Spencer Heath Archive

Item 2314

Heath’s proposed proprietary solution of the Suez crisis, to be read against the background of world shock and hysteria in the first critical weeks following Nasser’s take-over — when many were looking to Britain to move against Egypt with force. A small bulk mailing of this proposal was sent out and garnered 25 percent replies, extracts from which are appended. A follow-up mailing had no such result, as the psychological moment had passed. In the white Originals Envelope are phrases from our correspondence copied by Spencer MacCallum for possible further use.

October 1956

 

SOLUTION FOR THE SUEZ

The Suez impasse is a political problem — so recognized by all — a problem not of property but of ex-propriation. Its solution depends on the re-estab­lishment of proprietary administration under a wholly non-political ownership that will benefit all parties and that all will feel themselves bound to respect.

 The following rough and general outline looks to a proprietary ownership and administration of the Canal under which the particular interests of all parties, in­cluding Egypt, would be safe-guarded and the world-interest well served.

 The eighteen or more governments, including Egypt, who are most interested could invite the leading ship­ping interests who use the Canal to form a Canal Owners Corporation to be chartered by each one and all of these governments, including Egypt, with powers and limitations to be agreed upon by them, including, first of all, recognition and respect by all parties of the present sole sovereignty of the Government of Egypt over the territory occupied by the Canal.

 The great shipping interests, or a large part of them, might well agree, upon condition of no discrimin­ation against any would-be user of the Canal, to estab­lish a new corporation in which all would hold shares proportionate to their several contributions to it. These contributions would constitute a fund wherewith to purchase from the present or recently expropriated owners of the Canal their entire outstanding equity rights in the property. The new Corporation could be formed upon the express agreement and consent of all the sovereign powers, including Egypt, avowing high interest and concern for the free and open and non­-discriminatory use of the Canal and upon agreement by the Corporation to provide the services of the Canal to all the world alike on equal terms. Such agreement could become part of a solemn covenant by and between all the interested governments and with the new Corpora­tion — a covenant of non-aggression against any of the tangible or intangible properties and rights of the new Corporation as chartered by them all.

The interested governments, in consideration of absolutely non-discriminatory use of the Canal by themselves and all nationals under them, would thus relin­quish all present or future claim to any sole or separate sovereignty or control over the Canal. However, the Government of Egypt, in consideration of its ac­ceptance of equal joint sovereignty with all the other interested governments, in exchange for its present separate sovereignty over the territory of the Canal, should be paid, in part immediately and the remainder serially, out of funds of or raised by the new Corpora­tion, a fixed sum to be agreed upon by and between the Government of Egypt and the new Corporation. These payments could be guaranteed by all the other interest­ed governments, either outright or proportionately. The cost, doubtless, would be enormous, but not more so than the advantages.

 Established in this manner, the new Corporation would come not into sovereign but into a guaranteed proprietary jurisdiction over the Canal, with the right and duty to police and defend its properties, but over which, in the interest both of itself and of its patrons,

it could exercise none but proprietary and not any coercive or non-contractual administration. It could take its place in the world as a productive enterprise, solvent and profitable out of the voluntary revenues that its high services to its patrons would command. Free from assessments and encroachments against its properties and from exactions out of its revenues, it could become enormously profitable and thereby able not only to maintain the Canal but to improve and extend it in all respects and directions as its present or prospective world patronage might justify or require. The Corporation might make such profits that it could du­plicate the Canal. This would allow for one-way traffic both ways and much more than double its present capacity both to serve and to earn.

 As a highly productive and profitable business corporation, solvent and stable, its shares would come into very wide demand, its ownership international to the ends of the earth, especially among those persons and corporations most engaged in commerce among the nations and thus most interested in the operation and extension of this very important and essential facility for it.

 An arrangement such as here outlined would serve and support the great objects avowed by all. To the interested governments: 1. The open, free and non­discriminatory use of the Canal. 2. The avoidance of any measures provocative of war. 3. No compromise of sovereignty by the interested governments. To the Government of Egypt: 1. Full recognition of its present exclusive sovereignty over the territory occupied by the Canal. 2. Exchange of its now precarious sole sovereignty for a guaranteed joint sovereignty, guaranteed and protected not by the power of Egypt alone but by all of the interested governments. And adequate and acceptable but certain and specific money recompense, in lieu of uncertain revenues and heavy and unaccustomed responsibilities. 4. A pattern and precedent for the acquisition of further great recompenses and revenues from similar proprietary regional authorities in other great public projects such as (possibly) development of the Nile.

                                                              Spencer Heath

 

_____________________________

 

There is no recognition of sovereignty so impressive — especially to a have-not government — as an offer to purchase a portion of it. Louisiana, Florida, Alaska all witness this. Sovereignty was relinquished for immediate gain. They were bargains in the eyes of all concerned.

There is a common interest of all parties and powers — enough to motivate joint action: The free use and service of the canal, equal and impartial to all. Egypt needs money. All need the Canal. She would do well to sell her sole sovereignty, backed only by her own force, in exchange for an equal joint sovereignty backed by the solemn compact of all and sweetened with more money than Nasser can ever hope to get in any other way.

An owning and managing corporation, chartered by each and all and guaranteed by each and all the full freedom to earn, save and serve, without molestation of any kind, would be a truly free enterprise, serving all the world on equal terms to the enrichment of all, without menace of war and no sovereignty impugned.

___________________________

 

/Form letter:/

Dear _______:

I am enclosing some suggestions looking to a proper and permanent solution of the current Suez Canal difficulty for your earnest consideration.

 I think you will agree that the final solution must be found along non-political lines and must be one in which the rights and interests of all parties, including Egypt, would be respected and the avowed common object of a completely non-discriminatory ad­ministration of the Canal well assured.

 I should be pleased to have any comment that may occur to you. In any case, if you think well of the enclosed proposal, please pass it along to those persons who are most interested with or without any credit to me.

Sincerely,

 

______________________________

/Extracts from replies received:/

I have read your plan with great interest and appreciation. If I may say so you are to be praised for having devoted so much thought and ingenuity to the subject, and I will certainly pass on the result.

Lord Robert Gilbert Vansittart

Your plan seems eminently sensible.

Aldous Huxley

I haven’t the slightest question about that plan of yours. It seems to me that it is the most sensible one possible and that if the people who run Egypt now are sensible they will regard it, as you say in your last page, as a bargain.

Crane Brinton

Harvard University

I think the plan one very much worthy of consideration.

M. F. Ashley Montagu

It seems to me not merely well presented, but logical and persuasive.

Felix Morley

I have passed it around to members of our organization who have expressed interest and seemed to think that your proposal is reasonable.

Graham DuShane

American Association for the Advancement of Science

I thought your program practical and will take advantage of your suggestion to use in discussions of that problem here, which you may be sure engages a good deal of our attention.

Hon. Peter Grimm

         United States Ambassador

         Rome, Italy

I am looking for the best method to place it in the hands of interested people.

          Dr. Ludwig von Mises

New York University

I read your “SOLUTION FOR THE SUEZ” with great interest. I trust that you are exercising your influence on your own government, whose role is obviously vital in the matter, in favor of your solution.

          Dr. William E. Rappard, President

          Institut Universitaire de Hautes

          Etudes Internationales

          Geneva, Switzerland

 

I think it merits serious consideration.

          J. Donald Adams

          New York Times Book Review

It would seem to me that your proposed solution is far superior to that which obtained before the present trouble.

          Zay Jeffries

          Vice President

         General Electric Company

I was indeed interested in your approach, which I think a very creative and constructive one.

          Donald Harrington, President

          United World Federalists

Thank you for your admirable outline for the Suez Canal settlement. I believe that some such solution will have to be found, and I will draw the attention of anyone who may aid in this purpose to your proposals.

Gerald Heard

Your plan would give Egypt the rights which she deserves and would at the same time guarantee freedom of use by other nations. It needs the proper publicity.

          Rev. Walter Donald Kring

          Unitarian Church

          New York City

I think that your idea is excellent.

Vivien Kellems

I have read this with both interest and approval and want to show it to my associates that they might share in it.

        Leonard E. Read, Director

        Foundation for Economic Education

I wish that the contentious parties were sensible enough to accept it.

          Dean Clarence E. Manion

I have read it carefully. It makes good sense.

     Dr. Howard E. Kershner, President

          Christian Freedom Foundation

Your suggestion about the Suez Canal is very interesting. I am going to pass your piece on to a few others and see what they think.

         James C. Ingebretsen, President

         Mobilization for Spiritual Ideals

This is a fine application of Citadel, Market and Altar to a pressing problem. Congratulations.

          Lyle H. Munson, Director

         The Bookmailer

I marvel at your ability to cut to the heart of a thorny international problem and present your solution in such clear, simple language.

         John L. Davis, President

         Chapman College

_____________________________

 

GEORGETOWN UNIVERSITY

Washington 7, D. C.

December 14, 1956

My dear Mr. Heath:

I have studied your Suez proposal and think it an in­genious device in principle for two reasons:

A. It is in agreement with the findings of political geographers to replace linear boundaries by boundary regions, the buffer state concept.

B. In this region property rights would be decisive rather than sovereignty, thus showing the world another path away from our modern monomania of national sovereignty.

 There are, of course, the actualities, which need an extremely delicate touch.  The new Near Eastern nationalism is so unsure of itself that, in my opinion, only the most discrete approach would gain a hearing.

 I read in the Star last night that Great Britain and France seem inclined to reopen negotiations with Egypt directly. There might be an opportunity to inject your proposal at that time.

 The most convincing argument to the Egyptians would be, I am sure, the presence of a financial group, ready to launch the Corporation. Who could do it? The history of the old Suez Canal Company might be searched usefully, or the methods of financing the Union Pacific by European capital via Credit Mobilier such as substituting new stock for the old stock and sell the rest throughout the world.

 As you see, you have set my mind going. Let me know what you think in this matter.

Sincerely yours,

 

 

Dr. Josef Solterer, Chairman

Department of Economics

Georgetown University