difficulties connected with the appointment of a Commission of Liquidation had been overcome. After discussions which lasted some three months, the Commissioners agreed on a law which was submitted to the Khedive and signed by him on July 17, 1880. The Commissioners never sent in any report explanatory of the provisions of the law. In a letter addressed by Sir Rivers Wilson to Lord Granville, who succeeded Lord Salisbury at the Foreign Office on April 28, 1880, it was stated that there "was an apprehension lest the divergencies of opinion which manifested themselves on certain points among the Commissioners should render impossible a unanimous report, and lead to reservations or even protests detracting from the authority of the official decisions of the Commission."

It is unnecessary to allude at any length to these differences of opinion. It will be sufficient to say that some members of the Commission, who were supported by the Controllers, were in favour of a cautious estimate of revenue, and an estimate of administrative expenditure which would have left a margin to be applied to the benefit of the country, whilst others took a more optimistic view of the revenue and endeavoured, in the bondholding interest, to keep the administrative expenditure down to the lowest possible figure. Eventually, a compromise was effected. The revenue was taken at £E.8,362,000 for 1880 and 1881, and at £E.8,412,000 for subsequent years. The administrative expenditure was fixed at £E.4,520,000. The rate of interest on the Unified Debt was fixed at 4 per cent. The outstanding portions of the short loans were absorbed into the Unified Debt. A fresh issue of Preference Stock to the extent of £E.5,600,000 was made in order to assist in paying the Floating Debt. The Floating

Debt creditors were divided into three categories, viz. privileged creditors, creditors holding special securities, and ordinary creditors. The privileged creditors were paid in full. Special arrangements were made with the creditors holding special securities. Their claims were reduced by about 7 per cent. The ordinary creditors received 30 per cent in cash and 70 per cent in Preference Stock. At the price then current, they lost 81 per cent on the capital of their claims. On the whole, it may be said that the arrangement was a fair one. Its main defect was that too large a proportion of revenue (66 per cent) was mortgaged to the bondholders, whilst the balance left at the disposal of the Government was insufficient.

Thus, matters were improving in Egypt. Several beneficial reforms had been carried out. Some of the worst features of the old oppressive system of government had disappeared. The relations between the Government and their creditors were established on a legal basis, and the charge on account of debt, although still very heavy, had been brought more into conformity than heretofore with the resources of the country. There were, however, some dark specks on the horizon. For instance, a petition was circulated amongst the officers of the army, couched in language which was intended to incite the Moslem population against the European Control. It concluded with a threat that the petitioners might have recourse to the sword to attain their ends.

In June 1880, I was appointed Financial Member of the Governor-General's Council in India. Sir Auckland Colvin succeeded me as ControllerGeneral in Egypt.

In December 1880, I visited Cairo on my way to India. At that time, it was manifest that the only serious danger which threatened Egypt arose

from the fact that the discipline of the army had been profoundly shaken by the events of 1878. I warned Riaz Pasha of this danger, and urged him to remedy any grievances of which the army could justly complain, but at the same time to treat severely any signs of insubordination. Riaz Pasha said that my warning was unnecessary, for that not the smallest danger was to be apprehended from the army.

For the moment, therefore, it appeared that Egypt had at last fairly entered the path of reform, and that all that was required was time to complete the superstructure of which the foundations had been so laboriously laid.

CHAPTER XI

THE MUTINY OF THE EGYPTIAN ARMY

JANUARY-SEPTEMBER 1881

Discontent amongst the officers-They petition Riaz Pasha-Mutiny of February 1-Dismissal of the Minister of War-Imprudent conduct of the Khedive-Conduct of the French Consul-GeneralIncrease of discontent in the army-Mutiny of September 9Sir Auckland Colvin-Demands of the mutineers-Dismissal of the Ministers-Reluctance of Chérif Pasha_to accept officeNomination of the Chérif Ministry-Chérif Pasha supports the European Control-Arábi is the real ruler of Egypt-His conduct due to fear-Situation created by the mutiny.

SIR JOHN BOWRING wrote in 1840: "The situation of the Osmanlis in Egypt is remarkable; they exercise an extraordinary influence, possess most of the high offices of state, and, indeed, are the depositories of power throughout the country. They are few, but they tyrannise; the Arabs are many, but obey."

After Sir John Bowring wrote these lines, the Egyptians, properly so called, gradually acquired a greater share in the administration of the country, but in 1881, as in 1840, the Turks were the "paramount rulers." In the army, however, the number and influence of the Turks sensibly diminished as time went on. During the reigns of Abbas, Said, and Ismail, the Egyptian element amongst the officers had increased to such an extent as to jeopardise the little that remained of the still dominant Turco-Circassian element.

The large number of officers who were placed on half-pay in 1878 were, for the most part, Egyptians. The discontent due to this cause was increased by the fact that, whilst great and in some degree successful efforts were made to improve the civil administration of the country, nothing was done to improve the condition of the army. The prevailing discontent eventually found expression in a petition addressed by certain officers of the army to Riaz Pasha on January 15, 1881.

Áhmed Arábi, an Egyptian of fellah origin, who was colonel of the 4th Regiment, soon took the lead in the movement which was thus begun. But the prime mover in the preparation of the petition was Colonel Ali Bey Fehmi, who commanded the 1st Regiment. His regiment had been the object of special attention on the part of the Khedive. It guarded the palace. For some time previously, however, there had been a marked cessation of friendly relations between the Khedive and Ali Bey Fehmi. In the East, to be in disgrace is to be in danger. Ali Bey Fehmi determined to strengthen his position by showing that the Egyptian portion of the army could no longer be treated with neglect, and that he himself could not with impunity be dismissed or exiled.

The petition set forth that the Minister of War, Osman Pasha Rifki, had treated the Egyptian officers of the army unjustly in the matter of promotions. He had behaved "as if they were his enemies, or as if God had sent him to venge His wrath on the Egyptians." Officers had been dismissed from the service without any legal inquiry. The petitioners, therefore, made two demands. The first was that the Minister of War should be removed, "as he was incompetent to hold such a high position." The second was that an inquiry should be held into the qualifications of those who