26 July 1956-Nasser nationalizes the Suez Canal

Gamel Abdul Nasser

Leader of Egypt 1952-1970

Gamel Abdul Nasser, the dictator of Egypt, saw himself as the unifying force in the Arab world. The British saw him as a usurper who had overthrown the Egyptian King Farouk in 1952. The French saw him as a growing concern to their interests in the Middle East, as Nasser was supplying arms and assistance to the rebels France was battling in Algeria. The Israelis saw him in the same light, as Nasser supplied arms and assistance to Palestinians in the Gaza Strip (which would remain Egyptian territory until the Israelis conquered it during the Six Day War). The United States had mixed feelings about Nasser. On the one hand he was seen as an example of countries throwing off their shackles of European imperialism, but on the other hand he was also seen as an irritant to two of our most important NATO allies, the UK and France. The U.S. ambivalence turned to open hostility when Nasser made plans to purchase arms from Czechoslovakia. Purchasing arms from a Communist country which was in the firm orbit of the Soviet Union was anathema to U.S. Secretary of State John Foster Dulles, an ardent Cold warrior. Nasser went one step further on 16 May 1956, when Egypt recognized the People’s Republic of China. Dulles looked for a way to punish Nasser for his transgressions, and the best way was to cancel an International Monetary Fund loan to Egypt for the construction of a dam on the Nile.

Nasser had hoped to construct the Aswan High Dam to generate more electrical power for his struggling nation, and the cancellation of the IMF loan infuriated him. Egypt simply did not have the internal funds for the construction, and while Nasser had no problems buying arms from Communist nations, he was leery of allowing Soviet technicians into his country for the construction of the dam. Looking around for ways to generate revenue, he cast his eyes on the Suez Canal.

In 1956 the Suez Canal was run by a semi-private/semi-public British and French consortium. Ships paid fees to transit the canal, and the fees went back to Paris and London, despite the fact that the canal was on Egyptian soil. Nasser realized that if he seized and nationalized the canal, those fees would go to Egypt, and that he could use the money to build the dam and for other purposes. On 26 July he gave a speech in Alexandria, damning the western powers for their meddling in the internal affairs of Middle Eastern nations. In the middle of his speech, he deliberately uttered the name “Ferdinand de Lesseps”, the Frenchman who had built the canal in the 1800s. The mention of de Lesseps’ name was a signal to Egyptian armed forces to move in and seize the canal’s operational centers and offices. Nasser informed the British and French that the canal was now Egyptian property, and that the stockholders would be paid the price of their shares at their values when the market closed that day.

Nasser’s actions shocked the West, and the Conservative government of Prime Minister Sir Anthony Eden was especially shocked. Eden came under intense pressure from his backbenchers to do something about the canal seizure and Nasser. That “something” would become the Arab-Israeli war of 1956.