"Life Line of the British Empire"

New Zealand Herald, Volume LXXVI, Issue 23263, 4 February 1939, Page 3 (Supplement)

"Life Line of the British Empire"

seas. Japanese naval experts have j made no secret of their belief that in a war against Britain they must close the Suez Canal and then smash Singapore before a battle fleet can arrive from Britain to defend it. _ 4 The coming spring and summer in Europe will almost certainly reveal just how far Mr. Chamberlain is likely to be successful in his policy of "appeasement." • If, happily, he should succeed in postponing war long enough for the democracies to make their position impregnable, if Britain and Franco are not forced in tho meantime to agree to territorial changes affecting the status quo in the Near East, and if the peace established by "appeasement" lasts tor another 30 years, the Suez Canal will again be in the news headlines in 1968, when the Canal Company's concession from tlio Government of Egypt will expire. At this distance, it would bo sheer futility to speculate about what will become of it, but it is certain to bo the prize in a major international scramble, unless the whole tenor of world politics undergoes a drastic change. In the past 20 years the change has been for the worse, but there are still hopes that Mr. Chamberlain may turn out to be the political Moses come at last to lead the Allied Powers and any others who care to join them, out of the wilderness into which they blundered. Agreement With Egypt in the meantime, Britain, Eranco and the Suez Canal Company must dofond the "life-line of the Empire. Three years ago Britain made an agreement with Egypt, as part of the AngloEgyptian Treaty, that the canal should be defended by British forces until such time as Egypt should be able to undertake the responsibility herself. It is very unlikely, incidentally, that this time will bo considered to have arrived before 1968.

ON the day after Mr. Chamberlain and Viscount Halifax completed their talks in Rome with Signor Mussolini, the yice-chairman of the Suez Canal Company, Monsieur E. Bonnet, issued a significant statement in i'aris on behalf of the company's board of directors. The company ttould not be coerced, said M. Bonnet, into the relinquishment of its fights. French and British interests control the Suez Canal, held under a concession from the Egyptian £*ov®rnment, itself dependent mainly upon Britain for its indepedence. ffhe canal has often been called "the life-line of the British Empire," find a few months ago Lord (then Sir Maurice) Hankey, who knows more of the secrets of Imperial Defence than any other man living, the post oi secretary of the British Cabinet and the Committee of Imperial Defence, held ever since the war years, to join the directorate of the Suez Canal Company. Italy's Eyes The directors are paid £3OOO or £4OOO * y e ar, but there is no reason to suppose Lord Hankey's transference from post of great trust and responsibility was conditioned by financial con®lderations. No reason for it was guen *hen the announcement was made, but " appears hardly necessary to look father for it than the rumours then •'ready gathering strength—the secret ■rchives of the Cabinet may indeed W contained more than the rumours *hich reached the public —that Italy casting envious eyes upon more , or tb African territory, and in pnrtip»'2r upon the Franco-British monody of control of the great water highly from the Mediterranean,, the -'' lta lian lake" of I) Duce's dreams, to I t e Indian Ocean and the Fast. 1 •* * s rue that in the Anglo-Italian f of April last Britain and tely reaffirmed their loyalty to the Ua vention of 18S8, by which Britain,

France, Italy, Germany, Austria, Russia, Spain, Holland and lurkey guaranteed the absolute neutrality of the canal and its freedom at all times to the transit of warships and merchant vessels of every flag. Yet Britain and France cannot have forgotten that in the Great War, in spito of the convention, they had to defend the canal against the forces of soma of the signatories. The history of conventions and treaties since the pens scratched at Versailles in 1919 has not been very encouraging. Sudden Firmess One of the French directors of the Suez Canal Company is General Weygand, formerly Chief of the French General Staff. Did Lord Hankey, British defence expert on the directorate, receive a communication from Mr. Chamberlain in Borne recently that caused the board to issue through the French vice-chairman a statement making specific refer nee to the "Italian claims" and declaring that "it would not bo coerced into the relinquishment of its rights or a change in the concession, for whiich it had assumed all risks" ?

The totalitarian States have a way of making events move quickly these days, and the reasons for M. Bonnet's sudden display of firmness may soon reveal themselves, even if Mr. Chamberlain does not himself discloso them in the House of Commons Threat In War Reaffirmations of conventions and treaties notwithstanding, it would be foolish to believe that in the event of another war. no effort would be made by the enemies of Britain and France to close the Suez Canal to their naval and merchant ships. The German Government might claim that it is not responsible for the convention of 1888; it would not be the first to repudiate the commitments of its predecessors. The Japanese Government was not a signatory' to the convention, yet Japan is tho world's third naval Power and undisputed mistress of Eastern

The Egyptian Government has, of course, a financial interest in the canal. Prior to 1875 the Khedive Ismail held 176.602 of the total of 400,000 shares in the £8,000,000 company formed in France to construct tho canal, which had been projected in 1852 by Ferdinand de Lesseps and was opened in 1869. However, in 1875 Disraeli made his shrewd deal with the. Khedive by which Britain acquired the Egyptian ruler's shares for £4,000,000 (borrowed from the Rothschilds), and Egypt has since drawn only a fixed share of the profits. This was increased by an agree-

Suez Canal Administration Great International Undertaking

COMPANY ASSERTS ITS RIGHTS

By G.R.C.

ment made last year from £200,000 (Egyptian) to £300,000 per annum. Incidentally, the shares that Disraeli was so bitterly criticised for buying were valued last year at £78,000,000. Besides increasing Egypt's share of the profits, the company agreed last year to improve the Port Said-Suez road at its own cost, provided this did not exceed £300,000 (Egyptian), and to increase the quota ol Egyptian employees from 25 to 33 per cent. The road, of course, is of great strategic importance. Britain is also believed to have constructed fortifications in the canal zone and she has a number of troops and squadrons of the Royal Air Force permanently stationed in the country. When tho trouble with Italy arose during tho Abyssinian War of 1935-36 and the Mediterranean Fleet based at Malta was exposed to tho risk of attack by Italian bombers, it was removed to Alexandria. It was thought by many people, when tho League of

Nations had declared Italy guilty of unprovoked aggression against Abyssinia, and the League Powers proceeded with the application of economic sanctions, that the canal might be closed to Italian transports. This, however, was forbidden by the convention of ISBB, and even had it not been, it would inevitably have led to war with Italy, which none of the League Powers was prepared to undertake, as was made plain by their refusal to proceed with the "oil sanctions" when Signor Mussolini made it clear that this would bo regarded as a hostile act. The permanent and absolute neutrality of the canal was actually emphasised in 19.% by the chairman of the company, the Marquis de Vogue, speaking at the annual general meeting in Paris.

"If by any act of force, which nothing entitles one to anticipate," said the Marquis, "any Power thought of forbidding entry into the canal to another Power, that gesturo would bo equivalent to an act of war, with all its con-

sequences. As for our board, tho question of closing the canal cannot arise for it, and it has never had to discuss the matter "

The use of the canal by Italy for the transport of her troops and munitions to Abyssinia was a very good thing for the Canal Company, for the dues paid by the Italians amounted to the very handsome sum of about £50,000 a week for the duration of the war. So that, although in 1935-3G, owing to the international situation, British traffic through the canal was the lowest for 10 years (with the exception of 1932, the peak year of the depression). British revenue from the canal was £2,449,073 as compared with £2,394,828 in the previous financial year. With the passing over of the threatened storm, however, the traffic figures again rose rapidly, .and in 1937 transits through the canal exceeded all previous totals, amounting to 6635 ships, representing 36,491,000 tons net register. This result was due in part to the

activity of the Italo-Abyssinian traffic, still very great, at least during the first half-year, but whatever tho increase brought by this traffic, it was nevertheless smaller than that of the previous year, and, everything considered, it was to normal traffic that the 1937 increase of 12.7 per cent was due. Merchant Tonnage Increases The analysis of the net tonnage showed an important decrease of 927,000 tons in the transit of warships and troopships. On the other hand, all categories of merchant ships increased. British slijps passing through the canal in 1937 totalled 17,254,000 tons, or nearly half the total traffic. Italy and Germany were the next most important users of the canal, the former's tonnage being 5,866,000 aud the latter's 3,313,000. An Italian company, the Lloyd Triestino, paid the largest share of the dues for any individual concern on 3,913,000 tons of shipping, the British Tanker Company having 3,019,000 tons and the Peninsular and Oriental Company and its associated lines 2,913,000 tons. Tho weight ■of goods through the canal reached 32,776,000 tons in 1937, thus showing the considerable increase of 7,220,000 tons, or 27.5 per cent, over that of 1936. European exports showed proportionately less advance than European imports, as shown by the respective increases of transits in tho two directions, namely, 15 per cent from north to south and 35 per cent from south to north. The distribution of traffic by countries of origin or destination beyond Suez showed that they had all shared in the increases mentioned. Australian Traffic Australian traffic in particular, which had greatly decreased in 1936, experienced an appreciable revival, and the diversion of this traffic via the Cape of Good Hope was less important than in the previous year. The reductions in dues granted by the company had something to do with this return to the Suez route, but it was also affected to some extent by moro favourable econoniio circumstances and especially by a period of relatively high freights.

cargoes including huge quantities of rubber from the Indies and tea from Ceylon, Assam, Burma and China, tin and wolfram from the mines of Malaya, amounting to about 60 per cent of the world's supplies, raw silk (85 per cent of the world's supply) iind 35 per cent of all the wool grown for world markets. There are, in addition, millions of tons of manufactured goods of all kinds from the ports of Europe. Dues are paid on the basis of what is called the Suez Canal net ton of 100 cubic feet. They have been reduced throo times since July, 1936, when the charge was 7s 6d per ton, for. loaded ships, to 5s 9d per ton to-day. For ships in ballast the charge is now 2s 10|d per ton. Passenger ships have to declare the number of passengers they are carrying, and tax is paid at the rate of 5s 9d per head. Thus the cost of transit for a moderately large ship would amount to several thousands of pounds. Revenue and Expenditure The Canal Company's revenue is enormous, but its administration and maintenance expenses are also very high. It employs about 100 highly-paid pilots and over 2000 "workmen, engineers, dock hands and office employees. It is constantly carrying out maintenance and improvement work such as maintaining the width and depth of the channel, rectifying curves and generally keeping; up to datei the technique of canal navigation to meet the needs and present tendencies of shipping and guarantee thtj maximum* security for vessels passing through. . i

A very large proportion of the world s goods passes through the canal, the

It is small wonder that the directors of this great concern—there are 19 French members of the board, 10 British, two Egyptian and one Dutch —■ are highly-paid men of great business and political experience. As the chairman olf the board, the Marquis de Vogue remarked at the last annual general meeting: "The extraordinary confusion of economic conditions, the incessant variations of currencies and the uncertainty affecting their interrelations weigh heavily on the general position: the task of those who have, to manage an international undertaking like the Suez Canal Company, and translate into figures the record -of its activities, becomes each day more difficult . • • " "The satisfactory . functioning of so important a service as the Suez Canal calls more than ever for prudence, as do the decisions of those who are responsible for it, decisions of whicu tils effect, direct or indirect, may « e i> fcAP far and wide, and in the future.