Lord Derby to Lord Lyons.
10, Downing Street, Whitehall, Nov. 17, 1875.
I am not quite easy in my mind about a story I hear, to the effect that the Khedive is negotiating with a French Company for the sale of his interest in the Suez Canal. If the telegram has not been sent to you officially, I will enclose it. Now his bias has always hitherto been against the pretensions of Lesseps, and he has been of use to us in keeping that rather irrepressible gentleman in order. If he withdraws from the concern, and a French Company takes his place in it, our position will be very unfavourably altered. Have you heard anything of the negotiations in question? I really think the matter very serious, and it is one of which the English public will fully understand the importance.
I think I am not violating any confidence in enclosing to you for your personal use only an extract from Odo Russell's letter to me received on Monday which seems to throw light on the situation. I can add to it nothing in the way of comment.
Your information as to the position of the French Government is satisfactory. It looks as if the worst of their troubles were over.
P.S.—Since I began this note I have received further details, which I send you, and, I may add in strict confidence that we are prepared ourselves to take over the Viceroy's interest, if it cannot be kept out of French hands by other means.
I find Lord Odo's letter is with the Prime Minister, so the extract I promised must wait till next messenger.
The result of Lord Lyons's inquiries, which had to be made very discreetly, so as not to create suspicion, was the discovery that the Khedive was actively negotiating with a French Company, but it was believed that he wanted to mortgage, and not to sell the shares. Lord Derby's next letter to Lord Lyons shows how reluctantly he took action.
Nov. 19, 1875.
From General Stanton's[14] telegrams it appears that the Khedive has no intention of selling his interest in the Suez Canal, though he may be obliged to mortgage it for a time. He has promised to give us notice, if, from any cause, he should change his mind, and to give us the option of purchase.
I sincerely hope we may not be driven to that expedient. The acquisition would be a bad one financially, and the affair might involve us in disagreeable correspondence both with France and the Porte. But there is a strong feeling here about not letting the Canal go still more exclusively into French hands, and as we contribute nearly four-fifths of the traffic, it cannot be said that this jealousy is unreasonable. There are intrigues of all sorts going on at Cairo, but I think we may reckon on the Khedive being true to us, if not tempted too strongly. I rely on you to tell me all you hear on the subject.
The memorandum of Lord Odo Russell referred to by Lord Derby is a lucid exposition of the European situation at the time and of Bismarck's attitude with regard to the other Powers, more especially Russia.