The remainder of his scattered-forces was now collected at Kermeh, about 30 miles north of Dongola, where, under the command of Mohammed-el-Kheir, they awaited reinforcements.
CHAPTER LIV.
FINANCE, THE SUEZ CANAL, AND THE ARMY OF OCCUPATION.
In the year 1885, each of the subjects mentioned in the heading of the present chapter came prominently to the front. In the following pages it is proposed to deal with the different matters in succession.
Finance. In July, 1885, Egypt, thanks to the good offices of Great Britain, was enabled to arrange a very thorny question which had arisen with regard to her finance. To explain what occurred, it is necessary to refer to the events which had previously taken place.
Under the financial decrees of Ismail Pasha, certain revenues were assigned to the Public Debt Commissioners to provide for the interest and Sinking Fund of the debt. Although, by the Law of Liquidation accepted by the Powers in 1880, the rate of interest was reduced, the provision for the Sinking Fund was left untouched, and the result was that the debt was gradually reduced by about a million. This, however, was too good a state of things to last. The expenses caused by the insurrection in the Soudan, the necessity of providing for the payment of the Alexandria indemnities, and other pressing claims, not only rendered it impossible for Egypt to continue the reduction of her existing debt, but made it indispensable to contract a fresh one in the shape of a new loan.
In March, 1884, at the invitation of Lord Granville, a conference of the Great Powers was held in London to discuss the situation. To purchase the goodwill of France, what became known as "The Anglo-French Convention" was entered into. By this, subject to the acceptance by the Powers of the British financial proposals, the British troops in Egypt were to be withdrawn at a fixed date, unless the Powers, in the meantime, should agree to their remaining. Lord Granville pointed out the absurdity of Egypt continuing to pay off her old debts at a moment when the funds at her disposal were insufficient to meet her current expenditure. The British proposals, which involved not only a suspension of the Sinking Fund, but also a further diminution in the rate of interest, were opposed by the French representative; and Lord Granville, in a somewhat summary manner, dissolved the conference. Lord Northbrook was then despatched to Egypt as High Commissioner, and in September, 1884, no means having been discovered of relieving the financial tension, the Egyptian Government, under his advice, adopted the strong measure of directing the governors of the provinces, as well as the heads of the customs and railway administrations, to pay directly to the Treasury the balance of their receipts for the current half-year (which closed on the 25th October), instead of to the "Caisse" of the debt. It is worthy of remark that there was at this time sufficient money in the "Caisse" to pay the interest on the debt, and the funds intercepted would simply have gone to swell the Sinking Fund. The step, nevertheless, was a clear violation of the existing arrangements between Egypt and her creditors, and naturally raised a storm. Protests rained in from all quarters; and some of the Powers, notably France, Germany, and Russia, used strong language. The Commissioners of the debt also attacked the Khedive's Ministers in the Mixed Tribunals. The Egyptian Government, realizing that it had got into a "tight place," again by British advice, meekly bowed its head and directed the payments to the "Caisse" to be resumed. The Cairo Mixed Tribunal on the 18th December gave judgment directing the Government to refund the money diverted. This they were absolutely unable to do, and an appeal was lodged, partly to gain time and partly because the negotiations with the Powers, abruptly broken off by Lord Granville, had been in the meantime renewed. At last, on the 18th March, 1885, "The London Convention" came to the aid of Nubar Pasha and his Cabinet. The effect of this agreement and the declarations dated the 17th March annexed to it was that the Powers acquiesced in the issue of a new loan of £9,000,000. Foreigners were made liable to certain taxes, and the Law of Liquidation was modified. Further than this, the Mixed Tribunals were declared incompetent to proceed with the action against the Government. On 27th July, 1885, a decree embodying these terms was signed, and a situation full of embarrassment was happily put an end to.
The Suez Canal. It should be mentioned that in the declarations annexed to "The London Convention" was one which provided that a commission composed of delegates of the Great Powers should assemble at an early date to consider the measures to be adopted to secure the free navigation of the Suez Canal in time of war. What possible connection there was between this question and that of Egyptian finance it is hard to say, but, the engagement having been made, it had to be carried out, and the negotiations were at once taken in hand.
The International Commission for dealing with the matter held its first sitting in Paris on the 30th March, 1885, and proceeded to discuss the various points involved.
As stated in a previous chapter, the attention of the Powers had been called to the matter by Lord Granville, then Foreign Secretary, as far back as the 3rd January, 1883, though thus far no progress had been made.