This is one of those times the tangent proved a bigger timesink than the actual topic. I intended for the next post to cover the 1956 Melbourne Olympics, but I've found myself badly side-tracked by the reason several countries decided to boycott. The Suez Crisis is, however, more relevant than you might think, representing an excuse to dig into both the state of the British Empire, and the state of the oil industry, as they existed in 1956 – and the tale involves Australia a lot more than I expected.
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| Suez is the source of some of my favourite photos, of immense ships serenely gliding between the dunes. This one's the SS Oriana in 1959, colourised. (Source: Facebook.) |
Okay, I'll Bite: What's a Suez Canal?
The Suez Canal is a 193km waterway dug through the dunes of Egypt, extending from Port Said (just east of the Nile delta), to the city of Suez at the tip of the Red Sea forefinger. It was the brainchild of Ferdinand de Lesseps, a Frenchman of Napoleon III's day, who'd had the bright idea to dig a canal linking the Mediterranean to the Red Sea and thus save ships the trouble of sailing all the way around Africa. To this end, in 1858 he'd founded the Compagnie universelle du canal maritime de Suez, or Suez Canal Company, and financed it with an issue of nearly 400,000 shares.
200,000 of these shares were sold to private French investors at 500 francs apiece (extremely tricky to adjust for inflation, but at the time that was a labourer's wage for more or less an entire year). The other 177,000 shares went to the khedive (more or less, "viceroy" or local ruler) of Ottoman Egypt, Sa'id Pasha, in return for allowing the Suez Company to dig the Canal through his country and then collect tolls from it for the next 99 years. When Pasha hit financial troubles in 1875, however, he'd been forced to sell his shares to Disraeli's British government (with Victoria's blessing, of course). As the pre-eminent colonial power of the 19th Century, Britain's interest in the Canal had been intense, immediate, acute: it shaved 9,000km off the voyage to India, the jewel in the Imperial crown, so it's no surprise that from the moment it opened in 1869, two-thirds of all traffic through the Canal was British.
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| Battle of Tel El Kebir by Alphonse-Marie-Adolphe de Neuville. Robert Brockway has suggested these 19th Century battle paintings are the inspiration behind Warhammer 40k official art, and I have to admit he might be onto something. (Source: Wikipedia.) |
In 1882, Britain graciously stepped in to aid the khedive in putting down a revolt – and, while they were there, they decided they might as well secure the Canal. After that, there was a permanent British garrison defending it, which made Egypt a de facto British protectorate – even though it was still technically a province of the Ottoman Empire. The garrison stuck around through two World Wars, and was only dislodged by the burning desert winds of Arab nationalism. Frustrated with his playboy lifestyle (and his timidity at tossing the British out), Egypt's King Farouk was overthrown by a 1952 army coup led by one Colonel Gamal Abdel Nasser. After a brief internal power struggle, Colonel Nasser became President Nasser, who signed an agreement with Churchill that would remove all British presence within two years i.e. by June 1956. For the first time in seven decades, there would be no British troops in Egypt to defend the Canal.
This was a concern, as in the immediate post-war world, the profitability of the Canal had risen sharply. In 1955, the toll was about eighty U.S. cents per ton (about $9.60 in 2025), so once you factored in a few sundry fees, it was about $6,200 ($74,000) to put through a common-or-garden cargo vessel. Not church change by any means, but the real game-changer was what those vessels were now carrying – oil from the Middle East, which was being freighted to Europe in ever-greater volumes. By the mid-1950s, total world oil production was around 12 million barrels per day, more than half of which was produced in the Middle East.
Oil had been a headache for Britain since the First World War, as unlike good old-fashioned Welsh coal, the Sceptred Isle had no reserves of its own (discovery of the North Sea basin was still decades in the future). To secure a supply, Sykes-Picot had dissected the emerging Middle East with the loving cruelty of a Cenobite, deliberately drawing the borders to divide every place against itself and ensure there could be no independent bases of power. Two of the states it created you might've heard of: One of them, an oil pipeline with a vestigial country attached, was ruled by the puppet King Faisal II, kept on the throne purely by the force of British arms; its name was Iraq. Another was its next-door neighbour Iran, where in 1953 the British and Americans had colluded to overthrow the democratically-elected government of Mohammad Mosaddegh in favour of a military dictator, the Shah Pahlavi. Mosaddegh's crime? Daring to speak of nationalising Iran's oil industry so the profits would flow back into Iran, rather than lining the bank accounts of the Anglo-Iranian Oil Company. The resulting public outcry had been so great that AIOC had been forced to rebrand simply as "British Petroleum" – BP, for short.
Britain had some form here, is what I'm saying, and with 70 percent of Britain's oil (not to mention 66 percent of Western Europe's), passing through the Canal, there was no such thing as an over-reaction, in their eyes, should it ever be threatened.
The Game Begins
Exactly what knocked over the first domino of the Suez Crisis varies depending on which account you read. Indy and the TimeGhost crew said it was Nasser spurning a U.S. arms deal in favour of a Soviet one, mostly because the Soviets didn't attach so many T's & C's to avoid an arms race with Israel. The Menzies Institute says it was Nasser's recognition of Mao's communist party as the legitimate government of China (the U.S. still favoured the Nationalists in Taiwan). Perhaps it was simply that de-colonisation naturally led former colonies to align with the Soviets, whose anti-imperialist rhetoric resonated strongly with the victims of colonial violence (never mind that the Soviet Union was itself a colonial power – you didn't have to go overseas to colonise, after all).
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| Gamal Abdel Nasser aka. Mister President. (Source: Wikipedia.) |
Either way, Egypt drifted a touch too close to the Soviet bloc, so on 19 July 1956, the Americans pulled the plug on a $250 million loan to finance the proposed Aswan Dam (a boon for irrigation, a source of hydroelectricity, and a revolution in Nile flood control). This was Nasser's pet project, so cancelling it threatened to undermine his entire regime: in response, he gave a speech in Alexandria on 26 July, in which he namedropped the Canal's creator, Ferdinand de Lesseps – a pre-arranged code word signalling his men to go ahead and seize the Canal. Nasser revoked the Suez Company's concession and transferred it to the state-owned Suez Canal Authority instead, aiming to use the tolls from the Canal to fund the dam. Alarm bells began ringing in London and Washington. The Suez Crisis had begun.
There Goes My Hero
For the next few months the Crisis took the form of a flurry of diplomacy, as world leaders scrambled to work out what (if anything) should be done. British Prime Minister Anthony Eden – a man who'd picked up an amphetamine habit following a botched operation in 1953, who now only slept five hours a night, and who happened to nurture a burning personal hatred for Nasser – immediately called for war. The French, dealing with an insurgency in Algeria that Nasser was funding and arming, agreed wholeheartedly. But John Foster Dulles, Eisenhower's Secretary of State, managed to instill a little bit of calm in the room, advancing a proposal that the Canal be declared international waters and administered by a new, multi-national body. The question was, who should bring the idea to Nasser? Ideally it would be someone with clout, someone with tact, and preferably someone from the Commonwealth to bolster the idea that Britain was willing to negotiate. The man chosen for the job was the long-serving Prime Minister of Australia, Robert Menzies.
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| Who looks enough like Clive Palmer in his official photos to make me wonder how inbred these toffs really are. (Source: Wikipedia.) |
The Canal only shortened the voyage to Australia by 400 miles, but even so, 60 percent of our Anglo-focused trade passed through it, so you couldn't say we didn't have any skin in the game. And maritime trade was something Pig Iron Bob knew all about. Since we'd last run into him, Menzies had become a founding member of the shiny new Liberal Party which, confusingly for Americans, was actually the more conservative of Australia's two major parties. It makes more sense if you recall they meant "liberal" in an economic sense – that is, that they believed in laissez-faire capitalism rather than the quasi-socialism of wartime Labor. As Stephen Williams wrote in his 2018 article, Australian Politics for Beginners, Part one:
The Liberal Party was formed in 1944 from anti-Labor groups, with Robert Menzies as its champion.
It represents conservatives in general, but especially the wealthy and mercantile class. Since these people own the country, they think it is only fair that they run it. ...
The Liberals' economic agenda can be summarised as harking back to the good old days of the 1920s, when people knew their place. Business should be allowed to run government and therefore the country, while everyone else does what they are told. That, after all, is the natural order, as vouchsafed by the monarchy and the class system. Those who don't like the class system are, of course, socialists who would have us queueing up for our breakfast with ration cards...
Menzies' shadow looms long over his party, and over Australia in general. He was Prime Minister from 1949 clear through to 1966, partly because the Liberals seemed really good at managing the expanding post-war economy, and partly because Labor fractured into infighting, as the more fanatically anti-communist and Catholic wing walked out to form a splinter party. With such assistance, Menzies was able to lead his party to a record seven election victories in a row (to put that in perspective, try to imagine Mr Albanese remaining in office until 2039). Such a spectacular accomplishment doesn't exactly speak of a dullard, and yet his imminent mismanagement of Nasser makes me wonder if he was a broken clock who just happened to be right for the times. Today it's easy to mock his simping for the Queen with John Ford's famous verse, "I did but see her passing by, and yet I'll love her 'til I die." But consider what the Sydney Morning Herald wrote on the fiftieth anniversary of Lizzy's 1952 visit to our shores:
Royalty can have a strange effect on people who come into contact with it. It had an extraordinary effect on an estimated 7 million Australians who flocked to see the young Queen Elizabeth 50 years ago …The estimated figure was about 70 per cent of the Australian population of nearly 10 million. Nearly one million people were thought to have crowded Sydney's foreshores and streets when the Queen arrived on February 3, when the city's population was 1.8 million. About 150,000 crammed around Sydney Town Hall and neighbouring streets when she attended the Lord Mayor's Ball. A newspaper reported that 2000 collapsed in the crush.
So Menzies' painful Anglophilia and monarchism were no stumbling block for the Australia of 1956, and yet it's hard to deny that the ship of state steamed in circles while he had his hand on the tiller. He maintained a burning hatred for the working class in general and unions in particular, doing his best to overturn the industrialisation of the Chifley years and return to the wool-exporting economy of the 19th Century (and then importing the products of Britain's clapped-out industry). He tried to strangle the Snowy Mountains Scheme in the cradle, then claimed in his memoirs that it had been his baby all along. He offered Australia to the British when they needed a testing ground for their latest nuclear weapons (without even consulting his cabinet), condemning an unknowable number of us to slow death by cancer. He never hesitated to commit Australian troops (all conscripts in those days, remember) to die overseas in Imperial wars, and indeed had them on deployment at this very moment in Malaya. And perhaps most tellingly, First Nations people gained citizenship in 1948, then were included in the census in 1967, two dates which happen to lie just before and just after his time in office. I don't believe that's a coincidence.
This was the man who'd now been entrusted to meet with, and persuade, a brown man that he should turn his country's property over an an international consortium. A man who swore he couldn't let Nasser, "get away with such an act of brigandage". A man who wrote in his private diary, "These Gyppos are dangerous lot of backward adolescents, full of self-importance and basic ignorance." It turned out about as well as you'd expect.
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| Menzies meets Nasser. Note the smiles: it was all downhill from here. (Source: Australian Financial Review.) |
On 5 September, a five-country delegation, featuring the Ethiopian Foreign Minister, the Swedish Foreign Minister, the U.S. Deputy Under Secretary of State for Administration, and of course Menzies himself, was dispatched to Cairo. And at first it went surprisingly well. Two meetings lasting an hour and a half saw little progress, with Menzies telling the press, "So far I am doing all the talking and here we are." Indeed, according to Nasser's confidante and newspaper editor, Mohammed Hassanein Heikal, Menzies had proudly worked through his repertoire of impressions, including Winston Churchill, famed Irish playwright George Bernard Shaw, and the South African statesman Jan Smuts – and, by all accounts, it worked. Nasser was amused, and started warming to the Australian buffoon he'd been forced to welcome into his office.
Unfortunately, the honeymoon period was short-lived. Menzies reported to his good friend Eden that Nasser was, "In some ways a likeable fellow but so far from being charming, he is rather gauche … I would say that he was a man of considerable but immature intelligence." In short, Menzies thought he was a bit of a yokel, someone who'd be easy to manipulate. He was mistaken. Two days after the meetings, Nasser received a rather pompous letter suggesting, in the tone of a schoolmaster dealing with a particularly dense schoolboy, "The dangerous tension now existing internationally could be relaxed and terms satisfactory to the user nations and entirely consistent with Egypt's proper dignity, independence and ownership." An irritated Nasser replied that, "An act of such a nature is both self-defeating and of a nature to generate friction, misunderstanding and continuous strife. It would be not the end, but the beginning of trouble."
Any hope of a negotiated settlement died shortly thereafter when, in a horrible display of foot-in-mouth disease, Menzies warned that it would in fact be Nasser's refusal of an international administration that would be the beginning of trouble. As Heikal observed:
Nasser immediately closed the files on the desk in front of him and said: "You are threatening me. Very well, I am finished. There will be no more discussions. It is all over."
The delegation rushed to apologise – Menzies included – but it was too late. According to Heikal, the President made his feelings very clear: "To tell me that my refusal to accept an international administration will be the beginning of real trouble is a threat and I will not negotiate under threat."
The "international control" idea was dead, but Dulles, its architect, merely shrugged: "I don't look unhappy, do I?" America's chilled-out attitude was totally explained by a single sentence in the opening paragraph of a 1978 paper by Bent Hansen and Khairy Tourk, titled The Profitability of the Suez Canal as a Private Enterprise, 1859-1956. That sentence noted bluntly: "American investment [in the Canal] would not have been profitable." Indeed, if oil prices were driven up by the closure of the Canal, then U.S. exports from California and Texas – around 300,000 barrels a day in this period – would only have become more valuable. It won't surprise you, then, that U.S. President Dwight Eisenhower had effectively cut off the delegation at the knees by publicly announcing there would be no military action to enforce compliance. They'd never had any leverage to begin with.
The Sinai War
The rest you probably know. Unable to go to war openly, Britain and France found a loophole – what if they intervened in a war that was already underway, instead? Say, a war between Egypt and the new state of Israel? The Israelis were ready to listen: skirmishes and nuisance-raids were already a semi-regular occurrence on their southern border, so they regarded a war with Egypt as more or less inevitable. If they could get it over with while they had strong Western allies, so much the better. So it was, that on 22 October 1956, French Prime Minister Guy Mollet, his Israeli counterpart David Ben-Gurion, and our old mate Anthony Eden all got together in the French town of Sèvres (halfway between Paris and Versailles) to hatch a plot. Israel would invade Sinai, France and Britain would cry out in horror and beg for a ceasefire, Israel would accept and, of course, Nasser would refuse. Once that happened, the Europeans would have the pretext they needed to invade Egypt proper, securing the Canal and removing Nasser from power.
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| Israeli armoured column in Sinai. (Source: History Central.) |
Israel pulled off their part flawlessly, invading without any declaration of war on 29 October and then rapidly encircling Egyptian forces at the border – they'd learned the Wehrmacht's tricks well. Right on cue, Britain and France issued their pre-arranged ultimatum, calling for both sides to pull back to at least 10 miles from the Canal... only for there to be red faces all-round, as it was realised the Israelis were still 30 miles from the Canal. The cat was out of the bag, as the whole world realised at the same time that this had all been set up ahead of time – an impression that was confirmed when photocopies of the Sèvres agreement (which had been foolishly signed by Mollet and Ben-Gurion) began circulating publicly. But it was too late to change tack, so before long the British were landing the Parachute Regiment in Port Said, and the proper war began.
The result was instant, savage condemnation for France and Britain, especially from their alleged closest ally, the United States. Eisenhower was furious he hadn't been consulted about this, not least because they'd just embarrassed him in front of the Soviets. 24 October happened to be the day the Kremlin decided to respond to the Hungarian Revolution by parking a T-34 on every city block, which Eisenhower had condemned in the strongest terms – only for his allies to turn around and do pretty much the same thing five minutes later. After that kind of betrayal they were never going to have his support, and that had severe consequences down the line.
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| The larval form of the SAS: men of A Company, 3rd Battalion, the Parachute Regiment during the assault on El Gamil airfield, 5 Nov (Source: Imperial War Museum.) |
Britain's finances, never in the best shape after 1941, immediately took a dive as panicked investors sold off their sterling. To counter this, the Treasury had dipped into their already-low cash reserves in order to buy them back, with the result that the Treasury lost £50 million in only a few days. The best way to counter that would've been some help from the Americans – another loan, a waiver on existing debts, anything – but Ike was in no mood. Far from sending the financial aid Eden had quietly counted on, Eisenhower actually threatened to crash the pound by selling off America's stash of British bonds (which, remember, would crash the Australian pound at the same time, as its value was pegged to the British pound).
Alongside the looming financial crisis was a matching oil crisis. Despite interference from Royal Navy fighters, the Egyptians scuttled the 320-foot, cement-laden freighter Aka (a former WWII LST) in the middle of the Canal near Ismailia. She was the first of 32 ships deliberately sunk to close the Canal – in effect, strategically Ever Given-ing it thirty-two times over. Europe was suddenly facing oil shortages as tankers from the Persian Gulf now had to travel all the way around the Cape of Good Hope, a journey of weeks. A CIA estimate guessed that 86 percent of western Europe's supply was now affected.
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| Scuttled ships block the Canal at Port Said. (Source: Times of Israel.) |
The only other source was the U.S., but once again Ike was ruthless, placing both Britain and France under an oil embargo until they accepted a U.N.-brokered ceasefire. The run on the pound and the oil crisis compounded each other, the lack of oil throwing the economy into chaos, with no money in the bank to buy more. At last bowing to the pressure, Eden announced that Britain would accept the ceasefire starting at midnight on 7 November. He held out one last hope that British troops might remain in Port Said as a bargaining chip, but Eisenhower bent his arm until he agreed to a complete withdrawal. His gamble had failed. The Americans estimated that, even with emergency shipments from the U.S., Western Europe would see a deficit of 10-15 percent of its oil needs for the next few months at least, and Britain was forced into yet more fuel rationing that lasted from December 1956 until May 1957.
Aftermath
The Suez Crisis was a disaster for Britain, proving beyond all doubt that its days as a great power were over. Ruthless realpolitik and imperial greed didn't play too well when you no longer had the might to back it up. In the new, superpower-dominated Cold War world, Britain could no longer conduct its own foreign policy. Like the rest of NATO, it was now nothing more than an extension of the U.S., native auxiliaries to the Pax Americana. The debacle also cost Eden his job – not because of the public outcry, but because the strain led to a mental breakdown.
The big winners of Suez were the Israelis, who'd got to show off their chops, warning their hostile neighbours that they'd be no pushover in the event of war. They'd also conquered a lot of land, gaining them access to the Straits of Tiran (negating the fact that they could no longer use the Canal), and also the Gaza Strip, which certainly wouldn't lead to anything bad happening seventy years later. Funnily enough, the other big winner was Nasser. Sure, his armies had been soundly defeated, and all that expensive Soviet military aid had gone up in smoke, but the Egyptian people had stood behind him, and he'd emerged a hero to the developing world who'd stood firm in the face of colonial aggression. Best of all, the Canal reopened on 10 April 1957, and the tolls started being paid into the Egyptian treasury. Today, it costs about half a million to put a ship through the canal (though it varies wildly depending on tonnage, beam, draft, and whether or not you're coming from or heading into the Mediterranean, which requires extra cleaning). It generates about $5 billion in revenue for Egypt annually.
And Australia? Our Prime Minister had humiliated himself, with even his biggest fans agreeing the whole event was the low point of his career (though, unlike his friend Eden, his career did survive). It's impossible to be certain that he'd have committed Australian troops to the Suez campaign, but there's no reason to think he wouldn't have – he did it in Korea, he did it in Malaya, he declared war on Germany in 1939 without even getting Parliamentary approval (the only Prime Minister ever to do so), and he'd go on to do it for the Americans too, as the Vietnam War ramped up. But by far, the most minor, insignificant, well-deserved comeuppance from the whole affair came later in the month, as a handful of countries declined to send athletes to our Olympic Games in Melbourne.
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