No. 796.
Mr. Beardsley to Mr. Fish.
Agency and Consulate-General of the United States in
Egypt,
Cairo, April 29,
1874. (Received May 26.)
No. 193]
Sir: I have the honor to inform you that
Mr. Lesseps has accepted for the Suez Canal Company the decision of
the Sublime Porte, and that the new tariff of tonnage dues, as
recommended by the international commission, goes into effect today,
the 29th.
In my dispatch No. 183, of the 4th instant, I had the honor to
explain the nature of the controversy between Mr. Lesseps and the
Porteas it existed at that day. Mr. Lesseps after that date
determined to persist in the arbitrary manner of collecting the
tonnage dues which was adopted in July 1872 and has been followed
until this time, and announced his
[Page 1186]
intention of preventing all ship passing
through the canal which refused to pay the customary toll. He
declared that sooner than submit to any reduction in the rate of
tonnage-dues he would withdraw his pilots, extinguish the lights,
and close the canal to navigation.
The vizieral letter from His Majesty the Sultan to His Highness the
Khedive, ordering the latter to enforce the application of the rules
laid down by the international commission, a copy of which I had the
honor to inclose with my dispatch No. 183, granted to the canal
company a delay of three months in which to prepare for the
application of the new rules. That delay expires today. Until the
25th instant Mr. Lesseps maintained a bold and defiant attitude, and
the Khedive prepared to enforce the decision of the Porte, and
determined, if necessary, to take possession of the canal and manage
it himself.
On the 23d instant a force of several hundred men and officers, under
the command of General Stone, was stationed at various points along
and in the neighborhood of the canal, to prevent any overt action on
the part of the canal company, and to be ready to take possession of
the canal in case of necessity. The Egyptian frigate Menemet Ali
arrived at Port Said from Alexandria the same day, the 23d, and,
with the stationary frigate at Port Said, formed the naval
contingent of General Stone’s force. The general had with him pilots
who were acquainted with the canal, and was supplied, with
everything necessary for facilitating the passage of ships and the
organization of a new transit-service.
Mr. Lesseps was at Jaffa on the 23d instant, where he had been for
several days. On the 24th he returned to Port Said and Ismaila, and
on the 25th he arrived at Cairo.
On the 23d instant I received a communication from the minister of
foreign affairs, (inclosure No. 1,) informing me of the mission of
General Stone, and requesting me to order any citizens of the United
States who might be in the service of the canal to abstain from
appealing to their nationality or displaying the flag of their
country in case of a conflict of authority between the canal company
and the territorial authorities. On the 24th I addressed official
communications to Mr. Page at Port Said, and to Mr. De Haro, United
States consular agent at Ismaila, (iuclosures Nos. 2 and 3,)
instructing them in case of any conflict to maintain a strict
neutrality.
On the 26th instant I received a second communication from the
minister of foreign affairs, (inclosure No. 4,) informing me that
Mr. Lesseps had decided to conform to the decision of the Sublime
Porte in regard to the tonnage-dues, and inclosing Mr. Lesseps’s
official letter to the minister of the interior, (inclosure No. 5,)
in which he announced that from the 29th instant, today, the new
rules, as recommended by the international commission, would, under
protest, go into effect.
I have the honor to inclose also a leading article on he Suez Canal
from the London Mail of the 24th instant, (inclosure No. 6,) and a
letter on the same subject from the Constantinople correspondent of
the same journal, (inclosure No. 7,) both of which are interesting
contributions to the subject treated of in this dispatch.
Iam, &c,
[Inclosure 1 in No.
193.—Translation.]
Nubar Pacha
to Mr. Beardsley.
Mr. Agent and Consul-general: You no
doubt are aware that Mr. Lesseps has manifested his intention of
opposing the execution of the decision of the imperial
[Page 1187]
government in regard
to the dues to be collected by the Suez Canal Company from ships
using the canal.
The imperial government, in presence of the attitude taken by the
company, has requested His Highness to employ every possible
means, even force, if necessary, to insure the execution of its
decision and the passage of ships.
The company maintains in its service a personnel composed of employés of different
nationalities Those employés might be induced to take part in
the threatened resistance in obedience to orders issued to them.
In so far as they are in the employ of an Ottoman company, and
acting for it, they cannot be considered by the territorial
authorities otherwise than as local subjects, incapable of
taking advantage of their particular nationality.
I beg of you, monsieur agent and Consul-general, to be so kind as
to inform all those under your jurisdiction who may be in the
service of the Suez Canal that it is in this sense that General
Stone has been charged by His Highness to see that the decision
of the imperial government is executed, and has received orders
to oppose by force any attempt at resistance.
The government of the Khedive will be pleased, monsieur agent and
Consul-general, if you will request them to abstain from
appealing to their nationality for the purpose of opposing, as
agents of the company, the action of the territorial
authorities, especially to avoid displaying and thus
compromising in a regretable conflict a foreign flag.
The government hopes, monsieur agent and Consul-general, that you
will notify them to this effect, because the question at issue
in the present case concerns the execution of a decision of the
imperial government, given by advice of other powers, and to be
executed by the territorial authority, against a company under
the Ottoman jurisdiction. It is therefore a question of simple
internal administration, in which His Highness would see, with
the greatest regret, the interference of persons without
authority or mission, and especially the abusive use of the name
and flag of their government.
Accept, &c,
[Inclosure 2 in No.
193.]
Mr. Beardsley to Mr. Page.
Agency and Consulate-General of the United States
in Egypt,
Cairo, April 24,
1874.
Sir: I have the honor to inclose
herewith for your information and guidance a copy of a dispatch
which I have just received from the minister of foreign affairs
in relation to the Suez Canal.
I believe there are no citizens of the United States in the
service of the canal company, and it would seem that there could
be no possibility of such a conflict of authority occurring, so
far as we are concerned, as is suggested by Nubar Pacha’s
dispatch.
Should a conflict of authority unfortunately occur, however,
between the Egyptian authorities and canal company, of course
you will observe that the neutrality of the United States flag
is not compromised.
I am, &c,
[Inclosure 3 in No.
193.]
Mr. Beardsley to Mr. De
Haro.*
Agency and Consulate-General of the United States
in Egypt,
Cairo, April 24,
1874.
Sir: I hasten to inclose for your
guidance a copy of a dispatch which I have just received from
the minister of foreign affairs in relation to the Suez
Canal.
Should a conflict of authority between the Egyptian government
and the canal company unfortunately occur, you will be careful
to observe the strictest neutrality, so far as your position of
a United States consular agent is concerned, and in no manner to
make use of the United States flag or in any way compromise it
or yourself.
I am, &c,
[Page 1188]
[Inclosure 4 in No.
193.—Translation.]
Nubar Pasha
to Mr. Beardsley.
Mr. Agent and Consul-general: I have
the honor to inclose herewith copy of the letter that Monsieur
de Lesseps has addressed to his highness the minister of the
interior, by which he informs the Egyptian government that from
the 29th of April he will conform to the decision of the Sublime
Porte concerning the application of the tariff to ships passing
through the canal of Suez.
Accept, &c,
[Inclosure 5 in No.
193.—Translation.]
Mr. Lesseps
to the Minister of the
Interior.
Monseigneur: In answer to the dispatch
which I had the honor to receive yesterday from your highness, I
hasten to transmit to you the copy of a telegram sent the same
day to the administration of the Suez Canal at Paris:
“Cairo, April 25, 1874.
“In consideration of the orders given by the Sublime Porte to
take possession of the canal, and under protest, reserving
all the rights of the shareholders, our transit-service will
apply from the 29th the special tax of navigation, with the
surtax imposed by the Porte.
“LESSEPS.”
Your highness will find inclosed my protest against the decision
of the Ottoman Porte, in order that it may be communicated to
Constantinople.
Accept, &c,
The president-director of the joint company of the Suez
Canal:
[Inclosure 6 in No.
193.]
[From the
London Mail of April 24,
1874.]
M. de Lesseps has resolved to bring to a crisis the protracted
differences between the Suez Canal Company and the mercantile
marines of Europe, represented by their respective governments
and acting through the authority of the Porte. The
representative of the company in England has given notice, in
the name of its president, to the board of trade that “vessels
will, in future, have to take the old route round the cape, or
discharge their ships’ cargo at Alexandria, for transit by rail
to Suez, unless they pay the legal and regularly-fixed
passage-dues of the Suez Canal Company.” To the admiralty he
writes that, “in consequence of a general measure. Her Majesty’s
ships will henceforth have to pay the passage-dues before
entering the Suez Canal at Port Said.” “I may add,” he says,
“that the company’s agents in Egypt have received orders to
enforce the strict observance of this measure.” On the 29th
instant the three months grace, during which the company was
permitted by the Porte to maintain its present charges, will
have expired, and the rules framed by the international
commission will come into force; but M. de Lesseps has announced
that nothing will induce him to accept the new tariff. He has
threatened to dismiss the pilots, put out the lights, and
declare the canal closed. This menace was made sometime since,
and it was thought that as the day approached, and the
responsibilities of the position became clearer, more moderate
counsels would prevail. It seems that this expectation is to be
disappointed. M. de Lesseps is not afraid to face Sultan and
Khedive, embassadors and consuls, the Peninsular and Oriental
and the Messageries Maritimes, the merchants of India and China
and the antipodes. It is M. de Lesseps contra
mundum, but the ruler of the Suez company will not
flinch. His officials at the canal will even “enforce” his
regulations on the warships of the first naval power of the
world.
Our first thought, on receiving such a communication, must be to
prevent the execution of the threat. Many persons will receive
it with incredulity, as a bravado which there is no intention to
act upon, or as a device for attracting the attention of the
governments, with an ultimate financial purpose. But it is quite
possible that Whatever the designs of M. de Lesseps, they may be
advanced by actually doing what he has threatened. It would
bring the Suez Canal in its mercantile and political
[Page 1189]
aspects prominently
before the world; it would show the maritime nations the
transcendent importance of the work, and how much they have to
lose if they suffer it to fall into inefficiency and decay; it
would make the rights and grievances of the shareholders the
theme of universal discussion; it would produce a deep feeling
in France, where the interest or sympathies of a great number of
people are already in favor of the company; in short, it is a
bold and cleverly sensational policy. But if it be carried into
execution, the most lamentable consequences may ensue to the
great traffic which has now come into existence. We will not
suppose that M. de Lesseps would have his way permanently and
force the mariners of Europe to “take in future the old route
round the cape,” but even a “strike” of a few weeks on the part
of that distinguished personage would cause public inconvenience
and private loss not easily computed. If he were really to break
up his staff it would be difficult to replace it immediately,
even though the Egyptian government should undertake the working
of the canal. The withdrawal of the pilots accustomed to the
navigation would make the passage difficult and perhaps
dangerous for some time to come.
Immediate action is therefore necessary to prevent any
interruption of the traffic. So far as the mandates of authority
can give us assurance; we have it. M. de Lesseps applied to the
Porte to rescind its adoption of the rules made by the
commission, and when he failed in this he demanded that three
months longer should be allowed to the old tolls, the time to be
spent in devising some scheme of remunerating the company for
the change which the commission had introduced. It is said that
at various times he has assumed a lofty tone in his dealings
with the Turkish government, and threatened even more decisive
measures than his agent in England now announces to Her
Majesty’s navy and the British marine. When these his latest
declarations were officially brought before the Porte, prompt
action was taken. Orders were at once dispatched to the Khedive
that should the president of the company abandon the working of
the canal the Egyptian government was to take it in hand and do
all that was necessary. Whatever may be the views of Ismail
Pasha, there is no reason to doubt that the order would be
obeyed. But eastern governments are apt to be dilatory, and,
moreover, the company’s influence is strong at Cairo. It would
be only prudent to urge on the Porte the propriety of a summary
interference to protect the advantages which the maritime
nations enjoy. By the terms of the original concession from the
Egyptian government, and of the firman confirming it, which the
present Sultan granted, the service of the canal is to be
efficiently performed in accordance with specified regulations.
A defiant closing of the canal, to the detriment of the
sovereign power and of the nations at peace with it, might be
justly considered to incur the forfeiture of the concessions
made to the company. When, therefore, such an act is threatened
in official communications such as have been made to our board
of trade and admiralty, the Porte is perfectly justified in
anticipating it, and exercising its rights at once.
It may be expected that we should speak of the moral merits of
the case. Admitting that the president of the Suez Canal Company
would commit a violent and unjustifiable act in closing the
canal, has he any excuse in the conduct of the Porte, or in the
regulations which the European powers have recommended and, as
it were, enforced! To this we must reply that legally he has
not. By the terms of the firman which authorized the
construction, possession, and working of the canal, certain
conditions were imposed on the company in return for its
extraordinary privileges, and the Sultan’s government retained
the right to define and interpret those conditions. It has so
interpreted in the present case, after taking the advice of the
most competent body of men who could be brought together—the
official representatives of all the maritime states of Europe.
Full accounts of the controversy have from time to time appeared
in our columns. As is well known, the company received from the
Porte the right to demand the sum of ten francs per ton, and no
more, from vessels passing through the canal. It was inevitable
that the question should one day arise, what is a ton? There is
gross tonnage and net tonnage; there is tonnage by weight and
tonnage by measure, and tonnage in which these two enter in
various arbitrary relations, differing among different nations.
In fact, there have been almost as many systems of reckoning
tonnage as there are states with ships at sea. The Suez Canal
Company charged on gross tonnage, and reckoned it after a system
of its own, which the ship owners, and especially the owners of
steamers, thought unfair. After long controversy and some
litigation, the Sultan’s government, with which the decision
rested, resolved to invite international advice on the subject.
Every maritime European state responded, and sent competent men
to sit on the commission. Great Britain, France, Germany,
Austria, Russia, Italy, Spain, the Netherlands, Belgium, Sweden
and Norway, and Greece were represented. Of the two French
members, one was M. Rumeau, who really represented M. de Lesseps
and the company. The commissioners unanimously agreed to a
report, in which they declared that net tonnage should be
reckoned in paying the canal dues. They reported that the
process of measuring the capacity of ships established in the
United Kingdom by the merchant-shipping act of 1854, under the
name of Moorsom’s system, realized best the conditions required
to determine gross tonnage, and they
[Page 1190]
recommended rules for ascertaining the
net tonnage from the gross. In consideration of the small return
the company had yet received from its investment, they
recommended a surtax over and above the 10 francs per net ton.
This surtax, which varies with various classes of vessels, is to
be diminished by half a franc as soon as the tonnage of vessels
passing the canal shall reach 2,100,000 tons in a year, and
every additional increase of 100,000 tons per annum is to be
followed by a deduction of half a franc until such tonnage shall
reach 2,600,000 tons, when the surtax is to cease altogether,
and the original tax of 10 francs per ton remain permanently as
the toll. This does not on the face of it appear hard-dealing
with the company. The Porte, though it does in the exercise of
its acknowledged authority define the ton on which the charge is
to be made, deals justly and, as we conceive, liberally with the
company. Even M. Rumeau makes no protest, but appends his name
with the rest. The real grievance of the company lies, not in
this decision, but in the unfortunate fact that, financially,
the canal has been far from successful. The shareholders have
conferred great benefits on the world to their own loss,
sometimes almost to their ruin. This circumstance necessarily
affects the acts of the company’s managers, and its influence
may be discerned in the present instance.
[Inclosure 7 in No.
193.]
Constantinople, April 17.
[From the London Mail of April 24, 1874.]
THE SUEZ CANAL.
[From our own correspondent.]
M. de Lesseps has at last, after a few interlocutory
negotiations, made his final declaration, which is, that rather
than submit to the decision of the Porte, founded on the
conclusions of the international commission, he will suppress
the navigation of the canal by withdrawing his pilots and
extinguishing his lights and signals; in other words, he will
close the canal. This is a bold declaration, and resembles the
throwing down of his last card, if, indeed, M. de Lesseps is in
earnest and not playing the game of “brag.” This threat, if
carried out, simply entails the forfeiture of the concession;
and although M. de Lesseps affects to believe that “la
compagnie, e’est moi,” yet it is incredible that he should
venture on such a step without the authority of the
shareholders. It is not, therefore, improbable that this
declaration is a mere menace, which he more than once before has
repeated. On a certain occasion, at an interview with a grand
vizier, M. de Lesseps astonished the Porte and the foreign
powers by saying that if they interfered with his pretensions he
would put chains across the two entrances of the canal and sink
every ship that dared to navigate his waters.
Before making the above portentous threat M. de Lesseps might
have reflected that it could do no good. The verdict of the
international commission as to the principle on which the tolls
should be levied was unanimous. Even the French delegates, one
of whom was the nominee of M. de Lesseps, acceded to the general
view of the commission. The Porte thereupon undertook a solemn
engagement that the dues should be levied on the principle laid
down, and cannot therefore surrender its decisions, which France
and the other powers assisted in forming.
Under these circumstances the Porte has only one course to
pursue, and the Khedive it is understood will be instructed,
should M. de Lesseps attempt to carry out his threat, to take
possession of the canal and secure its free navigation. In the
interest of the company, however, it is to be hoped that M. de
Lesseps will not drive the Porte to this extreme course of
proceeding, which would be in fact the death of the company. As
to the fact of the canal continuing its ultimate operations
there can be no doubt. If the company should be destroyed by M.
de Lesseps, the canal would nevertheless be maintained; in other
words, the suicide of the company would never produce the death
of the canal.
But let me consider for one moment how far M. de Lesseps has any
right to complain of the treatment the company has received at
the hands of the Porte and the international commission. The
company is entitled by its charter to levy a tax of 10 francs
per ton on all shipping passing through the canal. This tax was
at first levied on the tonnage of ships as stated on their
official papers. This system, however, did not produce an
adequate dividend to the shareholders. It was competent then for
M. de Lesseps to apply, as in fact he did, for permission to
increase the toll. But subsequently he preferred to take another
course, and invented a new tonnage upon which he insisted on
levying his toll. This system was disputed; he consequently
appealed to the Porte whether he was right or not. He demanded
from the Porte their interpretation of the terms of his
concession, and engaged to abide by their decision. The Porte
accepted this office. They stated that the toll leviable was
that on the available space for cargo, in other words, “net
tonnage;” and desiring to ascertain practically,
[Page 1191]
once for all, what this net
tonnage is, summoned an international commission, which was
formed of the most eminent practical men of the day. The
international commission duly performed its functions and
defined “net tonnage.” Though justified in arriving at the
conclusion that the company was illegally levying the tolls, yet
they considered that their decision would act detrimentally on
the company, and therefore suggested that the company might be
authorized to levy a temporary surtax which would admit of a
fair dividend being paid to the shareholders. The Porte granted
the surtax, and M. de Lesseps was further allowed to continue
levying his own high rate of tariff for three months longer. How
then can the company complain of hardship? It is said, why not
grant M. de Lesseps’s last application for an additional three
months of illegal taxation? But his demand was something beyond
this. The language he held to the Porte was virtually as
follows: “I will not accept your surtax in favor of the company;
and if I adopt the principle of taxation laid down by the
international commission, it shall only be on the condition that
you (the Porte) shall pay me the difference between the
estimated receipts upon my system of tonnage and the
international system, and that you shall give me three months
more before I submit to your terms, such time being necessary to
afford notice of a change of tariff under my concession.” Surely
such a notice can never be required in the case of making a
change from an illegal to a legal system of tolls, and the Porte
cannot be blamed for refusing an application unjust in itself
and accompanied with a threat for damages.
Happily, there is still a chance that the French government or
other friendly advisers may interpose to save the company from
the evil consequences of the conduct of its president.
To the Editor:
Sir: In requesting your permission to
publish the inclosed important letters for general information,
I wish to state that I entirely share the views of M. de Lesseps
as to the absolute necessity for the step he has thought proper
to take in the matter of the Suez Canal dues.
It is well known that the question of the legality of raising the
dues was disposed of in Paris by the cour d’appel on the 11th of
March, 1873, in favor of the Suez Canal company. This judgment
was appealed against by the Messageries Maritimes before the
cour de cassation, and again recorded in favor of the Suez Canal
company.
One would suppose that this would have set the matter at rest;
not so, however. Her Majesty’s government and other powers,
urged on by a section of ship-owners, and possibly their own
interests, convened an international and scientific commission
appointed to discover a new mode of measurement which would give
the real utilizable capacity of ships; but instead of adhering
to their originally intended mission, viz, to ascertain a mode
for determining the real capacity of ships, endeavored to unify
the inexact official tonnages; and, proceeding a step further
while they were about it, actually went the length of expressing
their wishes with reference to the matter of the Suez Canal dues
itself, with the object of getting a reduction of the present
low rate of 8 shillings per ton of capacity, or, indeed,
scarcely so much.
It was hoped that the admitted legal and vested rights of the
shareholders would have been respected, but neither the
administration of the canal company nor its president was ever
so much as called or heard at the commission’s deliberations,
which possesses no right whatever to interfere in the matter of
a contract with the signing of which they had nothing to do; no
more than they would have in any shipping or railway company in
this country, where such a step would not for a moment have been
tolerated. No wonder, then, that M. de Lesseps and those with
him consider themselves in duty bound to prevent that which, if
enforced under the circumstances, may be viewed as an act of
confiscation, and any tacit submission to arbitrary commands
would amount to a betrayal of interests confided to the care of
those who direct the affairs of the Suez Canal company.
I have the honor to be, sir, your most obedient servant,
DANIEL A. LANGE.
21 Regent Street, April 22.
“21 Regent Street,
London, April 22,
1874.
“Sir: I am requested by the
president of the Suez Maritime Canal Universal Company to
state for the information of merchants and ship-owners of
this country that vessels wall in future have to take the
old route round the cape or discharge their ships’ cargoes
at Alexandria for transit by rail to Suez, unless they pay
the legal and regularly-fixed passage dues of the Suez Canal
company.
“I have the honor to be, sir, your most obedient servant,
“DANIEL A. LAHGE,
Representative of the Suez Canal Company.
“To the right honorable the President of the Board of Trade, London.”
[Page 1192]
“21 Regent Street,
London, April 22,
1874.
“Gentlemen: I am requested by the
president of the Suez Maritime Canal Universal Company to
inform you that, in consequence of the application, of a
general measure, Her Majesty’s ships will henceforth have to
pay the passage dues before entering the Suez Canal at Port
Said or Suez. I may add that the company’s agents in Egypt
have received orders to enforce the strict observance of
this measure.
“I have the honor to be, gentlemen, your most obedient
servant,
“DANIEL A. LANGE,
“Representative of the Suez Canal
Company.
“To the right honorable the Lords
Commissioners of the Admiralty.”
