THE SUEZ CANAL

Northern Advocate, 18 February 1926, Page 2

THE SUEZ CANAL

HOW . BRITAIN SECURED IT. DISRAELI'S BRILLIANT COUP. THE ROTHSCHILD MILLIONS. Fifty yours ago today, writes the “Times” on the anniversary of the event, there was signed in Cairo the contract by which the then Khedive of Egypt, Ismail Pasha, father of the reigning King, transferred his holding of 17(i,C02 shares in the Suez Canal Company to the British Government. Queen Victoria, who had been apprised on the morning of November 25, 1875, of the success of the negotiations by Mr Disraeli in the words: “It is just settled; you have it, Madam,” wrote to her Prime Minister; “This is indeed a great and important event, which,, when known, will, the Queen feels sure, be most popular in the country.. The great sum is the only disadvantage. ”

The great sum, which was voted by Parliament in the following February, ! was £4,080,000, to cover the whole expenses of the transfer, in connection with which Messrs Rothschild had advanced to the Khedive on behalf of the British Treasury £2,000,000 on December 1, £1,000,000 on December 16, and the final £976,582*0f the price on January 1, 1870,. and the country thus acquired the £2O shares at about £23 4s each. The Khedive, who had. in 1867g£), hypothecated his fight to draw dividends on the shares until 1894 in return for 30,000,000 francs (about £1,200,000), agreed to pay interest at the rate of 5 per cent, on the share capital until that date, after which the shares would driw dividends in the ordinary way. SPUR OF THE MOMENT. In»this way was obtained for the British Empire an interest second in importance , only to that held in Prance in the control of the all-imp ortant waterway across Egypt through which British trade to and from Australia, India, East Africo, and . the Middle and Far East provides be tween, CO and 70 per cent, of the traffic. Its acquisition was made on the spur of the moment. The increasing -financial difficulties of the Khedive, ■dffo to, the cumulative effect of a long period of extravagant borrowing and reckless expenditure, had made it. necessary for liim *to raise money on his Suez Canal holdings, and •he was negotiating with two groups of financiers for the purpose. One of these was. discussing an offer to sefi outright for £3,680,000 provided that the Khedive paid 11 per cent, in lieu of dividends on the shares till 1894; the other was proposing to advance. £3,400,000 for three months at a rate of 18 per cent, on the shares, together with the Khedive’s royalty of 15 per cent, oil the profits of the canal;' In case of default, both shares and j royalty were, to pass to the syndicate , and the Khedive was to pay 10 per ] cent, in lieu of dividend orj, the shares . until 1694. i

■Tho news that these negotiations ' were in progress was imparted to Lord Derby, then Secretary of State for Foreign Affairs, on November 15 by' Mr Frederick Greenwood, of the "Pall Mail Gazette," who had learned it at dinner from Mr Henry Oppen heim, a man much interested in the finances of Egypt. Mr Greenwood’s information is believed to have confirmed an official dispatch received' at the Foreign Office at the same time, and his suggestion that the British Government should offer for the shares was communicated by Lord Derby to the Prime Minister, Mr Disraeli, perceiving the immediate political importance and ultimate financial advantage to the Treasury of such a transaction more clearly than his less imaginative colleague, immediately decided to take action. He was anxious to prevent the canal from becoming as entirely French in proprietorship as it was in administration, and was eager to seize an opportunity of demonstrating the importance that the British Government ; attached to the question of Imperial : commun cations by way of the canal through which tho Prince of Wales (afterwards King Edward VII) had just passed on his voyage to India.