THE SUEZ CANAL

Evening Post, Volume CXIX, Issue 134, 8 June 1935, Page 27

THE SUEZ CANAL

PENALTY ON SHIPPING

HOW THE DUES MOUNT

The Suez Canal was opened to commercial traffic in 1869. The dues authorised in the original concession were 10 francs per ton, writes H: G. W. Woodhead from Shanghai to the "Sydney Morning Herald." British shipping circles regarded this charge as excessive, and eventually an agreement was reached under which, after payment of a certain dividend, a proportion of the surplus should be allotted to a reduction of tolls. In 1906 the dues were 72 francs (for loaded vessels), in 1928 7 francs, and in 1934 the nominal rate was 6.65 gold francs, reduced as a temporary measure to 6 francs. A charge of 10 gold francs per passenger is also made. Half dues are charged on vessels in ballast.

An application for an extension of the concession, which expires in 1968, was unanimously rejected by. the Egyptian Legislature in 1909. The British Government, which had frowned upon the Suez Canal project in the early days, experienced a change of heart in 1875, when Disraeli purchased the then Khedive's 176,602 shares for about £4,000,000. It thus acquired a seven-sixteenths interest, which is today valued at £88,570,241, and, in the financial year 1933-34, yielded dividends amounting to £4,655,000. The majority control, however, and the head office of the Canal Company remain in France, 21 of the 32 administrators being French, 10 British, and one Dutch. The French Government has no direct financial interest in the canal. Of the British administrators, three only, represent the Government, the other seven being representatives of commercial and shipping. interests.

During the Great War it, became necessary for the British' military authorities to take over the direction and protection of the .canal, which was strongly fortified. A Turkish military column once reached the eastern bank, but was repelled and rounded up before it could do any serious damage. One result of the war was the construction of the railway from Egypt to Palestine, which involved the erection of a swing railway bridge at Kantara—the only remaining visible sign of the British military occupation. Under the AngloEgyptian Treaty, however, Britain reserves to herself the military protection of the canal zone.

Construction of the Panama Canal was far more difficult than that of the Suez waterway. Much of the excavation had to be done in solid rock, and eight locks had to be made to enable ships in transit to be raised some .85 feet above sea-level en route. The Panama Canal is only half the length of the Suez Canal (50 miles compared with 100). It has, however, a minimum depth of 41 feet, as compared with 33. The I,otal cost of the enterprise, which was ; completed in 1914, was 366,650,000 dollars, and the total investment of the American Government to date has been about 544,000,000 dollars. The tolls were at first fixed at 1.20 dollars per ton for loaded ships, and 72 cents fof vessels in ballast. They have since been reduced to one dollar and 60 cents respectively. In 1928 the tolls amounted to 27,176,045 dollars, and the expense's to 8,951,200 dollars. '

The 1934 statistics of the Panama and the Suez Canals have been' published recently in the New York "Maritime Register" and the "Shipping World" respectively, and a comparison of the figures is illuminating. As the Panama returns are quoted in United States dollars, and the Suez,figures in French francs, it. is necessary to' convert them to a common basis to appreciate their significance. This has been done at an exchange rate of 6.6o, : francs -to the United States dollar, in the following table:— • 1981. Panama C:inal... Suez Cnnnl. Rccolpta .... Fes. 374,631,000' Fes. 5G0.700,000 ($24,358,323) . ($38,000,000) Xo. of vessels • \ in transit . '. 5,312 . , 5.U03 Tonnauo. of; . ! vessels ... 29,970,590 • 31.500.000 Tonnage " of ■' ■■ •■>r.l'.---cargo .... ■•;• 25,900*132 £8,400,000 Averaga "tolls ' '•'.'' por vessel . Fes, 70,003 Fcs.lSl.W (»4,558) . (S9,SS2) TWICE AS GREAT. From the above figures it would appear that the tolls levied by the Suez Canal administration, average more than twice as much as those imposed for the passage of the Panama Canal. This disparity appears the more striking when it is recalled that, though difficulties exist in keeping the Suez Canal free from sand-drift, the construction of the Panama Canal was a far more costly undertaking, and its operation requires the maintenance of eight locks, with elaborate machinery for opening and closing them, and for towing vessels through. The Panama Canal is the property of the American Government, and there is, therefore, no question of the payment of. any dividend' to stockholders. The Suez Canal, oh the other hand, is a commercial enterprise, with a limited/concessionary period. Even so, however, the dues levied by the latter appear excessive. The latest dividends have amounted to over 150 per cent, of the par value of the shares and it is difficult to imagine any other monopolistic enterprise of such vital importance to the world's shipping profiteering on such a scale without being the target of continuous and world-wide hostile criticism. The present tariff of the Suez Canal may not unfairly be characterised as a serious hindrance to trade, it operates, also, to prevent the speeding-up of passenger and cargo vessels plying betweeen Europe and the Far East or Australasia. RELIEF NEEDED. The magnitude of the Suez Canal levy may. best be appreciated by taking as an example a hypothetical passenger steamer, with a full complement of passengers, and carrying a general cargo of, say, 16,700 tons gross and 9540 tons net register. Her tonnage measurement for the Suez Canal would amount to approximately 10,500, on which she would be required to pay for a single passage 63,000 gold francs. Ai(i to this a levy of 10 gold francs for 599 passengers, we get a total bill of 68,990 gold francs, or, at current exchange rates, approximately £4695. It does seem that, in these days of universal depression, when the question of granting subsidies to shipping is receiving the attention of every maritime State, the Suez Canal might reasonably be expected to make some contribution towards relieving the burden on the shipping that uses that waterway. The Suez Canal would certainly remain a very paying proposition if the tolls were reduced to the Panama Canal level (say 4s instead of 6s 6d per ton on vessels in transit), with no capitation charge for passengers, and one might then expect a gen-eral-reduction in freight rates, 'and an acceleration of steamship services east of Suez. Unfortunately* as .has been made plain above, while the British Government owns a seven-sixteenths, it does not hold a controlling interest. The French Government exercises no control whatever over the undertaking, and private investors, while the future of the enterprise remains uncertain, and the concession has only thirtythree years to run, may be reluctant to forgo immediate profits. The only means, apparently, by which an early reduction in Suez tolls can be looked for is a mutually satisfactory agreement between the concessionaires and the Egyptian Government in regard to the future of the canal on. tho expiration of the concessiom