Egypt’s president, Colonel Gamal Abdel Nasser, has announced the nationalisation of the Suez Canal Company to provide funding for the construction of the Aswan High Dam.
The British Government and French stockholders who own shares in the Suez Canal Company have reacted with shock to the news.
In a two-and-a-half hour speech delivered to a mass gathering in Alexandria, President Nasser said the Nationalisation Law had already been published in the official gazette.
He said all company assets in Egypt had been frozen and stockholders would be paid the price of their shares according to today’s closing prices on the Paris Stock Exchange.
Twelve Egyptians have been appointed members of a special board which will manage the newly-nationalised company.
The Suez Canal is a key waterway for world trade and an important source of revenue for Britain.
The Suez Canal Company, which manages the waterway, is legally Egyptian but, in 1869 was granted a 99 years’ concession.
It was not due to revert to the Egyptian Government until November 16, 1968.
President Nasser, who took control of Egypt following a Coup d’Etat four years ago, has been implementing a nationalisation programme in the country, and was vehement in his criticism of the West.
He said 120,000 Egyptians had died building the canal but Egypt was receiving just a tiny proportion of the company’s £35m annual earnings.
President Nasser’s decision to nationalise the Suez Canal company comes following Britain and America’s withdrawal of financial assistance towards the Aswan Dam.
It is understood the USSR agreed last month to provide an unconditional loan towards the project.
Courtesy BBC News
In context
As well as nationalising the Suez Canal Company, Nasser also blockaded the Straits of Tiran – Israel’s only outlet to the Red Sea.
Britain and France joined forces with Israel, although this alliance was denied for years afterwards.
On 29 October, 1956, Israeli troops invaded Egypt’s Sinai Peninsula.
Two days later, British and French military forces attacked and invaded Egypt’s canal zone after President Nasser had refused their offer of creating a buffer zone between Israel and Egypt.
The Soviet Union threatened to intervene on Egypt’s behalf.
President Eisenhower of the United States and the UN, fearing the USSR would use the crisis as a way of gaining power in the Middle East, pressured Britain, France and Israel into agreeing to a cease-fire and eventual withdrawal from Egypt in November 1956.
