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United States Department of State / Papers relating to the foreign relations of the United States, transmitted to congress, with the annual message of the president, December 4, 1876

Egypt,   pp. 594-605 PDF (934.1 KB)

Page 598

1894, but their value is lessened by an annual sum for a sinking-fund sufficient
to redeem ~ll of them by 1894. At the close of that year, therefore, the
last obligation will have been drawn and paid off, and the 176,602 shares
will be entirely free, and will enjoy whatever dividends the company are
then able to pay. To compensate England for the loss of the detached coupons,
Egypt agrees to pay her 5 per cent. on £4,000,000 until 1894, when
the shares will begin to yield dividends again.
 The Khedive still retains important claims upon the canal, as is but just
that he should, in view of the great sacrifices Egypt has made in behalf
of the great work, which has proved of but little advantage to her. Seventeen
million pounds is a low estimate of what the canal from first to last has
cost Egypt. Extraordinary concessions and rights were originally granted
to the company by SaId Pasha, which Egypt in selfdefense has been compelled
to take back, paying heavily therefor in every case.
 The Emperor Napoleon, to whom various disputed questions were referred as
arbitrator, decided that Egypt should pay an indemnity of £3,360,000
to the company for taking back certain concessions, which had been granted
to it for nothing. The fresh-water canal from Cairo to Suez was constructed
at great expense to the Khedive The concession for this work was originally
granted free to the canal company and brought back for £400,000, when
it could not otherwise raise money.
 The cutting off of twenty-five years' coupons from the shares that England
has bought was the last of the Khedive's heavy sacrifices for the benefit
of the company. The company needed money to continue its work; no more could
be borrowed in Europe. It again appealed to the Khedive, and succeeded in
inducing him to purchase various rights which had been conveyed in the original
act of concession. The company ceded its rights to navigate and levy tolls
on the fresh-water canal, and the right of fishing in the Suez canal and
the lakes it traverses, as well as all special privileges connected with
the working and maintenance of the fresh-water canal; and for these concessions
it charged £800,000. It also ceded to the government, for £400,000,
all the establishments which it possessed on the isthmus, such as hospitals
and their furniture, and its magazines and establishments at Boulac and Damietta.
To raise money to pay this £1,200,000, a fresh loan n~t being expedient,
the Khedive cut off twenty-five years~ coupons from his shares, begin. fling
with the coupon payable on the 1st of January, 1870. Having accepted the
coupons instead of money, the company capitalized them by issuing against
them 120,000 "obligations," as stated above, which were to receive the 5
per cent. interest borne by the coupons. As the Khedive could not pay the
£1,200,000 in money, 10 per cent. was charged him until the company
realized from the obligations, and it is stated that the amount he actually
paid was over £1,600,000.
* Thus Egypt has made great sacrifices in behalf of the Suez Canal, sacrifices
out of all proportion to her interest in the work and her resources, and
she alone has reaped the fewest benefits from the success of the great work.
She has lost all her transit-traffic, which was very heavy and a source of
great revenue to her railways as well as to the i)ort of Alexandria. The
canal passes through an arid desert and is of
no advantage whatever to local commerce. The political importance of Egypt
as the highway to the East has, without doubt, been increased, but this is
a doubtful advantage, as she is only too liable to be made the foot-ball
of European diplomacy and a perpetual bone of contention.
 But for Egypt's sacrifices the canal would never have been finished,

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