The Suez Canal shares 1875

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  • Suez Canal
    • Canal built in 1869
      • Was jointly controlled by the French and the Khedive Ismail, the ruler of Egypt
    • 1875
      • The Khedive of Egypt was in serious financial difficulty and on the verge of bankruptcy
        • So, he decided to sell his share in the Suez canal
          • He needed £4M to avoid insolvency
      • At the time there was a strong possibility of a French company buying the shares
        • This posed a threat of the French having complete control of the canal
          • This meant they could control who went through it
            • However, the French company had difficulty raising the money
              • Disraeli stepped in quickly and seized the splendid piece of opportunity
                • Consulted Queen Victoria who ave the purchase her blessing
                  • Brought the Khedive's shares for the British government, using £4M loaned from the Jewish banking house of Rothschilds
                    • Gladstone was highly critcal of the purchase
                      • He believed it  would lead to the eventual British occupation of  Egypt
                      • Called it: "  ruinous and michievous  misdeed'
                • Secured the approval of the Cabinet without difficulty
                  • Brought the Khedive's shares for the British government, using £4M loaned from the Jewish banking house of Rothschilds
                    • Gladstone was highly critcal of the purchase
                      • He believed it  would lead to the eventual British occupation of  Egypt
                      • Called it: "  ruinous and michievous  misdeed'
                • So why was this significant?
                  • Britain managed to negotiate  a low rate for British shipping passing through the canal
                    • This helped to achieve cheaper imports + exports and so simulated trade
                  • The deal helped to establish a solid British interest in Egypt.
                    • The important point was, even though Britain owned fewer than half the shares in the canal, it perverted the French having exclusive control
                • kind of a grand gesture that would dazzle the public
    • Vital for trade with India as it shortened travel time.

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