EDITOR'S NOTE: In July 1956, Egyptian President Gamal Abdel Nasser nationalized the Suez Canal, marking Egypt's decisive break with its colonial past.

Before that, the canal, built in 1869 by French engineers, had largely been under British and French control. It served as a vital link to ship oil, as well as other goods between British colonies around the world. Nasser made the decision to nationalize the canal to help fund construction of the Aswan Dam, which was completed in 1970 to control the flow of the Nile River.

But Nasser's move angered France and England, and the two, with the help of Israel, invaded and took over the waterway. They ultimately withdrew under diplomatic pressure and Egypt was able to reopen it in March 1957.

Now, 59 years later, The Associated Press is making two stories about the nationalization of the Suez Canal available, along with historic photos of the passage, ahead of Egypt's unveiling of a major extension of the waterway.


ALEXANDRIA, Egypt, JULY 26 — Egypt is seizing the Suez Canal under a nationalization decree, President Gamal Abdel Nasser announced tonight.

Its revenues will be used to build the Aswan High Dam, he said.

Nasser declared his government, throughout taking over the canal, could receive $100 million a year in revenue.

"We don't have to seek American and British aid for building our dam," he said. "We'll build the dam ourselves and with our own money."

The dam has been projected to cost $1,300,000,000.

To wildly cheering thousands packed in Alexandria's Liberation Square, Nasser read this decree:

"In the name of the nation we hereby declare that the International Suez Canal Co. be nationalized. The company with its assets and liabilities will be transferred to the Egyptian state. The present management will be liquidated. Shareholders will be compensated according to the closing prices in the stock exchange.

"The company will be annexed to the Egyptian Ministry of Commerce. The company will have its own budget. All company money in Egypt and abroad will be frozen. Banks and individuals are forbidden to dispose of this money except with the permission from the new Egyptian management. All employees will remain in service. No resignations will be accepted."

In London, Prime Minister Anthony Eden called in the U.S. charge d'affaires and the French ambassador for emergency talks.

The 101-mile canal is operated by the Suez Canal Co., under a concession due to expire in 1968. The company is an Egyptian joint-stock company. The British government holds about 350,000 of its 800,000 shares. Half its board of directors is made of Frenchmen.

British armed forces occupied the Suez Canal for 74 years, but withdrew gradually over the last few years.


PARIS, JULY 27 — France and Britain sharply protested in concerted to the Egyptian government today and made plain they will not accept President Gamal Abdel Nasser's abrupt nationalization of the Suez Canal.

British officials were reported to feel that with American support it would be practical to challenge Egypt's control of the canal — possibly by the test passage of a British ship which would refuse to recognize Egyptian authority.

The decisions of Prime Ministers (Anthony) Eden of Britain and Guy Mollet of France apparently awaited the outcome of consultations in Washington and other capitals. The U.S. State Department disclosed tonight that these urgent talks were ongoing.

The Eden government was reported under strong pressure from such British Commonwealth countries as Australia, New Zealand and South Africa to challenge Egypt's action, which they feared threatened their sea lanes.

As a first installation of what promised to be far-reaching penalties against Egypt, Eden informed a tense House of Commons that Britain was considering freezing Egyptian sterling balances in London, stopping all arms shipments to the Nile republic and bringing the matter before the U.N. Security Council.

In Paris, the hurriedly summoned French Cabinet refused flatly to accept what Foreign Minister Christian Pineau called Egypt's unilateral "act of plunder." Saying Nasser was acting like "a man at bay," Pineau prepared to fly to London Monday for further moves against the Egyptian.


The AP Corporate Archives and the AP News Research Center contributed to this report.