The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1875-12-04 00:00:00

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ENGLAND AND THE SUEZ CANAL.

Referring to the political and commercial importance of
the purchase of the Khedive's shares in the Suez Canal, The
Times, in a leader, writes :

An act so prompt and opportune as the purchase of
the Khedive's interest in the Suez Canal will gratify
the country, not only on account of the ultimate mate-
rial advantages promised, but because it gives assurance
that we have a Government of spirit and initiative. . . .

The possible results of this nattonal investment are
so large and indefinite that it would be vain to specu-
la..e upon them, and yet they present themselves per-
sistently to the imagination. It is plain that we acquire
an interest in Egypt and its administration which will
compel the constant attention of the Queen's Govern-
ment. We have purchased nearly half the shares of the
Suez Canal. We are the largest proprietors, and it need
not be said that the others will look to us for the manage-
ment of the property, the protection of the common
interests, and the maintenance of satisfactory relations
with the local Government and with the other Powers
of the World. To this country will belong the decision
1 on every question, whether scientific, financial, or
political; administration and negociation will be in
our hands, and as we have the power, so we shall have
the responsibility before the world. Add to this that
we shall probably receive offers of further' large
amounts of sharee, and that the interest of the
British Government will inevitably tend to increase.
It is evident that the position of a Company in
which the principal proprietor is the first naval and
commercial Power in the world is very different 1
from that of a Company consisting of a multitude I
of small French shareholders under the patronage of I
one monster proprietor, the ruler of the land. The
possession of the Suez Canal is now a great political
power which must be considered in all discussions of
the Eastern question. Any scheme derogatory to the
rights of the Company will be met, not by a feeble
body of investors, hut by a nation which can make
Its will respected, and has the strongest interest in
doing so. We have now an abiding stake in the
security and welfare of Egypt. Our possession is in
the nature of things fixed and local. It will grow in
value with the growth of the regions in its neighbour-
hood as well as in the increase of distant traffic; and
to this growth we must look in part for the profit on
the investment. Everything, therefore, that concerns
the south-eastern corner of the Mediterranean becomes
of importance to England. The security of Egypt is
part of the policy of this country. This, which con-
nects itself with the general attitude of England on
the Eastern question, is the first consequence Of the
recent act of her Majesty's Government. We feel sure
that the nation will not shrink from this responsibility,
but will rather be glad to know that our policy in the
East will henceforth he not merely the prompting of a
vague partisanship, the justice of which our rivals
might question, hut will be based on substantial in-
terests which we have an undoubted right to maintain.
Another consideration is that it will inevitably be-
come the interest of this country to encourage economy
and sober finance in Egypt. The immediate effect of
the transaction is that the Khedive becomes the debtor
of England in the sum of £4,000,600. On this sum he
ae
has engaged tes.pe v interest, it is said, at 5 per cent.
until such time . e shares he has sold to us become
entitled to partici
te in the diviciands of the Corn-
pauy. The hy peat !cation of these shares for a term
of years was the re -,ou why the Khedive found his
financial friends in the French capital bent on. im-
posing upon him onerous terms. He has turned to
England, which treats him at once with liberality and
confidence. This country does, in fact, lend him four
millions on easy terms, and give him the chance of
saving himself and his country. It is needless to
argue that this gives us the right to pay some attention
to the course of Eeyptian finance. The interest on
• four million sterling is not a heavy burden for a great
country, but it is pos,ible for a State to be brought by
1 extra:war ce so low as not to be able to pay even thus
south. It is hardly possible, indeed, that the British
i Government should refrain now and then from
j timely counsel, or that Ismail Pasha should be un-
affected by it. It would, indeed, be a misfortune if
! this were carried too far—if the Government shculd
! give any justification to the rumour that Egypt is to
be "taken in hand," and placed under financial tute-
lage. Any such interference would probabiy impose
I upon ourselves inconvenient liabilities without sub-
stantially improving the present state of affairs. The
Egyptian Ruler has had a severe lesson, and he may be
left to profit by it. If he has any of the qualities with
which he has been credited, he will find that he is on
the road to ruin. It is not improbable that be may
willingly follow the guidance of the Power which has
saved him for the present, and thus the British
! Government may find, without seeking it, the oppor-
tunity to -promote his interests and those of England.

_
We come now to the effect of the business upon
foreign Powers. At the first announcement yesterday
there were certain vague apprehensions that Russia, or
even France, might have something to say to so consi-
derable a transfer of property and political influence. A
little reflection will show that there can be no ground
set' katever for this feeling. The shares belonged to the
Khedive; he offered them for sale, and,.they found a
buyer. Me might have sold them to any other Euro-
pean iteovernment, and we should have had no right
to complain. If eith,..r of the groups of French finan.
ciers had succeded in getting hold of the property,
they might, and very probably would, have sounded
more than one Government as to buying them.
That they have come into the possession of the State
which has the best title to the administration and
guardianship of the Canal is only what is fitting and
desirable. It is by British enterprise that the
dividends of the Suez Company must be supplied,
and no other State has the same strong and unceas-
ing interest to maintain and protect the enter-
prise. Other nations, if they consider well, will see
their own interest bound up with ours. Those only
can take offence who have some design hostile to
the gen ral prosperity of the world, and we cannot
believe this of any of our neighbours. We may
expect to hear a few ill-natured remarks from some
organs of Continental opinion, but of these it will
be hardly neces?ary to take account. The general
.feeling will be that the P.ritish Government has shown
the proper spirit of a great State, and made a stroke
the policy of which no one can mistake. This country
has done many vigorous acts, in its time, filling friends
with astonishment and enemies with dismay. Some of
these achievements will hardly bear a critical examina-
tion, some were justified by necessity and extreme
danger. In this case the action has been as energetic,
as sudden, iind, we Lelieve, as effectual, but no one is
hurt or threatened, or has any right to complain.

Referring to the purchase of the Suez Canal Shares, the
Economut remarks :

The English Governmett have undertaken to give
£4,000,000 for 176,602 shares of i',2o each in the Suez
Canal which belor g to the Egyptian Government, and
Messrs. Rothschild are to find the money—or as much
of the money as the Khedive requires—immediately.
As far as the Money market is concerned, we do
not apprehend it will have very much effect. Very
little of the Khedive's pressing debts are in Egypt
itself ; most of them are in London or Paris, or.
elsewhere in Europe, and the £4,000,000 will be
used to pay off these. The effect, as far as it goes,
will be to raise the value of money here, for the foreign
holders of Egyptian debt paid by this means will have
the power of taking money from England. But this will
be only one item in the general exchange account of the
country; it will not cause a diain of gold, and, there-
fore, will not be much felt. Of the consequences to
our own finances we cannot speak fully till the bargain
has been fully described. It is a much more complex
one than the first bare announcement would lead us to
imagine. The 176,602 are part of 400,000 shares o.
I:20 each constituting the capital of this Canal com-
pany, but they have been dealt with very. curiously.
The Khedive wished to assist the company in 1869 in
yawing money, and therefore "cut off," as the phrase
is, the coupons for 25 years and gave them to the
company. The -company then issued assignments
(delegations is the French word, and the operation
was a French operation) of these coupons, which are
now running. We believe these coupons carry the
whole income of the shares for 25years, but we cannot he
quite sure, for that income is, by the constitution of the
company, dealt with in a very complex way. First,
it goes to pay 5 per cent, interest on the capital ;
secondly, to pay off a certain part of these shares
i
annually, so that n 99 years from the beginning they
might be all paid off, the holders still retaining the
right to dividend, however, to the end of the 99 years;
thirdly, to pay a dividend, of which 15 per cent. goes
to the Egyptian Government, 10 per cent. to the
founders, 2 per cent. to the administrators, 2 per cent.
to the employes, and the rest, or 71. per cent., to the
shareholders. And we are not sure if the pledged
coupons take with them more than the 5 per cent.,