Foreign News: Smouhaha

When Queen Victoria ruled the waves, Lord Palmerston sent the fleet to blockade the port of Athens simply to collect damages for a Gibraltar-born Jewish Briton whose house had been destroyed by a Greek mob. “A British subject in whatever land he may be,” proclaimed the Queen’s Foreign Secretary, “shall feel that the strong arm of England will protect him against injustice and wrong.”

Last week, a century later, the Anglo-Egyptian agreement to let Suez bygones be bygones was being held up largely because of the claims of one Iraqi-born Jewish British subject to property in Egypt. This time, far from boasting of its readiness to defend each and every subject of the crown, Britain’s Treasury spokesman insisted: “We have never, never said the name of Smouha.”

What Is a Farm? The Smouha affair, or the Smouhaha, as London wags inevitably called it, arose over the fanciest deal struck in a lifetime of shrewd dealing (cotton, moneylending, land speculating) by one Joseph Smouha, longtime operator in the Persian Gulf, Lancashire and the Levant, and known as the richest British subject in Egypt. This was his acquisition of 700 swampy acres on Alexandria’s outskirts. He got Farouk’s father, Fuad I, to proclaim it “Smouha City” and, while holding about half as low-tax “farm land” for future speculative profit, turned the other half into villas and a luxurious sports club and race track to provide him the pleasures—denied him by his origins —of the stuffy Alexandria Sporting Club

First List. When British and French invaded Egypt in 1956, Joseph Smouha, then 80, fled to Paris, taking with him all his kinfolk and household, numbering about 60. The Egyptians sequestrated his property. In Cairo last month the Egyptians agreed to pay $87 million compensation for 1) expropriated British-owned rural property, and 2) “damage” to sequestrated urban properties now to be returned to their owners. Afterward, going over the papers its negotiators had initialed, the Treasury in London “noticed that some figures didn’t seem to be in the right column.” Among other things, Smouha City was classified as farm land.

The Egyptians blandly explained that they had accepted Smouha’s definition of his Alexandria holdings as farm land—and listed it for expropriation at his own low tax valuation of $2,800,000. Egypt’s $87 million for expropriated lands is already earmarked for other British claimants; furthermore, Smouha’s solicitors were pressing a market-value claim of $30 million. Britain faced the prospect of having to pay for Nasser’s single biggest expropriation of British landholdings out of its own resources. “Hoodwinked in a deal that had all the elements of the Middle East bazaar business,” gasped London’s News Chronicle.

Second Start. In these straits. Britain’s chief negotiator, Sir Denis Rickett, flew to Washington last week to see World Bank President Eugene Black, who was most responsible for working out the Egyptian-British settlement in the first place (TIME, Jan. 19). Black agreed to return to Cairo to try “to remove the remaining points of conflict” without which Her Majesty’s government—in the spirit of Palmerston, if not his manner—will not sign the agreement with Nasser.