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Egypt in the Nineteenth Century. London, 1898.—EBERS. Egypt : same year, a general settlement of the liabilities of the Descriptive, Historical, and Picturesque. (Translation by Clara Bell.) 2 vols. London.—ERMAN. Ancient Life in Egypt. London, 1886.

country was effected on the proposals of Mr Goschen and -HARTMANN. The Arabic Press of Egypt. London, 1899. –

M. Joubert. It was recognized that no mere rearrangement IBRAHIM - HILMY (Prince). The Literature of Egypt and the of existing liabilities could be expected to produce satisSoudan. 2 vols. London, 1886–88.—LANE. Ăn Account of the factory results unless some guarantees were given against Modern Egyptians. 5th ed. 2 vols. London, 1871.-LESSEPS.

future maladministration. For this purpose the Dual Le Canal de Suez. 8 vols. Paris, 1875.—MILNER. England in Egypt. 6th ed. London, 1899. — MOBERLY BELL. Khedires

Control was instituted. In its first form it consisted of two anul Pashas. London, 1879. —Egyptian Finance. London, 1886. controllers, an Englishman and a Frenchman, the former

- From Pharaoh to Fellah. London, 1887.-MCOAN. Egypt as superintending the revenue and the latter the expenditure It Is. London, 1877.Egypt under Ismail. London, 1889.MALORTIE (Baron de). Egypt: Native Rulers and Foreign Inter

of the country. This arrangement was of short duration, ference. London, 1883. -MIEVILLE (Sir W.) Under Queen and It was based upon erroneous information supplied by the Khedive

. London, 1899. -PexField. Present-day Egypt. Lon- Khedive and his ministers as to the real resources of the don, 1899.- POLLARD. The Land of the Monuments. London, country. It was only with the greatest possible difficulty, 1896. — POOLE. Egypt. In Foreign Countries and British Colonies and by the application of the most rigorous and most Series. 1 vol. London, 1881.-Social Life in Egypt. 1 vol. London, 1884.—Cairo. 3rd ed. London, 1897.—RAE. Egypt arbitrary measures to the unfortunate Egyptian taxpayer, To-day. London, 1892.—WALLACE (Sir D. MACKENZIE). Egypt that the payment of the coupon could be continued. and the Egyptian Question. London, 1883. —WARD (JOHN). Pyra- Finally, in the hope of obtaining a reduction of the rate mids and Progress. London, 1900.—WHITE. The Expansion of of interest on the debt, Ismail consented, in January 1878, Egypt. London, 1899.-WILLCOCKS. Egyptian Irrigation. 2nd ed. London, 1899.- Wood. Egypt under the British. 1 vol.

to the appointment of a commission armed with full powers London, 1896. — WORSFOLD. The Redemption of Egypt. London, to inquire into the whole state of the country. The first 1899.

(11. G. L.) report of this commission insisted on the necessity of a FINANCE.

proper system of government through responsible minis

ters before any real reform could be effected. This was The history of Egyptian finance is the story of Egypt at first accepted by the Khedive, and in the new cabinet since 1863, the date of the accession of the Khedive Ismaïl.

the two European controllers were changed into responThe notorious and unparalleled extravagance of sible ministers entrusted respectively with the portfolios History,

that ruler necessitated continual recourse on in- of the ministries of Public Works and Finance. The new 1863-1876.

creasingly onerous terms to the capitalists of order soon became irksome to the autocratic spirit of Europe, and finally plunged his country into a sea of Ismaïl. The dismissal of the ministry, followed by the political and financial embarrassment from which it is only opposition of the Khedive to the later measures recomnow emerging. When Ismaïl came to the throne the

mended by the commission of inquiry, culminated in his Egyptian debt amounted to a little over three millions. deposition in June 1879. Through the joint action of the By the end of 1876 it was already estimated at ninety-one British and French Governments, the Dual Control was millions, and in reality considerably exceeded this figure. re-established in a different form, with increased powers. During the same period the taxation of the land, the prin

The two controllers took part in the deliberations of the cipal source of revenue, had been increased about 50 per council of ministers, and worked together in their supercent. Under the improvident system of borrowing pursued vision of the financial administration, the principle of by Ismail, the amount of debt contracted very consider- dividing their functions being abandoned. ably exceeded the money actually realized, and even of the

These changes enabled the financial proposals of the latter very little was expended on developing the resources of the country. It is stated in Mr Cave's report of March shortly after the accession of Tewfik they were embodied

commission of inquiry to be put into execution, and 1876, that "for the present large amount of indebtedness in the law of liquidation of July 1880, the next general there is absolutely nothing to show but the Suez Canal,

settlement of the liabilities of Egypt. By this law the the whole proceeds of the loans and floating debt having floating debt was paid off and the debt consolidated into been absorbed in payment of interest and sinking funds,

a few large loans, the rate of interest being reduced to with the exception of the sum debited to that great what it was at the time considered just possible for the work.” The Suez Canal, from which, owing to the

country to pay. Under this settlement the Egyptian debt forced sale of the country's interests therein, Egypt

was composed as follows: derives no direct benefit to-day, cost the Egyptian Government sixteen millions.

£22,609,0001 By the end of 1875 this

Privileged debt 1876-1882.

Unified debt

58,018,000 wild career of prodigality had begun to produce Daïra loan

9,513,000 its natural result of serious financial embarrassment. In

Domains loan

8,500,000 May of that year, in order to allay the apprehen

£98;640,000 sions of the foreign creditors of Egypt, and to put a curb on the extravagant borrowing of Ismail, the

The rate of interest was fixed at 5 per cent. on the Caisse de la Dette was instituted. The Caisse was at privileged and Domains loans, and 4 per cent. on the first composed of only three members, a Frenchman, unified and Daïra loans, the latter being entitled to an an Austrian, and an Italian, but in the following year an additional 1 per cent. contingent on certain circumstances Englishman was added. The original functions of the that never arisen. The total annual encumbrances members were to act as the receivers of certain revenues

of the country, including the tribute due to Turkey and that had been assigned to the service of the debt.

In the interest on the Suez Canal shares bought by Great order to render their powers effective, they were given the Britain, but excluding the interest on the Daïra and right to sue the Government in the Mixed Courts for Domains loans—which were expected to be defrayed by any breach of engagement towards the bondholders. The the revenues of the respective estates on which these loans effects of this measure were far more momentous than

were secured—amounted to four and a half million pounds, was apparent at the time or than was intended by its about half the then annual revenue of Egypt. Further, authors. It was, in fact, the beginning of international the revenue was divided between the Government and the interference in the financial administration of Egypt. From bondholders, any surplus in the latter's share after full this moment the period of financial reform may be said to

1 The figures of the Egyptian debt are always given in pounds have commenced. Shortly afterwards, in November of the sterling.

British control.


payment of the interest being devoted to redemption of the Germany, and Russia—are represented. The functions of capital. A brief period of prosperity followed the passing the Caisse, originally limited to receiving certain assigned of the law of liquidation, but the Arabist rebellion and the revenues on behalf of the bondholders, have since that events which culminated in the British occupation of date become much more important. The exact extent of

Egypt in September 1882, immediately followed their powers is not capable of accurate definition, nor by the disastrous reverses in the Sudan, again would it be possible to lay down limits which would meet

plunged the country into financial embarrass- with general acceptance from all parties. The widest ment. A new loan was absolutely necessary to settle interpretation of their functions at has been put forward the Alexandria indemnities and to pay off the liabilities would give them the right to control, on behalf of the arising out of the rebellion and the Sudan war. More- Powers of Europe, the due execution by the Egyptian over, the proportion of the revenue assigned to the Government of almost all the complicated international Government by the law of liquidation was altogether in- agreements regarding the finances of the country. In virtue sufficient for the expenses of administration, so that while of the law of liquidation, their assent, as well as that of the sinking fund was in full operation, the Treasury was the Sultan, is necessary before any new loan can be issued. compelled to borrow on short loans at high rates of interest No portion of the general reserve fund can be used in order to meet its ordinary expenditure. At the initiative without their sanction. All questions are decided by the of the British Government, negotiations were begun with vote of the majority of the members, with the exception of the Great Powers and Turkey, which, after prolonged dis- grants for extraordinary military expenditure, which, by cussions, resulted in the London convention of March 1885. an arrangement concluded with the Powers in November That convention was the last settlement of the liabilities 1899, require unanimity. All assigned revenues are paid of Egypt, and, with a few subsequent modifications of directly to the Caisse de la Dette by the collecting departdetail, its dispositions form the organic law under which ments without passing through the Ministry of Finance. Egyptian finance is administered at the present day. After the Caisse de la Dette come the Railway Board

It will be convenient here to state, as briefly as possible, and the Commissions of the Daira and Domains, each the exact position of the Egyptian Government in respect consisting of three members—an Englishman, a French

of its financial autonomy, as established by the man, and an Egyptian. The former administers the Financial various treaties, conventions, and agreements railways, telegraphs, and port of. Alexandria, paying the

in force. By the Imperial firman of June net receipts, after deduction of the expenses, fixed for the 1873, the Khedive of Egypt obtained, subject to the pay- railways at 45 per cent of the gross receipts, into the ment of an annual tribute to Turkey of £696,000, com

Caisse. The Daïra and Domains Commissions administer plete fiscal autonomy, including the right to conclude the large estates that are mortgaged to the holders of those commercial conventions and to raise loans. The latter loans. Out of the net profits they pay the annual interest privilege was taken away by the firman appointing charge, and any surplus and the produce of the sales of Tewfik Pasha, and since that time Egypt cannot raise land are employed in paying off the capital. Should the a loan without the previous consent of the Sultan. The net profits in any year be insufficient to meet the coupon, international obligations of Turkey remained, of course, the Egyptian Government is bound to make good the binding upon Egypt, and amongst them the capitula- difference. Since their creation both these administrations tions, by which certain privileges are conferred upon showed an annual deficit up to 1890. From that date, foreigners resident in the Ottoman dominions. From with the exception of the year 1895, the Daïra has yielded a financial point of view the most important of these a surplus; but the Domains continued to be administered privileges-based to a certain extent on the text of the at a considerable loss, which formerly varied between original treaties, but still more on an abusive extension £50,000 and £200,000 a year, down to 1900, in which in practice which had grown up in Egypt—is immunity year there was a surplus for the first time. from all direct taxation without the assent of their re It is now possible to explain the working of the finanspective governments. The only exception, resulting from cial system prescribed by the London convention. The the Ottoman law under which foreigners are allowed to principle of dividing the revenues of the country

Working. acquire and hold real property, is in the case of the land between the Ministry of Finance and the Caisse

At the present time all taxes that were formerly de la Dette was maintained. The revenue assigned to paid by natives and not by foreigners have been abolished the service of the debt remained as before, so that the in Egypt, but the immunity described above constitutes security of the bondholders was in no way diminished. a most serious obstacle to all schemes for redistributing At the same time it was recognized that the non-assigned the burden of taxation in a more equitable manner. The revenue was insufficient to meet the expenses of administrasupervision exercised over the finances of Egypt by the tion. A certain scale of administrative expenditure was, French and British controllers prior to the British occu- therefore, authorized, and the Caisse, after paying in full pation was abolished in 1883, and replaced by that of the interest on the debt, had to make good out of the a British official called the Financial Adviser. This balance of the assigned revenue any deficit between the functionary is appointed by the Khedive on the recom- authorized expenditure and the non-assigned revenue. If, mendation of the British Government, and has a seat on after making good any such deficit, a surplus still rethe council of ministers, but without a vote. It has been mained, this surplus was divided equally between the laid down by the British Government that “no financial Caisse and the Government, the share of the former being decision should be taken without his consent," an interpre- applied to the reduction of the debt, while the Governtation which has never been questioned by the Egyptian ment was free to dispose of its share as it thought best. Government. In addition to the control of the Financial By an arrangement with the Powers, concluded in 1888, Adviser, there exist in Egypt certain commissions or the Caisse's half-share in the surplus is now paid into a boards, known as "Mixed Administrations," appointed in reserve fund, and the sinking fund is suspended until virtue of international agreements, and having relations of that fund amounts to two millions. The authorized exa more or less ill-defined, but quasi-independent character penditure for administrative purposes was originally fixed with the Egyptian ministry of finance. First and fore- at £E.5,237,000,1 but by subsequent agreement with the most is the Caisse de la Dette, on which, since 1885, the Powers other items have been added, so that in six Great Powers-France, Austria, Italy, Great Britain,

1 The Egyptian pound=£1, Os. 6d.


1900 it amounted to £E.6,195,000. The effective ad was effected in 1898. From 1894 onwards it was thought ministrative expenditure has always exceeded the amount desirable to pay more attention than heretofore to the fixed by the London convention, and of late years the legitimate demands of the spending departments. Accordgrowing wants of a country in process of development ingly, money was devoted to remunerative objects, such as have naturally had a tendency to increase this excess. irrigation works, railway extension, and also to others, Any excess can, however, only be met out of the half- such as the construction of hospitals, prisons, and other share of the eventual surplus which is at the free disposal public buildings, the improvement of education, &c., of the Government. Consequently, in order to meet new

order to meet new which, although not directly remunerative, are equally expenditure necessitated by the new requirements of the necessary to the well-being of the country. In 1896 the country, just double the amount of revenue must be decision of the British Government to undertake the exraised. One-half of the new revenue increases the pedition to Dongola, leading by the natural progress of Government share of the surplus, and thereby pays for events to the reconquest of the Sudan, subjected the the new expenditure. The other half goes for the moment finances of Egypt to a severer strain than had been exinto the general reserve fund, and would ultimately, perienced since they had been placed on a sound footing. when that fund has attained its maximum, be employed The endeavour to obtain assistance towards the cost of in reducing the debt. This limitation of administrative the military operations from the general reserve fund, expenditure is the great blot in the system designed by with the co-operation of the Caisse de la Dette, failed, the authors of the London convention, and now that the owing to an adverse decision of the Mixed Tribunals as to resources of the state are greatly on the increase, it has the legality of such a course. Nevertheless, with a certain become a serious obstacle to the development of the amount of financial aid from the British Government, the national prosperity. The London convention left the Egyptian treasury was able to meet the expenditure of permanent rate of interest on the debt, as fixed by the law the campaign without recourse to extraordinary expediof liquidation, unchanged, but in order to afford tempor- ents. The conduct of the war was quite as remarkable ary relief to the Egyptian exchequer, a reduction of 5 per from a financial as from a military point of view, and cent. on the interest of the debt was granted for two years, there have been few instances in history of such great on the condition that if at the end of that period pay results being obtained at such comparatively small cost. ment, including the arrears of the two years, was not re The total amount expended for the whole campaign, from sumed in full, another international commission was to be the commencement of the Dongola expedition to the appointed to examine into the whole financial situation. capture of Omdurman, was in round figures two millions. Lastly, the London convention empowered Egypt to raise of this about £E.900,000 was spent on railway and telea loan of nine millions, guaranteed by all the Powers, at a graph construction, works of permanent utility, the balance rate of interest of 3 per cent. For the service of this loan of £E.1,100,000 representing the purely military expendian annuity of £315,000 is provided in the Egyptian ture. After the conclusion of the campaign a further budget for interest and sinking fund. This sum was sum of £E.300,000 was granted for the extension of the sufficient to pay the Alexandria indemnities, to wipe out railway to Khartum.

The British Government gave a the deficits of the preceding years, to give the Egyptian grant-in-aid of £800,000, and the balance was borne by treasury a working balance of £E.500,000 and thereby the Egyptian treasury out of its half-share in the annual avoid the creation of a fresh floating debt, and to provide surpluses. So far, then, the finances of the country a million for new irrigation works. To the wise foresight triumphantly stood the test to which they were subjected. which, at a moment when the country was sinking beneath But a graver problem preoccupied the minds of those who a weight of debt, did not hesitate to add this million for were responsible for the financial administration of Egypt, expenditure on productive works, the present prosperity of and that was whether the resources of the country could Egypt is largely due.

support the annual burden of the occupation and governDuring the two years that followed the London con ment of so large an area without detriment to the normal vention, the financial policy of the Egyptian Government development of Egypt itself. It was wisely decided to

was directed to placing the country in a posi- leave no room for doubt on this point, by at once taking 1885-1899.

tion to resume full payment of the interest on steps to increase those resources on a large scale in the the debt in 1887, and thereby to avoid the appointment of immediate future. A vast scheme for the construction of an international commission. By the exercise of the most à reservoir at Assuan for the storage of the waters of rigid economy in all branches this end was attained, though the Nile had long been under consideration. In 1898 a budgetary equilibrium was only secured by a variety of financial arrangement was concluded whereby the execufinancial expedients, justified by the vital importance of tion of this project

, which will enormously increase the saving Egypt from further international interference. By productive powers of the country, was at once put in hand. such means this additional complication was averted, but The original estimate of the cost of the works was two the struggle to put Egypt in a genuinely solvent position millions, and the Egyptian Government arranged to meet was by no means over. It was not until his report on the the expenditure by the payment of an annuity of £160,000 financial results of 1888 that Sir Evelyn Baring (afterwards a year for thirty years, beginning from the 1st July 1903. Lord Cromer) was able to inform the British Government This important undertaking was brought to a successful that the situation was such that "it would take a series termination in 1902, and the actual expenditure incurred of untoward events seriously to endanger the stability of amounted to about £E.3,250,000. The difference between Egyptian finance and the solvency of the Egyptian Govern- the sum originally provided and the ultimate cost was ment.” From this moment the corner was turned, and granted by the Caisse de la Dette out of the general reserve the era of financial prosperity commenced. The results of fund. In the course of 1899 a great financial reform, the labours of the preceding six years began to manifest the desirability of which had long made itseli felt, was themselves with a rapidity which surprised the most seriously taken in hand, namely, the reassessment of the sanguine observers. The principal feature of the suc- land-tax. The existing assessment, which was made before cessive Egyptian budgets from 1890 was the fiscal relief the British occupation, had long been condemned by all afforded to the population. This period may be said to competent authorities, but the inherent intricacies and have been brought to a close in 1894, though sub- difficulties of the problem had hitherto postpone. 1 a solusequent reduction of the land-tax by £E.216,000 a year tion. After careful study and a preliminary examination


of 50 Kilos.

per Cantar.







[ocr errors]


Ardebs. 2




of the land, a scheme was passed which has given satis-

financial situation. Cotton and sugar are the two principal pro-
faction to the land-owning community, and which will,

ducts of the country, forming together about 90 per cent. of the
when completed, distribute the tax equitably in proportion

total value of the exports. The following tables show the amount

and value of the cotton and sugar crops from 1885 to 1898 :-
to the fertility of the soil.

This brief sketch of the history of Egyptian finance
would not be complete without a few statistics showing

more definitely the remarkable progress made

since 1883. The following particulars, giving
the general financial results obtained since the

1885-86 2,905,000



commencement of the British occupation, are taken from

3,026,000 240


1887-88 2,963,000 249
Lord Cromer's reports and other official publications. The

1888-89 2,766,000 264

difference between the real ordinary revenue and expendi 1889-90 2,872,000 294

ture of the Egyptian Government during these years is

1890-91 3,638,000 255


shown in the following table :-

4,195,000 205

1892-93 4,610,000


1893-94 4,548,000


1894-95 4,347,000 168

1895-96 4,695,000


1896-97 5,177,000



1897-98 5,765,000 157



5,056,000 175



Cotton Seed




per Ardeb.



1885-86 1,967,000



1886-87 2,307,000



1887–88 2,182,000



1888–89 2,080,000



1889-90 2,211,000


1890-91 2,828,000


1891-92 3,128,000



1892-93 3,157,000



1893-94 3,032,000


1894-95 2,708,000



This table shows very clearly the cleavage line between

1896-97 3,526,000


the period of semi-insolvency and that of prosperity 1897-98 3,736,000


through which Egypt has passed. During the four years

1898-99 3,163,000


1883–86, both inclusive, the aggregate deficit amounted
to £E.2,606,000. By 1886 the Sudan expenditure had

greatly diminished. The efforts of the reformers, notably
those of the irrigation officers, had begun to bear fruit.

Tons of 1000 Kilos.

per 100 Kilos.
The aggregate surplus of the fourteen years from 1887

to 1900, both inclusive, was £E.11,847,000. During the



same period direct taxation was reduced to the extent of 1886



about £E.1,275,000 a year. Arrears of land-tax to the 1887



extent of £E.1,245,000 were remitted. In the domain




of indirect taxes the salt-tax was reduced by 40 per cent.,



the postal and telegraph rates were reduced by 50 per 1891



cent., and the octroi duties were abolished in all the pro-



vincial towns. Large reductions were made in the rail-





way rates.
The only increase of taxation was in the


tobacco duty, which has been raised from P.T. 14 to P.T. 1896



20 per kilogramme. The house-tax was also imposed on



European residents in Egypt. In spite of the great relief



thus afforded to the taxpayers of Egypt, the revenue
increased by £E.2,512,000. In 1883 a

revenue of Trade and Commerce, 1884–98.–The following table shows the
£E.8,935,000 was wrung with difficulty from the country. bullion, for the three quinquennial periods between 1884 and

average annual value of the total imports and exports, excluding
In 1900 £E. 11,447,000 was collected with ease. On the
other hand, a stringent control has been exercised over
the expenditure. In 1883 the “ordinary” expenditure


Imports. Exports. Total Trade.
amounted to £E.9,856,000. In 1900 it amounted to
£E.9,895,000, an increase of only £E.39,000.

1884-88 8,257,000 11,106,000 19,363,000
In connexion with this subject it must be borne in mind that,

1889-93 8,423,000 12,887,000 21,310,000
during the period under review, Egypt has suffered very severely

1894-98 9,822,000 12,592,000 22,414,000
from the general fall in prices. Had it not been for
the great increase of production, the result of im-

Owing to the great perturbation of prices that has characterized
provements in the system of irrigation, and the fiscal
relief afforded to the landowners, the agricultural

the period under review, the above figures give a very imperfect
depression would, without doubt, have seriously impaired the impression of the real growth of the trade of the country. A

clearer view is obtained by comparing the quantities of some of the
1 Owing to a change in the way of making up the accounts, normal
expenditure of £E.340,000 was not included in the accounts of 1887,

1 100 P.T. = £E.1= £1, Os. 6d.
so that there was practically financial equilibrium in that year.

An ardeb of cotton seed weighs 267 lb.

S. III. — 88






[ocr errors][merged small][merged small][merged small][merged small]


Cotton Goods.

Steel and Iron





Cotton Seed.


On the


de la Dette.



more important categories of imports and exports. In the follow During this period fresh debt was incurred for the following ing tables those articles have been selected which have an intimate purposes : connexion with the national prosperity :

Alexandria indemnities

Average Annual Imports.
Deficits of years prior to 1886, including Sudan

Commutations of pensions and allowances of the
Khedivial family

Treasury working balance

513,000 Irrigation works

1,959,000 Kilos. Tons. £E.

Tons. 1884-88 13,452,000 12,000 308,000

Expenses of loans (commissions, &c.). 449,000

1,169,000 1889-93 13,665,000 25,000 388,000 513,000 1894-98 16,984,000 34,000 513,000 701,000

Less—Paid out of special receipts (sales of land, &c.) 1,305,000
Average Annual Exports.
Leaving a net increase on this account of

To this sum must be added the amount by which

the debt was increased in consequence of the

conversion of the preference and Daïra stocks 1,945,000 Kantars. Hectolitres. Kilos.

Kantars. 1884-88 2,707,000 4,240,000 38,919,000 226,000

Making a total increase of .

£15,330,000 1889-93 3,659,000 5,425,000 43,375,000 656,000

On the other hand, the amount of bonds on the market has been 1891-98 4,951,000 6,458,000 63,147,000 1,083,000 diminished by the following amounts :

By sales of property (mostly Daïra On the 31st December 1900 the total amount of the

and Domains)


By surplus Egyptian debt was £102,714,000, of which £7,273,000

which revenue, of

£7,273,000 is now held by the was held by the commissioners of the debt on Debt.

commissioners of the debt

10,042,000 account of the general reserve fund and the

£16,346,000 fund of the economies of the conversion, as will be explained hereafter, thus leaving £95,441,000 in the hands Making a net reduction of .

£1,016,000 of the public. The particulars of the different loans are These figures are remarkable. They show that in spite shown in the accompanying table :

of about £13,000,000 having been borrowed for various

objects, and in spite of conversion operations, which added Llell by the

nearly £2,000,000 to the capital of the debt, the total Market.

amount of Egyptian bonds on the market in 1901 was one

million less than in 1883. This result was mainly, although Guaranteed loan 3 per cent. 8,333,000 392,000 7,941,000 not entirely, due to the system under which large sums of Preference debt 3 per cent. 29,393,000 1,055,000 28,338,000 money remained at the close of each year in the hands of Unified debt 4 per cent. 55,972,000 5,493,000 50,479,000

the commissioners of the debt, and were by them invested Domains loan 43 per cent. 2,899,000 2,000 2,897,000| Daïra Sanieh loan 4 6,117,000 331,000 5,786,000

in Egyptian stocks. Whatever objections may on other

grounds be urged against this system, it cannot be doubted Total. 1102,714,000 7,273,000 95,441,000 that its result is to accumulate what is practically a large

and ever-increasing sinking fund. During the five years In June 1890 the assent of the Powers was obtained to 1896–1900 debt was either paid off or withdrawn from the conversion of the preference, Domains, and Daïra the market by Government purchase at an average rate of loans on the following conditions, imposed at the initiative no less than £1,262,000 a year. It should be added that of the French Government :

the interest charge on the bonds on the market, which on 1. The employment of the economies resulting from the conver

the 1st January 1883 stood at £4,166,000, was in 1901 sion was to be the subject of future agreement with the Powers.

£3,604,000, a diminution of £562,000. 2. The Daïra loan was to be reimbursed at 85 per cent., instead In order to give a complete account of the financial of 80 per cent., as provided by the law of liquidation.

3. The sales of Domains and Daira lands were to be restricted position of the Egyptian Government, some explanation to £E.300,000 a year cach, thus prolonging the period of liquida

must be supplied of the various reserve funds which are tion of those estates.

in operation. The general reserve fund was

Reserve The interest on the preference stock was reduced from

created with the assent of the Powers by the de

Funds. 5 to 3 per cent., and on the Domains from 5 to 41 per

cree of the 12th July 1888. Beginning with a cent. As regards the Daïra loan, there was no apparent in the system of accounts introduced in 1887, this fund is

sum of £E.310,000, being the amount saved by a change reduction in the rate of interest, which remained at 4 per cent., but the bondholders received £85 of the new stock

increased annually by the share of the Caisse in the surfor every £100 of the old. The annual economy to the pluis, by the interest on the invested accumulations, and Egyptian Government amounted at the time of the con

by the produce of the sale of certain Government lands. version to £E.348,000. Further, an engagement was

When the unpledged portion of the fund reaches the sum entered into that there should be no reimbursement of the

of £E.2,000,000, no further accumulation is allowed under loans till 1905 for the preference and Daïra, and 1908

the provisions of the above-mentioned decree, and the for the Domains. By an arrangement concluded in June

excess has to be applied to sinking fund. Up to the end 1898, between the Egyptian Government and a syndicate, is primarily intended to be used in making good any de

of 1901 this contingency had never occurred. The fund the unsold balance of the Daïra estates will be taken over by the syndicate in October 1905, for the amount of the ficiency in the payment of the interest on the debt or of debt remaining. The Daïra loan will then cease to exist.

the administrative expenditure authorized by the London The total amount of Egyptian bonds on the market on

convention and subsequent agreements. It may also be the 1st January 1883 and ist January 1901 respectively vious consent of the commissioners of the Caisse. The

drawn upon for extraordinary expenditure with the prewas as follows:--

total amount paid into the general reserve fund, from its 1st January 1883

£96,457,000 constitution in 1888 down to the end of 1900, was 1st January 1901


£E.8,106,000, of which £E.4,577,000 was actually spent Showing a reduction of

£1,016,000 on extraordinary expenditure, and a further sum of


per cent.

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