But financial chaos was not the only evil from which Egypt suffered. There was administrative chaos also, and this was not diminished by the special jurisdictions which had been allowed to the various groups of Europeans settled in the country. The army, unpaid and undisciplined, was ready to revolt; and above all, the helpless mass of the peasantry were reduced to the last degree of penury, and exposed to the merciless and arbitrary severity of the officials, who fleeced them of their property under the lash. All the trading nations were affected by this state of anarchy in an important centre of trade; all the creditors of the Egyptian debt observed it with alarm. But the two powers most concerned were France and Britain, which between them held most of the debt, and conducted most of the foreign trade, of Egypt; while to Britain Egypt had become supremely important, since it now controlled the main avenue of approach to India.

When a successful military revolt, led by Arabi Pasha, threatened to complete the disorganisation of the country (1882), France and Britain decided that they ought to intervene to restore order, the other powers all agreeing. But at the last moment France withdrew, and the task was undertaken by Britain single-handed.[7] In a short campaign Arabi was overthrown; and now Britain had to address herself to the task of reconstructing the political and economic organisation of Egypt. It was her hope and intention that the work should be done as rapidly as possible, in order that she might be able to withdraw from a difficult and thankless task, which brought her into very delicate relations with the other powers interested in Egypt. But withdrawal was not easy. The task of reorganisation proved to be a much larger and more complicated one than had been anticipated; and it was greatly increased when the strange wave of religious fanaticism aroused by the preaching of the Mahdi swept over the Soudan, raised a great upheaval, and led to the destruction of the Egyptian armies of occupation. Britain had now to decide whether the revolting province should be reconquered or abandoned. Reconquest could not be effected by the utterly disorganised Egyptian army; if it was to be attempted, it must be by means of British troops. But this would not only mean a profitless expenditure, it would also indefinitely prolong the British occupation, which Britain was desirous of bringing to an end at the earliest possible moment.

[7] See above, p. 164

The romantic hero, Gordon, was therefore sent to Khartoum to carry out the withdrawal from the Soudan of all the remaining Egyptian garrisons. On his arrival he came to the conclusion that the position was not untenable, and took no steps to evacuate. There was much dangerous delay and vacillation; and in the end Gordon was besieged in Khartoum, and killed by the bands of the Mahdi, before a relief force could reach him. But this triumph of Mahdism increased its menace to Egypt. The country could not be left to its own resources until this peril had been removed, or until the Egyptian army had been fully reorganised. So the occupation prolonged itself, year after year.

The situation was, in fact, utterly anomalous. Egypt was a province of Turkey, ruled by a semi-independent Khedive. Britain's chief agent in the country was in form only in the position of a diplomatic representative. But the very existence of the country depended upon the British army of occupation, and upon the work of the British officers who were reconstructing the Egyptian army. And its hope of future stability depended upon the work of the British administrators, financiers, jurists, and engineers who were labouring to set its affairs in order. These officials, with Sir Evelyn Baring (Lord Cromer) at their head, had an extraordinarily difficult task to perform. Their relations with the native government, which they constantly had to overrule, were difficult enough. But besides this, they had to deal with the agents of the other European powers, who, as representing the European creditors of the Egyptian debt, had the right to interfere in practically all financial questions, and could make any logical financial reorganisation, and any free use of the country's financial resources for the restoration of its prosperity, all but impossible.

Yet in the space of a very few years an amazing work of restoration and reorganisation was achieved. Financial stability was re-established, while at the same time taxation was reduced. The forced labour which had been exacted from the peasantry was abolished; they were no longer robbed of their property under the lash; they obtained a secure tenure in their land; and they found that its productive power was increased, by means of great schemes of irrigation. An impartial system of justice was organised—for the first time in all the long history of Egypt since the fall of the Roman Empire. The army was remodelled by British officers. Schools of lower and higher grade were established in large numbers. In short, Egypt began to assume the aspect of a prosperous and well-organised modern community. And all this was the work, in the main, of some fifteen years.

Meanwhile in the Soudan triumphant barbarism had produced an appalling state of things. It is impossible to exaggerate the hideousness of the regime of Mahdism. A ferocious tyranny terrorised and reduced to desolation the whole of the upper basin of the Nile; and the population is said to have shrunk from 12,000,000 to 2,000,000, although exact figures are of course unattainable. One of the evil consequences of this regime was that it prevented a scientific treatment of the flow of the Nile, on which the very life of Egypt depended. Scientific irrigation had already worked wonders in increasing the productivity of Egypt, but to complete this work, and to secure avoidance of the famines which follow any deficiency in the Nile-flow, it was necessary to deal with the upper waters of the great river. On this ground, and in order to remove the danger of a return of barbarism, which was threatened by frequent Mahdist attacks, and finally in order to rescue captives who were enduring terrible sufferings in the hands of the Mahdi, it appeared that the reconquest of the Soudan must be undertaken as the inevitable sequel to the reorganisation of Egypt. It was achieved, with a wonderful efficiency which made the name of Kitchener famous, in the campaigns of 1896-98. The reconquered province was nominally placed under the joint administration of Britain and Egypt; but in fact the very remarkable work of civilisation which was carried out in it during the years preceding the Great War was wholly directed by British agents and officers.

The occupation of the Soudan necessitated a prolongation of the British occupation of Egypt. But, indeed, such a prolongation was in any case inevitable; for the beneficial reforms in justice, administration, finance, and the organisation of the country's resources, which had been effected in half a generation, required to be carefully watched and nursed until they should be securely rooted: to a certainty they would have collapsed if the guardianship of Britain had been suddenly and completely withdrawn. The growing prosperity of Egypt, however, and still more the diffusion of Western education among its people, has naturally brought into existence a nationalist party, who resent what they feel to be a foreign dominance in their country, and aspire after the institutions of Western self-government. But it has to be noted that the classes among whom this movement has sprung up are not the classes who form the bulk of the population of Egypt—the fellahin, who from the time of the Pharaohs downwards have been exploited and oppressed by every successive conqueror who has imposed his rule on the country. This class, which has profited more than any other from the British regime, which has, under that regime, known for the first time justice, freedom from tyranny, and the opportunity of enjoying a fair share of the fruits of its own labour, is as yet unvocal. Accustomed through centuries to submission, accepting good or bad seasons, just or unjust masters, as the gods may send them, the fellah has not yet had time even to begin to have thoughts or opinions about his place in society and his right to a share in the control of his own destinies; and if the rule which has endeavoured to nurture him into prosperity and self-reliance were withdrawn, he would accept with blind submissiveness whatever might take its place. The classes among whom the nationalist movement finds its strength are the classes which have been in the past accustomed to enjoy some degree of domination; the relics of the conquering races, Arabs or Turks, who have succeeded one another in the rule of Egypt, the small traders and shopkeepers of the towns, drawn from many different races, the students who have been influenced by the knowledge and the political ideas of the West. It is natural and healthy that a desire to share in the government of their country should grow up among these classes: it is in some degree a proof that the influence of the regime under which they live has been stimulating. But it is also obvious that if these classes were at once to reassume, under parliamentary forms, the dominance which they wielded so disastrously until thirty years ago, the result must be unhappy. They are being, under British guidance, gradually introduced to a share in public affairs. But the establishment of a system of full self-government and national independence in Egypt, if it is to be successful, must wait until not only these classes, but also the classes beneath them, have been habituated to the sense of self-respect and of civic obligation by a longer acquaintance with the working of the Reign of Law.

Since the Great War broke out, the British position in Egypt has been regularised by the proclamation of a formal British protectorate. Perhaps the happiest fate which can befall the country is that it should make that gradual progress in political freedom, which is alone lasting, under the guidance of the power which has already given it prosperity, the ascendancy of an impartial law, freedom from arbitrary authority, freedom of speech and thought, and emancipation from the thraldom of foreign financial interests; and in the end it may possibly be the destiny of this ancient land, after so many vicissitudes, to take its place as one among a partnership of free nations in a world-encircling British Commonwealth of self-governing peoples.

The most vexed, difficult, and critical problems in the history of the British Empire since 1878—perhaps the most difficult in the whole course of its history—have been those connected with the South African colonies. In 1878 there were four distinct European provinces in South Africa, besides protected native areas, like Basutoland. All four had sprung from the original Anglo-Dutch colony of the Cape of Good Hope. In two of them—Cape Colony and Natal—the two European peoples, British and Dutch, dwelt side by side, the Dutch being in a majority in the former, the British in the latter; but in both the difficulty of their relationship was complicated by the presence of large coloured populations, which included not only the native African peoples, Hottentots, Kaffirs, Zulus, and so forth, but also a large number of Asiatics, Malays who had been brought in by the Dutch before the British conquest, and Indians who had begun to come in more recently in large numbers, especially to Natal. Difference of attitude towards these peoples between the British authorities and the Dutch settlers had been in the past, as we have seen, a main cause of friction between the two European peoples, and had caused the long postponement of full self-government. In the other two provinces, the Transvaal and the Orange Free State, the white inhabitants were, in 1878, almost exclusively Dutch. The native populations in these states were no longer in a state of formal slavery, but they were treated as definitely subject and inferior peoples: a law of the Transvaal laid it down that 'there shall be no equality in Church or State between white and black.' Thus the mutual distrust originally aroused by the native question still survived. It was intensified by ill-feeling between the Boers and British missionaries. When Livingstone, the British missionary hero, reported the difficulties which the Boers had put in his way, British opinion was made more hostile than ever. Of the two Boer republics, the Orange Free State had enjoyed complete independence since 1854; and no serious friction ever arose between it and the British government. But the Transvaal, which had been turbulent and restless from the first, had been annexed in 1878, largely because it seemed to be drifting into a war of extermination with the Zulus. As a consequence, Britain was drawn into a badly managed Zulu-War; and when this dangerous tribe had been conquered, the Transvaal revolted. The Boers defeated a small British force at Majuba; whereupon, instead of pursuing the struggle, the British government resolved to try the effect of magnanimity, and conceded (1881 and 1884) full local independence to the Transvaal, subject only to a vague recognition of British suzerainty.