No. 796.
Mr. Beardsley to Mr. Fish.

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.

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.*

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.


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.]

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.]

[From the London Mail of April 24, 1874.]


[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,


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,


Representative of the Suez Canal Company.

“To the right honorable the President of the Board of Trade, London.

[Page 1192]

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,

“Representative of the Suez Canal Company.

“To the right honorable the Lords Commissioners of the Admiralty.”

  1. Mr. De Haro is in the employ of the Suez Canal Company.—R. B.