Suez Canal

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SUEZ CANAL

A nineteenth-century engineering wonder that realized age-old dreams and modern ambitions, the Suez Canal reinforced Egypt's position at the junction of international trade and hastened Europ's scramble for empire. Linking the Red Sea to the Mediterranean, the Canal runs for approximately 100 miles (160 meters), with an average width of 90 feet; unlike the Panama Canal, it requires no locks to compensate for differences in sea level along its course.

The Canal was the brainchild of Ferdinand de Lesseps (1805–1894), a French diplomat and consul general in Egypt from 1832 to 1838. There he befriended Muhammad Said, son of Mehmet Ali (r. 1805–1848), the Ottoman viceroy of Egypt, who had gained substantial autonomy and set out to modernize the country. His successor Abbas Hilmi I (r. 1848–1854) undid much of Mehmet Ali's agenda, but Said, who ruled from 1854 to 1863, reopened western-style academies, rebuilt the Delta Barrages (a system of dams on the Nile), and granted foreign concessions to establish a telegraph network and to link Suez to Alexandria by rail.

Lesseps, who had resigned from the foreign service, approached his old friend with an audacious proposal—deemed implausible by many—to cut a maritime channel through the Isthmus of Suez. The two signed a hastily written contract in 1856 that granted Lesseps's Suez Canal Company a ninety-nine-year concession to construct and operate the waterway. The company could import supplies duty free, had the right to mobilize unpaid peasant labor (the corvée), and would exercise extra-territorial rights on a freshwater canal to be cut through to the Nile. This included the right to cultivate and reap profits from newly arable land. In addition to the return on its shares, Egypt would accrue 15 percent profits from shipping transit. The concession signed, Lesseps floated 400,000 shares on the international market at 500 francs per share. Lesseps's venture was troubled from the start. He scrambled to gather capital commitments even as construction began and wound up fronting a large proportion of the initial cost outlay from personal funds. Lesseps faced bitter opposition from the British government, which feared exposing India and losing commercial revenues at Alexandria, and indifference from his own. Formal approval from the various governments involved came only after construction had commenced in 1859. The Ottomans agreed reluctantly. In 1860 Said, who had originally purchased 64,000 shares, found himself stuck with 114,000 unsold shares. To pay for these he first issued treasury bonds, then borrowed from foreign banks.

By the time the Canal neared completion in 1869, four years behind schedule, Said had died. The new viceroy, Ismail (r. 1863–1879), inherited a boom economy—the blockade of Southern shipping during the U.S. Civil War caused Egyptian cotton prices to skyrocket—but also a mounting foreign debt. Egypt's arrears for unpaid Canal shares had grown from fifteen million to fifty-four million francs by 1862. Ismail dreamed of furthering Said's modernizing agenda. Unfortunately, by late 1864 cotton prices had stabilized; the following year they plummeted. To make matters worse, French arbitration of a dispute between Egypt and the Canal Company resulted in a judgment of eighty-four million francs against Egypt.

In November 1869 Ismail presided over the gala opening of the Canal. His party drew an array of foreign dignitaries: the French empress Eugénie (Lesseps's cousin, who had helped persuade Napoleon III to back the project), Francis Joseph I of Austria, the writers Henrik Ibsen and Émile Zola, and Thomas Cook, the founder of modern tourism. A grand flotilla embarked south from Port Said on the Canal's Mediterranean mouth. At Ismailia the guests were treated to a banquet, at

which Lesseps and Ismail were toasted with allusions to Columbus and Moses.

The moment proved illusory. As Ismail's debts mounted his European creditors called in their loans. In 1875 he sold Egypt's 44 percent Canal Company shares to the British government headed by Benjamin Disraeli for nearly four million pounds (by 1908 they were worth twenty-five million pounds). Britain suddenly became the Canal Company's major shareholder. The following year, when Ismail suspended repayment of other outstanding loans, a European debt commission assumed control of Egypt's budget; under the system of Dual Control British and French cabinet ministers oversaw tax collection and expenditures. In April 1879, facing growing nationalist pressure, Ismail dismissed the Europeans. Two months later, at Europ's behest, the Ottoman sultan replaced Ismail as viceroy of Egypt, with his son, Tawfik (r. 1879–1892). Tawfik found his authority curbed by a nationalist government, but survived the British invasion of 1882, which initiated what would become a seventy-seven-year occupation.

The Suez Canal would remain a point of bitter contention between Britain, its European rivals, and Egyptian nationalists. Under the veiled protectorate of Sir Evelyn Baring, the Earl of Cromer, British agent and consul general from 1883 to 1907, Egyptian financial health was restored. In 1888 the major maritime powers signed the Convention of Constantinople, which guaranteed "free and open" passage through the waterway to all nations "in time of war as in time of peace." For Britain, however, the Canal came to represent the lifeline of empire and played a major role in the decision to prolong the Egyptian occupation indefinitely. By the mid-1880s some 3,500 ships passed through the Canal annually, the majority of them British.

In 1914, when the Ottoman Empire allied with the Central Powers, Britain declared a protectorate over Egypt. Its Suez bases became major staging grounds in two world wars. For Egyptians the Canal, once envisioned by Said as a passageway to independence, became a site of national humiliation, symbolic of foreign political and economic domination. Some twenty thousand peasants reportedly died building the Canal. The murder of Prime Minister Boutros Ghali in 1910 is attributable in part to his backing a proposal to extend the concession past 1969. When Gamal Abdel Nasser (1918–1970) nationalized the Canal Company in 1956 he invoked Lesseps as a symbol of foreign oppression. During the Suez War, Egypt mined the Canal and Egyptian partisans toppled the statue of Lesseps that stood by the customs house in Port Said. The pedestal remains empty to this day.