744 



SUEZ CANAL, THE. 



Somewhat more than three fourths of the 

 shipping that passed through the canal in the 

 ten years 1870-'79 belonged to Great Britain. 



History. M. de Lesseps, immediately after 

 the accession of Said Pasha, laid before him 

 the scheme for the canalization of the isthmus, 

 and received, Nov. 30, 1854, a deed of conces- 

 sion from the Viceroy, conferring upon him 

 authority and exclusive power to construct a 

 canal. A second act of concession, signed Jan. 

 5, 1856, defined more fully the privileges and 

 obligations of the company. The company 

 was endowed with the absolute grant of a wide 

 strip of land and the right to claim patents for 

 any lands it should reclaim by irrigation-works, 

 besides the use of forced labor and other priv- 

 ileges. The canal was to revert to the Gov- 

 ernment ninety-nine years after the date of 

 completion. Lord Palmerston combated the 

 project, and sought to have the charter re- 

 jected by the Sultan. He was opposed to the 

 opening of a shorter route to the East under 

 French auspices, and feared the establishment 

 of a French colony on the isthmus. British 

 shipping interests favored the longer and more 

 profitable route. The English opposition stim- 

 ulated the subscription of French capital. 

 The Porte declared its opposition to the scheme, 

 and, in consequence, a new arrangement was 

 made between the company and the Egyptian 

 Government, Jan. 30, 1866. All the lands of the 

 company but about ninety yards on each side 

 of the canal were retroceded, as well as the 

 sweet-water canal from Cairo. The question 

 of compensation for the revoked concessions 

 was submitted to the arbitration of the Em- 

 peror Napoleon, in accordance with whose 

 awards the Khedive paid the company 30,000,- 

 000 francs for the canceled land-grant, 10,000,- 

 000 for the sweet-water canal, 10,000,000 for 

 land and buildings near Cairo, and 74,000,000 

 to compensate for the concession of forced 

 labor. This settlement was the cause of the 

 hypothecation of the Khedive's shares. The 

 Government spent 31,000,000 in completing 

 the sweet-water canal, and 25,000,000 in va- 

 rious missions to Europe and on the opening 

 festivities. The charter, thus modified, was 

 ratified by the Sultan, March 19, 1866. The 

 canal was completed at a cost of about 200,- 

 000,000 francs for the work of construction, 

 though the total disbursements, including im- 

 provements, were more than double that. 



Military Operations in 1882. Having secured 

 the safety of the canal by means of assurances 

 to Arabi Pasha that its neutrality would be 

 respected, M. de Lesseps protested against its 



occupation by English troops in September, 

 1882. The British Government asserted that 

 the declaration of neutrality did not apply, 

 since it was at war with the de facto master of 

 Egypt, and also because it had the authoriza- 

 tion of the Khedive to suppress the rebellion. 

 The concession documents recognize the power 

 of the Khedive to exercise police control over 

 the canal, and also the right to occupy every 

 strategical point necessary for the defense of 

 the country. The military operations brought 

 in for the company about 2,000,000 francs. 

 The British Government did not acknowledge 

 the obligation to pay transit dues for its mili- 

 tary transports, but paid them voluntarily, in 

 recognition of the service rendered by the canal 

 in the suppression of the rebellion. 



English Shipowners. The English steamship 

 companies, during the earlier diplomatic con- 

 troversies over the canal, had forced the com- 

 pany to come to their terms regarding the 

 measurement of tonnage, etc. The English pro- 

 tectorate over Egypt was assumed chiefly to 

 preserve the neutrality and freedom of the 

 canal. The ship-owners thought to force the 

 company to concede advantages which they 

 could not have obtained through diplomacy or 

 by direct treaty with the managers, if they 

 could not oust the French management alto- 

 gether. The Beaconsfield Government had 

 provided for the bringing of the canal ulti- 

 mately under English direction by purchas- 

 ing the Khedive's shares, constituting 44 per 

 cent, of the capital stock. This menace to the 

 prospects of the canal as a richly-paying in- 

 vestment, and the diversion of M. de Lesseps's 

 attention to other enterprises, caused many 

 shares to be turned out into the speculative 

 market, so that an amount sufficient to make a 

 majority, with the shares owned by the Gov- 

 ernment, could easily be acquired, if it was not 

 already in the hands of English holders. Yet 

 during the twenty-five years for which the 

 Khedive had alienated the dividends of his 

 shares, the voting proxies for those shares be- 

 longed to the holders of the delegation certifi- 

 cates, and for that period, therefore, M. de Les- 

 seps and his friends were firmly seated in the 

 control of the company. 



The existence of political levers by which 

 the English customers could bring pressure to 

 bear on the company, led to constant friction 

 and complaints of the company's management, 

 of the officialism, the rigid regulations, etc. 

 The chief object and main burden of the com- 

 plaints, however, was to compel the company 

 to reduce its tolls, fixed by statute at 10 francs 

 a ton, and yield other pecuniary advantages. 

 The ship-owners demanded that the company 

 should divide with them its profits, which, 

 under the statutes, would soon reach the nor- 

 mal rate of from 20 to 30 per cent., and that 

 the transit, dues be lowered to 6 francs a ton. 



The Project of an Alternate Canal. When the 

 president and directors, in the interest of the 

 stockholders, refused to accede to the pecuniary 



