was not credible. When, therefore, it was represented to them that the last phase of European interference was that the privileges of the classes to which they belonged were threatened, it needed no great amount of persuasion to enlist their sympathies on the side of opposition to the new order of things. Religious antipathy would also drive them in the same direction.

It is, indeed, probable that, from the purely Egyptian point of view, Ismail Pasha's plan would have been more attractive if the proposal to establish an Egyptian Parliament had been dropped out of the programme, and if he had taken his stand on the general feeling of dislike to Europeans, and on religious fanaticism. Appeals to either of these sentiments would have been more comprehensible to his followers, and would have met with a more hearty response, than arguments based on the establishment of institutions which were foreign to the national traditions. Save to a very few, such arguments were probably incomprehensible.

But Ismail Pasha was debarred from using arms of this description, save to a very limited extent. In the first place, he was not a fanatic, and religious fanaticism was a matter of which he had had some experience. He knew its danger, and when it had appeared he had on several occasions adopted summary methods for stamping it out. He did not enjoy the reputation of being a devout Mohammedan, and, had not material interests and the fear of disobedience to a despotic ruler been brought into play, he would have exercised but little influence over those classes who honestly represented Mohammedan devotion. In the second place, it was a necessity of his position that he should not go far in appealing to sentiments of this description. He understood enough of European

opinion to appreciate the fact that any such appeals would forfeit the sympathies and evoke the fears of Europe. This might be dangerous. From every point of view it would be safer, and in all probability more productive of result, if the revolution were carried out in the name of civilisation and progress, and under the banner of constitutionalism. His followers could not, indeed, be prevented from acting in some degree according to their own imperfect lights. "Large numbers of the fanatical population" were summoned to Cairo. Sir Frank Lascelles thought they "might become a source of real danger." Provided proceedings of this sort were kept within proper bounds, they might afford powerful aid to the cause. But it would be impolitic if the Khedive were too openly associated with the crude ideas and ill-judged proceedings of his ignorant followers. It would be wiser to pose as an enlightened ruler, following the popular will and, at the same time, standing as a guardian angel between Moslem fanaticism and modern civilisation.

Ismail Pasha was employing dangerous instruments. First, he encouraged mutiny in his own army. Then he played with the uncongenial idea of introducing free institutions into the country. This was perilous work for a despotic ruler. The soldiers had learnt their power, and even amongst the poor ignorant people, who, at their master's behest, asked for things of which the large majority were completely ignorant, there might be some few who would take him at his word. The seed then sown did, in fact, bring forth some fruit at a later period of Egyptian history.

For the moment, however, the success of the manœuvre appeared complete. Europe must surely see that the Egyptian people were singularly unanimous, and that an enlightened ruler was

SO

about to confer on them the blessings of a constitutional form of government, which they ardently desired. The Khedive had defied two powerful Governments; he had got rid of his European advisers; and he had appointed in their places a number of men who would implicitly obey his orders, and who, albeit free institutions were to be introduced, would have no scruples in acting on the most approved principles of personal government. European Governments might perhaps lecture him, but international rivalry was intense that no common action of a serious nature was to be feared. He had, indeed, drawn a heavy draft on the credulity of Europe. Even those who were not conversant with Eastern affairs might not unnaturally think that when an Oriental Gracchus complained of sedition his arguments were not to be accepted without some reserve. Nevertheless, the scheme would probably have been successful if the financial plan, which the Khedive had pledged himself to carry out, had been based on any solid foundation. If he had been able to pay his debts, no excuse would have existed for further interference from abroad. Unfortunately for the Khedive, his financial plan was impossible of execution. The entire scheme crumbled to the ground and, in falling, overwhelmed its author.

CHAPTER VII

THE REPORT OF THE COMMISSION

APRIL 1879

Declaration of bankruptcy-Principles of the settlement-The Khedive's Civil List-The Ouchouri land-tax-The Rouznameh loan-The law of the Moukábala-Reductions of taxation-Composition with the creditors-Comments on the report-The Commissioners resign-The Khedive's counter-proposals-Revival of the practices of the old régime The Commissioners of the Debt institute legal proceedings against the Egyptian Government-My departure from Egypt.

DURING all this period, the Commission of Inquiry had been sitting with a view to the preparation of a plan for the settlement of the financial situation. It is unnecessary to enter into all the complicated details of the questions which came under the consideration of the Commissioners. But it will be desirable to state the main conclusions at which they arrived.

The Commissioners began their report1 by stating that the Egyptian Government were bankrupt, and, moreover, that the state of bankruptcy had really commenced on April 6, 1876, on which day the Khedive suspended payment of the Treasury bills falling due. It was true that since that date not only had the interest on the debt been paid, but a sum of £2,645,000 had been devoted to sinking

1 The first draft of this report was prepared by myself. It, of course, underwent a good many modifications before a final text was approved. The French was revised by M. de Blignières.

Leur

fund. As purchases of stock were made in the market at prices varying from 314 to 43, nominal capital to the extent of £4,858,000 had been extinguished. On the other hand, the actual deficits of the two years, 1877 and 1878, amounted to no less than £4,822,000. The floating debt had, therefore, been increased by an amount of £2,177,000 in excess of the money applied to sinking fund. "Payer les coupons, the Commissioners said, "dans ces conditions, c'est distribuer des dividendes fictifs, et l'on sait à quels résultats arrivent les sociétés qui persévèrent dans cette voie. situation paraît brillante jusqu'au jour ou la ruine est irrémédiable." In truth, the taxpayers and the creditors had alike suffered from the delay which had occurred in recognising the true facts of the case. The only sound starting-point for the establishment of a better order of things was to be found in facing the facts boldly. "Le pays," M. de Blignières said, "est saigné à blanc. Measures such as those which had been heretofore adopted to produce a fictitious appearance of solvency, must be discarded. The annual expenditure must be brought down to the limits of the annual revenue. It was a great point gained that these preliminary truths should be officially recognised by a trustworthy body of Europeans, amongst whom were included the representatives of the bondholders.

It

Having ascertained beyond doubt that the Egyptian Government could not meet all their financial engagements, the Commissioners proceeded to lay down the principles which should form the basis of a composition with the creditors of the State. was impossible to do justice to all the interests involved. "Le système de gouverner le pays,' we said, "jusqu'à présent en vigueur a rendu impossible de rendre justice à tous les intérêts engagés. Le seul résultat auquel le nouveau