Great Britain and the Suez Canal

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Great Britain and the Suez Canal  (1882) 
by William Rathbone






Reprinted from the "Fortnightly Review."







18, Prince's Gardens,
London, S.W
August 12th

In view of the importance of accurate information as to the relation of Egypt and the Suez Canal to English interests, I venture to send you a short article which I contributed to the Fortnightly Review, showing the effect of the Suez Canal on English commerce and communications with India.

I also send you a reprint of Mr. Norwood's letter to The Times of the 10th of July on the same subject.

It will be seen, moreover, that the history of Eastern commerce in the fifteenth and sixteenth centuries has a most interesting bearing on the probable effect of the Suez Canal on the present and future commerce of Europe and of England with the East.

As the leading commercial and maritime nation in the world, the interests of England in a great maritime highway occupy, of course, the first place; but what I think I have shown is that those are mistaken who contend that England has interests differing not merely in degree, but in their nature, from those of the rest of Europe. In the final settlement of this question, therefore, England's proper position will not be separate from the rest of Europe, but will be, as contended by the Government, at the head of the concert of Europe.

Though, as a merchant and shipowner, I have personally a serious interest in the preservation and safety of the Suez Canal as a commercial highway, I feel that the disposition to exaggerate the special responsibilities of this country, as distinct from those of Europe generally, is injurious to our national position and interests; and I do not believe it is conducive to the safety of the Canal itself.

In the settlement of the question, which I hope is at hand, it appears to me to be most important that the views I have tried to set forth should, if correct, have their due weight.



At this moment the attention of all Europe is fixed upon the course of events in Egypt. The Egyptian policy of our Government, a matter of deep interest to all the great States of Europe, is doubly interesting to us, the citizens of the United Kingdom. Men entertain different opinions as to what that policy should be, but each would justify his opinion by referring to the vital interests of our Empire in the East. One question has been hotly discussed, the question whether any special interest of England, apart from the rest of Europe, binds us to follow the perilous course entered on by Lord Salisbury, to continue his co-partnership with France in the management of Egyptian affairs, a course leading to impossible positions, a co-partnership dangerous to international amity; or whether we are free to carry out a policy which, in the hands of the Liberal Government, has elsewhere proved so successful, the policy of settling those affairs in concert with the other Powers of Europe, who are equally interested in them. The latter seems to me the calm, dignified policy of a nation strong in its own position and in the consciousness of its own power; the former seems the fussy and timorous policy of a government afraid of everybody, and, therefore, meddling with everything.

Most people seem to believe that we have in Egypt a vital interest which we are bound, more than other nations, to defend, in the free and unrestricted use of the Suez Canal. Few seem disposed to question the doctrine that the open passage through the Suez Canal is indispensable to the commercial prosperity, to the political greatness, and to the very integrity of the British Empire.

An attempt, then, to demonstrate the fallacy of the popular idea that through Egypt and the Suez Canal our enemies can strike at our mercantile greatness and at our imperial power, is not likely to meet with a favourable hearing. Yet I hope to show this, and illustrate it from my own personal experience. And if it can be done, it is worth trying to do it. For it is of the utmost consequence that we should all understand our real stake in the Suez Canal. This once clearly understood, we shall not be liable to panic; we shall not let ourselves be drawn into complications, wasteful of the blood of our citizens and the substance of our country; complications, moreover, which constantly expose us to the danger of becoming involved in a European war.

I do not for a moment wish to depreciate the enormous advantage which the Suez Canal has conferred upon producers and consumers both in Asia and in Europe, upon our fellow-subjects in India, and upon our own people at home. The Suez Canal is one of the noblest works of modern enterprise and modern science, and I regret that any English statesman should have opposed its construction. It has been of the utmost value to the general commerce of the world. Its maintenance is, in this sense, an interest common to all nations, and especially to all commercial nations. But when people attempt to make out that the formation of the Suez Canal has in any way promoted our commercial preponderance, or that our commercial preponderance could be destroyed by its destruction, or that we are any longer dependent on it for the rapid transfer of men and material of war from England to India, it can be shown from the actual results which have attended the opening of the Canal, from the history of commerce, and from the present power of our commercial marine, that they are mistaken. The Suez Canal has not improved the commercial position of England relatively to that of other powers; it has done just the contrary. Let us ask, What are already the established results of this great work?

Let us take a most important trade, the business of supplying East India cotton to the manufacturers of the Continent. I will give the history of East India cotton intended for the supply of a, say, Austrian manufacturer some forty years ago and at the present time. At that time cotton came down from the interior of India on bullock-carts, each cart carrying four bales. A native merchant, generally a Parsee, collected and assorted the cotton, and shipped it under advances from an English merchant in Bombay, who charged 2½ per cent, for so doing. It was carried by an English wooden sailing ship to England, consigned to an English merchant in Liverpool or London, who stored it in an English warehouse, insured it with an English assurance company, and sold it with a commission of 2½ per cent, to another Liverpool or London merchant. The latter purchased it under orders for, say, an Austrian manufacturer, to whom he charged a further commission of 2 per cent, for his trouble. Each of these merchants received thus a handsome commission, and the English warehouse owner, assurance company, and labourer were in turn paid for their services. Then the cotton was shipped on an English sailing ship or steam-vessel for Trieste, whence it was finally forwarded for the manufacturer's use.

Now all these operations, profitable to English merchants, shipowners, labourers, and others, have in most cases ceased; and the Austrian manufacturer can and does contract with a Bombay house through its European agent for the shipment direct from Bombay to Trieste of the required bales of cotton. Some of this cotton, it is true, is still carried by an English ship, but for a much shorter distance and for a small fraction of the freight formerly charged. I need not add that even for this fragment of the old traffic the energetic Mediterranean shipowner competes severely with the shipowner of our own country. For the Mediterranean shipowner has the advantage of being present in person at one end of the voyage to watch with a master's eye the disbursements, the condition of his vessels, and the conduct and management of his captains and his crews.

What has been said of our Austrian competitor holds no less true of all our other competitors on the Continent. "What has happened in the cotton trade has happened in other trades. Tea, for instance, now comes direct from China to Russia. In my early days London was the centre of the Eastern silk trade. The silk of China and of India came to London, and was thence distributed over Europe. Formerly this was one of the most profitable branches of our business. Since the opening of the Suez Canal, Lyons has succeeded London as the capital market for the silk of the East. But, with regard to silk, the Suez Canal perhaps did no more than assist a process already begun. Being so valuable an article, it was to a considerable extent, brought across the Isthmus previous to the opening of the Canal. What Trieste and Lyons have gained at the expense of London and Liverpool, that Havre, Marseilles, and, Odessa have gained too. To complain of all this would be ridiculous. That it should be so is perfectly right. But it is also ridiculous to say in the face of these facts that the opening of the Suez Canal has specially benefited the commercial interests of England as compared with other nations. On the contrary, it has favoured those nations at our expense, and the freedom of the Canal means more to them than it does to us.

It would be most unfair, however, to attribute exclusively to the Suez Canal the disappearance of so many intermediate agencies between the Indian producer and the European consumer. At the present day there is in all trades a tendency to bring the producer and the consumer into more immediate connection. But what the Suez Canal has done is to stimulate and accelerate this tendency, and to transfer the remaining agency between producer and consumer from England, once the centre and depôt of the commerce between Asia and Europe, to the ports and cities of the Mediterranean.

A short historical retrospect will place this matter in a clearer light, and may serve to show that the changes in commerce which have followed upon the opening of the Suez Canal are not accidental or irregular, but are rather the first effects of causes which will operate in the future constantly and with accumulated force.

The opening of the Suez Canal has exactly reversed what took place when the route round the Cape of Good Hope was substituted for the overland routes between Europe and the East. These overland routes in the fourteenth century seem to have been principally three. One of these routes passed through Egypt; another ran through Bagdad and Tabreez to the ports of Antioch and Seleucia; whilst the third traversed the highlands of Armenia and terminated at Trebizond. Western Asia, although it had declined from its former prosperity, was still rich, populous, and fairly well cultivated. Alexandria was then, what it has become once more, a great emporium of Oriental merchandise, and Constantinople was not inferior to Alexandria. From the ports of Egypt and Asia Minor that merchandise passed over to the West in the ships of Yenice and Genoa. From those cities it was distributed through the Alpine passes to the Free Cities of Southern Germany and the Rhine. In bulk, variety, and value, it was insignificant indeed compared with the cargoes that now pass through the Suez Canal. Yet how many German and Italian cities owed to this toilsome Oriental traffic their wealth and magnificence? Professor Thorold Rogers brings this out clearly in his most interesting book on the History of Agriculture and Prices in England. He says: "In the fifteenth century such towns as Nuremberg and Ratisbon, Mayence and Cologne, were at the height of their opulence. The waterway of the Rhine bears ineffaceable traces of the wealth which was carried down it in the numerous castles of the robber barons, the extirpation of whom became the first object to which the resources of civilisation were directed. The trade of the East enriched the burghers of the Low Countries, till, after a long and tedious transit, the abundant spices of the East, increased in price a hundredfold by the tolls which rapacity exacted and the profits which merchants imposed, were sold in small parcels by the grocer or apothecary, or purchased in larger quantities by wealthy consumers, at the great fair of Stourbridge or in the perpetual market of London" (Vol. iv., p. 654).

Then came a memorable revolution. Western Asia was repeatedy ravaged by the Turkish and Tartar hordes. In many rich, fertile, and famous countries the cultivated lands returned to their primitive desolation; great cities shrank into miserable country towns, and the people sank into an incurable and hopeless lethargy. The Christian merchant found it more and more dangerous, less and less profitable, to penetrate into the interior of Asia. At length the Turkish conquerors reached the Bosphorus and the Hellespont. The Greek Emperors gave place to the Ottoman Sultans, and under their new masters the Euxine and Asia Minor were closed to Christian commerce. From Constantinople the Ottomans spread their conquests to the Danube on the one side, and the Euphrates on the other. Finally Selim I. subdued Mesopotamia, the holy cities of Arabia, and Egypt, and stopped the last overland route a few years after Vasco de Gama had discovered the passage round the Cape of Good Hope. Professor Thorold Rogers has shown with great fulness how Selim's conquest of Egypt raised the price of almost every Oriental commodity imported into Europe. The same conquest struck a fatal blow at the greatness of many an Italian and German city. From this epoch we may date the decline of Venice, and Venice scarcely suffered more than Ratisbon, Augsburg, and Nuremberg. There, for generations, many an untenanted palace, many a silent street, reminded the traveller of that great change in the line of Eastern commerce.

Then Portugal first, and afterwards England and Holland, seized on the sea route to India, and on the traffic of the East. England, who added to that rich monopoly the Empire of India and of the seas, was to Europe all that Venice and Genoa, Augsburg and Nuremberg, had been; and she was much more. But the decline of the Ottoman Empire, followed by the construction of the Suez Canal and of the Alpine tunnels, has reopened the old path of commerce. The cities of the Mediterranean are reviving. The Mediterranean States have gained much and we have lost something, even in the last few years; and as time goes on they will continue to gain and we to lose. Any one who visited, as I did, the cities of Southern Europe forty years ago, then cities of the dead, would hardly recognise them now—all bustle, activity, and progress. But we must not forget that political freedom has had as much effect as the return of Eastern commerce in the renewal of their prosperity.

The English merchant is not so selfish as to complain of a change which has benefited the producers and consumers of the world. Instead of sitting down with his hands before him, bemoaning his hard fate or living upon a reduced trade, he has, as I shall indicate later on, found out new trades, if not so profitable to individuals even more beneficial to mankind than those which he has lost.

We shall be told, perhaps, to look at the immense increase in the mercantile marine of England. That increase has really had quite other causes. The invention of the compound steam-engine, which effected an enormous saving of fuel, took place shortly before the opening of the Suez Canal. One leaf out of the experience of our own firm will serve to exemplify how completely the carrying trade of the world was transformed by this invention. A few years before the opening of the Suez Canal we built and fitted with the new compound engines a steamer intended for the Alexandria trade. On her first voyage we found that, with a consumption of fuel less by one-third, she carried five hundred tons more of cargo than a steamer previously built for the same trade. Such an economy of fuel in proportion to cargo at once pointed to a revolution in the carrying trade. It meant that in future all valuable cargoes, at least, would be carried in iron steamers, not, as formerly, in wooden sailing ships.

Since the abolition of the Navigation Laws no shipowners in the world have been more energetic or enterprising than the British. Great Britain is the greatest iron shipbuilding yard, and also the most active machine-shop, in the world. London is the world's financial capital. To a vigorous use of these advantages, and not to the construction of the Suez Canal, this country owes the unrivalled development of her carrying trade. She has lost the large profits derived from her former position as geographical centre of the trade between Asia and Europe, but she has found fresh trades and fresh industries. Instead of bringing to England cotton and silk from India and China to be distributed over Europe, she brings millions of quarters of grain grown by her subjects in India to feed her artisans at home. Up to the present time she has even held her own in the carrying trade between her Indian possessions and the ports of the Mediterranean. Her merchants have now lost many large profits once realised by them, but she now has far more manufacturers, merchants, and other traders who make moderate incomes. Her political freedom, her freedom of trade, her enormous capital, the energy, enterprise, and experience of her citizens, have averted the fate which in similar circumstances overtook the great marts of mediæval commerce. And those beneficent powers will continue to avert that fate so long as her manufacturers, merchants, and other tradesmen retain their enterprise and integrity, her mechanical engineers their inventive skill, her artisans their intelligence and industry. To these good qualities, and to these fortunate circumstances, but not to the making of the Suez Canal, she will owe her mercantile prosperity. Had the Canal never been made she would have maintained that prosperity as fully and with less effort. It is, therefore, as absurd for us to say, as it is undesirable for foreigners to believe, that by closing the Canal they can ruin the commerce of the United Kingdom.

Then as to the necessity to England of the Suez Canal for the swift transport of men and munitions of war to India, it would be most valuable, no doubt, in case of mutiny in India unaccompanied by a European war. But in case of any war in which a Mediterranean State was concerned, I do not for a moment believe that the Canal would be available. On this subject I would refer to Mr. Caine's letter in the Daily News, and to Mr. Norwood's full and carefully written letter to the Times of the 10th of July. In confirmation thereof I am advised that there would be no difficulty in building transports capable of performing the journey to Bombay by way of the Cape in about thirty-one days, only four days more than the time occupied by the steamers of the Peninsular and Oriental Company in reaching the same destination by way of the Canal. Our present troopships, I believe, perform the shorter voyage in about thirty-one days. The improved troopships would perform the voyage through the Canal in shorter time, if no danger or impediment lay in their course. But if we were at war with a Mediterranean power, they would be exposed to such dangers in passing an enemy's shores through those narrow seas, they would be so much harassed by gunboats and torpedo-vessels issuing from the enemy's ports, that they would probably have to be placed under convoys, which would counteract in point of speed any advantage to be gained in going through the Canal. On the other hand, whilst we control the high seas, such swift and powerful transports would be dangerous to follow and difficult to capture in mid-ocean, where our cruisers would outnumber the cruisers of the enemy, and our ports of refuge would be nearer than theirs.

These arguments seem to me to have a conclusive bearing on our present position. It is not necessary for the protection of our commerce, it is not essential to our communication with India, that we should entangle ourselves in a partnership with any single State in Europe for the protection of peculiarly English interests. Surely the present Government were amply justified in hesitating to intervene in Egypt, in alliance with a single power, at any rate, before asking, in the first instance, for the help of a European concert. I hope that they will take the first opportunity of liberating themselves altogether from the false system engendered by the suspicious fears of their predecessors, by a timidity which led to alternate displays of rashness and weakness. Such partnerships can lead us in the future only where they have led us in the past, into positions which no Government, however able or well-disposed, can maintain with credit or escape from without either national misunderstandings or the sacrifice of British wealth and British lives. That which is really a European interest should be provided for by European concert. Our experience in the Crimea might have prevented the late Government from entering on such a course in conjunction with a country whose policy was, and still is, in a state of constant change and uncertainty.

William Rathbone.

This work was published before January 1, 1926, and is in the public domain worldwide because the author died at least 100 years ago.