Littell's Living Age/Volume 125/Issue 1614/The Suez Canal

From The Pall Mall Gazette.

THE SUEZ CANAL.

Notwithstanding the annual meetings of the shareholders in Paris, the actual financial position and prospects of the Suez canal have been much of mysteries hitherto — at all events to Englishmen. We knew that great sums had been spent in the construction; that the original estimates had been enormously exceeded; that the cost of foreign labour employed had involved a great expenditure of life and money; and, moreover, we could fancy that the system of backshish so common in the East must have been in full operation, and that M. Lesseps' diplomatic gifts and indefatigable energy must necessarily have been backed up by heavy draughts on the expectations of his company. At last, however, these mysteries seem to be happily dissipated. The shares of the company are admitted to formal quotation on our stock-exchange; and, thanks in especial to one or two admirably sound and lucid articles in the Economist, the English speculator may calculate approximately what are the chances of an investment in Suez Canal-shares.

We may say at once that the company's balance-sheet is more satisfactory than might have been expected, and much more satisfactory than has been generally believed. It shows that the present market-price of the property is by no means excessive, according to the estimates of experts, or in consideration of the company's prospects in reference to the facts and figures placed before us. In round numbers, the works appear to have cost £19,000,000. From that sum, however, £6,000,000 has to be deducted, which was derived from other sources than the pockets of the shareholders; it came chiefly in the way of indemnity for rash concessions by the khedive that were subsequently retracted. But in withdrawing these first concessions of extensive riverain desert, the company was still permitted to retain considerable domains round such centres of its traffic as Port Saïd and Ismailia. The consequence is, as the Economist puts it, that it is in possession of a properly at £6,000,000 below cost price, as well as of very considerable stretches of soil or sand which probably may advance materially in value. The receipts for 1873 — those for 1874 have not been issued — were £991,000. The expenditure amounted to £225,000. The cost of working is said to be no more than 23 per cent. From the net balance of £766,000 of profit must be deducted a sum of £469,000, appropriated to various preferential claims. But the upshot is that the company was earning in 1873 a dividend of 3 3·4 per cent; that it must certainly have been improving its position in the past year; and that there can hardly fail to be a progressive advance, although there must necessarily be a variety of opinions as to the amount of it.

Looking at the position his grand project has already attained to, M. Ferdinand de Lesseps may well be proud. He had to fight a hard battle against formidable odds on a field that kept shifting under his feet like the sands of the desert. He had to argue, to bargain, to bribe, and sometimes — as you must do when you have to carry your point with Orientals — to bully. Nothing could have enabled him to triumph over such opposition but a very rare combination of qualities. He united indomitable perseverance to considerable powers of persuasion, aided by the contagious earnestness of profound conviction. He had necessarily a good deal of the gambler's temperament, with a marvellous gift of abstraction and self-control, even when the exciting game had drawn on to its climax. Those who saw him on the day the canal was opened still for the most part regarded him as a visionary and enthusiast. Rumours were general that the "game was up" after all, and his canal a failure: that at certain places it had proved impossible to keep the indispensable depth of water above the heaving mud of the bottom. It was a fact that a vessel had stuck fast, and the circumstance gave consistency to the sinister reports in circulation. Impartial strangers who were most hopeful were inclined at best to believe that but an ephemeral triumph had been achieved at an utterly disproportionate price. To all outward seeming, the confidence of M. Lesseps himself had never been shaken for a single moment. He had made a dash up the canal in the early morning to see to the stoppage. He came back serene and smiling to figure as the host in the ceremonies of the day. He took his place himself in the biggest and most awkward vessel of the whole fleet of the messageries impériales; and when the whole train of ships had filed through, and when Suez had been reached with scarcely a check or detention, he expressed his conviction, with his habitual emotional confidence, that his scheme must be a grand commercial success, and must work a revolution in the trade of the world.

We think it only honest to record all this, now that bis sanguine expectations seem likely to be fulfilled. It is true, as the Economist very shrewdly pointed out, that the calculations on which he founded his estimates have been materially falsified in one respect. He looked forward to having his canal freely used by the sailing-ships that hitherto had been subjected to costly delays in weathering the storms of the passage round the cape. As it has turned out, scarcely any sailing-vessels are being towed through the isthmus, and steam has been running sails off the route. But the main fact remains, that he is diverting the Eastern trade as he proposed to do. And in matters of engineering detail, events have marvellously confirmed his opinions and experiments, and those of his advisers. It was said the treacherous bottom of Lake Menzaleh was likely to present insuperable difficultites. So far as we can learn, that part of the passage has presented in practice no difficulties at all. It was said the banks of incohesive sand must crumble in places to the mere motion of the screws or paddles of passing steamers. It would appear that the banks have not crumbled, nor has the channel been filled up seriously, even where the surface of the desert is loosest and most drifting. The silting at the terminal harbours, especially at Port Saïd from the Nile-drift, has been counteracted by dredging. There are extra expenses awaiting the company no doubt; but they arise for the most part out of its success. Passing places must be multiplied, and, not improbably, it may come to be needful to widen the canal throughout its whole length. Profits beyond a certain point will be partially neutralized by the stipulation that insists upon charges being modified should the traffic increase in a certain ratio. But even adopting the Economist's moderate estimate of a probable annual increment in the net profits of five per cent., the ultimate success of the company seems ensured.