Saturday, March 15, 2014

How a Banker Capitalized on the Suez Crisis

In my historical novel BIRTHRIGHT, I wanted to show how Samuel Kronengold, the dominant figure in the British Kronengold bank, could try to maneuver political leaders to his will, while simultaneously deciding where to place the bank's investment bets. I chose the Suez Crisis. Egypt's President Nasser had just ordered the seizure of the Suez Canal from Britain and France. Along with Israel, they countered by attacking Egypt to retake the Canal, infuriating U.S. President Eisenhower. Within days, Britain's weak-willed prime minister, Anthony Eden, would cave in to the U.S. and end the invasion.

Here’s an excerpt that occurs just after the three countries attack Egypt:

EGYPT'S SEIZURE OF THE SUEZ CANAL from Britain and France in July of 1956 set into motion events on a scale far larger than a single person's or a single family's destiny. The resulting crisis four months later would threaten world peace; would shake the Atlantic alliance; would humiliate Britain, dishearten it, and hasten its decline, its self-absorption, and the fall of its prime minister. It would frustrate France and accelerate its loss of Algeria, the end of its Third Republic, and the return to power of Charles de Gaulle; and provoke hostility to Britain as a future Common Market partner. It would endow Israel with more secure borders for the next decade and a port on the Gulf of Aqaba, leading to the Indian Ocean; would safeguard Egypt and make a hero of Gamal Abdel Nasser, that nation's chief of state; and would sow the seeds of a pan-Islamic oil policy based on nationalistic needs and concerted action, which would someday bring to once poor countries wealth and power beyond their wildest hopes and shake the foundations of the industrialized world.

The first retaliation for Egypt's seizure of the Canal occurred on October 29, 1956, when Israel attacked Egyptian positions in the Sinai. Two days later, in accordance with a secret scheme previously agreed to with Israel, Britain and France began bombing Egyptian airfields, alleging they were acting to protect the Suez Canal, an essential international waterway. Israel had swept across the Sinai on schedule to prearranged positions near Suez while pressing southward to free the Gulf of Aqaba to Israeli shipping.

As the days passed Anthony Eden, Britain's prime minister, hesitated to give the word that would unleash the French and British troops waiting on Cyprus and Malta and begin the full-scale attack. He faced a host of pressures: a popular outcry against the bombings in his own country, blustering condemnation from a Soviet Union allied with Egypt and trying to divert attention from its own invasions of Poland and Hungary, and perhaps most telling, United States President Eisenhower's fear that his own NATO partners were bringing the world to the brink of war. With only days remaining before the U.S. presidential election, Eisenhower, in order to force Britain to back down, was exerting both diplomatic influence in the United Nations and financial muscle by weakening the British pound.

Fearing that Eden was about to get cold feet and leave his secret Jewish allies militarily and diplomatically high and dry, Israeli high officials cast about for someone who might approach the British prime minister and allay his fears about Eisenhower's ability to undermine Britain's currency and economy. When they learned that Eden and his wife, Clarissa, were scheduled to attend a dinner at the home of Baron Samuel de Kronengold on that very night of November 4, 1956, they asked Pierre, his French cousin, to telephone Samuel about speaking to Eden.

Although Samuel was a contributor to Israel, the Israelis were far closer to Pierre, who spent a good deal of time in Israel and funded numerous projects there. The two cousins had been in negotiations for months about merging their banks into a larger, unified financial institution—after a century of separation—now that it appeared Britain would soon join the Common Market. Both men feared, among other things, that a failure to retake the Suez Canal and topple Nasser would result, instead, in toppling both the French and British governments. That would put an end to British acceptance into the Common Market for the time being and, thus, to the merger of the French and British Kronengold banks.

Samuel needed little convincing by Pierre, viewing Britain's refusal to knuckle under to Nasser as a reassertion, at last, of British greatness. He spent the day rehearsing the arguments he would use to stiffen Eden's backbone.

Only after dinner, when Samuel led the men, erect in black tie and tuxedo, to the Trophy Room, was he able to talk alone with Eden. Although they sat in a corner and conversed for a very long time, all of Samuel's persuasion proved fruitless; he found himself facing a very ill, very frightened man.

Read more:   BIRTHRIGHT

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