883.8123/7–2445: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 11:50 p.m.]
7456. In commenting informally in recent flare up in American press regarding payment of Suez Canal tolls by American ships during war despite fact that similar charges are placed under Lend Lease in case of British vessels using Panama Canal, head of Egyptian Dept35 of FO (Foreign Office) today expressed concern that this question had been forced from normal course of technical discussion between FEA and British Treasury, and made subject of recriminatory publicity. Result was that British Govt was being placed unfairly “on the spot” and Egyptian Dept head particularly stressed difference between US Govt-owned Panama Canal and Suez Canal which as result of Disraeli tradition36 is not infrequently thought of as being British-owned and controlled whereas fact of course is that it is an international company in which British Govt owns 40% of shares and remainder are in private hands. It was true that during occupation of France the British directors had assumed responsibility for maintenance and operation of canal, but they had taken care to do so merely as trustees and not to assume powers of the governing board. As matters now stand functions have been transferred practically entirely from London to Paris.
FO official observed that under existing circumstances all ships, including British, pay Suez Canal tolls and it is difficult to see how on the one hand Suez Canal Company could be asked to forego tolls with resultant risk of being forced into bankruptcy or on the other hand why British Govt should be held accountable for paying tolls on American ships as well as its own. The last thing British Govt would want to do, however, would be to be placed in position of seeming to profiteer in prosecution of war against Japan and it is entirely willing to proceed with discussion looking to a mutually satisfactory [Page 77] solution, but it is as yet difficult to see what form such a solution will take.
Incidentally Egyptian Dept head observed that as matters seemed to be turning out the highly speculative stories which had been current from time to time during the past several years regarding Axis acquisition of Suez Canal shares do not seem to be borne out by information now coming to light, which is to general effect that control of Suez shares has not changed on an extensive scale. It will only be possible to check accurately on the situation, however, when normal operations such as the distribution of profits are resumed.
Repeated Cairo as 36.