|First traffic in Suez Canal|
Ferdinand de Lesseps, a Frenchman with support from Napoleon III and Empress Eugénie, was the major force behind the construction of the Suez Canal; he also subsequently pushed for the construction of the Panama Canal.
The Suez Canal created a direct link between the Mediterranean Sea and the Red Sea and was a much shorter and direct trade route from Europe to Asia than the long and often dangerous route around Africa and the Cape of Good Hope.
In 1855 de Lesseps persuaded his friend Said, the khedive of Egypt, to grant him a broad concession to build the canal. At the time the British opposed construction of the canal because many thought it would not be financially profitable, and others wanted to limit French imperial ambitions.
Undeterred, de Lesseps launched a major campaign to raise money to finance the canal through the sale of stock. Preference shares went to Said for granting the concession; founder shares were held by the organizers or given to influential personages, and public shares were sold in Europe and the United States, where, largely owing to the Civil War, they went mostly unsold.
Said took most of the unsubscribed shares, and digging for the canal began in 1859. Said also agreed to provide forced labor through the corvée of Egyptian peasants, or fellaheen, to build the canal. The forced labor was supplemented by paid foreign labor and machinery that cost twice as much as manual labor. At the time the Egyptian economy was booming, as, with the lack of cotton from the United States, the price of cotton, Egypt’s main export, was high.
The 100-mile canal was finished in 1869 and opened with great pomp and circumstance. During its first years, the canal operated at a loss, but revenues gradually increased. In 1874 Khedive Ismail, facing bankruptcy, sold his ordinary shares of the canal to the British for the bargain price of 4 million pounds.
However, Ismail ultimately was forced to turn over control of the Egyptian economy to the international Caisse de la Dette run by Europeans. The canal became the major trade route for the transport of goods and personnel between England and the British Empire in Asia.
The desire to protect British interests in the canal was a major motivating factor behind the British occupation of Egypt in 1882. Although the Suez Canal was on Egyptian territory and had been built largely with Egyptian labor, it remained under foreign control until the Egyptian leader Gamal Abdul Nasser nationalized it in 1956.