In the end, Lesseps scraped together half of his initial capital by building a fragile coalition among France, Turkey (which controlled Egypt) and the provincial Egyptian government. For the other half, Lesseps sold shares directly to the public through a dubious network of underwriters, drawing outrage from the press. As the London Globe put it, "The whole thing is a flagrant robbery gotten up to despoil the simple people who have allowed themselves to become dupes."
As progress slowed, investors grew hostile, and Lesseps grew desperate. In 1867, already years behind in interest payments, Lesseps received permission from the French government to sell even more bonds to the "simple people." By then, what began as a symbol of French national pride had turned to cynicism. The only way Lesseps could unload the new notes was to attach them to lottery tickets that qualified bondholders for quarterly prize drawings of 1 million francs a year. They sold out in five days.
When the Suez finally opened, initial revenues were far below what Lesseps had expected. Despite the obvious benefits of a shorter, safer trip, shippers were slow to change their habits. Fewer than 500 boats passed through the canal in its first year of operation. Lesseps himself made nothing from the Suez (and tried, unsuccessfully, to make up for it by building a canal across Panama). The Egyptian government, meanwhile, had hoped the canal would help them buy their independence from Turkey. Instead, it found itself strapped for cash as the canal floundered.
Within four years, though, the canal was finally generating enough revenue to begin paying off overdue debts. The company's stock, which had crashed after an early speculative bubble, began to trade over its par value in 1875.
That's when the British swooped in. Though they had ridiculed the project from start to finish, the British bought out Egypt's 40-plus percent of the company (the Turks' shares had been consolidated with the Egyptians'; the French stayed on as minority shareholders) and took over the company. By the outbreak of World War I their shares had increased in value tenfold.
It has been only in the past 50 years that the canal has generated spectacular profits. Between 1955 and 1966, after Egypt nationalized the canal in an event still known as the Suez Crisis, traffic increased by 50 percent and revenue tripled. Nearly a century after opening, the Suez was finally living up to Lesseps' outrageous claims.
The Suez Canal is characteristic of all great infrastructure projects. Because they attempt to do what has never been done, their design and construction is fraught with unknowns. Setbacks, accidents and exasperating changes in strategy are frequent. They are often the obsessive dreams of visionaries who invariably come equipped with egos big enough to match their ideas. Their arrogance leads to startling turns of events, and thus the projects become a topic of never-ending fascination by the press, who cannot resist reporting on the folly of trying something new.
