutions adoptees par 1'Assemblee Generale et des 
decisions du Conseil d'Administration. 

II soumet au Conseil d'Administration les propositions relatives aux objets 
ddfinis k 1'Article 35 ci-dessus. 

II repr&ente la Societe et agit en son nom, par un ou plusieurs de ses membres, 
dans tous les cas ou une disposition expresse n'exige pas Pintervention de PAssem- 


App. 3 STATUTES OF THE SUEZ CANAL COMPANY 185 

blee Generate des Actionnaires ou du Conseil d' Administration, notamment en 
ce qui concerne les objets ci-apres: 

1. Nomination et revocation des employe's; fixation de leurs fonctions et de 
leur solde; 

2. Travail des bureaux; 

3. Reglements et ordres de service; 

4. Ordonnancement et reglement des depenses; 

5. Transferts de rentes, d'effets publics, et de commerce; 

6. Perceptions de droits, recouvrements de creances, quittances, et mainlevees 
avec ou sans pavement, instances judiciaires et administratives, mesures con- 
servatoires; 

7. Defenses en justice, compromis, transactions, desistements; 

8. Traites, marches, adjudications, achats de mobilier, baux et locations. 

Les actions judiciaires en demandant ou en defendant sont diriges par ou 
contre le President et les membres composant le Comite de Direction. 

En consequence, les notifications ou significations sont faites et revues par le 
Comite de Direction au nom de la Societe. 

Les decisions du Comite, les actes et engagements approuves par lui, sont signes 
par le President ou par deux membres du Comite delegues k cet effet. 

Art. 41. Le Comite de Direction et le President du Conseil peuvent dele"guer, 
par procuration authentique, & un ou plusieurs Administrateurs, fonctionnaires de 
la Compagnie, employes ou autres, le pouvoir de signer tous les actes et engage- 
ments mentionnes ci-dessus. 

Art. 42. * 

Un Agent Superieur, chef des services, reside en Egypte; 

II est investi de tous les pouvoirs necessaires pour Texecution des travaux et 
la marche de 1'exploitation; 

II represente la Compagnie dans tous ses rapports avec le Gouvernement 
figyptien et les tiers. 

TITRE V. Assembles Generale des Actionnaires. 

Art. 43. L'Assemblee Generale regulierement constitute represente Puniver- 
salite des actionnaires. 

Art. 44. L'Assemblee Generale se compose de tous les actionnaires proprie- 
taires d'au moins vingt-cinq actions. 

Elle est regulierement constitute lorsque les actionnaires qui la composent 
sont au nombre de quarante et representent le vingtieme du fonds social. 

Art. 45. Lorsque, sur une premiere convocation, les actionnaires presents ne 
remplissent pas les conditions specifiers ci-dessus pour constituer la validite* des 
deliberations de I'Assemblee Generale, la reunion est ajourne*e de plein droit, et 
1'ajournement ne peut etre moindre de deux mois. 

Une seconde convocation est faite dans la forme prescrite par PArticle 47 
ci-apres. 

Les deliberations de I'Assemblee Generale dans cette seconde reunion ne peuvent 
porter que sur les objets a Tordre du jour de la premiere. Ces deliberations sont 
valables quel que soit le nombre des actionnaires presents et des actions repre*sente"es. 

1 As modified in 1874. 

Bb 


1 86 STATUTES OF THE SUEZ CANAL COMPANY 1856 

Art. 46. I/ Assemble Gnerale se reunit, chaque annee, dans la premiere 
quinzaine du mois de Mai. 1 

Elle se reunit, en outre, extraordinairement toutes les fois que le Conseil 
d'Administration en reconnatt 1'utilite. 

Art. 47. Les convocations ordinaires et extraordinaires sont faites par un avis 
public* un mois avant 1'epoque de la reunion dans les formes prescrites pour les 
appels de fonds, par PArticle 9 ci-dessus. 

Art. 48. Les actionnaires, pour avoir le droit d'assister ou de se faire repre- 
senter a I'Assemblee Generale, doivent justifier, au domicile de la Societe, au 
moins cinq jours avant la reunion, du depot fait de leurs titres dans la Caisse 
Sociaie ou chez un representant de la Compagnie designe k cet effet par le Conseil 
d'Administration, dans les villes denomme*es k 1'Article 8 ci-dessus. 

Les depots faits dans ces conditions donnent droit k la remise de cartes d'admis- 
sion nominatives. 

Les actionnaires porteurs de certificats de depot out egalement la faculte de se 
faire repr&enter aux Assemblies Generates par des mandataires munis de pouvoirs 
rguliers, dont la forme est determinee par le Conseil d'Administration. 

Les fonds de pouvoirs doivent deposer leurs procurations au domicile de la 
societe cinq jours au moins avant la reunion. 

Nul ne peut representer un actionnaire a I'Assemblee s'il n'est lui-meme membre 
de cette Assemblee. 

Art. 49. L'Assemblee Generale est presidee par le President ou par 1'un des 
Vice-Presidents du Conseil d'Administration, et k leur defaut, par un Administra- 
teur nomme par le Conseil. 

Les deux plus forts actionnaires presents au moment de Touverture de la seance, 
et qui acceptent, sont nommes Scrutateurs. 

Le President designe le Secretaire. 

Art. 50. Les deliberations de 1'Assemblee Generale sont prises a la majorite des 
voix des membres presents ou regulierement representes, conformement k TArticle 
48 ci-dessus. 

En cas de partage, la voix du President est preponderante. 

Art. 51. Vingt-cinq actions donnent droit k une voix: le meme actionnaire ne 
peut reunir plus de dix voix, soit comme actionnaire, soit comme mandataire. 

Art. 52. Le scrutin secret peut tre reclame par dix membres. 

Art. 53. Les deliberations de 1'Assemblee Generale sont constatees par des 
proc&s-verbaux signes par le President, par les Scrutateurs, et par le Secretaire. 

Les copies ou extraits de ces proces-verbaux, pour etre valablement produits en 
justice ou ailleurs, doivent tre certifies par le Secretaire-General de la Compagnie. 

1 By Resolution of 1864 general meetings may take place between May ist and August 
ist. 

Resolution du 6 Aout> 1864. 
L'AssembleV. 

Conformement aux propositions developpe*es dans sa reunion du 15 Juillet, 1863, 
approuve la modification del' Article 46 des Statuts,qui fixe la reunion ordinaire del' Assem- 
ble Ge*ne*rale des Actionnaires du i er au 15 Mai de chaque anne*e, en ce sens que cette 
reunion pourra avoir lieu, sur la convocation du Conseil, du i er Mai au i er Aout. 

Adopte*e a 1'unanimite. 


Jiff. 3 STATUTES OF THE SUEZ CANAL COMPANY 187 

Art. 54. Une feuille de presence, destined a constater le nombre des membres 
assistant a 1'assemblee et celui des actions reprsent6es par chacun d'eux, reste 
annexe*e a la Minute du proces- verbal, ainsi que les pouvoirs conferes par les action- 
naires absents. 

Cette feuille doit etre signee par chaque actionnaire a son entree a la stance. 

Art. 55. L'ordre du jour de PAssemblee Generale est arrete par le Conseil 
d'Administration. 

Aucune autre question que celles portees a Tordre du jour ne peut &tre mise en 
deliberation. 

Art. 56. L'Assemblee Generale entend les Rapports du Conseil d'Administra- 
tion sur la situation et les interets de la Societe. Elle d&ibere sur scs propositions, 
en se renfermant dans les limites des Statuts et du Cahier des Charges, concernant 
tous les interets de la Compagnie. Elle nomme les Administrateurs en remplace- 
ment des membres du Conseil sortants ou a remplacer. Elle confere, lorsqu'il y a 
lieu, au Conseil les pouvoirs necessaires pour la suite k donner a ses resolutions. 

L'approbation de TAssemblee Generale est ncessaire pour toute decision 
statuant sur les objets ci-apres, savoir: 

1. Concessions nouvelles; 

2. Fusion avec d'autres entreprises; 

3. Modifications aux Statuts de la Socie*te"; 

4. Dissolution de la Societe; 

5. Augmentation du capital social; 

6. Emprunts; 

7. Reglement des comptes de premier etablissement en fin de 1'exdcution des 
travaux; 

8. Reglement des comptes annuels; 

9. Fixation de la retenue pour le fonds de reserve; 

10. Fixation du dividende a distribuer annuellement aux actionnaires. 

Art. 57. Les deliberations relatives aux objets mentionnes a T Article 56, para- 
graphes i, 2, 3, 4, 5, et 6, doivent, pour tre valables, etre prises par une assembled 
reunissant au moins le dixieme du fonds social et a la majorite des deux tiers des 
voix des membres presents, au nombre de cinquante au moins. 

Lorsque, sur une premiere convocation, les actionnaires presents ne remplissent 
pas ces conditions, il est procede a une deuxieme convocation, conformment aux 
prescriptions de TArticle 47 ci-dessus. 

Les deliberations de TAssemblee G^n^rale reunie en vertu de cette deuxteme 
convocation sont valables quel que soit le nombre des actionnaires presents et des 
actions representees. 

Art. 58. Les deliberations de P Assemble Gnerale prises conformement aux 
Statuts obligent tous les actionnaires, mme ceux qui sont absents ou dissidents. 

TITRE VI. Comptes dnnuels. A 'mortis sement. Interets. Fonds de Reserve. 

Dividendes. 

Art. 59. Pendant 1'execution des travaux, il est paye* annueliement aux action- 
naires un intere't de 5 pour cent sur les sommes par eux vers^es, en execution de 
1'Article 9 ci-dessus. 


188 STATUTES OF THE SUEZ CANAL COMPANY 1856 

II est pourvu au payement de ces int6rts par le produit des placements tempo- 
raires de fonds et autres produits accessoires, et au besoin sur le capital social. 

Art. 60. Apres 1'achevement des travaux, le compte des recettes et depenses de 
la Compagnie pendant la dure de ces travaux est arrete et soumis a 1'Assemblee 
Gnerale des Actionnaires par le Conseil d'Administration. 

Art. 61. A dater de 1'ouverture du Canal Maritime & la grande navigation, un 
inventaire general de 1'actif et du passif de la Societe au 31 Decembre precedent est 
dresse* dans le premier trimestre de chaque annee. Get inventaire est soumis a 
1' Assembled Generale des Actionnaires reunie dans le courant du mois de Mai 
suivant. 

Art. 62. Les produits annuels de 1'entreprise servent d'abord k acquitter dans 
1'ordre ci-apres: 

1. Les depenses d'entretien et d'exploitation, les frais d' Administration, et 
gnralement toutes les charges sociales; 

2. L'intere't et 1'amortissement des emprunts qui peuvent avoir etc contracr.es; 

3. Cinq pour cent du capital social pour servir aux actions amorties et non 
amorties un intrt annuel de 25 fr. par action, les interets differents aux actions 
amorties devant rentrer au fonds d'amortissement, constitue conformement & 
T Article 66 ci-apres; 

4. Quatre centiemes pour cent du capital social egalement applicables a ce 
fonds d'amortissement; 

5. La retenue destinee k constituer ou a complete r un fonds de reserve pour les 
depenses imprevues, conformement aux dispositions de 1'Article 69 ci-apres. 

L'excdent des produits annuels, apres ces divers prelevements, constitue les 
produits nets ou b6nfices de 1'entreprise. 

Art. 63. ! Les produits nets ou benefices de Tentreprise sont repartis de la 
maniere suivante: 

1. 15 pour cent au Gouvernement figyptien; 

2. I o pour cent aux fondateurs; 

3. 3 pour cent aux Administrateurs; 

4. 2 pour cent pour la constitution d'un fonds destine k pourvoir aux retraites, 
aux secours, aux indemnites ou gratifications accordes, suivant qu'il y a lieu, par le 
Conseil, aux employe's; 

5. 70 pour cent comme dividende a rdpartir entre toutes les actions amorties 
et non amorties indistinctement. 

Art. 64. Le payement des interets et dividendes est fait & la Caisse Sociale, ou 
chez les repr&entants dsignes par le Conseil d' Administration dans les villes 
dnommes a 1'Article 8 ci-dessus. 

Le payement des intrts est fait en deux termes, le i er Juillet, et le i er Janvier 
de chaque annee. 

Le dividende est pay6 le i er Juillet. 

Toutefois le Conseil peut, lorsqu'il juge qu'il y a lieu, autoriser le payement 
d'un acompte de dividende le i er Janvier. 

Chaque payement est annonce au moyen de publications faites conformement 
aux prescriptions de 1'Article 9 ci-dessus pour les appels de fonds. 

1 Modified by Resolution in 1 871 to give 2 per cent, to Administrators and 71 per cent, 
to holders of shares, whether amortized or not. 


3 STATUTES OF THE SUEZ CANAL COMPANY 189 

Art. 65. Les interets et dividendes qui ne sont pas reclames a 1'expiration de 
cinq annees apres 1'epoque annoncee pour le pavement sont acquis a la Societe. 

Art. 66. L'amortissement des actions est effectue en quatre-vingt-dix-neuf ans, 
suivant le Tableau d'amortissement dresse en execution des presents Statuts. 

II est pourvu a cet amortissement, ainsi qu'il a 6t dit a 1'Article 62 ci-dessus, 
au moyen d'une annuite de o fr. 04 c. pour cent du capital social et de 1'inte'ret a 
5 pour cent des actions successivement remboursees. 

S'il arrivait que, dans le cours d'une ou de plusieurs annees, les produits nets 
de 1'entreprise fussent insuffisants pour assurer le remboursement du nombre 
d'actions a amortir, la somme necessaire pour completer le fonds d'amortissement 
serait prelevee sur la reserve, et, a defaut, sur les premiers produits nets disponibles 
des annees suivantes, par preference et anteriorite a toute attribution de dividende. 

La designation des actions a rembourser a lieu au moyen d'un tirage au sort 
fait publiquement chaque annee au domicile de la Societe, aux epoques et suivant 
la forme determinees par le Conseil. 

Art. 67. Les numeros des actions dsignees par le sort pour etre remboursees 
sont annonces au moyen de publications faites conforme*ment aux prescriptions de 
FArticle 9 ci-dessus. 

Art. 68. Le remboursement des actions designees par le tirage au sort pour tre 
amorties est fait aux lieux indiques pour le payement des interets et dividendes par 
1'Article 64 ci-dessus. 

Les porteurs d'actions amorties conservent les mmes droits que les porteurs 
d'actions non amorties, a 1'exception de 1'interet a 5 pour cent du capital qui leur a 
ete* rembourse. 

Art. 69. La retenue operee pour la constitution ou le complement du fonds de 
reserve, conformement au paragraphe 5 de 1' Article 62 ci-dessus, est de 5 pour cent 
des produits annuels, apres deduction des charges definies aux paragraphes I, 2, 3, 
et 4, du meme Article. 

Lorsque le fonds de reserve atteint le chiffre de 5,000,000 fr., 1'Assemblee 
Generale des Actionnaires peut, sur la proposition du Conseil, reduire ou sus- 
pendre la retenue annuelle a ce affectee ainsi qu'il vient d'etre explique*. 

Cette retenue rep rend cours et effet des que le fonds de reserve descend au- 
dessous de 5,000,000 fr. 

Art. 70. La part attribute aux fondateurs dans les benefices annuels de 1'entre- 
prise par le Cahier des Charges est representee par des titres speciaux dont le 
Conseil determine le nombre, la nature, et la forme. 

Dans tous les cas, les prescriptions des Articles 17, 18, 19, et 21 ci-dessus, 
concernant les actions, sont egalement applicables aux titres des fondateurs, dont 
les droits suivent ceux des actionnaires sur la jouissance des terrains faisant partie 
de la Concession. 

TITRE VII. Modifications aux Statuts. Liquidation. 

Art. 71. Si 1'experience fait reconnaitre Putilite d'apporter des modifications ou 
additions aux presents Statuts, PAssemblee GeneVale y pourvoit dans la forme 
determinee a PArticle 57. 

Les resolutions de 1'assemblee a cet egard ne sont toutefois exe*cutoires qu'apres 
1'approbation du Gouvernement gyptien. 


190 STATUTES OF THE SUEZ CANAL COMPANY 1856 

Tous pouvoirs sont donnes d'avance au Conseil d'Administration, deliberant 
a la majorit6 des deux tiers des voix des membres presents dans une reunion 
speciale a cet effet, pour consentir les changements que le Gouvernement Egyptien 
jugerait necessaire d'apporter aux modifications votees par 1'Assemblee Generale. 

Art. 72. Dans le cas de dissolution de la Societe, 1'Assemblee Generale, sur la 
proposition du Conseil d' Administration, determine le mode k adopter, soit pour la 
liquidation, soit pour la reconstitution d'une Societe nouvelle. 

TITRE VIII. Attribution de Juridiction. Contestations. 

Art. 73. La Societe etant constitute, avec approbation du Gouvernement 
Egyptien, sous la forme anonyme, par analogic aux Societes anonymes autorisees par 
le Gouvernement Fran^ais, elle est regie par les principes de ces dernieres Societes. 

Quoique ayant son siege social k Alexandrie, la Societe fait election de domicile 
le*gal et attributif de juridiction k son domicile administratif k Paris, ou doivent lui 
tre faites toutes significations. 

Art. 74. Toutes les contestations qui peuvent s'elever entre les associes sur 
l'excution des presents Statuts et a raison des affaires sociales sont jugees par 
arbitres nomms par les parties, sans qu'il puisse etre nomme plus d'un arbitre pour 
toutes les parties representant un meme interet. 

Les appels de ces sentences sont portees devant la Cour d'Appel de Paris. 

Art. 75. Les contestations touchant 1'interet general et collectif de la Societe 
ne peuvent etre dirigees soit centre le Conseil d'Administration, soit contre Tun de 
ses membres, qu'au nom de la generalite des actionnaires et en vertu d'une delibera- 
tion de 1'Assemblee Generale. 

Tout actionnaire qui veut provoquer une contestation de cette nature doit en 
faire la communication au Conseil d'Administration quinze jours au moins avant 
la reunion de 1'Assemblee Generale, en la faisant appuyer par la signature d'au 
moins dix actionnaires en mesure d'assister & cette Assemblee. Le Conseil est alors 
tenu de mettre la question & 1'ordre du jour de la seance. 

Si la proposition est repoussee par 1'assemblee, aucun actionnaire ne peut la 
reproduire en justice dans son interet particulier. Si elle est accueillie, 1'assemblee 
de*signe un ou plusieurs commissaires pour suivre la contestation. 

Les significations auxquelles donne lieu la procedure ne peuvent etre adressees 
qu'aux dits commissaires. Dans aucun cas, elles ne doivent 1'etre aux actionnaires 
personnellement. 

TITRE IX. Commissaire Special du Gouvernement gyptien prts la Compagnie. 

Art. 76. Conformement au Cahier des Charges un commissaire special est delegue' 
pres la Compagnie, a son domicile administratif, par le Gouvernement figyptien. 

Le Commissaire du Gouvernement Egyptien peut prendre connaissance des 
operations de la Societe, et faire toutes communications ou notifications necessaires 
a 1'accomplissement de son mandat, pour 1'exdcution du Cahier des Charges de la 
Concession. 

TITRE X. Dispositions Transitoires. Premier Conseil d y Administration. 

Art 77. Par derogation aux Articles 24, 26, 27, 30, 56 ci-dessus et sauf 
Pexception dtermine*e par PArticle 23 de PActe de Concession, le Conseil 


3 CONVENTION OF 1866 191 

d'Administration est constitue comme suit, pour toute la dure des travaux et 
pendant les cinq premieres annees qui suivront Pouverture du Canal Maritime a 
la grande navigation. 

MM. 

Independamment des attributions determinees par les Articles 34 et 35 des 
presents Statuts le Conseil d' Administration, constitue comme il est dit ci-dessus, 
est investi de tous pouvoirs pour assurer Pexecution de Pentreprise. A cet effet, il 
peut choisir le mode qui lui parait le plus favorable tant pour Pacquisition et la 
revente des terrains que pour Pacha t des matieres, Pexecution des travaux, et la 
fourniture du materiel de toute nature. II peut autoriser la mise en adjudication 
de tout ou partie des travaux, Pacquisition de tous biens meubles et immeubles 
necessaires a Petablissement et k Pexploitation des Canaux et dependances faisant 
partie de la Concession. II peut egalement, et dans le meme but, autoriser les 
travaux en regie et les marches a forfait pour tout ou partie de Pentreprise. 

Le premier Conseil d'Administration est autorise, pendant la duree du mandat 
special qui fait Pobjet du present Article, a se completer, en cas de vacances, de 
quelque maniere que ces vacances se produisent. 

TITRE X I . Publications. 

Art. 78. Tous pouvoirs sont donnes au porteur d'une expedition des presentes 
pour les faire publier a Alexandrie et partout ou besoin sera. 

Nous Mohammed Said Pacha, Vice-Roi d'figypte, apres avoir pris connaissance 
du projet des Statuts de la Compagnie Universelle du Canal Maritime de Suez et 
dependances, lequel nous a ete presente par M. Ferdinand de Lesseps, et dont 
Poriginal, contenant soixante-dix-huit Articles, reste depose dans nos archives, 
declarons donner aux dits Statuts notre approbation, pour qu'ils soient annexes k 
notre Acte de Concession et Cahier des Charges, en date de ce jour. 

Alexandrie^ le 26 Rebi-ul-akhir, 1272 (5 Janvier, 1856). 

(Cachet de Son Altesse le Vice-Roi.) 

Appendix 4 

Convention entre le Vice-Rot d'Egypte etla Compagnie Universelle du Canal 
Maritime de Suez. Signe au Caire, le 22 Fevrier, 1866. 

[EXTRACT] 

ENTRE Son Altesse Ismail Pacha, Vice-Roi d'figypte, d'une part; et la Com- 
pagnie Universelle du Canal Maritime de Suez, representee par M. Ferdinand 
de Lesseps, son P resident-Fonda teur, autorise a cet effet par les Assemblies 
Generales des Actionnaires des I er Mars et 6 Aout, 1864, et par decision spciale 
du Conseil d'Administration de la dite Compagnie, en date du 13 Septembre, 
1864, d'autre part; a ete expose et stipule ce qui suit: ... 

Art. 9. Le Canal Maritime et toutes ses dependances restent soumis a la police 
gyptienne, qui s'exercera librement comme sur tout autre point du territoire, de 
fa^on a assurer le bon ordre, la securite publique, et Pexecution des lois et regle- 
ments du pays. 

Le Gouvernement figyptien jouira de la servitude de passage a travers le 


I 9 2 CONVENTION OF 1866 1866 

Canal Maritime sur les points qu'il jugera necessaires, tant pour ses propres 
communications que pour la libre circulation du commerce et du public, sans que 
la Compagnie puisse percevoir aucun droit de peage ou autre redevance sous 
quelque pretexte que ce soit. 

Art. 10. Le Gouvernement figyptien occupera dans le perimetre des terrains 
reserves comme dependance du Canal Maritime, toute position ou tout point 
stratgique qu'il jugera necessaire k la defense du pays. Cette occupation ne 
devra pas faire obstacle a la navigation et respectera les servitudes attachees aux 
francs-bords du Canal. 

Art. ii. Le Gouvernement figyptien, sous les memes reserves, pourra occuper 
pour ses services administratifs (poste, douane, caserne, &c.), tout emplacement 
disponible qu'il jugera convenable, en tenant compte des necessites de 1'exploitation 
des services de la Compagnie; dans ce cas, le Gouvernement remboursera, quand 
il y aura lieu, a la Compagnie les sommes que celle-ci aura depensees pour creer ou 
approprier les terrains dont il voudra disposer. 

Art. 1 2. Dans Pintert du commerce, de 1'industrie, ou de la prospere exploita- 
tion du Canal, tout particulier aura la faculte, moyennant 1'autorisation prealable 
du Gouvernement et en se soumettant aux reglements administratifs ou munici- 
paux de Tautorite locale, ainsi qu'aux lois, usages, et impots du pays, de s'etablir, soit 
le long du Canal Maritime, soit dans les villes elevees sur son parcours, reserve faite 
des francs-bords, berges et chemins de halage; ces derniers devant rester ou verts k la 
libre circulation, sous 1'empire des reglements qui en determineront Fusage. 

Ces tablissements, du reste, ne pourront avoir lieu que sur les emplacements que 
les ingenieurs de la Compagnie reconnaitront n'etre pas necessaires aux services de 
1'exploitation, et a charge par les beneficiaires de rembourser & la Compagnie les 
sommes depensees par elle pour la creation et 1'appropriation des dits emplacements. 

Art. 13. II est entendu que I'etablissement des services de Douane ne devra 
porter aucune atteinte aux franchises Douanieres dont doit jouir le transit general 
s'effectuant & travers le Canal par les batiments de toutes les nations sans aucune 
distinction, exclusion ni preference de personne ou de nationalite. 

Art. 14. Le Gouvernement figyptien, pour assurer la fidele execution des 
Conventions mutuelles entre lui et la Compagnie, aura le droit d'entretenir a ses 
frais, aupres de la Compagnie et sur le lieu des travaux, un Commissaire special. 

Art. 15. II est declare, k titre d'interpretation, qu'a Texpiration des quatre- 
vingt-dix-neuf ans de la Concession du Canal de Suez et a defaut de nouvelle 
entente entre le Gouvernement gyptien et la Compagnie, la Concession prendra 
fin de plein droit. 

Art. 1 6. La Compagnie Universelle du Canal Maritime de Suez etant 
gyptienne, elle est rgie par les lois et usages du pays; toutefois, en ce qui regarde 
sa constitution comme Societe" et les rapports des associes entre eux, elle est, 
par une Convention speciale, reglee par les lois qui, en France, regissent les 
Socie*tes anonymes. II est convenu que toutes les contestations de ce chef seront 
juges en France par des arbitres avec appel, comme sur-arbitre, a la Cour 
Impriale de Paris. 

Des differends en figypte entre la Compagnie et les particuliers, a quelque 
nationalite qu'ils appartiennent, seront juges par les Tribunaux locaux suivant 
les formes consacre*es par les lois et usages du pays et les Traites. 


Aft. 4 RULES OF NAVIGATION 193 

Les contestations qui viendraient & surgir entre le Gouvernement figyptien et 
la Compagnie seront egalement soumises aux Tribunaux locaux et resolues suivant 
les lois du pays. 

Les preposes, ouvriers et autres personnes appartenant a 1'Administration de 
la Compagnie, seront juges par les Tribunaux locaux, suivant les lois locales et 
les Traites, pour tous delits et contestations dans lesquels les parties ou 1'une d'elles 
seraient indigenes. 

Si toutes les parties sont etrangeres, il sera precede* entre elles conformnient 
aux regies etablies. 

Toute signification a la Compagnie par une partie interessee quelconque en 
gypte sera valablement faite au siege de 1'Administration a Alexandrie. 


Appendix 5 

SUEZ CANAL: RULES OF NAVIGATION (January 1933) 

GENERAL 

ARTICLE i 
Obligation to comply with the regulations. 

i. Transit through the Suez Canal is open to ships of all nations, subject to 
their complying with the conditions hereinafter stated. 

However, the Company reserves to itself the right to refuse access to the Canal 
to ships which it may consider dangerous to shipping generally. 

On receiving a copy of these regulations, captains of ships bind themselves to 
abide by and conform with them in all points, to comply with any requisition made 
in view of their due carrying-out, and obey all signals prescribed in the special 
Book of Signals, of which a copy is placed at their disposal. 

2. Mail ships, ships carrying petroleum, or having dangerous materials on 
board, and ships under quarantine, must show the signals prescribed in the special 
Book of Signals. 

3. Ships carrying petroleum or dangerous materials must comply with these 
regulations and also with the Rules of Navigation, Appendix for ships carrying 
dangerous materials, a copy of which is given to captains on their arrival in one of 
the Canal ports. 

4. The navigation of ships, undecked vessels, or any other craft, measuring 
five hundred tons gross or under, is governed by special regulations. 

ARTICLE 2 
Draught of ships and seaworthiness. 

At present, ships with a draught of no more than 33 English feet (metres 1 0-06) 
are authorized to transit. 1 

1 This draught (33' max.) of the ship is not to be confused with the depth of water in 
the Canal. 

cc 


i 9 4 RULES OF NAVIGATION 1933 

Ships are not permitted to transit when their draught of water exceeds the 
maximum, or when they are not well-found in every respect for navigation in 
the Canal. 

ARTICLE 3 
Responsibility of Captains. Pilots' Duties. 

All ships measuring more than Jive hundred tons gross must take, either for 
entering or leaving the harbours of Port-Said and Port-Thewfik, or for transit 
through the Canal, a pilot of the Company, who will furnish all particulars as to 
the course to be steered. 

In the case of ships measuring under five hundred tons gross the Company 
reserve the right of sending aboard either a pilot or a master should the require- 
ments of the service render it advisable. 

The pilots place at the disposal of captains their experience and practical know- 
ledge of the Canal, but as they cannot be acquainted with the defects and peculiari- 
ties of individual ships and their machinery, whether in navigating, stopping, steer- 
ing, &c., the responsibility of handling the ship devolves solely upon the captain. 

Captains are held responsible for all damage or accidents of whatsoever kind 
resulting from the navigating or handling of their ships by day or by night. 

Normally, the pilots' duties commence, or cease, at the exterior buoys of Port- 
Said and Port-Thewfik harbours. 

ARTICLE 4 
Mail Ships. Distinctive character. 

Mail ships are all ships performing a regular mail service under contract with 
a Government, at fixed dates appointed in advance. The contract must have been 
duly exhibited to the Company by the owners. 

ARTICLE 5 
Ships in ballast. Distinctive character. 

Merchant ships which are not earning freight on their voyage, and which are 
carrying only such fuel as is necessary for their own consumption, and only their 
crews with the provisions for same, are considered as being in ballast. 

A ship landing her passengers or cargo before passing through the Canal and taking 
them on board afterwards, will in no case be considered as being in ballast. 

Further, in order to be entitled to claim the benefit of the ballast rate, 1 the 
volume of bunker coal or fuel must not exceed 1 25 per cent, of the engine-room 
space as shown on the Suez Canal Certificate. Bunker coal or fuel should, 
primarily, be contained in the ship's permanent or movable bunkers. However 
on the Captain's application, if well founded, permission may be granted for it to 
be stowed on deck or in the ship's holds. In any case owners will have to take 
the necessary steps so that the total volume of all bunkers on board can be easily 
ascertained. 2 

1 See Art. 7. 

2 See Art. 16 and 17 of the Regulations for the measurement of tonnage, p. 205. 


jfff. 5 TRANSIT AND PASSENGER DUES 195 

ARTICLE 6 
Suez Canal tonnage. 

i. The tonnage on which all dues and charges to be paid by ships, as specified 
in these regulations, are assessed, is the net tonnage resulting from the system of 
measurement laid down by the International Commission held at Constantinople 
in 1873,' and duly entered on the special certificates issued by the competent 
authorities in each country. 

In assessing the dues, any alteration of net tonnage subsequent to the delivery 
of the above-mentioned certificates is taken into account. 

2. The Company's officials are empowered to ascertain whether cargo or 
passengers are carried in any space not included in the net tonnage entered on 
the ship's special certificate. 

And, generally, may verify whether all spaces which ought to be included in 
the tonnage are entered on the certificate and are correctly determined therein. 

3. Every ship not provided with the special certificate showing the net 
tonnage prescribed by the Constantinople Commission, is measured by the Com- 
pany's officials in conformity with the rules laid down by the Constantinople 
Commission. 

The net tonnage thus arrived at is provisionally made use of for the assessing of 
the dues, until such time as the ship tenders a special certificate duly drawn up by 
the competent authorities. 

ARTICLE 7 
Transit dues. 

I. Tonnage dues are, at present, six francs sixty-five centimes per ton. 2 

2. Ships in ballast are allowed a reduction of fifty per cent, thereon (i.e. pay 

three francs thirty-two and a half centimes per ton). 3 

3. As a temporary measure, the above-mentioned dues are reduced to six 

francs for loaded ships and to three francs for ships in ballast. This reduction will 

remain in force until December 3ist 1933. 


ARTICLE 8 
Passenger dues. 

I. In addition to the tonnage dues mentioned in art. 7, transit dues are charged 
on all passengers at the rate of ten francs per passenger above twelve years of age, 
and five francs per passenger between three and twelve. 

Children under three years of age pay no dues. 

1 See pages 205-10: 

Regulations for the measurement of tonnage. Additional deductions allowed by the 
Suez Canal Company. Rules for the measurement of deck spaces. Taxation of double- 
bottoms. 

2 In the present Rules all rates or tariffs are expressed in gold francs as defined by the 
French law of the yth of the month of Germinal, year XI. 

3 See Art. 5. 


196 BERTHING AND PILOTAGE DUES 1933 

2. Sailors occasionally taken on board of ships passing through the Suez 
Canal are considered as passengers and are charged for as such, unless they are 
duly entered on the ship's articles and certified as being intended for ships belonging 
to the same owners. 

ARTICLE 9 
Berthing dues. 

The rate of berthing dues at Port-Said, Ismailia and in the Company's docks 
at Port-Thewfik, is two centimes per ton, per day, whatever be the duration of the 
ship's stay, but the first 24 hours are not included. These dues are payable every 
ten days. 

ARTICLE 10 
Pilotage dues. 

Pilotage in the Canal itself is free of charge. 

The payment of dues for pilotage in or out of Port-Said and Port-Thewfik is 
charged for as follows: 

I. For ships not going through the Canal: 

TJ i (steamers or motor ships, 25 francs; sailing vessels, 

y y ' ' ' ' \ 10 francs. 

By night (between sunset and (steamers or motor ships, 50 francs; sailing vessels, 
sunrise) [ 20 francs. 

2. For ships going through the Canal: 

By day . . . . Free. 

. , (steamers or motor ships, 25 francs; sailing vessels, 

y nl & * * * { 10 francs. 

The payment of these pilotage dues is compulsory on all ships above five hundred 
tons gross measurement. 1 

When the pilot is kept on board beyond the time required for pilotage proper, 
a charge of forty francs per day is due. 

ARTICLE n 
Divisions of Transit. 

A reduction of half the transit dues and half the passenger dues is allowed to 
ships and passengers using only half the length of the Canal 

No other division than one-half of the length of the Canal is admitted: between 
Ismailia and Port-Said being considered one-half, and between Ismailia and Port- 
Thewfik the other half, or inversely. 

ARTICLE 12 
Local traffic between Port-Said and Ismailia. 

For ships effecting a voyage from either Port-Said to Ismailia in ballast and back 
from Ismailia to Port-Said with a cargo of Egyptian origin, or from Port-Said to 

1 See Art. 3. 


Aft. 5 PAYMENT OF DUES 197 

Ismailia with a cargo for an Egyptian destination and back from Ismai'lia to Port- 
Said in ballast, the rate of tonnage dues is only two francs per ton for the entire 
journey. 

Payment must be made in full previous to the commencement of the journey. 
Over and above this, the ships are subject to the same incidental charges as other 
ships. 

The carrying of passengers only is not considered as being local traffic 

ARTICLE 13 
Mode of payment of dues. 

i. All dues and charges specified in the present rules must be paid in cash, at 
the Company's conditions, in Egypt, Paris, or London. 

2. Tonnage dues and passenger dues are payable in advance. 

3. In the case of payments made in Paris or London the Company will wire 
out to its officials in Egypt, at owner's risk and expense, due notice of the amounts 
paid. 

Whenever amounts thus paid in advance are insufficient for the discharge in full 
of all charges and incidental expenses due by the ship, the balance must be paid in 
Egypt at the Company's Offices. 

4. Claims for errors in the declaration of tonnage or in the levying of the dues 
must be sent in within a month after the ship's passage through the Canal. 


MOVEMENTS OF SHIPS 

ARTICLE 14 
Arrival. 

i. When nearing the buoys at the approach to the Port-Said channel, a ship 
wishing to enter sends up the signal for a pilot. On coming on board the pilot 
hands to the captain a copy of the present Rules and a pilotage form. 

The captain fills up the pilotage form and gives it back to the pilot when the 
latter leaves the ship. 

2. The captain must clearly show as indicated by the pilot, when entering the 
channel: 

(a) The ship's commercial number in the International Code. 

(b) the ship's specific signal (mail-ship, coasting ship, collier, oil-ship, ship having 
explosives, &c.) as per the Book of Signals. 

(c) If necessary, the signal prescribed in the Book of Signals for a ship which 
intends remaining more than 12 hours at Port-Said, or which is in need of 
repairs. 

3. The port officials direct the ship to its mooring berth either by signals 
hoisted at the masthead of the Company's Office, or verbally by sending a boat to 
meet the ship. The ship must acknowledge. 

4. When coming in, changing berth, or leaving, the Captain must work his 
hawsers by means of the ship's boats or with the help of the mooring boats of a firm 
approved by the Company. 


198 MOVEMENTS OF SHIPS 1933 

ARTICLE 15 
Stay in the Canal ports. 

I . The captain is responsible for the mooring of his ship in the ports of the Canal. 

2. He must attend specially to the instructions in the following paragraphs: 

3, When the ship is moored on buoys, the hawsers must be watched and 
handled so as to always ensure a good mooring. 

If two ships are moored to the same buoy, when one leaves, the other must 
rectify her mooring as necessary. 

Hawsers which have been slacked down for the passage of barges or tugs must 
be hauled taut as soon as possible. 

4. Captains must conform to the advice which the port captain will give re 
hawsers during the stay of their ships in port, especially when, in case of impending 
bad weather, he shall consider it necessary that the hawsers and shackles should be 
inspected and, if need be, strengthened. 

5. When a ship is moored with her stern to the bank, the captain must keep 
himself continually informed of the draught of water aft, so as to avoid grounding 
on the submerged slope either as a result of the settling of the ship as she loads, or 
of her too great proximity to the bank. 

6. At night, the ship, either moored or manoeuvring, must show the lights 
as prescribed by the International Regulations for preventing collisions at sea. 

Moreover, ships moored at right angles with the bank must carry the forward 
white light at the extreme bows at a sufficient height for it to be clearly visible. 

7. Unless otherwised authorized, barges alongside a ship must not be more 
than two abreast. 

8. It is forbidden to try the projector, or to put in action the propellers during 
the process of warming up, in the absence of the pilot, or without informing him 
if he is on board. 

9. Ships must not put their engines out of working order for any cause what- 
soever without informing the Company. In such cases moorings shall be streng- 
thened to avoid danger to the ship in case of bad weather. 

10. The captain must always keep on board sufficient crew to ensure, beside 
the handling of the mooring hawsers, the manning of all available appliances for 
coping with a fire or a leak. 

11. The port captain or his delegate shall have free access on board ship to 
ensure the carrying out of the Regulations, to verify the ship's seaworthiness, and 
especially to ascertain that there is no dangerous cargo on board. 

12. Ships moored in the Dock at Port-Thewfik are subject to the same 
regulations as in the Canal over and above those set out in 7 and 8 of the 
present article. 

They cannot be authorized to effect repairs which may deprive them of the use 
of their motive power. 

ARTICLE 16 
Changing berth. 

I. A captain wishing to change the berth of his ship shall notify the port 
captain or his representative, stating the time when his ship will be ready for the 


5 MOVEMENTS OF SHIPS 199 

move, and whether he wishes for the aid of a tug. The new berth will be allocated 
by the port captain. 

A pilot will be sent him in due course. 

The move shall take place at the time fixed by the port captain or his delegate. 

2. All charges entailed by a change of berth resulting from the captain's 
erroneous or incomplete declaration must be paid by the captain. 

3. The charges for changing berth are 25 francs for steamers or motor ships 
and 10 francs for sailing ships. 

If, for want of steam, the ship has to be towed, she pays for the hire of tugs as 
per tariff on page 2 1 o. 

4. When necessary in the general interest of navigation, the port captain 
may order a ship to change her berth, and when so ordered the change is free of 
charge. The change shall be made as quickly as possible. 

ARTICLE 17 
Ships passing one another. 

I. Ships under way in the harbours or in the entrance channels shall conform 
to the international regulations for preventing collisions at sea. 

2. In the harbours the speed of ships must be reduced to the lowest limit 
allowing them to answer the helm. Captains must not hesitate to stop engines 
when passing moored ships, in order to avoid the breaking of hawsers and resulting 
accidents. 

ARTICLE 18 
Fire on board. Leak. 

i. In case of fire on board, or leak, when in harbour, the captain must inform 
the port captain at once. 

At the same time he must give general warning by means of long blasts on the 
steam-whistle and make ready for moving his ship if requested to do so. 

2. Neighbouring ships must in such cases also be ready to change berths. 

3. The Company's officials will direct operations. 

ARTICLE 19 
Sailing. 

I. Ships which do not enter the Canal must, during their stay in Port-Said, 
report themselves at the Harbour office, and the special certificate showing the 
ship's capacity be produced. 

2. Captains of ships intending to put to sea must pay in advance the dues for 
pilotage and berthing, if any. They must state the hour of their departure by 
means of a letter or telephone message addressed to the port captain by the ship's 
Agent. 

They will apply for a pilot by clearly exhibiting half an hour before the stated 
hour of departure the signal as prescribed. 

3. Mooring must not be changed before the pilot is on board. 

The ship will get under way only if there is no signal from the Company to the 
contrary. 


200 CONDITIONS OF TRANSIT 1933 

When several ships are ready to get under way, the order of their sailing either 
for the Canal or for sea will be fixed by the Harbour office. 

4. The Captain may apply for the Company's tugs to help to manoeuvre his 
ship. Such help will be granted under the conditions of Article 20. 

5. When the pilot leaves ship, the Captain will hand back to him the pilotage 
form after having filled it in as required. 

ARTICLE 20 
Towage. 

i. Tugs may be placed at the disposal of captains to help manoeuvre their 
ships on arrival and departure. 

Such help is free of charge. 

The tugs do not supply hawsers. 

2. Tugs may be hired for any operation where their assistance may be neces- 
sary to tow a ship, or to get her afloat, in the harbours or outer-harbours. (See 
tariff, page 210.) 

3. Whatever may be the conditions and circumstances under which the 
Company places a tug at a ship's disposal, the captain of the ship has exclusively 
the direction and control of the operations; consequently he bears the responsibility 
for any damage or accidents whatsoever resulting from the use of the said tug. 

ARTICLE 21 
Prohibitions. 

I. Sounding of the steam-whistle is only allowed for working the ship, or in 
the circumstances laid down in the present Regulations and in the International 
Regulations. 

2. Boats, other than the Canal Company's own, are not allowed to come 
alongside ships which are under way or manoeuvring, except the following ones 
at their own risk: 

(a) The Quarantine and Police boats, 

(b) The mooring boats, 

(c) The ship's agent's boat. 

CONDITIONS OF TRANSIT 

ARTICLE 22 
Formalities to be fulfilled. 

When a ship intending to proceed through the Canal has taken her moorings, 
the captain must enter his ship at the Transit-Office and pay the transit dues, as 
well as, when there is occasion, the dues for pilotage, towage and berthing. A 
receipt is delivered to him, which serves as a voucher in case of need. 

The following written information must be handed in by him: 

Name and nationality of the ship, authenticated by exhibiting the ship's papers 
respective thereto, 

Name of the captain, 

Names of the owners and charterers, 


Afp. 5 CONDITIONS OF TRANSIT 201 

Port of sailing, 

Port of destination, 

Draught of water, 

Length, 

Breadth, 

Number of passengers as shown by the passenger list, 

Statement of crew as shown by the ship's articles, 

Capacity of the ship authenticated by producing her special certificate. 

The captain must also exhibit the bill of health. 

ARTICLE 23 
Preparations for entering the Canal. 

I. All ships ready to enter the Canal must have their yards braced forward, 
their ladders and jib-booms run in, and their boats swung in, and the derricks 
obstructing the view forward, lowered. 

2. At least 4 mooring hawsers in good condition must be in readiness at 
suitable points on deck in case it should be necessary to tie up in the Canal, and 
every arrangement must be made for their quick handling. 

One or two boats, according to the size of the ship, must be in constant readiness 
for lowering in order to carry the hawsers to the mooring posts without any delay. 

3. The bow anchors must be ready to let go. 

T he steering gear and the engine room telegraph must be ascertained to be in 
good working order before entering the Canal. 

4. Captains must, before entering the Canal, ascertain that deck loads, if any, 
are stowed in such manner as not to affect the ship's stability or impede the crew. 

5. The captains of ships in ballast must fill all spaces intended to be used for 
carrying water ballast in such proportion as the officials of the Company may direct. 

6. Ships intending to go through the Canal by night 1 must first satisfy the 
officials of the Company in Port-Said or Port-Thewfik that they are provided with: 

a. A projector (search-light) placed in the axis showing the channel 1,200 
metres ahead (roughly 1,300 yards) and so constructed as to admit of rapid splitting 
up of the beam of rays into two separate segments of 5 each, with a dark sector in 
the middle also of 5. 

b. Overhead lights powerful enough to light up a circular area of about 200 
metres diameter (roughly 650 feet English) around the ship. 

The officials of the Company decide whether the appliances fulfil the require- 
ments of the regulations in order to ensure safe navigation of the Canal at night. 

Special insistence will be exercised on care being taken that the working of the 
generators does not obstruct the sight of the man at the wheel. 

Night transit may be suspended in case of damage to, or imperfection in, the 
appliances. 

7. Captains shall place their wireless apparatus and equipment at the disposal 
of the Canal Company during transit through the Canal. 

Pilots shall be allowed to receive and send free of charge to the Company all 
service messages which may be deemed necessary. 

1 See, regarding night transit, Art. 26, paragraphs 2, 3, and 4. 

Dd 


202 CONDITIONS OF TRANSIT 1933 

The wireless watch will be kept in accordance with the indications of the pilot 
and it may even be required that a continual watch shall be kept during the whole 
transit through the Canal. 

ARTICLE 24 
Hours of departure and movements under way. 

I. The Captain will apply for a pilot by clearly exhibiting, one and a half 
hours before the stated hour of departure, the signal as prescribed. 

2. Mooring must not be changed before the pilot is on board. The ship will 
get under way only if there is no signal from the Company to the contrary. 

3. When several ships are ready to get under way at the same time, the order 
of their sailing either for the Canal or for sea will be fixed by the Company. 

The Company will prescribe the movements of ships under way in order to give 
full security to navigation, and to ensure, as far as possible, the speedy passage of 
mail ships. 

Consequently no ship may demand immediate passage through the Canal, and 
no claim as to delay arising from the foregoing causes can be admitted. 

4. The Captain may apply for the Company's tugs to help to manoeuvre his 
ship. Such help will be granted under the conditions of Article 20. 

5. The Captain must set a watch both by day and by night. 

6. All ships, tugs included, must stop whenever there is not a clear passage 
ahead. 

They must also slow down passing sidings, sections of the banks being stone- 
faced or cut back, as well as all ships in sidings or under way, hoppers, dredgers, 
and other floating plant. 

7. As soon as a ship has tied up, whether in or out of a siding, she must hoist 
the signals prescribed in the special Book of Signals. 

Ships must slack down any hawsers they may have had to run across the Canal 
so as to give free passage to tugs, steam or motor launches, hopper-barges and any 
other light draught craft that may have to pass them. 

Men must be constantly at hand ready to slack down hawsers or cut them in 
case of need. The ship's engines must always be under steam ready to be started. 

8. Ships proceeding in the same direction are not allowed to overtake one 
another under way in the Canal. 

In the case of a ship being allowed to pass another one ahead of her, this must 
be done comformably with the indications given by the Company's officials. 

9. Captains are forbidden to anchor in the Canal, except in case of absolute 
necessity. 

ARTICLE 25 
Speed. 

The maximum speed of ships passing through the Canal is normally twelve 
kilometres (6 nautical miles) per hour. 

Exceptionally, a speed slightly in excess of the twelve-kilometre maximum may 
be allowed in order to enable ships to steer better. 


Aft. 5 CONDITIONS OF TRANSIT 203 

ARTICLE 26 
Night transit. 

i. Navigation of sailing craft of every description by night is entirely 
forbidden. 

2. During night transit ships must keep their projector alight. 1 They must 
show their regulation lights and keep a man on the look-out forward. 

3. When a ship under transit at night is about to tie up whether in or out of 
a siding, she must at once extinguish her projector and turn on her overhead lights. 1 
When she has completed tying-up she must extinguish her overhead lights and her 
navigating lights and hoist the lights prescribed in the special Book of Signals. 

4. Ships navigating at night in the Large Bitter Lake must extinguish their 
projector except in the portions immediately adjoining the outlets of the Canal 
into the Lake where the channel continues to run between two lines of buoys. 

5. Ships not provided with projectors are only allowed to transit at night 
under exceptional circumstances, the captain being entirely responsible for any 
delay, mishap or damage of any description, that may happen to his own ship, as 
well as for any similar accidents he may cause to other ships in the Canal or to the 
Company's craft, plant or installations. Ships going through the Canal under these 
conditions are subject to all the other rules for night transit. 

ARTICLE 27 
Prohibitions. 

The following prohibitions are hereby notified to captains: 

1. Throwing overboard in the ports of the Canal or at any point during transi- 
tion from sea to sea, earth, ashes, cinders, or articles of any kind. 

2. Emptying or letting flow oil, petrol, heavy oil, oil fuel, or scourings or clean- 
sing water from tanks having contained such products. Loading, unloading, and, 
generally, handling of liquid fuel must be so carried out as to avoid any fuel leaking 
into Canal waters, failing which, the Company reserves to itself the right to stop 
such operations until the necessary repairs will have been effected. 

3. Picking up, without the direct intervention of the Company's officials, any 
object that may have fallen into the Canal or its ports of access. 

Whenever any object or merchandize whatsoever falls overboard, the circum- 
stance must be immediately reported to the Canal Company. 

If the Company considers that the picking up cannot be effected by the interested 
parties without impeding the transit, the Company proceeds to carry it out, at their 
expense. 

4. Allowing any gun shots to be fired. 

5. Burial in the banks of the Canal. 

6. To take boats or floating appliances of whatever description in tow. 

ARTICLE 28 
Accidents. 

i. Whenever a collision appears probable, ships must not hesitate to run 
aground, should this be necessary, to avoid it. 

1 See art. 23, paragraph 6. 


204 TOWAGE AND CONVOYING 1933 

2. Whenever a ship is accidentally stopped on her way, she must, if other 
ships are following her, attract their attention by sounding her steam- whistle 
sharply four or five times in close succession, repeating this several times at a few 
moments' interval until the ship following her repeats this signal, which must be 
taken as an order to slacken speed at once with a view to stopping, if need be. 

Ships stopped accidentally at night must immediately replace their white stern 
light by a red light. 

In case of grounding the captain must also immediately signal to that effect 
conformably with the indications in the Book of Signals. 

3. When a ship gets aground, the officials of the Company alone are em- 
powered to prescribe and supervise all operations required to get her off, including 
unloading and towing if necessary, captains placing at their disposal all available 
means. 

All attempts on the part of other ships to get off a ship aground are strictly 
prohibited. 

4. When a ship grounds or stops in the Canal in consequence of an accident 
other than a collision, the Company, in order to remove the obstruction in the 
fairway with all possible speed and to hasten the restarting of the ship, does not 
claim any reimbursement whatsoever of expenses incurred in getting off the ship. 
If once afloat, the ship continues her transit in tow, she must from this moment 
pay towage charges, as scheduled in the present regulations. 

It is moreover well understood that ships bear all expenses incurred in repairs, 
or putting into condition, necessary to remedy such damage as might interfere 
with their restarting, whatever be the moment at which the damage may have 
taken place, and that they remain responsible for all damage and accidents of 
whatsoever kind which may be the consequence of the grounding. 

5. When a ship grounds or stops in the roads, or ports, from whatever cause, 
or in the Canal itself in consequence of collision, all charges of getting the ship off, 
towing, unloading, reloading, &c., are charged to the ship and must be paid, as 
per statement drawn up by the Company, before leaving Port-Thewfik or Port- 
Said. 

TOWAGE AND CONVOYING 

ARTICLE 29 
Compulsory towage or convoying. 

The Officials of the Company may order that certain defective ships, or ships 
carrying dangerous cargoes, shall be towed or convoyed in the Canal by one of 
the Company's tugs. 

Towage charges are based on the schedule at the end of the present rules. 

ARTICLE 30 
Hire of tugs on a lump sum basis. 

By arrangement with the Company, tugs can be hired on a lump sum basis for 
the towage of any type of craft or vessel which cannot transit the Canal under their 
own power. 


Afp. 5 MEASUREMENT OF TONNAGE 205 

ARTICLE 31 
Use of private tugs. 

I. Shipowners are authorized to have their ships towed or convoyed by their 
own tugs, or tugs belonging to third parties, under their entire responsibility. Such 
tugs must be approved of by the Canal Company. 

2. Ships towed or convoyed by approved tugs pay fifty centimes towage dues 
per ton. 

3. Approved tugs towing or convoying ships are free of any charge. 

When they go through the Canal either for the purpose of meeting ships which 
they are about to tow or convoy, or in order to return to their home berth after 
having towed or convoyed the said ships, tugs are not liable to payment of the 
tonnage dues, but they must take a pilot on board. 

They must carry neither goods nor passengers; the fact of having on board 
passengers or goods renders them liable to the payment of all dues and charges to 
which ships in transit are subject. 

4. Notwithstanding the special treatment above stipulated, tugs belonging to 
private owners are subject to the strict observance of all other articles of the regula- 
tions relative to ships under way or berthed. 

EXTRACT FROM THE REGULATIONS FOR THE MEASURE- 
MENT OF TONNAGE 

recommended by the International Tonnage Commission assembled at Constantinople 

in 1873 

(Minutes of Proceedings, xxi, Appendix ii) 
GENERAL PRINCIPLES 

1 . The gross tonnage or total capacity of ships comprises the exact measurement of all 
spaces (without any exception), below the upper deck, as well as of all permanently covered 
and closed-in spaces on that deck; 

N.B. By permanently covered and closed-in spaces on the upper deck are to be under- 
stood all those which are separated off by decks or coverings or fixed partitions, and there- 
fore represent an increase of capacity which might be used for the stowage of merchandise, 
or for the berthing and accommodation of the passengers or of the officers and crew. Thus, 
any one or more openings, either in the deck or coverings, or in the partitions, or a break 
in the deck, or the absence of a portion of the partition, will not prevent such spaces being 
comprised in the gross tonnage, if they can be easily closed in after admeasurement, and thus 
better fitted for the transport of goods and passengers. 

But the space's under awning decks without other connexion with the body of the ship 
than the props necessary for supporting them, which are not spaces 'separated off' and are 
permanently exposed to the weather and the sea, will not be comprised in the gross tonnage, 
although they may serve to shelter the ship's crew, the deck passengers, and even merchan- 
dise known as 'deck loads'. 

2. 'Deck loads' are not comprised in the measurement; 

3. Closed spaces for the use or possible use of passengers will not be deducted from the 
gross tonnage; 

4. The determination of deductions for coal spaces may be effected either by the rules 
of the European Danube Commission of 1 87 1 or by the exact measurement of fixed bunkers. 


206 MEASUREMENT OF TONNAGE 1933 

RULE II. FOR LADEN SHIPS 

ART. 9. When ships have their cargo on board, or when for any other reason their 
tonnage cannot be ascertained by means of Rule I, proceed in the following manner: 

Measure the length on the upper deck from the outside of the outer plank at the stem 
to the aftside of the stern-post, deducting therefrom the distance between the aft-side of the 
stern-post and the rabbet of the stern-post at the point where the counter-plank crosses it. 

Measure also the greatest breadth of the ship to the outside of the outer planking or 
wales. 

Then, having first marked on the outside of the ship, on both sides thereof, the height of the 
upper deck at the ship's sides, girt ship at the greatest breadth in a direction perpendicular 
to the keel from the height so marked on the outside of the ship, on the one side, to the 
height so marked on the other side, by passing a chain under the keel; to half the girth thus 
taken add half the main breadth; square the sum, multiply the result by the length of the 
ship taken as aforesaid; then multiply this product by the factor 0-17 (seventeen hundred ths) 
in the case of ships built of wood, and by the factor 0-18 (eighteen hundredths) in the case 
of ships built of iron. The product will give approximately the cubical contents of the ship, 
and the general tonnage can be ascertained by dividing by 100 or by 2-83, according as the 
measurements are taken in English feet or in metres. 

ART. 10. If there be a break, a poop, or other permanent covered and closed-in spaces 
(as defined in the general principles) on the upper deck, the tonnage of such spaces shall 
be ascertained by multiplying together the mean length, breadth and depth of such spaces 
and dividing the product by 100 or 2-83, according as the measurements are taken in 
English feet or metres, and the quotient so obtained shall be deemed to be the tonnage of 
such space, and shall be added to the other tonnage in order to determine the gross tonnage 
or total capacity of the ship. 

DEDUCTIONS 1 

TO BE MADE FROM THE GROSS TONNAGE IN ORDER TO ASCERTAIN THE NET TONNAGE 

ART. 1 1 . To find from the gross tonnage of vessels as above set forth the official, or net 
register tonnage, either for sailing vessels or for steam ships, the following mode of operation 
must be resorted to: 

Sailing vessels. 

ART. 12. For sailing vessels deduct: the spaces exclusively and entirely occupied by the 
crew and the ship's officers, those taken up by the cookhouse and latrines exclusively used 
by the ship's officers and crew whether they be situated above or below the upper deck; the 
covered and closed-in spaces, if there be any situated on the upper deck, and used for 
working the helm, the capstan, the anchor gear, and for keeping the charts, signals, and 
other instruments of navigation. 

Each of the spaces deducted as above may be limited according to the requirements and 
customs of each country, but the deductions must never exceed in the aggregate 5 per cent, 
of the gross tonnage. 

ART. 13. The measurement of these spaces is to be effected according to the rules set 

1 Extract from the final report of the International Tonnage Commission assembled at 
Constantinople in 1873: 

17. It is recommended that a penal provision shall be enacted to the effect that if any of 
the permanent spaces which have been deducted shall be employed either for the use of merchan- 
dise or passengers, or in any way profitably employed for earning freight, that space shall be 
added to the net tonnage, and nevermore be allowed as a deduction. 


App. 5 MEASUREMENT OF TONNAGE 207 

forth for the measurement of covered and closed-in spaces on the upper deck; the result, 
obtained by deducting the total of such allowances from the gross tonnage, represents the 
net or register tonnage of sailing vessels. 

Steam ships. 

ART. 14. For vessels propelled by steam or any other mechanical power, deduct: 

1 . The same spaces as for sailing vessels (art. 1 2) with the limitation to 5 per cent, of 
the gross tonnage; 

2. The spaces occupied by the engines, boilers, coal-bunkers, shaft-trunks of screw 
steamers, and the spaces between decks and in the covered and closed-in erections on the 
upper deck surrounding the funnels, and required for the introduction of air and light into 
the engine-rooms, and for the proper working of the engines themselves. Such deductions 
cannot exceed 50 per cent, of the gross tonnage. 

ART. 15. The measurement of the spaces allowed for both in sailing vessels and in 
steam ships (section I of art. 14) is to be effected according to the rules set forth in articles 
1 2 and 1 3 for sailing vessels. 

Spaces for which allowances are made in steam ships only (section 2 of art. 14) are 
measured according to the following rules: 

Ships having coal-bunkers with movable partitions. 

ART. 1 6. In ships that do not have fixed bunkers, but transverse bunkers with movable 
partitions, with or without lateral bunkers, measure the space occupied by the engine-rooms, 
and add to it, for screw steamers 75 per cent., and for paddle steamers, 50 per cent, of such 
space. 

By the space occupied by the engine-rooms is to be understood that occupied by the 
engine-room itself and by the boiler-room together with spaces strictly required for their 
working, with the addition of the space taken up by the shaft-trunk in screw steamers and 
the spaces between decks which enclose the funnels and are necessary for the admission 
of air and light into the engine-rooms. 

These spaces are measured in the following manner: 

Measure the mean depth of the space occupied by the engines and boilers from its crown 
to the ceiling at the limber strake, measure also three, or, if necessary, more than three 
breadths of the space at the middle of its depth, taking one of such measurements at each 
end and another at the middle of the length; take the mean of such breadths; measure also 
the mean length of the space between the foremost and aftermost bulkheads or limits 
of its length, excluding such parts, if any, as are not actually occupied by or required for the 
proper working of the engines and boilers. 

Multiply together these three dimensions of length, breadth and depth, and the product 
will be the cubical contents of the space below the crown. 

Then find the cubical contents of the space or spaces, if any, between the crown aforesaid 
and the uppermost or poop deck, as the case may be, which are framed in for the machinery 
or for the admission of light and air, by multiplying together the length, depth and breadth 
thereof. 

Add such contents as well as those of the space occupied by the shaft-trunk to the cubical 
contents of the space below the crown; divide the sum by 100 or by 2*83, according as 
the measures are taken in English feet or metres, and the result shall be deemed to be the 
tonnage corresponding to the engine and boiler-room which serves as basis for the 
deductions referred to. 

If in any ship in which the space aforesaid is to be measured, the engines and boilers are 
fitted in separate compartments, the contents of each shall be measured separately in like 
manner, according to the above rules, and the sum of their several results shall be deemed to 
be the tonnage of the engine-rooms which serves, as aforesaid, as basis for the total deductions. 


208 MEASUREMENT OF TONNAGE 1933 

Ships with fixed coal-bunkers. 

ART. 17. In ships with fixed coal-bunkers, measure the mean length of the engine- and 
boiler-room, including the coal-bunkers. Ascertain the area of three transverse sections of 
the ship (as set forth in the rules given in articles 3 and 4 for the calculation of the gross 
tonnage) to the deck which covers the engine. 

One of these three sections must pass through the middle of the aforesaid length, and the 
two others through the two extremities. 

Add to the sum of the two extreme sections four times the middle one, and multiply the 
sum thus obtained by the third of the distance between the sections. This product divided 
by 100, if the measurements are taken in English feet, or by 2*83 if they are taken in metres, 
gives the tonnage of the space in question. 

If the engines, boilers, and bunkers are in separate compartments, they are separately 
measured, as above set forth, and the results are added together. 

In screw steamers the contents of the shaft-trunk are measured by ascertaining the mean 
length, breadth and height, and the product of the multiplication of these three dimensions 
divided by TOO or 2-83 according as the measurements are taken in English feet or in metres, 
gives the tonnage of such space. 

The tonnage of the following spaces between decks and in the covered and closed-in 
erections on the upper deck, is ascertained by the same method, viz.: 

a. The spaces framed-in round the funnels; 

b. The spaces required for the admission of light and air into the engine-rooms; 

c. The spaces, if any, necessary for the proper working of the engines. 

ART. 1 8. Instead of the measurement of fixed bunkers, the rules for bunkers with 
movable partitions as set forth in article 16 may be applied. 

ART. 19. In the case of fugs the allowances are not limited to 50 per cent, of the gross 
tonnage; all the spaces occupied by machinery, boilers, and coal-bunkers may be deducted. 

Nevertheless, if such vessels are not exclusively employed as tugs, the deductions in 
question cannot exceed 50 per cent, of the gross tonnage. 

ADDITIONAL DEDUCTIONS ALLOWED BY THE SUEZ CANAL 

COMPANY 

The Company allow the following spaces to be included in the deductions specified at Art. 12 
of the regulations for the measurement of tonnage ', provided the deductions do not, in the 
aggregate, exceed 5 per cent, of the gross tonnage: 

A. The chart-room, even when also used as the captain's cabin. When, however, the 
captain's accommodation comprises several rooms, one of which is the chart-room, that 
room alone is deducted; but, in all cases, the room used as the chart-room must, if it is to 
be deducted, be situated on the upper deck. 

B. The cabins of the ship's doctors, if actually occupied by them. 

C. A mess-room, if there is one, for the exclusive use of the officers and engineers; or, 
if they exist, two mess-rooms: one of them for the exclusive use of the officers, the other 
one for the exclusive use of the engineers. 

A mess-room, if there is one, for the exclusive use of the petty officers. 
No deduction is allowed for the officers' mess-room in ships having passenger accommoda- 
tion, which are not also provided with a passengers' mess-room. 

D. All spaces fitted as bath-rooms, or lavatories, for the exclusive use of the ship's 
officers, engineers, and crew, with the exception of such of the said bath-rooms as is available 
for passengers when no bath-room for their exclusive use is provided. 

E. All spaces specially provided for the storage of search-lights, the wireless telegraphy 


. 5 MEASUREMENT OF TONNAGE 209 

installation and the operator's berth, on condition that they are situated on the upper 
deck. 

The above specified spaces can only be deducted if they bear a distinctly visible and 
permanent indication of their exclusive appropriation. 

MEASUREMENT OF DECK SPACES 

For ships fitted with superstructures the following rules, which concern only such spaces as are 
excluded from the national tonnage, are applied; 

I. Ships with one tier of superstructures only 

1. Poop, bridge, forecastle. 

The following exemptions are allowed: 

a. Such length of the poop measured from the inside of the stern timber, at half height 
of the said poop, as shall be equal to J Q th of the full length of the ship. 

b. The portion of the bridge in way of the air spaces of the engine and boiler spaces, 
it being understood that such air spaces are not considered to extend beyond the forward 
bulkhead of the stoke-hold and the after bulkhead of the main engine-room. 

c. Such length of the forecastle measured from the inside of the stem at half height of 
the said forecastle, as shall be equal to ?th of the full length of the ship. 

d. In each of the above three cases of superstructures, such portions as are in way of 
openings in the walls of the ships not provided with any means of closing and facing one 
another. 

2 . Poop and bridge combined, or forecastle and bridge combined. 

In each of these combined spaces, the following exemptions are allowed: 

a. That length only which corresponds to the openings of the engine-room and boiler 
spaces as specified in (r. <) above. 

b. Such portions as are in way of openings not provided with any means of closing and 
facing one another in the walls of the ship. 

3. Shelter-decks. 

In the case of shelter-decks, the following exemptions are allowed: 
The portions in way of openings in the side plating of the ship not provided with any 
means of closing and facing one another. 

Such air spaces as are situated within the shelter-deck must be measured into the engine- 
room space and deducted together with 75 per cent, of their volume. 

II. Ships having more than one tier of superstructures. 

a. The exemptions prescribed in paragraphs i, 2, and 3 above are applicable in their 
entirety to the lower tier only. 

b. Tiers above the lower tier are only allowed the exemption of such portions as are in 
way of openings in the side plating of the ship not provided with any means of closing and 
facing one another. 

Remark. 

Should a ship, at any time, transit with passengers, merchandise of any kind, or bunker 
coal, or stores of any description, in any portion whatever of any exempted or deducted 
space, the whole of that space is added to the net tonnage and can nevermore be exempted 
from measurement. 

E e 


210 


MEASUREMENT OF TONNAGE 
TAXATION OF DOUBLE-BOTTOMS 


1933 


When double-bottom spaces are utilized for the carriage of oil during the transit of the 
Canal their cubical capacity will be added to the tonnage. 

Contrary, however, to the rules actually in force, this addition will not be of a perma- 
nent character; the cubical capacity of the said spaces will only be added to the tonnage 
when they are utilized. 


A tugboat 


A lighter 


Floating Crane of 
100-150 tons 


Sheer-hulk 60 tons 


TARIFF FOR THE HIRE OF PLANT 


i st class ...... per hour 

2nd 

3rd 

,4th 

{ i st category per day 
2nd 
3rd 

'ist hour . ....... 

For each con- fat work ...... 

secntive hour I while shifting position or waiting . 
after the first \ 

ist hour ........ 

For each con- (at work ...... 

secutive hour I while shifting position or waiting . 
after the first ( 


(ist hour ...... 
For each con- (at work 
secutive hour J while shifting position or waiting 
after the first { 

A sheer-hulk of 12 (\s\. hour 

tons. (A floating I For each con- (at work 

self-propelling j secutive hour I while shifting position or waiting 

crane.) \ after the first \ 


Sheer-hulks of 8 and! For each con- at work 


10 tons 


| secutive hour (while shifting position or waiting 
\afterthefirst \ 


Diving appliances 


250 Fr. 
140 

7$ 99 

50 

75 
50 
25 

15 99 

120 

40 

TOO 
60 

25 99 

80 Fr. 
50 

20 


100 

60 

25 

60 
40 
15 

15 


Hire ....... per hour 

Plus-. Per hour of diving proper, reckoned from the 
moment the diver enters the water to the moment 
he leaves it . . . . . . .15,, 

NOTE. For sheer-hulks and diving appliances the hire will be increased by 50 per cent. 
between 6 p.m. and 6 a.m. 

The same increase will be made between 6 a.m. and 6 p.m. on Sundays and holidays. 

For tugboats, hire is reckoned from the time of first firing; for the other appliances, from 
the time they leave the depot. Hire ceases when they re-enter the depot. The charges for 
towage of the appliances have to be paid over and above the amount for hire. 


Afp. 6 AUSTRALIAN GOVERNMENT AND SUEZ CANAL DUES 211 

Appendix 6 

CORRESPONDENCE RELATING TO SUEZ CANAL DUES' 

NOTE 

THIS correspondence well illustrates the difficulties created by the dual position 
of the British Government as a large shareholder on the one hand and on the 
other as the authority to whom all His Majesty's subjects naturally look to secure 
equitable treatment for British shipping and for the products of His Majesty's 
Dominions and Dependencies beyond the Seas. The Governor-General suggests 
that His Majesty's Government should use their influence to secure a reduction 
of dues. The British Suez Canal Directors point out that such reduction might 
lead to pecuniary loss to the British Treasury. The Treasury concur in the view 
expressed by the British Directors. It only remains for the Board of Trade and 
the Colonial Office meekly to concur with the Lords Commissioners of the 
Treasury. The dividend payable in 1905 was 28 per cent.; it has since attained 
the figure of 44 per cent. ; it is known that representations on the subject have been 
made by some Dominion and Colonial Governments and that six maritime powers 
protested unofficially in 1931 to the Foreign Office, but without result. 

A. T. W. 

No. I 

Governor -General Lord Northcote to the Earl of Elgin. 

My Lord, Sydney, May 15, 1906. 

I HAVE the honour to inform your Lordship that my Ministers have recently been making 
inquiries with a view to considering measures for the improvement of the present means of 
transport between Australia and Great Britain, for the purpose of the encouragement of 
trade and the carnage of immigrants at cheap rates. 

2. In the course of inquiries the important question has arisen as to the route followed 
by steam-ships trading between England and Australia, the voyage via the Cape of Good 
Hope involving a delay of several days as compared with that via the Red Sea and the Suez 
Canal. 

3. It has been learned that many shipowners are deterred from taking the shorter route 
by reason of the very heavy charges which are imposed by the Suez Canal authorities. 
Shipowners are compelled either to increase their rates for passage and freight by adding the 
Canal dues, or else to take the longer but less expensive course round South Africa. As 
every shortening of the voyage between Great Britain and Australia is valuable to shippers 
of perishable and other products, especially in certain seasons, my Ministers are anxious 
that no means shall be left untried to induce the ships to use the Suez Canal. 

4. Seeing that the Canal dues enable shareholders to receive a dividend of 28 per cent., 
my Ministers are of opinion that the time has arrived for the reconsideration of the existing 
rates, and possibly for a substantial reduction therein, and they suggest that, on behalf of 
Australia, as well as of all other British possessions lying to the east of Egypt, the influence 
of the British Government might be employed in procuring concessions which would have 
an early and material effect on inter-Empire trade, as well as upon the volume of traffic 
which will pass through the Canal. 

I have, &c. 

(Signed) NORTHCOTE. 
1 From Command Paper Cd. 3345, 1907. 


212 AUSTRALIAN GOVERNMENT AND SUEZ CANAL DUES 1906 

No. II 
British Suez Canal Directors to Sir Edward Grey. (Received q.th September.) 

Sir, Paris, August 31, 1906. 

IN conformity with the instructions contained in your despatch of the I3th ultimo, we 
have the honour to submit, for the information of the Secretary of State, the following 
observations. 

We have perused the inclosures which are forwarded in the despatch, and have given 
special attention to the letter in which the Governor-General of Australia invokes the 
employment of the influence of the British Government to procure concessions in the way 
of a reduction of the existing rates of dues on vessels passing through the Suez Canal. 

Lord Northcote's Ministers adduce four reasons in support of a reduction of the Tariff 

1. That shipowners are deterred from taking the shorter route on account of the very 
heavy charges. 

2. That the dividends now paid amount to 28 per cent. 

3. That the inter-Empire trade would be beneficially affected. 

4. That the volume of traffic through the Canal would be increased. 

Although these points have been discussed in considerable detail in previous correspon- 
dence between the Foreign Office and ourselves, we will again review the arguments 
briefly. 

1. With regard to the first statement, the statistics of navigation by the Canal route 
present incontrovertible evidence that during the thirty years in which it has been in 
existence the number of ships which have made use of it has greatly and, with the exception 
of minor fluctuations, steadily increased, viz., from 2,000,000 tons net in 1876 to 
13,000,000 tons in 1905. 

Although it might reasonably be supposed that this six-fold increase was in the main due 
to the reductions which have been made in the tonnage rates, little or no relation in the 
way of cause and effect can be traced between them, while the increased traffic appears to 
be proportionate to the growth of the maritime commerce of the world in a very exact 
measure. 

Paradoxical as it may appear, we are assured by many large shipowners that, although 
reductions in the Tariff are welcomed by them, these reductions have practically no effect 
in increasing the Canal traffic, or in diverting from the Cape to the Canal route any material 
amount of tonnage. Far more importance is attached by them to the widening and deepen- 
ing of the Canal than to any reduction in the charges for its use. 

It cannot therefore be maintained that the charges are deterrent, as alleged, but we have 
always supported their reduction, and we would point out that the dues, which were 
originally, in 1869, fixed at 10 fr. per ton, and raised to 13 fr. per ton in 1874, have by 
successive stages been reduced to 7 fr. 75 c. per ton, at which rate they now stand. The 
last reduction of 75 centimes per ton was conceded as recently as from the ist January of 
this year, and followed on a reduction of 50 centimes per ton made on the ist January 
1903, amounting to a total reduction by 14 per cent, of the Tariff during the last three 
years. 

2, While the present dividend of 28 per cent, on the 5oo-fr. share is an undoubted sign 
of the great prosperity of the enterprise, we cannot regard it as a proof that its profits are 
exorbitant. The arrangement which admits of this result was agreed to between the ship- 
owners and M. Ferdinand de Lesseps in 1882, neither party at the time anticipating its 
realization. It must be borne in mind that from 1 869 to 1 870 the shareholders only received 
a yearly dividend of 5 per cent.; from July 1871 to July 1874 the dividend was 
passed and replaced by a certificate for 8 5 fr., which was subsequently paid. From that date 
to July last the average of the dividends has been 16 per cent., but from the formation of 
the Company to the present date it has only amounted, in round figures, to 12 J per cent., 


. 6 AUSTRALIAN GOVERNMENT AND SUEZ CANAL DUES 213 

and, owing to the large increase in the market value of the shares, the return to the purchasers 
for some years past has ranged between 3 and 4 per cent. 

It is manifest that the body of shareholders is interested in maintaining the growth of 
the dividend, and that their voting power at a general meeting would most probably be 
exercised in favour of further increase (with the exception, of course, of the British vote, 
which very inadequately represents the proportion of shares held by His Majesty's Govern- 
ment). We are, however, still hopeful that a method of adjusting the partition of surplus 
revenue, more acceptable to the clients of the Company, may be eventually arrived at. 

It must not be forgotten that the Company spends every year large sums on the improve- 
ment of the Canal, and that a scheme of important works is being carried out with a view, 
on the one hand, to widen the Canal, which will enable the passage to be made more 
quickly; and, on the other, to deepen it, which would enable a large number of vessels to 
carry more cargo, and thus increase their freight-carrying capacity. If further sacrifices 
were asked and obtained from the shareholders the result would probably be a delay in 
carrying out the work of improvement, if not its entire cessation, a result known to be quite 
contrary to the wishes of the shipowners. 

3. That the inter-Empire trade would be beneficially affected is, no doubt, a very valid 
reason for both the Home and Colonial Governments to press for further reductions; but 
these would obviously have a precisely opposite effect upon the foreign rivals of our mari- 
time commerce through the Canal, and it would be futile to urge this argument upon our 
Continental colleagues. 

4. It has often been alleged that the volume of traffic through the Canal would increase 
on a reduction of tariff; but this contention is not wholly borne out by the facts, for the 
reasons that we have already assigned. While we do not altogether deny that some slight 
increase of volume has followed reductions of tariff, the only conspicuous result is a diminu- 
tion of receipts. This is especially apparent in the present year, when the Tariff has just 
been reduced by 75 centimes. The consequent loss would, at the present date, have 
amounted to at least 4oo,ooo/., if the traffic had not been considerably increased by the 
return to Europe, through the Canal, of the Russian troops engaged in the Far East. 

The Board of Trade, having been kept fully informed by the Foreign Office of all the 
somewhat complicated conditions affecting Suez Canal tariffs, will be in a position to give 
its views upon the points raised by Lord Northcote in his despatch. While we cordially 
agree in the general aspiration of the Australian Government, we have, as the representatives 
of the financial interests of His Majesty's Government, to protect the large revenue which 
now accrues to the Exchequer; and we submit that any further reductions of the Tariff 
would practically amount to a subsidy to ships using the Canal, at the cost, to a great extent, 
of pecuniary loss to His Majesty's Government. 

We have, Sec. 

(Signed) H. AUSTIN LEE. 
JOHN C. ARDAGH. 
H. T. ANSTRUTHER. 

No. Ill 
Foreign Office to Board of Trade. 

Sir, Foreign Office, September 12, 1906. 

WITH reference to your letter of the 6th July last, I am directed by Secretary Sir E. Grey 
to transmit to you, to be laid before the Board of Trade, the accompanying copy of a des- 
patch from the British Directors of the Suez Canal Company, 1 in connection with the 
request of the Governor-General of Australia that His Majesty's Government should use 
their influence to secure a reduction in the charges imposed by the Canal authorities. 

1 No. II. 


214 AUSTRALIAN GOVERNMENT AND SUEZ CANAL DUES 1906 

A Copy of this despatch has also been communicated to the Treasury, and Sir E. Grey 

would request that the reply to the Governor-General of Australia should be deferred until 

the Lords Commissioners have had the opportunity of expressing their views on the subject. 

I am, &c. 
(Signed) F. A. CAMPBELL. 

No. IV 
Treasury to Foreign Office. 1 (Received 2 October.} 

Sir, Treasury Chambers, October i, 1906. 

I HAVE laid before the Lords Commissioners of His Majesty's Treasury Mr. Campbell's 
letter of the I2th ultimo, inclosing copy of a despatch from the British Directors of the Suez 
Canal Company on the subject of the Australian Government's request that the influence 
of His Majesty's Government may be used to secure a reduction in the charges imposed on 
traffic through the Canal. 

In reply their Lordships direct me to acquaint you, for the information of the Secretary 
of State for Foreign Affairs, that they concur in the views expressed by the Directors, and 
that a reply to the Australian Government in that sense would meet with their approval. 

While my Lords are in full sympathy with the object of the Commonwealth Ministers, 
they do not think that anything would be gained by the attempt to pursue that object 
without due regard to the interests of those who have a purely financial concern in the 
affairs of the Canal. 

I am, &c. 
(Signed) E. W. HAMILTON. 

No. V 
Board of Trade to Foreign Office. (Received 17 October.) 

Sir Board of Trade, October 16, 1906. 

WITH reference to your letter of the nth instant, transmitting a copy of a letter from 
the Treasury respecting the Australian Government's request that the influence of His 
Majesty's Government may be used to secure a reduction in the Suez Canal dues, I am 
directed by the Board of Trade to state, for the information of Sir E. Grey, that they pro- 
pose to send a copy of the despatch from the British Directors of the Suez Canal Company 
which accompanied your letter of the I2th ultimo to the Colonial Office, and to com- 
municate to that Department the substance of the Treasury letter, with an intimation that 
the Board, having regard to all the circumstances of the case, acquiesce in the views expressed 
therein. 

The Board will be glad to be informed whether Sir E. Grey concurs in this proposal. 

I am, &c. 
(Signed) WALTER J. HOWELL 

No. VI 
Foreign Office to Board of Trade. 

Sir, Foreign Office, October 18, 1906. 

I AM directed by Secretary Sir E. Grey to acknowledge the receipt of your letter of the 
1 6th instant respecting a reduction of the Suez Canal dues, and to state that he concurs in 
the proposal of the Board of Trade as expressed therein. 

I am, &c. 

(Signed) E. GORST. 
1 Copy sent to Board of Trade, nth October 1906. 


App.i MIGRATION OF MARINE FAUNA 215 

No. VII 
The Earl of Elgin to Governor-General Lord Northcote. 

My Lord, Downing Street, October 31, 1906. 

I HAVE the honour to transmit, for the information of your Ministers, the accompanying 
copy of a letter 1 from the British Directors of the Suez Canal Company regarding the 
charges imposed by the Suez Canal authorities. 

I am informed that the Lords Commissioners of the Treasury and the Board of Trade 
concur in the views expressed by the Directors, and that although they are in full sympathy 
with the object of your Ministers, they do not think that anything would be gained by an 
attempt to pursue that object without due regard to the interests of those who have a purely 
financial concern in the affairs of the Suez Canal. 

I am, &c. 
(Signed) ELGIN. 


Appendix 7 

NOTE ON THE EFFECT OF THE SUEZ CANAL ON THE 
MIGRATION OF MARINE FAUNA* 

THE marine fauna of the Mediterranean and the Red Seas differ widely from one 
another. Relatively few species are common to both seas. Since the opening of 
the Suez Canal, however, a considerable number of marine plants and animals 
have passed through from one sea to another. By 1896 creatures hitherto peculiar 
to the Red Sea had reached Fiume and Tunis, probably attached to the hulls 
of ships. The swimming crab, a staple article of food in Egypt, formerly existed 
only in the Red Sea: it is now found in large numbers at Alexandria and Haifa. 

The canal itself is not favourable to migration; constant dredging, incessant 
churning of the muddy bottom, high water temperatures, and the absence of any 
current from one end to the other are the principal obstacles. Though there is 
a progressive diminution in the salt content of the Bitter Lakes, due to the inter- 
mingling of sea-water brought by the canal, the salinity is still very high. This is 
not, however, necessarily an obstacle to migration, as the fauna of the Lakes are on 
an average larger than the corresponding species in either sea. Red Sea species 
tend to predominate, owing probably to tidal currents. 

1 No II. 

2 Abstracted ^frorn the Proceedings of the Zoological Society of London, vol. xxii, 1926: 
Cambridge Expedition organized in 1924 by Professor Stanley Gardiner, F.R.S. 


INDEX 


AALI PASHA, 21. 

Abaza Pasha, 99, 100-1. 

Abbas Pasha, 12. 

Abbas Hilmi, Khedive, 96. 

Abbas Hilmi II, cited, 102, 104. 

Abdul Hamid, 93. 

Abdul Latif Pasha Sufani, 97, 98. 

Aboukir Bay, 10. 

'Actions de jouissance', 109. 

Actium, battle of, 35. 

Aden, Gulf of, tonnage of shipping, 137. 

Africa, 'colonization' of, 117. 

tonnage of shipping, 1 18, 137. 
Agreement, draft of 1883, 66. 
Ahmed Afify Pasha, 97. 
Ahmed Yehya Pasha, 97. 
Aiton, contractor, 28. 

Akaba, 140. 

Gulf of, 93. 
Alabama question, 39. 
Aleppo, 20. 

Alexander the Great, 4. 
Alexander, R., 79, 108. 
Alexandretta, Gulf of, 141. 
Alexandria, 155. 

Police, 139. 
Alexandria-Suez railway, 1 1 . 
AlexiefF, 79. 

Algeciras Conference, 93. 

Allen, Capt. W., 65, 81. 

Allenby, Gen., 142. 

Aly Sha'rawy Pasha, 97. 

American War, effect on canal construction, 

26. 

Amin Bey El-Aaref, 97. 
Amin el Shamsy Pasha, 97. 
Amos, Mr. Sheldon, quoted, 57. 
Amru, Khalif, 5. 
Anderson, A., cited, 8, 13. 
Anderson, Sir A., 108. 
Anderson, J. G. S., 84. 
Anglo-Egyptian negotiations in 1921, ix. 

declaration of 1922, ix. 
Anglo-French agreement in 1904, 92. 
Anstruther, H. T., 108, 213. 
Antioch, 19, 20. 

Apponyi, Count, 24. 


Arabi Pasha rebellion, 63, 90. 

Ardagh, Sir J., 108, 213. 

Argyll, Duke of, 45. 

Arish (El), 142. 

Aries, M., 9. 

Arrow, Sir F., cited, 57. 

Arsinoe, 2. 

Asquith, Rt. Hon. H. H., 93. 

Attakah, 3. 

Australia, and canal, 94, 117, 149. 

tonnage of shipping, 118, 137. 

Austria, 22. 

Austrian Govt., views of, 17, 211-15. 

Austro- Hungary, tonnage of shipping, 135 . 

BAAL ZEPHON, 3. 

Babylon, 4. 

Bacon, Lord Chancellor, quoted, iii. 

Baghdad, 4, 20. 

Baldwin, Rt. Hon. Stanley, quoted, x. 

Ballah, Lake, 28. 

Barakat Bey, 100. 

Bartlett, Mr. Ashmead, 73. 

Basrah, 20. 

Bauer, Monsignor, 39. 

Becrsheba, 140. 

Belbeis, 5. 

Belgium, subscriptions from, 22. 

Berthier, 6. 

Bikanir Camel Corps, 139. 

Bitter Lakes, I, 139, 140. 

Bombay, 1 17. 

Borel and Lavalley, 28 sqq. 

Bosnia, 46. 

Bosphorus, 8, 19. 

Boutros Pasha Ghali, 98. 

Brassey, Lord, 108. 

Bright, John, 53. 

British India S. N. Coy., 42. 

Brocket Hall, 29. 

Brocklebank, Sir A., 108. 

Bruce, Mr. T. C, 73, 87. 

Brunlees, J., cited, 13. 

Bubastis, 2, 5. 

Buckingham, J. S., 7. 

Buckle, Life of Disraeli, quoted, 54. 

Bulwer, Sir H., 23, 25. 


pf 


220 INDEX 

Hamley, W. G., cited, 5, 13. 
Hammond, Mr., 53. 
Hardinge, R.I.M.S., 140. 
Harden, M., 26. 
Hartington, Lord, 52 sqq. 
Hartley, Sir C., 8, 32; cited, 43. 
Harun er Rashid, 4. 
Harvey, Sir P., 97. 
Hassan Bey Bakry, 97. 
Hassan Madkur Pasha, 97. 
Hawk, S.S., 40. 
Hawkshaw, Sir J., 32 sqq. 
Hay-Pauncefote Treaty, 144. 
Henderson, Rt. Hon. Arthur, 159. 
Herodotus quoted, I. 
Heron, R. M., cited, 13. 
Heroopolis, 4. 
Heroum, 2. 
Herschel, Sir F., 65. 
Herzegovina, 46. 
Hewett, Admiral, 90. 
Hilaire, St., cited, 14. 
Holland, subscriptions from, 22. 

representation on Board, xi. 
Hong Kong, 149, 151. 
Home, Sir R., 108. 

Hoskins, Dr. H. L., cited, viii, 13, 20, 30, 

42, 54- 

Hough, B. Olney, cited, 128. 
Howell, Walter J., 214. 
Hughes, J. W., 108. 
Hughes, T. H., 108. 
Hugli pilot, 10. 
Husain Kamal, Prince, 97. 

IBRAHIM PASHA, 33. 
Ibrahim Murad Pasha, 97. 
Imperial Shipping Committee, I 59. 
Inchcape, Lord (Sir J. L. Mackay), 108, 
155; quoted, 130. 

interviews deputation, 155. 
India and canal, xi, 117, 1 18. 

tonnage of shipping, 118, 137. 
Interlaken, Franco-Russian discussions at, 

* 8 ' . 
'Iraq pipe-line, 150. 

Ismail Effendi Karim, 97. 
Ismail Pasha, accession, 25, 33. 

debts of, 48. 

plans to sell shares, 49. 

Abaza, 97, 98. 

Ismailia, 29 sqq., 90, 139, 140. 


Italy, tonnage of shipping, 118, 135, 150. 

subsidies to shipping, 154. 

JAMES, SIR H., 65. 

Janina, Pasha of, 48. 

Japan and canal, xi, 92, 118, 149. 

railways built in, 117. 

tonnage of shipping, 118, 135, 137, 
150. 

trade of, 150. 
Java, 1 54. 

Jerusalem, Archbishop of, 39. 

Johnson, Dr., quoted, 36. 

Johnson, Prof. Emery, quoted, 144. 

Journal de /' Union des deux Mers, 2 3 . 

Jules, M., 9. 

Jurien de la Graviere, 79. 

KANTARA, 90, 140, 142. 

Kcnney, C. L., cited, 30. 

Khalifs, 5. 

Khedive, title of, 33. 

Khedive's shareholding, amount of, 48 sqq., 

5 8. 

Kinglake quoted, 17. 
Kitchener, Lord, 141. 
Knebworth, Lord, 167. 
Kulzum, 2. 
Kylsant, Lord, 108. 

LABOUR, FORCED, USE OF, 24, 26. 

deaths among, 3 1 . 

religious needs of, 31. 

Laing, Sir. J., 79, 82, 84, 85, 108. 
Lane-Poole, S., cited, 7, 13. 
Lang, Andrew, cited, 50, 57. 
Lange, Sir D., 20, 45. 
Lansdowne, Lord, 11314. 
Laplace, 7. 
Laroche, M., 32, 79. 
Larousse, M. 32. 
Latif, frigate, 38. 
Lauture, E. de, cited, 13. 
Lavalley, 28 sqq. 
Lawrence, T. J., cited, 93. 
Layard, Sir A. H., 53. 
League of Nations, 56, 171. 
Lee, Sir Henry Austin, 108, 213 
Lefe*bure de Fourcy, 79. 
Leibniz, 6. 
Lemasson, M., 80. 
Leon, M., 9 


INDEX 


221 


Lepere, M., 6. 

Lesage, M., quoted, 160. 

*and administrative proposals (1883), 

84 sqq. 
Lesseps, F. de, quoted, iii; cited, 13- 

14, etc. 

and British occupation of canal, 91. 

and Gladstone, 69. 

and greed of speculators in canal shares, 

165. 

as mandataire y 63, 91, 161. 

defies Porte, 167. 

greatness of, vii, 167, 170. 

his alleged monopoly, 164. 

meets Enfantin, 7. 

meets Said Pasha, 1 1 . 

neutrality proposals of, 89, 90. 

obtains concession, 12. 

pension to his family, r 16. 

reception in London 1870, 4- 

relations with Lange, 20, 45. 

relations with Stephenson, 10, 20. 

tributes to, vii. 

views on profits, x. 

Levels, Port Said to Suez, I, 6 sqq. 

Levi, L., 87. 

Linant, M., 7, 79. 

Liverpool Ship Owners' Association, 129, 

155; quoted, 145. 
London Chamber of Shipping, 113. 
'London Programme' of 1883, 66, 112-14, 

157, 165. 

Lord Mayor of London, 40. 
Louis, Saint, 33. 
Louis XIV, XV, XVI, 6. 
Lucretius quoted, x. 
Lyons, Lord, cited, 50 sqq. 

McCLEAN, J. R., 19. 
McCoan, J., cited, 14. 
Mackay, Sir J. L., see Inchcape. 
Mackinnon, Sii^W., 79, 84, 108. 
Macrosty, Mr. H. W., acknowledgements 

to, ix. 

Madagascar, 77. 
Magnetic rock, 2. 
Magniac, C., cited, 57. 
Mahmoud Bey Abd El GhafFar, 97. 
Mahmoud Soliman Pasha, 97. 
Mahroussa, yacht, 39. 
Malcolm, Sir Ian, 108; cited, 43, 143, 

1 66; quoted, viii, 22, 39, 78. 


Malta, 27, 63. 

Mamelukes, 6. 

Manby, C., 19. 

Manchuria, 117. 

Manila, 151. 

Mansur, Khalif, 5. 

Mansurah, 33. 

Marquis, Mr. F. J., quoted, 152. 

Massah and Menbah, 25. 

Maxwell, Sir J., 139, 141; cited, 138; 

quoted, 143. 
Medina, 5. 

Melbourne, 150, 155. 
Memphis, 2. 
Menzaleh, 32 sqq. 
Messageries Maritimes, 60. 
Mesopotamia, canals in, 4. 
Metternich, Prince, 89. 
Mex, 28 sqq. 

Michael, Grand Duke, 39. 
Mimaut, M., 8; cited, 160. 
Miocene period, i. 
Modena, 25. 

Mohammed Eloui Pasha, 97. 
Mohammed Said Pasha, 99. 
Mokattam, hill, 4. 
Monk, C.J., 108. 
Moorsom, Capt., system of, 60. 
Moratorium, introduction of word, 48. 
Morcos Semaika Bey Pasha, 97. 
Morlcy, John, cited, 30. 
Mougel Bey, 79. 

Muhammad Ali, viceroy, 7, 33, 48, 89. 
Muhammad Kassim, viii. 
Muhammad Shawarby Pasha, 97. 
Murray, Mr., 8. 
Murray, Sir A., 141-2. 
Mutiny, Indian, 19. 

NAHRWAN CANAL, 4. 

Naples, subscriptions from, 22. 
Napoleon Bonaparte, 6. 
Napoleon III, 15, 26. 

Life of Caesar > quoted, 1 6. 
Navigation of canal, aids to, 80. 
Necho, i. 

Nefiche, 28. 
Negrelli, 9. 
Nejd, Eastern, 35. 

Netherlands, tonnage of shipping, 94, 118, 
135,150. 

and canal, xi. 


222 INDEX 

Neutralization of canal, 89 sqq. 

New Caledonia, tonnage of shipping, 137. 

Newfoundland, 77. 

Newton, Lord, cited, 50. 

New York, 149, 150, 151. 

New Zealand, 94, 149. 

tonnage of shipping, 137. 
Nicaragua canal, 16. 

Nile, River, 3. 

Nimrod, 4. 

Nineteenth Century and After, 169. 

Northcote, Lord, quoted, 2 1 1 . 

Northcote, Sir S., 50 sqq., 87. 

Norway, tonnage of shipping, 135, 150. 

Norwood, Mr., 72, 97. 

Nourse, J. E., quoted, 2; cited, 30. 

Nubian sandstones, i. 

OMAR, KHALIF, 5. 
Ophir, 3. 

Oppenheim, Mr. H., 49 sqq. 
Ottoman Empire, 22. 

PAKENHAM, MR. CONSUL, 77. 
Palestine, 141, 143. 
Palmer, Mr. C., 73. 
Palmer, Sir C. M., 108. 
Palmerston, Lord, 7. 

views of, 9, 2 r . 

death of, 29. 
Panama Canal, 53, 97. 

comparison of, with Suez Canal, 57, 

92,93, 104, 129, 144. 

dues levied, 144 sqq., 1 54. 

finances, 146 sqq. 

salary of Governor, 144. 

tonnage figures, 147-8. 

transits, 145 sqq. 

Parma, 25, 144. 

Pascal, M., 79. 

Patumos, 2. 

Pauncefote, Sir J., 82, 91, 92. 

Pelusiac branch of Nile, i . 

Pelusium, 2. 

Pender, Mr., 46. 

Peninsular and Oriental S.S. Coy., 42. 

Permanent Court of International Justice, 

56. 

Persian Gulf, 154, 169. 
tonnage of shipping, 51, 137, 154, 

171. 
Peschek, Herr, 79. 


Phaccusa, 2. 

Pharaohs, 4. 

Philippines, 154. 

tonnage of shipping, 137. 

Philon, 2. 

Piedmont, 22, 29. 

Pierre, Admiral, 77. 

Pilots, canal, nationality of, 68. 

Pleistocene period, I. 

Pliny quoted, 3. 

Pliocene period, r. 

Pompey, 2. 

Port Said, 28 sqq., 90, 115, 138, 139, 141, 

142. 

Portugal, 22. 

Post Office, British, 9, 40. 
Price, J. S., cited, 14, 30. 
Proverbs, Book of, quoted, 24. 
Prussia, 22. 
Psammitichus, i. 
Ptolemy, 2. 

QANTARA, see Kantara. 
Qasim, Al, 35. 

RABINO,]., cited, 28. 

Railway Schemes, Alexandria-Suez, 1 1 . 

Cairo Suez, 7. 

Kantara-Port Said, 142. 

Rand gold output, 117. 
RasalWadi, 33. 
Rashid Pasha, 20, 21. 
Rathmore, Lord, 108. 
Red Sea, 140, 144. 

levels, 7. 

tonnage of shipping, 137. 

Rees, Sir J. D., 102. 

Reeve, Mr. H., 53. 

Rendel, Mr. J. M., 19. 

Requin, French battleship, 140. 

Rhine Railway, 5 5 . 

Richards, Admiral, 46. 

Rivers Wilson, Sir C., 50 sqq., 91, 95, 

108. 

Robertson, Sir C. K., 77. 
Robinson, J. R., M.P., 158. 
Rochester, to. 
Rockwell cited, 7, 14. 
Rome, 22. 

Rose, J. H., cited, 6, 14. 
Rosetta, 3. 
Rothschild, Baron L. de, 48. 


INDEX 


223 


Roux, J. Ch., cited, vii, 5, 14. 
Royal Central Asian Society, 1 5960. 
Rdyal Society of Arts, 169. 
Royden, Sir T., 108. 
Royle, Mr., 86. 
Russell, Lord, 26. 
Russell, Sir J., 24. 
Russia, 22. 

and canal, 90, 92, 117. 

tonnage of shipping, 118, 135. 
Russo-Japanese war, 117. 

SAAD MAKRAM, 97. 

Saad Pasha, see Zaghlul. 

Saavedra, Senor, 79. 

Said Pasha, n, 25, 33. 

Saint-Simonians, 7. 

Salisbury, Lord, 68 sqq., 86, 92. 

Samuel, Sir A. M., quoted, 159. 

Sanderson, O., 108. 

Sandys, Mr. G. J., quoted, 102. 

San Francisco, 151. 

Sarah, wife of Abraham, 35. 

Sargent, A. J., cited, 81. 

Sauerbeck, A., cited, 115. 

Seeley, J. B., 7. 

Seleucia, 20. 

Selim I, 2. 

Sellier, M., 9. 

Semaika Bey, 101. 

Sennacherib, 2. 

Serapeum, 6, 32. 

Servia, 46. 

Sesostris, i. 

Shanghai, 149, 151. 

Shipowners, treatment of, 165. 

Shubra, 48. 

Siam, and canal, xi. 

railways built in, 117. 

tonnage of shipping, 118, 137. 
Siberia, tonnage of shipping, 137. 
Sidky Pasha, 99. 

Simencourt, A. de, cited, 14. 
Simpson, F. A., quoted, 16; cited, 30. 
Sin (village), 2. 
Sinai, 140, 142. 

geological features, I. 
Sinai peninsula, 141. 
Singapore, 149, 150. 
Sirry Pasha, 99. 
Smith, Sir E. W., 108. 
Socie*te Civile, 109. 


South African War, 117. 
Spain, subscriptions from, 22. 

tonnage of shipping, 135. 
Spender, J. A., cited, 93. 
Stagg, J., 108. 

Standen, E. J., 50 sqq., 108. 

Stanton, General, 45 sqq. 

Starbuck, R., 9. 

Steele, John, quoted, 43. 

Stephenson, R., 9, 1 1, 30, 75. 

Stokes, Sir J., 50 sqq., 95, 108,112, 164, 167. 

Stone, General, 62. 

Strabo, quoted, 2. 

Straits Settlements, tonnage of shipping, 

118, 137. 
Stratford, Lord, quoted, 13. 

described, 17. 
Stratheden, Lord, 87. 
Suez, Gulf of, 140. 
Suez Canal: 

acquisition of shareholding by British 
Govt., 53 sqq. 

administrative proposals (1883), 82-5. 

approval of Porte, 26. 

arbitration 1864, 26. 

capital, subscription of, 22. 

compared with Panama Canal, 57, 92, 
93, 104, 129, H4-5 T r 54 i?i- 

composition of Board, x, 160, 162. 

concessions granted, chap, ii ; text of 
concessions, 173-9. 

construction, progress in, 23 sqq. 

convention (1866), 1913. 

directors of, see Directors. 

dividend payments, 115, 163-5. 

dues, disputes regarding, 61, 152 sqq., 
211. 

during the Great War, 138-43. 

effect on marine fauna, 215. 

extension of concessions (1910), pro- 
posed and rejected, x, 95 sqq. 

finances, 44, 80, 94-5, 109-37, 163. 

juridical status, 56. 

literature on, vii-ix. 

loan to, by H.M. Govt., proposed, 47, 
66 sqq. 

management of, 166. 

mandataire, as, 1 6 1 . 

measurement rules, 59. 

neutralization of, 89 sqq. 

officials, arrogance of, 62. 


224 INDEX 

Suez Canal contd.\ 

passenger traffic, 119. 

payments, 132. 

profits, views of de Lesseps, x. 

division of, 133. 

proposed transfer to international com- 
mission, 45. 

public discussions on, summary of, 858. 

purchases in Great Britain, 166. 

receipts, 130. 

reduction of staffs, i66n. 

rules of navigation (1933), 193-211. 

'second Bosphorus', 8. 

second canal proposed, 65. 

shares, proposed division of, 163, 170. 

statutes, 179-91. 

subject to Egyptian courts, 45, 56, 160. 

tonnage of shipping, 94, 1 1 8,TT9", 1 1 2,1 3 5 . 

transit dues, 119-20, 123, 126-8, 144, 
154, 156, 164. 

voting power of British Govt., 55, 63, 
153, 158. 

weight of cargoes, 119, 126, 128. 

widening proposed, 74, 80, 95. 
Suez town, 90, 138, 139. 
Suez village, 2. 
Sufany Bey, 99. 
Sutherland, Duke of, 46. 
Sir T., 79, 84, 1 08. 
Sweden, tonnage of shipping, 150. 
Sweetwater Canal, 139. 
Switzerland, 22. 
Sydney, 149, 150. 
Symons, M. Travers, cited, 14, 104. 

TALABOT, PAULIN, 9. 

Teiresias, S.S., 140. 

Telegraph system finished, 28. 

Tel-el-Kebir, 90, 139. 

Temperley, H. W. V., 51. 

Thackeray quoted, 10. 

Tigris, 4. 

Tillier, 79. 

Times j The, viii, 40, 140. 

Timsah, L., 25, 140. 

Tineh, 2, 33. 

Tolba Seudi Pasha, 97. 

Touna, 33. 

Toussoum, plateau, 29. 

Trajan, 5. 

Trieste, 155. 

Tuckwell, G., cited, 81. 


Tunis, 22. 

Turkey, 139-41, 160. 

and neutrality of canal, 90. 

boundary dispute with, 93. 

Sultan of, bankrupt, 48. 
Tuscany, 22. 

Twiss, Sir T., cited, 14. 

UNITED STATES, 141. 

subscriptions from, 22. 

not represented at opening of canal, 

39- 

tonnage of shipping, 135, 150. 

trade of, 149. 
Urquhart, D., cited, 14. 

VALPARAISO, 151. 

Venetians, 6. 

Verdi, 40. 

Versailles Treaty, 152. 

Vetch, Capt. J. R. E., cited, 14. 

Victoria, Queen, and purchase of shares, 


Vidal-Dubray, 41. 

Vogue, Marquis de, 161 sqq., 170. 

Voisin, M., vii, 32, 79. 

WADDINGTON, M., quoted, 63, 87, 

88,93. 

Waghorn, Thomas, 10, 40, 88. 
Wales, Prince and Princess of, 37. 
Walewski, Count, 18. 
Warmington, E. H., cited, 5, 14. 
Webb, E. B., cited, 13. 
Wellington, 150. 
Westray, J. B., 82, 84, 108. 
Wilhelm II, 50. 
Willcocks, Sir W., cited, 14. 
Wolf, Mr. Lucien, 49 sqq. 
Wolff, Sir H. D., 92. 
Wolseley, Lord, 90. 
World Economic Conference, 170. 
Worms, Baron Henry de, 73. 

XERXES, 5. 

YAQUT, cited, 2. 
Yokohama, 149, 151. 

ZAGAZIG, 5. 

Zaghlul Pasha, 96, 99, TOO; quoted, IOO-I . 

Zetland, Lord, cited, 93. 

Zoan, 33. 


MEDITERRANEAN SEA 


THE SUEZ CANAI.