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the land in which the property is situated, has, in fact, legal authority and control over us, so far as that property is concerned. We are, pro tanto, his subjects, and have freely of our own accord contracted a new and peculiar relation towards him. M. de Rémusat pointed out in an excellent despatch of May 5th, 1873, that although the Suez Canal was originally a French undertaking, which has become universal from the interests engaged in it, it has always

been and remains Egyptian by the law which governs it. • France pledged herself to respect, as a principle of public law 6 and a safeguard of this great enterprise, the foreign sove• reignty under whose protection it is placed, and which is solely

competent to decide questions of jurisdiction over it.' It is totally impossible for us to impugn this principle. We have hitherto always contended loudly for it. But though private adventurers, who embark their capital in a foreign country, may very fairly pledge themselves to an implicit obedience to the law of the land and the authority of the ruler, whatever they may be, it may prove embarrassing for the Queen of England, as representing a large amount of shares, to hold them subject to the laws and authority of the Khedive of Egypt. Nor is this all. The authority of the Khedive himself is limited, above him is the Sultan; and the British Government has always most strenuously maintained that with reference to the Canal, as well as in all territorial rights over Egypt, the Sultan is paramount. The recent negotiation with reference to the method of measuring the tonnage of ships passing through the Canal was referred to Constantinople, and, to M. de Lesseps' great dissatisfaction, it was decided there. Therefore we are holding a property subject to a double superiority of the Khedive and the Porte. The answer to this difficulty resolves itself, we shall be told, into a question of political influence. But in our eyes this only increases the evil, and we shall presently have to inquire what the amount of political influence is that may be fairly attached to the purchase of shares in a trading

spect, indeed, this site the jea dismiss very

If, indeed, this species of political influence, so acquired, were real, it might excite the jealousy of foreign nations. But this is an objection we shall dismiss very summarily. Foreign nations have no reason whatever to be jealous of what we have done, and we do not believe that any jealousy is felt by them, or that any one of them would accept our bargain on the same terms. Nothing can be more absurd than the malicious assertion of certain foreign journals that · England

has seized Egypt,' and has given the signal for the partition

of the Ottoman Empire.' Other countries, indeed, viewing or pretending to view the purchase of these shares as a measure dictated by political rather than commercial motives, might take note of it and use it for their own purposes. The Sultan is insolvent: would it suit the purposes of Russia to purchase for a handsome sum a commanding site on the Bosphorus? Dr. Strousberg, one of the Jacks-o'-the-beanstalk of modern finance, held, we believe, a concession from the Belgian Government of lands on the left bank of the Scheldt, opposite Antwerp, where he proposed to erect a town. Would it suit the Pays des milliards and its mighty Minister to relieve Dr. Strousberg from his embarrassments by purchasing from him one of the most important positions in Western Europe? These are merely wild hypotheses-gorgeous dreams of Alroy

but we hazard them to show that the example we should set, if our object had been to purchase four millions' worth of political influence in Egypt, might be turned to inconvenient purposes elsewhere.

Next to the Khedive, it is to the French shareholders and interests in the Canal that a signal service has been rendered. The value of their property instantly rose in the market. Instead of a bankrupt partner from whom no financial aid could be expected, they suddenly find themselves associated with the richest country in the world, which has the strongest motives to promote the success of the enterprise, and, in fact, must now do so at any cost. England herself shares their liabilities, and allies herself in the closest manner with the French capitalists and adventurers, who have thus far carried on the work against a thousand obstacles, including the captious opposition of England herself. The language of M. de Lesseps on this point is extremely sensible and dignified. He had sought from the first to induce England to take a large share in this undertaking. He always foresaw and asserted, as we well know, that English commerce would be the greatest gainer by it. England was incredulous, suspicious, and hostile: she would have nothing to do with it.* M. de

* Exactly twenty years ago, in January 1856, three months before the concession of that year was signed, we published an article on the project of the Suez Canal, which is not even now forgotten (Ed Rev. ciii. p. 235). We had heard from M. de Lesseps all he had to say in support of the scheme, and we arrived at the conclusion that the Canal would cost two or three times as much as he supposed; that it would not be available for sailing ships; and that the calculation that six millions of tons of shipping would pass through the Canal annually was grossly exaggerated. Hence we concluded that the Canal could

Lesseps, with dauntless energy, carried his point, and has justly earned imperishable fame by his success. He knows full well that his company is too strongly constituted under the laws of France and Egypt to be materially affected by any transfer of shares, even when they are purchased by an empire. But he hails with apparent satisfaction the accession of so powerful a partner and ally, throwing her wealth and her might into a concern which has stood, and may again stand, in great need of assistance. It is like the introduction of a wealthy member into a vast house of business of comparatively scanty resources. And we are persuaded that England has never given to France a more practical proof of her confidence and friendship than by purchasing on a large scale these Egyptian shares in a French company, in which be it observed that the French interests remain entirely unchanged and still largely preponderate over our own.

We speak of the Suez Canal Company as a French Company, and so in some respects it is, but the manner in which the shares are distributed is extremely curious. M. de Lesseps obtained very little support from the great capitalists of foreign countries, or even of France. It is a fact that the Canal owes its existence to a movement of French popular enthusiasm largely stimulated by Lord Palmerston's pertinacious opposition to the plan. It is believed that there are about 40,000 shareholders in France holding in all nearly 200,000 shares—the average, therefore, is less than five shares apiece, and as twentyfive shares are required to give a .vote in the General Assembly of the Company, the great majority of these holders have no voice at all in the management. The shares were on July 1st, 1875, distributed as follows, when the coupons were paid :Alsace-Lorraine (Cerman) 4,781 / Switzerland . . . 23,460 Belgium . . . . 4,190 Egypt . . . . Spain . . . . 580 France . . . . 178,659 Italy . . . . 356 | Uncertain . . 11,324 This statement is not strictly accurate, because some of the

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not answer as a financial speculation to the shareholders. But we emphatically repudiated all opposition to the scheme on political grounds : we said, “No policy could be more absurdly illiberal than

that which would seek to close one of the grcat avenues of the trade of mankind to suit some fanciful theory of rival influence ;' and we even declared that if it could be shown that the Canal could be exe

cuted as easily as was supposed a British Minister would be perfectly * justified in proposing to Parliament that it should be executed by the * nation for the benefit of the world.' (P. 266.)

VOL. CXLIII. NO. CCXCI.

foreign shareholders sell their coupons to the Paris bankers or money-changers, but it is near enough for our purpose. In round numbers about 35,000 shares are held by persons who are neither French nor English. We have therefore to deal with a considerable amount of property which belongs to neither of these countries. It is curious that neither England, Holland, Russia, or Germany proper, or even Austria appear in this list.

We shall now proceed to lay before our readers some of the information which must sooner or later be considered by Parliament; and if we are led into more detail than we could wish, we trust that we shall be pardoned in consideration of the importance of the subject. Without this detail no rational opinion can be formed on the question, and we cannot doubt that Ministers, before they took their decision, had completely mastered it. To suppose that they had not the fullest information before them would be to impute to them a culpable amount of levity and ignorance.

The Act of Concession of the Suez Canal, which is now in force, was granted on January 5, 1856,* by the Viceroy of Egypt, Mohamed Said Pacha, to his friend M. Ferdinand de Lesseps, who as founder of the undertaking was appointed Director and President of the Company for ten years from the opening of the Canal. M. de Lesseps, therefore, holds his power from the Khedive, not from the shareholders. The capital of the Company was to be eight millions sterling, a sum since very largely increased and exceeded. The Pacha solemnly declared, subject to the ratification of His Imperial Majesty the Sultan, that the Canal should be always open, as a neutral passage, to the merchant ships of all nations, without distinction, on payment of the dues. The maximum rate of charge was fixed at ten francs par tonne de capacité, an expression which has since given rise to fierce disputes. The concession was made for ninety-nine years from the opening of the Canal, with power to the Egyptian Government to take over the stock at a valuation at the end of that time; or, if the concession is renewed, the share of profits payable to the Government is to increase to 20, to 25, and even 35 per cent. Of the original 400,000 shares, the Viceroy appears to have taken nearly half. By Art. 18, the Egyptian Government reserved to itself 15 per cent. on the annual net profits of the Canal; and by Art. 19, 10 per cent, is appropriated in

* A first concession had been granted in 1854, but nothing was done under it, and it was superseded by that of 1856.

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perpetuity to the founders of the Company,' and to their heirs and representatives; but nothing is at present payable under this head, as there are no net profits.

The first estimate has been largely exceeded. We learn from the inventory of the Company's property, taken on December 31, 1874, that the total cost and expenses of the Canal down to that date had amounted to nearly 472 millions of francs, or something less than 19 millions sterling. Of this sum 354 millions were raised thus:

Franes. Original capital.

200,000,000 Consolidation of interest * .

34,000,000 Loans of 1867-68–Debentures . . . 99,999,990 Loan of 1871 (Bons Trentenaires) . . 20,000,000

353,999,990 the remainder (118 millions) appears to have been paid by the Khedive.

But even this sum does not give a correct view of the cost of the Canal, because it does not include a variety of contributions in the shape of lands, water-privileges, quarries, customs' dues, &c., made by the Egyptian Government to the Company. The Khedive has, in fact, contributed to the Canal far

* This consolidation of interest is a peculiar feature in the case which demands a passing notice. From the commencement of the undertaking the pernicious principle was adopted of paying five per cent. interest on the capital paid up on the shares. This was done to induce the small French adventurer to buy shares : but as the Canal earned nothing for fourteen years, from 1856 till 1870, the interest during that time was paid out of capital. Thus the shareholders received back nearly 70 per cent. of the original cost of the shares, and the capital was diminished in the same ratio to be replaced by onerous loans. Just as the Canal was opened the power of raising money to pay interest stopped. In July 1874 seven of the coupons of interest on shares in the Company were unpaid. The Company had no means of paying off this arrear, though there was reason to expect that the future coupons would be paid in part out of the receipts. To meet this difficulty it was proposed to capitalise the interest overdue. The whole sum amounted to 35,000,000 fr., or 87 fr. 50 cents, per share, or deducting the stamp duty, 85 fr. This sum, therefore, was added to the capital of each 500 fr. share, with a preferential right to interest at 5 per cent. But as the coupons on the Khedive's shares (176,602) had been renounced, nothing was overdue upon them; and the capitalised interest on these shares was applied to the payment of interest on the debentures and to the extinction of a part of them. M. de Lesseps says this is not a loan : but it is unquestionably an augmentation of the capital. The interest on the consolidated interest must be added to the annual charges. It amounts to about 1,750,000 fr., or 70,0001. a year.

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