The Suez Concession

The Suez Canal : Its Past, Present and Future. By Sir Arnold Wilson. (Oxford University Press. 15s.)

DI 1982 the Suez Canal Company paid out in dividends 81.60 per cent. The figure may surprise people who have not considered the advantages of international monopoly. It al.so must have surprised the directors of the Suez Canal Company, who expected a larger sum. After all, in the crisis year of 1931, when England and Central Europe were in chaos, they had divided 37.90 per cent. : though admittedly for most of 1931 they had charged dues in excess of the 6 gold francs per -ton which has been their modest tribute ever since. Not that they reduced from 8.65 to 6 gold francs without a grumble. Nor that the concession was of any value to the British shippers who insisted upon one. In 1931 with the pound off gold, 6 francs became far more onerous than 6.65 were before. Thus in 1932, coal (the greatest sufferer under the Canal toll system) had to pay one-sixth Of its value to reach the Red Sea : previously it had paid only one-seventh for those hundred golden miles.

• The Bishop of Ripon, in a recent address, composed for the ear of the Duke of Atholl, spoke of a" staggering balance- sheet." He should have held his breath till the publication of Sir Arnold Wilson's book, if possible until he reached page 123. Here are reproduced the receipts and payments of the 'Suez Canal for the years 1928-32, and it will be remem- bered that these years covered the worst depression that the world has seen. Why not reproduce the payments side a second time ?

Administration • • • •

Transit Maintenance.. .. Estates, water, &c. Bonds : interest, &c.

Shares : dividend, &c. .. 129,520 Reserves (statutory, special depreciation, &c.) .. 431,000 ,g

Surplus profit .. 3,285,592 >9 29

Carried forward .. 4,531

Sinlsad must have known Suez. Had he thought of cutting a canal across it, Roc Whale and Diamond Valley would long since have been forgotten in the memory of the superb appropriation made to himself at Suez. In depression the Diamond market collapses, but another international monopoly still gives 30 per cent.

There must therefore be something remarkable about the Suez Canal concession, and Sir Arnold has rightly gone

deep into -its history. "The question of the Suez Canal concession," as Sir Edward Grey said, "is very complicated

and requires to be elucidated." Grey was rarely moved to words of more than two syllables in the House ; so it is clear that he meant that elucidation was beyond him. Sir Arnold Wilson has done it so thoroughly that one can under- stand the bewilderment of Grey. But if the book is to have practical and immediate value, history, legal status, and financial accounts of the Canal should be cut to a minimum, and the whole published as a pamphlet. Mr.

Keynes and the Socialist League have revived the art, and ths Suez Canal is ripe for treatment by it.

The Canal is a parasite on commerce because the majority of its shareholders, and an overwhelming majority of its directors, are not interested in the shipping that pays to

pass it. Britain, who in 1932 owned 55 per cent. of this• shipping, owned also 46 per cent. of the shares, through

Disraeli's initiative. Only a third of the directors are English, but that is neither here nor there, for directors of the Suez Canal in any case are paid in proportion to the profits. Thus in spite of the opposition of British to French interests one of their number can say that since 1884 `,` there has been nothing to disturb the harmony that has existed in that international board-room."

France in the first place got her majority of directors and of shares because De Lesseps, Napoleon III and the Khedive alone were far-sighted enough to plan and cut the Canal. England, and not least Disraeli, thought the venture dangerous and unprofitable, and fought it to the end. When De Lesseps had won Disraeli quickly saw his error; but he was not in power when early failures embarrassed De Lesseps so greatly that he was willing to sell out to the British

177,207 thousand francs 351,325 372,085 167,274 415,720

PP PO PS PO

29 29 72

Government. Gladstone refused to buy, and all that -Disraeli could pick up afterwards was the Khedive's holding. He bought it for political and commercial purposes, but he never - advanced either. Military control of the Canal in wartime passed to Great Britain after the Egyptian occupa- tion. . As for commerce, Stokes planned to divide the British holding into shares dispersed enough to control the direc- torate, and through them the Canal dues. Neither Disraeli nor his successors have done so, or taken any other measure to reduce dues. Even action through the Egyptian Govern- ment, whose mandatory the. Company is, has been left till it is too late to be practicable.

Sir Arnold Wilson prefers Stokes' plan. One objection to it appears : if Britain divides her 46 per cent. holding. into blocks of 250 to raise British voting- power to a maximum, the other holders, who are individuals not Governments, might conceivably do the same. But the odds are on their continued - avarice. Of course, shipping could boycott the Canal. Even now 75 per cent. of the shipping from Europe to Australia prefers an extra 1,000 miles round the Cape, and molasses tankers from Java and the Philippines and oil tankers from the Persian Gulf take the same route. Finally, with the Tramp Committee resolution in mind, it is possible to suggest a fourth cure. "Why should the Government not equitably subsidize shipping by paying Canal dues like Fascist Italy ? Great Britain as shareholder draws over 80 per cent, of the profits. It would be common

justice to refund the sum.

G. L. STEER.