Ward A.W. The Cambridge History of British Foreign Policy. 1783-1919. Volume 3
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EGYPTIAN
FINANCE
155
These
larger powers,
which a
careful
ruler
might
have exercised
with
great
public
advantage,
were
not an
unmixed
good
for
the
country;
for
the more
independent
Ismail
became,
the
more
he
indulged
in
rash
expenditure
and
the
deeper
he
sank
in
debt. Much of his ex-
penditure
was,
of
course,
incurred on
account of
public
works
of
greater
or less
value; but,
whether
the
money
was
intended to meet
public
or
private objects,
it
was
invariably
spent
wastefully.
There was
neither
limit
nor
intelligence
in his
borrowing.
He
took
money
wherever
it was to be
had,
and,
with
oriental
largeness
of
spirit,
never
haggled
about the
rate
of
interest,
with
the result that
harpies
robbed him
right
and
left.
French financial
groups
in
par-
ticular
were
ever
ready
to
supply
the
spendthrift
with
funds. In
1868
the
Societe
Generate
pour
le
developpement
du
Commerce
et
de
V
Industrie
lent
him
nearly
twelve
millions
sterling.
Two
years
later,
the
Banque
Franco-figyptienne
advanced seven
millions
on
the
security
of the
family
estates of the Khedive
—
the so-called Daira
loan. In
that
year,
even the
Sultan,
though
never
notable
as a
purist
in
money
matters,
deemed
it
expedient
to
protest
to
the Powers
against
the
conclusion
of
any
financial
arrangements
at
variance with
the
condi-
tions
laid
down
in
his
firmans
or
prejudicial
to the
country's
revenues.
When
Ismail's credit was
gone,
he resorted to
other means of
raising
money.
Treasury
bons
were issued at various
times,
on
which
10, 12,
even
15
per
cent,
interest
was
paid.
In
1871,
the
Monkabalah
Law
was
passed,
under which
persons
subject
to
assessment for
property
tax
could,
by
making
six
annual
payments
in
advance,
obtain relief
in
perpetuity
from
one-half of
this tax. This
discreditable device
brought
the Khedive five million
pounds;
but
it
was a bad
bargain
for
his
Treasury.
When,
by
firmans of
1872,
he
obtained the
power
to
contract
loans on
his
own
account,
the last
check
upon
his
rake's
progress disappeared.
Thus it
came
about
that,
by
1876,
Ismail
had
icreased the
public
debt to
over
ninety
million
pounds,
of
which
lount
only
a small
fraction
represented
works of
permanent
public
itility
1
.
Every year
of his
reign,
he
had
added to
the debt
a
pound
a
lead for
every
inhabitant of his
impoverished
country,
the
taxation
which
had,
in
the
meantime,
increased
by
one-half.
It
was
directly
owing
to Ismail's
monetary
embarrassments
that
1
Lord
Milner
estimates the
proportion
at
one-tenth at the
most. See
England
Egypt, p.
229.
156
FORWARD
POLICY
AND
REACTION,
1874-1885
Great Britain
at
this time
acquired
in
Egypt
a
commercial
interest
carrying
important
political implications.
Among
the
Khedive's
few
valuable
assets* were his shares in
the Suez
Canal
Company.
In
the
middle
of
November,
1875,
**
was
reported
to
Lord
Derby,
the
Foreign Secretary,
that Ismail
had to raise
by
the end of the month
a sum of
between three
and
four million
pounds,
so as
to
meet the
interest due
on the
public
debt,
and
that,
in his
straits,
he was
negotiating
with a
French
financial
group
for the
sale of these
shares.
Negotiations
had,
in
fact,
been
opened
with
two
such
groups,
not
as
yet
for the
sale
of
the shares
outright,
but
for their
mortgage,
and,
several
days
earlier,
the
Khedive had made a conditional
offer to
one
of
them,
which
retained the
option
until the
19th.
That
the transaction
had
not
already
been
completed
was
due
in
part
to
the action of the
rival
group,
at
the head
of
which was
F.
de
Lesseps,
who was
urging
his
Government to
acquire
the
shares
and so
bring
the Canal
en-
tirely
into
French
hands,
but also to the Khedive's
hesitancy
before
taking
a decision
of which he was
only
now
coming
to understand
the
political
significance.
De
Freycinet
has
recorded that Ismail
actually
offered
the shares to the French
Government
through
the
Societe Genirale at
the
price
of 100 million
francs,
but
that,
though
the
Due
Decazes,
then
Foreign
Minister,
favoured
purchase,
the
Cabinet
wavered
and
disagreed
1
.
Equal
indecision was
shown
by
Lord
Derby
and the
Foreign
Office
—
by
the latter not
for the first or
the last time
in
matters
of
the
kind
2
.
For,
five
years
earlier
(December,
1870)
the same
proposal
had
been
made to
Lord
Granville
when
Foreign
Secretary,
on
the
initiative
of
the
Khedive,
who
advised Great
Britain,
as
contributing
nearly
four-fifths
of
the
Canal
traffic,
to
acquire
the entire
enterprise,
in
the interest both of British commerce
and of
the
waterway
it-
self,
which was then
in
an
unsatisfactory
position.
At that
time,
de
Lesseps
himself was
understood
to
be
willing
to sell out. The
Foreign
Office, however,
decided
to
"give
no
opinion
on the
matter,"
and
a
fair
chance of
acquiring
at a
bargain
price
control of
a
great
but
undeveloped
undertaking
was
allowed
to
pass by.
For in that
year
the
gross
receipts
of the Canal
only
amounted
to a
quarter
of
a
million
pounds,
and the number of
ships
which
paid
dues was under
500.
1
C.
de
Freycinet,
La
Question
d'figypte, p.
151.
2
It will
be remembered
how,
nearly thirty
years
later,
the
Foreign
Office
similarly
refused
the
opportunity
of
joining
in
the
Bagdad
Railway
scheme on a
copartnership
basis,
with the result
that the scheme
passed
into
hands which
ultimately grew
unfriendly,
and
the
enterprise
consequently
became
an
international
danger.
THE CANAL SHARES
PURCHASE
157
The
same unbusinesslike attitude
was,
hereupon,
once
more
shown. The idea
of
purchasing
the shares
appears
for
a time
to have
actually
shocked the
Foreign
Secretary
and his
advisers.
Lord
Derby
heartily
disliked
it,
and
hoped
that it
would
not be
necessary
:
all
he
cared
for was
that the
Khedive
should
by
some means
be
prevented
from
withdrawing
from the
Company,
where
his influence
was
a
useful
check
upon
the
arbitrary
ways
of
de
Lesseps
1
.
While,
however,
Lord
Derby
remained
obstructive,
the
Prime-Minister,
with a keener
appreciation
both
of the commercial
and
the
political possibilities
of
the
transaction,
was
eager
for
purchase,
and
he soon took the matter
into
his
own hands.
Nevertheless,
he had to
overcome
strong
opposi-
tion
in
the Cabinet before he
gained
his
way
(November 17th)
and
obtained
carte blanche to see the
business
through.
Already,
the
Khedive had
promised
to
give
the British
Government an
option,
should
he
decide to
sell; and,
on the
23rd,
to the
chagrin
of the
French
groups,
the shares were
purchased
by
the
Cabinet for four
million
pounds,
Disraeli
obtaining
the
money
from
the
Rothschild
firm.
Two
days
later,
the contract was
signed,
and on
the
following
day
the
shares were
deposited
in
the British
Consulate
at
Cairo
2
.
Before
the
year
was
out,
the Khedive
wished to sell to so
good
a
customer his
contingent
interest
in
the
profits
of
the
Canal
;
but
the
offer was
declined.
Credit
for the
Suez Canal shares
transaction has
been
variously
claimed and
assigned.
There can
be little doubt that Lord
Derby
received
information
that
the shares
were on the market from
Frederick
Greenwood,
a
public-spirited
London
journalist,
though
his
service in
the matter
was
officially ignored.
For
the
actual
purchase,
the
praise
was
wholly.
due
to the
Prime-Minister.
His
biographer
suggests
that
Disraeli,
owing
to
his
relations
with the
Rothschilds,
had
probably
heard
independently
that
the shares
might
be
in
the
market,
and
even that
he had for
some time
been
watching
for
an
opportunity
to
buy
3
.
There was
later
some
criticism of his
action
in
allowing
these
private
bankers to
make
a substantial
profit
out of
1
"
I
sincerely hope
we
may
not be driven
to the
expedient.
The
acquisition
would
be a
bad
one
financially,
and the affair
might
involve
us
in
disagreeable
correspondence
both
with France
and
the Porte."
Letter to Lord
Lyons,
November
19th,
1875 (Lord
Newton,
Lord
Lyons;
a
Record
of
British
Diplomacy,
II.
87).
8
The
number
of
shares
mentioned
in
the
contract of
purchase
was
177,642;
but
later
the
actual
number
in the Khedive's
possession
was ascertained
to be
1040
less,
and
the
purchase
money
was
reduced
proportionately,
viz. from
£4,000,000
to
£3>97°>58o,
equal
to
about
£22.
10s.
per
share
of a nominal value
of
£16.
3
See
Life
of
Beacons
field,
v.
439,
440.
158
FORWARD
POLICY
AND
REACTION,
1874-1885
the
transaction,
instead
of
arranging
that
the Bank of
England
should
provide
the
money
until
the House
of
Commons had
passed
the
necessary
vote;
and
the
2| per
cent.,
yielding
the sum of
£100,000,
which
the
bankers
charged
for
a
very
short
accommodation,
"a
good
deal
startled" the
Lords
Commissioners of
the
Treasury
1
. What
was, however,
altogether
creditable
—
and to a
later
generation,
less
squeamish
in
such
matters of
public duty,
incredible
—
was
the fact
that no
one
in
the secret used his
knowledge
for
personal
gain.
At that
time, commerce,
finance
and
statecraft had
hardly begun
to
think in
millions with the
facility
which
came
later,
and
the trans-
action created
everywhere
a
considerable sensation.
At
home,
the
purchase
was
unquestionably
popular,
and
in
the House of Commons
Gladstone
vainly
endeavoured to
whip
up
serious
opposition
to
it.
Abroad,
except
in
France,
where there was much
resentment,
the
bold
coup
was
similarly
applauded.
The
King
of
the
Belgians (Leo-
pold
II)
professed
to
regard
it as "the
greatest
event of modern
politics."
Queen
Victoria
rejoiced
because
"it
was
a blow at Bis-
marck";
but a
blow which France shared with
him
fell
lightly
on
that
statesman,
who
warmly congratulated
the British Government
on
having
done
"
the
right
thing
at
the
right
moment,"
and
professed
to
regard
the
purchase
as a
new
guarantee
of
European
Peace.
Just
before,
Bismarck
had
told the British Ambassador
in Berlin that
England
might
have
Egypt
itself
if
she
liked;
Germany
would not
object
2
.
An
immediate
consequence
of the transaction was the
appointment
of
three British Directors to the Canal
Company's
Board;
subse-
quently,
one-third of
its
membership
was
assigned
to
this
country.
Political
effects followed.
Before
long,
Great Britain
clearly
took
the
lead
in
Egypt,
and
in
1882 French influence
experienced
its
Quebec
at Alexandria.
The
earliest indication that
the
British Government
now
regarded
Egyptian questions
from a
new
angle
of vision was
shown
by
the
despatch
to Cairo of
Stephen
Cave,
an
expert
of
authority,
for
the
purpose
of
investigating
the character
and
proportions
of
the
financial
incubus
which
lay
on
the
country.
A
vague
intimation
that
some
large
plan
was
forming
in Disraeli's
mind,
and also
of
the
manner
in which he
hoped
to
carry
it
out,
is contained
in
a
letter
written to Lord
Derby apropos
of the
Cave
Mission.
"We want
a
1
Sir Stafford Northcote
to
Disraeli,
December
24th, 1875.
Life of
Beacons
field,
v.
441.
2
Lord Odo
Russell
to Lord
Derby,
November
nth,
1875.
ISMAIL
SUSPENDS PAYMENTS
159
calm,
conciliatory
spirit
to
deal
with
Egypt,"
he
wrote,
V not
to
oppose
their
first
impressions
and
suggestions,
but to correct
and
change
them
in due
time"
(November
26th,
1875).
Cave
visited
Egypt
towards
the end of
the
year,
and
reported
in the
following
March.
He
found
that,
what with the
heavy
indebtedness
and
the
Monkabalah
Law,
the state
of the national finances was
critical,
yet
that,
given
certain
reforms
and
alleviations of
interest,
the
position
was
not
hope-
less.
The
principal
remedies
proposed by
him
were the
unification
of
the
debt,
the limitation of the
budget
to a
maximum
figure,
the
assignment
of
one-half
of the revenue
to the service of
the
debt,
and
the
institution of
an office of financial
control.
In view of the Cave
Mission,
the
Due
Decazes,
not
quite
certain
of
his
ground,
and anxious
lest his
country's
influence should
be
diminished,
urged
on
Lord
Derby
the
importance
of a
close under-
standing
between
the French
and British
Governments,
and
suggested
as an earnest
of
cooperation
the creation
of a
joint
commission
for
the control
of
Egyptian
finance,
to be exercised
by
the
two
countries,
with or without
Italy.
In
reply,
the
Foreign Secretary,
who dreaded
the
thought
of
intervention
anywhere
—
so much
so
that Lord Salis-
bury
said that
he would have
shrunk from
annexing
the Isle of Man
—
offered a
general opposition
to
any
measure
that
would entail "inter-
ference with the
independence
of
Egypt,"
and
added
that
the British
Government
"
could
not
view with
indifference
any attempt
to
gain
administrative control
over
Egypt by
another
Power."
Then,
in
April,
the Khedive raised a
signal
of
financial distress.
His
own
and
his
country's
credit
being pledged up
to
the
hilt,
so
that
borrowing
was now no
longer possible,
Ismail
decided to resort
to
the last
device of the insolvent
gambler,
and
suspended
payment
of his
debts,
as his
Suzerain,
the
Sultan,
had
done
six
months before.
On
April
8th
a
Decree
was
published
prolonging
for three months
the
Treasury
Bills
falling
due
in
that
month and
May. Deeply
con-
cerned for
the
interests of the
bondholders,
and
apprehensive
lest
a
policy
of
more
definite
repudiation
should
follow,
France
pressed
Great
Britain
more
urgently
than before to
join
her in
asserting
com-
plete
control
over
Egyptian
finance.
Yielding
to
the same
pressure,
the
Khedive,
by
a
Decree of
May
2nd
(probably
drawn
up
in
Paris),
instituted
the Caisse
de la Dette
publique.
Four
of
the
Great
Powers
were
invited
to
nominate
Commissioners,
viz. Great
Britain,
France,
Austria-Hungary,
and
Italy;
and the
last
three exercised the
option
in
favour
of M.
de
Blignieres,
Baron
von
Kremer,
and
M.
Baravelli,
160
FORWARD
POLICY AND
REACTION,
1874-1885
respectively.
The
British
Foreign
Office
delayed
action until
the
following
year,
when
Sir
Evelyn Baring
(later
Lord
Cromer)
was
appointed.
The Caisse
proved
merely
a
half-way
house to
the
more
direct
and
rigorous
form of
control
upon
which
the
French
Government
had
set its
mind, and,
following
on
an
Anglo-French
Financial Mission
consisting
of
Mr
Goschen
and
M.
Joubert,
a
Commission of Control
was instituted
by
Khedivial
Decree of
November
18th. Of
this
Com-
mission de
Lesseps
was
President;
Sir C.
Rivers
Wilson,
a
British
Treasury
Official,
was
Vice-president
and
Controller of State
revenues,
while
de
Blignieres
was Controller of
Treasury
accounts
and
disburse-
ments. The
other members
were
Sir
Evelyn
Baring,
Baron
vonKremer,
M.
Baravelii,
and Riaz Pasha.
When,
at
the end of
1877,
the
country
seemed on
the threshold of
bankruptcy
and
the
spectre
of
repudiation
again
alarmed
the
bondholders,
the British and
French
Governments
carried
their
demand for a
full and
searching
enquiry
into
the entire
financial
situation
by
Commission,
and
free
from
restriction or reserve
of
any
kind.
The Commission was
duly
appointed
(March,
1878)
and
its
result
was a bold
scheme
of financial and
political
reforms. The
financial
measures recommended for the Khedive's
spontaneous
and
prompt
acceptance
included the restitution to
the State of the Daira
lands,
which had
been
bought
with
public
money,
the
employment
of
their
revenues
in
the
liquidation
of
the
outstanding
debt,
and
the
suspension
of
the Dual Control.
Equally
important
were the
political
reforms
;
for
the
Commission
proposed
to
introduce the
principle
of
Ministerial
responsibility,
and to
give
to
Egypt
a
Constitutional status
and,
in
a
modified
form,
representative
government.
Less
from
conviction
than
under
compulsion,
the
Khedive
accepted
the
recommendations with-
out
demur.
The
enlightened
influence
of Nubar Pasha
weighed
heavily
on the side of reform.
While hostile to the
principle
of international
interference
in
administration,
even to the extent of the
Anglo-French
Financial
Control,
and
eager
that
Egypt
should
govern
herself
alone,
Nubar
recognised
the
need for
temporary
outside
assistance,
and,
as
a
measure
of
necessity,
he
particularly
favoured
the
appointment
of
an
Englishman
as Minister
of Finance.
His unreserved
approval
of
the
Commission's
recommendations
did much to
convince
the Khedive
of
the
uselessness
of
any
further
dallying
with half-measures.
By
Decree
of
August 29th,
the
now Constitutional
ruler
charged
Nubar
with
the
formation of a
Cabinet,
which he
described
as
"
le
A
CONSTITUTIONAL
REGIME
161
point
de
depart
d'un
changement
radical de
systime"
In this
Cabinet,
the
portfolio
of
Finance was
offered to Sir Rivers
Wilson
and
that
of Public Works to
de
Blignieres:
all
the other
Ministers
were
natives.
The
immediate business of
the new
Administration
was
to
carry
out the reform
scheme.
It
was the wish
of
Lord
Salisbury,
who
had
succeeded Lord
Derby
as
Foreign Secretary
in
March,
that the
functions
of the
Control
established
in
November,
1876,
should be sus-
pended
so
long
as
England
and France were
represented
in the
Cabinet,
but should be
revived in case either of
them should
be dismissed
with-
out
prior
agreement
with
his
Government;
and to this
France
agreed.
In the
political
reforms,
a
piece
of
machinery
excellent in
design
and material had
been
created;
but how would
it
work?
Lord
Salisbury
was
concerned
not to
lessen
native
responsibility,
for which
he
regarded
European cooperation
as no
adequate
substitute.
Hence,
he reminded
the Khedive
that,
though
he
had surrendered
his
personal
power
and a
Constitutional
regime
had been
introduced,
his
responsi-
bility
continued as
before,
and
warned
him that
the new
system
would
be
made
or
marred
by
his
personal bearing
towards
it.
Instead of
taking
this admonition to
heart,
Ismail
began
a course of
intrigue
against
his
own
Ministers,
even
using
for
his
purposes
the disaffected
elements in the
Army.
After
five
months,
he took the
first
step
towards
throwing
off the irksome Constitutional
fetters
by
dismissing
Nubar
(February
2nd,
1879).
Had he
dared,
he would have
rid
himself
of
all his
European
advisers
at
the same time
and
returned
at once
to
the comfortable old
despotism.
Faced
by
the threatened
collapse
of
their laborious
handiwork,
the Powers
through
their
mandataries,
the British
and French
Govern-
ments,
served on the
Khedive an ultimatum
in
which,
without
de-
manding
the reinstatement
of
Nubar,
they
insisted
on the
conditions
necessary
to
ensure the execution
of
the financial reforms.
To
this
end,
the two
European
Ministers
were to
have an absolute veto
upon
expenditure
of all
kinds. France was
still
concerned,
as
ever,
for
the
bondholders.
Lord
Salisbury heartily
disliked
this
responsibility,
and,
while not
indifferent
to the interests
of
creditors,
insisted
on
regarding
the financial
question
as
a
whole
1
. A
compromise
was
agreed
to,
as a
result
of
which the Khedive's
eldest
son,
Prince
Tewfik,
was
to
be the
President
of a
new
Ministry,
the
two
Europeans
1
"
It
may
be
quite
tolerable and even
agreeable
to
the French
Government,"
he
wrote
to Lord
Lyons
(April
ioth,
1879),
"to
go
into
partnership
with
the
bond-
holders,
or rather
to act as sheriff's officers for
them. But
to
us it
is a new
and
very
embarrassing
sensation.
Egypt
can never
prosper
so
long
as some
25
per
cent.
W.&G.III
11
1
62
FORWARD
POLICY
AND
REACTION,
1874-1885
continuing
in office.
Nevertheless,
in
April,
in
another hot
fit
of
revolt,
Ismail
dismissed
the
Council,
including
Wilson
and
de
Blignieres,
and made
Cherif
Pasha
Prime-Minister.
The first
act of the
incoming
reactionary
Ministers was to
reject
the
European
financial scheme
and to
produce
one
of their own.
In
this
situation,
the
two Governments
gave
the
Khedive
to under-
stand
that
they
intended
to
adopt just
such
measures
as
they might
deem
necessary
in order
to
protect
their interests and
promote
the
welfare
of
the
people
of
Egypt. Already, Waddington,
the
French
Foreign
Minister,
was
urging
upon
his British
colleague
the
summary
removal
of a
wily
and
obstinate
Viceroy,
who would neither
reform
his
country's
administration
himself nor allow others to do
it
for him.
To
so
strong
a
measure
Lord
Salisbury
for a time
demurred;
but,
in
the
end,
he came round
to the French view.
In all the Chanceries
of
Europe agreement
prevailed
that Ismail had
wilfully
thrown
away
a fair
chance
of
vindicating
his
position,
and that
no further
indulgence
of his whims
and
perversity
was admissible.
Accordingly,
after
futile
attempts
had been
made
by
the British and French
Representatives
in
Cairo
to
procure
his
abdication,
the
Sultan was
induced,
by strong
though
covert
pressure,
to decree
his
deposition.
This
he did
by
telegraph
on
June
26th,
appointing
Tewfik,
a better man
though
a
weaker,
his successor
by right
of
primogeniture
1
.
Great
Britain and
France,
thereupon,
reestablished the offices
of
Controllers-
General
without
protest.
of her revenue
goes
in
paying
interest on her
debt. We have no wish to
part company
with
France,
still less do we mean that
France
should
acquire
in
Egypt any special
ascendancy;
but, subject
to
these two
considerations,
I should be
glad
to
be
free
of
the
companionship
of
the bondholders"
(Lord Newton,
Lord
Lyons,
n.
175).
"
In
France
finance,
and
even
private finance,
is
politics,"
Lord Beaconsfield
wrote
to Lord
Salisbury
on
June
6th,
1879 {Life
of
Beaconsfield,
VI.
444)
;
but
he,
likewise,
did
not
want,
and
he
believed the
country
would not
approve,
"
a
mere
bondholders'
policy"
(June
24th, 1879,
ibid.
p. 445).
1
Lord
Salisbury's
assurance to
Waddington
on
June 26th,
that
"the Turkish
move
reported
to-day
does not
proceed
in
any way
from
our
suggestion,"
and
that
all the Government had
done was to
urge
the
Sultan not to interfere with
what was
being
done in
Cairo,
is
hardly
an
adequate
statement
of
what
actually
occurred.
On
June 22nd,
the
Foreign
Office
instructed Sir
Henry
Layard
to
"inform
the
Sultan
that there
are
grounds
for
thinking
that
some
communication from
the
Porte is
encouraging
the
Khedive
to
resist the
advice
which has been
tendered
to
him
by
the
Western Powers
;
that
the misdeeds of
the Khedive
have
been
the
fatal
impediment
to
the advance
of
any
money
by European capitalists
to the
Porte,
and
that the
Sultan
is more interested
than
anyone
else in
a
speedy
and
peaceful
transfer
of the Government
of
Egypt
into other
hands."
The
Sultan
had,
in
fact,
telegraphed
to the
Khedive
that
the
question
of his
abdication was
a
matter for the
Porte,
and
that the
Powers
had no
right
to
make a
proposal
to
him
of a
menacing
character.
On the
23rd,
the Sultan was to be
told
that France and
Great Britain
had
gone
too
DEPOSITION OF
ISMAIL
163
That
the
deposition
of Ismail
was
a
desirable,
and in the circum-
stances
unavoidable,
act
can
hardly
be doubted.
Nevertheless,
it
con-
tributed
to
bring
about
untoward
consequences.
The
setting-up
of a
new
ruler
by
external
influence
unquestionably
heightened
the
existing
Egyptian
resentment
against
foreigners
and
strengthened
nationalist
sentiment;
it
may
even
have
laid
the
train
which,
fired
by
the
rebel
leader
Arabi,
led to the
explosion
of 188
1-2.
In the
following year
was
passed
the Law
of
Liquidation
(July
17th,
1880),
by
which
Egypt
made
what is known to
bankruptcy
law as
an
arrangement
with creditors.
This
implied
insolvency;
but,
instead
of
being
declared a
defaulter,
the debtor was
given
his
discharge
on
payment
of a reasonable
composition upon
his
liabilities. The
rate
of interest
on the debt
was reduced
;
but,
in
return,
a
limit
was
placed
on national
expenditure,
with a view to
ensuring
the future
punctual
honouring
of the bonds.
The laws
establishing
the
Caisse de
la Dette
and
limiting
expenditure
became the sheet-anchor of so much sound
finance as was
possible
in a
country
which had been so
long
and so
pitilessly
bled
by prodigal
rulers
and
greedy
usurers. Both of
these
measures were forced on the
Egyptian
Government from
without,
and the
Powers
which
instituted them claimed the
right
to enforce
them,
and therewith to
direct
the
entire financial administration. From
international control
of
finance
to control of
domestic and
foreign
policy
in
general
was a
logical,
and an
inevitable,
step.
VI. The
British Occupation
of
Egypt,
1
879-1
883
Egyptians
in the mass
had witnessed the
abrupt
removal of Ismail
with
comparative
unconcern
: like the
rise and fall of the
Nile,
such
was
the will of
Allah,
and
it was well.
Different
was
the
attitude of
those sections of the
population
which
represented
what
passed
for
public
opinion.
These, too,
had
little reason for
lamenting
the
dis-
appearance
of
a
Khedive
who
had
imposed upon
their
country
an
intolerable
burden
of
debt and
taxation.
Nevertheless,
they
resented
far to
recede,
and
that,
"if
owing
to
encouragement
from
Constantinople
the
Khedive
resists the
will
of
the
Five
Powers,
it will
probably
result
in
Egypt
being
severed from the
Turkish
empire
altogether.
. . .
You
should use
all the
means
of
influence
at
your
command."
On
the
25th,
Layard
was
empowered
to
ask whether
the
British Government
would
be
satisfied
if the
Sultan
at once
deposed
the
Khedive,
withdrew the
firman
of
1873
altering
the
Succession,
and
appointed
Tewfik. Lord
Salisbury replied
that
it
would be
necessary
to
consult
France. The
deposition
followed next
day.
164
FORWARD
POLICY
AND
REACTION,
1874-1885
the
instrumentality by
which
Ismail had
been
supplanted,
for
none
of them
was
credulous
enough
to
suppose
that
the
Sultan
cared so
much
for
sound finance
and
good government
in
the Khediviate as
to
have
deposed
Ismail of his
own
accord.
An
act in itself
defensible
was viewed
with
suspicion
insomuch as it
afforded additional
evidence
of
the
growing subjection
of
Egypt
and its
Government to outside
dictation.
The influence of the
foreign
population
had
long
been
resented,
owing
to the
gross
abuses which
prevailed
under the
system
of
Capitulations.
In no
part
of
the Ottoman
empire
had the
exercise
of
exterritoriality
and the
grant
of concessions to
foreign
residents
been carried so far as it had
in
Egypt,
where,
in
1876,
the
number of
settled
Europeans
was
estimated
at
100,000.
There were no
fewer
than
seventeen Consular
Tribunals,
and
in most
of them
the merest
travesty
of
justice
was administered.
Europeans
were
systematically
acquitted
of
crimes
and
offences
which
there was no
difficulty
in
proving,
while
it
was difficult for natives to come
by
their
rights
when
the
aggressors
were aliens.
Moreover,
these exotic
jurisdictions
had
gradually
been extended
in
directions never intended
originally.
Apart
from the
often
illicit
protection
given
to them
by
their
national
Courts,
foreigners enjoyed
other
privileges
detrimental
to
the
interests of the native
population;
and,
in
particular,
their im-
munity
from certain kinds of taxation
was a
great grievance. Many
foreigners, again,
had
benefited
unduly by
commercial
privileges
freely
granted
by
the
prodigal
ex-Khedive
under the
pressure
of
financial
difficulties,
regardless
of
the
country's
permanent
interests.
Some-
thing
had been done
by
the Powers towards
correcting
the
more
flagrant
abuses incidental to a
system
of
divided
jurisdiction by
a
law
of
February, 1876,
creating
Mixed
Tribunals.
Owing
to
the
opposition
of
France,
however,
the
operation
of
these
Courts
was
restricted
to civil
cases,
and
within
a
large
sphere
of
jurisprudence
there was
still one law for
the native
and another
for the
foreigner.
A
further
grievance
was the
large
and
increasing
number of
foreigners
in the
public
services,
from
the
higher
posts
in which
the natives
were
practically
excluded.
In the
early
'eighties,
on the
testimony
of
a
French
statesman,
"all
the Government
departments
were
run
by
French
agents
1
."
Egypt,
according
to this
witness,
was
"
France's
adopted daughter,"
and,
like
many adopted daughters,
she
was loved
chiefly
for the
sake of her
fortune.
The most efficient
of
1
Deschanel, P.,
Gambetta
(1919), p. 303.