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subject to the acceptance by the Powers of the British financial proposals, the British troops in Egypt were to be withdrawn at a fixed date, unless the Powers, in the meantime, should agree to their remaining.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.

By the 13th June, 1885, the Commission had agreed on the text of a convention by which the freedom of navigation of the Canal in war-time was to be secured, and the Commission then concluded its sittings.

It should be mentioned that the British delegates, in approving the arrangement, formally declared that they did so under express reservation against the application of any of the clauses which might be incompatible with the existing situation in Egypt, or which might fetter the action of Her Majesty's Government or the movements of Her Majesty's forces during the British occupation of Egypt. From the date last mentioned, the question was under discussion by the respective Governments till more than three years later, when the Convention was concluded, and finally ratified by the Powers on the 22nd December, 1888.

The principal provisions of the Convention were the following, viz.:--

That the Canal should be open to both merchant vessels and men-of-war both in time of war and peace; that the Canal should not be subject to the exercise of the right of blockade; that no act of hostility should be committed in the Canal, its ports of access, or within a radius of three miles; that vessels of belligerents should only take in supplies so far as they were actually necessary, and that their stay in port should be limited to twenty-four hours; that the like interval should elapse between the sailing of a belligerent vessel and the departure of a vessel of a hostile Power; that no belligerent Power should disembark or embark either troops or munitions of war; that no vessel of war belonging to the contracting Powers should be stationed in the Canal, and not more than two at Port Saïd or Suez; that the restrictions imposed should not apply to measures which the Sultan or the Khedive might take for the defence of Egypt by their own forces or for the maintenance of public order; and that no fortifications should be erected.

Referring to a former chapter dealing with M. de. Lesseps' contention as to the neutrality of the Canal, it is worthy of note that in no part of the Convention does the word "neutrality" occur, and it is a fact that in Lord Salisbury's instructions to the British delegates they were expressly warned to avoid using that expression and to substitute for it the term "freedom of navigation."

_The Army of Occupation._ In August, 1885, the continued presence of the Army of Occupation (then 14,000 in number) had for some time been producing increased irritation on the part of the Sultan, and also of the French Government. Sir H. Drummond-Wolff was then sent to the East with the object of endeavouring to arrive at some understanding with regard to the withdrawal of the British troops. The British envoy was also, in combination with the Turkish commissioner Moukhtar Pasha, to consider the steps to be taken for tranquillizing the Soudan, and to inquire what changes might be necessary in the civil administration of Egypt.

The British commissioner was received by the Sultan on 29th August, and having signed a preliminary convention with the Turkish Minister of Foreign Affairs at Constantinople, came on to Cairo two months later, where he was joined by his colleague.

Their joint inquiry lasted till the end of 1886, and resulted in various suggestions which were not adopted.

In January, 1887, the Sultan, backed by France, was pressing the British Government to name a day for the evacuation, and, with a view to meeting his views as far as possible, a definite convention on the subject was signed by the two commissioners on the 22nd May, 1887.

According to this agreement, the British troops were to withdraw at the end of three years, unless at the expiration of that period external or internal danger should render the postponement of the evacuation necessary, in which case the troops were to be withdrawn as soon as the danger should have disappeared. Two years after the withdrawal, the supervision exercised by Great Britain over the Egyptian army was to cease. Thenceforward Egypt was to enjoy territorial immunity, and, on the ratification of the Convention, the Powers were to be invited to recognize and guarantee the inviolability of Egyptian territory. Nevertheless, the Convention continued, the Turkish Government was to have the right to occupy the country militarily if there should be danger from invasion without, or if order and security were threatened within. On the other hand, the British Government reserved the right to send, in the above-mentioned cases, troops which would take the measures necessary to remove those dangers. Lastly, both the Ottoman and British troops were to withdraw as soon as the causes calling for their intervention should be removed.

The essential point in the agreement was the recognition, by the Sultan, of England's right to reoccupy Egypt, on emergency, and this at once gave rise to trouble.

As soon as the terms of the Convention were communicated to the French Government, the French Ambassador was rampant everywhere, and both he and his Russian colleague at Constantinople made the most violent opposition. They lost no opportunity of putting pressure on the Sultan, who at first was disposed to abide by the arrangement. They went so far as to declare that, if he ratified the Convention, France and Russia would thereby have a right to occupy provinces of the Turkish Empire, and to leave only after a similar convention should be concluded with them. They also hinted that France might do this in Syria, and Russia in Armenia. Austria, Germany, and Italy, on the other hand, urged the ratification of the Convention, but the poor Sultan was too much alarmed to consent, and, on the 14th July, proposed to England to throw over the agreement which his Ministers had signed, and to reopen negotiations for a new convention altogether.

This was a little too much for Lord Salisbury, then Foreign Secretary and Prime Minister. Needless to say the mission of the British envoy, upon which £25,046 in money and two years in time had been wasted, came to an end, and Sir H. Drummond-Wolff, who had already been waiting for a month to obtain the desired ratification, left Constantinople on the 15th. His colleague, Moukhtar Pasha, whose occupation was now gone, nevertheless remained in Egypt, where he is to be found at the present date, drawing a handsome salary, but with no defined duties.

The failure of the negotiations was probably as little regretted by Lord Salisbury as it was by everybody else having the welfare of Egypt at heart. Although the time may arrive when that country will be in a position to walk alone, in 1890 (the period fixed for the withdrawal of the Army of Occupation) that time had not been reached. The reforms inaugurated were then only beginning to bear fruit, and, without the supporting influence afforded by the presence of British troops, ran the risk of being only imperfectly carried into effect, even if they did not perish altogether.

It must be conceded that, considered merely as a military force, the presence of the Army of Occupation has for years ceased to be necessary. British Ministers have over and over again declared that England's intervention in Egypt was for the purpose of suppressing anarchy, supporting the authority of the Khedive, and restoring public order. No one can deny that all these objects have long since been attained, and those who attempt to justify the retention of the British troops on the supposition that their withdrawal might be followed by fresh troubles adopt an argument similar to that of a person who, having extinguished a conflagration in his neighbour's house, should persist in occupying it on the pretence that the fire might break out again.

But regarded as a moral support to England in carrying out her extended programme of reforming Egyptian institutions, the presence of the Army of Occupation may be for some time to come a necessity.

Writing on this subject, Sir Alfred Milner, in his admirable work "England in Egypt," remarks as follows:--

"The British troops have of course no sort of status in the country. They are not the soldiers of the Khedive, or foreign soldiers invited by the Khedive; they are not the soldiers of the protecting Power, because in theory there is no protecting Power. In theory, their presence is an accident, and their character that of simple visitors. At the present moment they are no longer, from the military point of view, of vital importance, for their numbers have been repeatedly reduced, and for several years past they have not exceeded, and do not now (1892) exceed, 3,000 men. It is true that their presence relieves a certain portion of the Egyptian army from duties it would otherwise have to perform, and that, if the British troops were altogether withdrawn, the number of Egyptian soldiers might have to be somewhat increased. But its value as part of the defensive forces of the country does not, of course, constitute the real importance and meaning of the British Army of Occupation. It is as the outward and visible sign of the predominance of British influence, of the special interest taken by Great Britain in the affairs of Egypt, that that army is such an important element in the present situation. Its moral effect is out of all proportion to its actual strength. The presence of a single British regiment lends a weight they would not otherwise possess to the counsels of the British Consul-General. Take the troops away, and you must either run the risk of a decline of British influence, which would imperil the work of reform, or devise, for a time at least, some new and equivalent support for that influence, a problem not perhaps impossible, but certainly difficult of solution."