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Full text of "The Egyptian Problem"

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the desperate financial situation which the Khedive Ismail had bequeathed to Egypt. Immediately after the Occupation, the British Government had intimated to France that the arrangement under which, in 1876, Egyptian financial control had been primarily vested in two joint controllers, one English and one French, must cease, and that there would no longer be room for a French controller in Cairo. France had acquiesced, but she still remained firmly entrenched in the International Commission of the Public Debt, commonly known as the Caisse, which derived considerable powers of control from the famous Law of Liquidation. In view of the heavy expenses—including a sum of £4,000,000 for compensation for the destruction by Arabi's troops of a large part of Alexandria—into which Egypt had been plunged since the Law of Liquidation, that enactment stood admittedly in need of drastic revision if the Egyptian Government was ever to be placed financially on its feet again. A Conference of the Powers which assembled in London in 1884, on Lord Granville's invitation, failed, mainly through French obstruction, to arrive at any settlement. A one-sided attempt to set aside the Law of Liquidation had to be dropped ignomi-niously when the French representative on the Caisse and his Italian and Austrian colleagues appealed to the Mixed Tribunals. Only in 1885 was a modus vivendi reached, considerably modifying the Law in favour of the Egyptian. Treasury with the assent of the Powers, including now also Germany and Russia as well as Turkey, and Egypt was allowed to raise a loan under their collective guarantee for certain specific purposes, including the Alexandria indemnity, for which foreigners of all nationalities were waiting impatiently. This modus vivendi gave Egypt breathing time and a little more latitude as to the limit and nature of expenditure allowed by the international guardians of her financial conscience, but it still tied up any surplus revenue in such a way as to arm the Caisse very frequently with a practical right of veto, even inled, however, to produce        danger of foreign complications.