§ MR. T. P. O'CONNOR, who had given Notice that he would call attention to the circumstances of the issue of Egyptian loans by Messrs. Goschen and; Früuliling, and other English houses; and to move—
That the representative of Her Majesty at the Conference of the Great Powers on the Egyptian Question ought not, in the opinion of this House, to propose any reduction in the rates of interest payable to the creditors of Egypt among the subjects of Germany, France, and other Foreign Powers, unless such proposal be accompanied by a resolution calling for the refunding of the excess of the ordinary rate of commission received by the firm of Messrs. Goschen and Frühling, and by other British subjects who have been engaged in floating loans for the late Khedive of Egypt,said, that he was precluded from moving the Motion which stood in his name by the Forms of the House; but he would call attention to the subject generally. The House would perceive that the Motion consisted of two parts. It called attention to the manner in which loans had been raised by British firms, and it 317 invited the British Representative at the coming Conference to take up a particular line. He would remind the House that the hon. Member for Wicklow (Mr. M'Coan), who had a very intimate acquaintance with the affairs of Egypt, had on a previous occasion drawn a distinction between, the case of the bondholder and that of the loanmonger. The bondholder had, he said, a claim for high interest, because his investment was of a somewhat perilous character —that possibly he might not get all his principal back, and possibly might not get all his interest back. But the hon. Gentleman stated that the case of the loanmonger was very different; for, in the first place, he ran little risk; and, in the second place, he got his money down, and that accordingly the loanmonger had not the same right to a high rate of interest as the bondholder had. The hon. Gentleman further stated that between the years 1862 and 1879 the nominal loans amounted to £77,000,000, but that of those nominal loans only £55,000,000 had been received.
§ MR. GOSCHENWill the hon. Gentleman give the reference for that statement?
§ MR. T. P. O'CONNORI am quoting from the speech of the hon. Member for Wicklow, made in Committee of Supply on the despatch of the Forces to the Mediterranean.
§ MR. GOSCHENThe hon. Member in his last speech on this subject made a misquotation of £20,000,000. He mentioned £75,000,000, whereas the hon. Member for Wicklow gave the figure as £55,000,000.
§ MR. T. P. O'CONNORI am quoting from the speech of the hon. Member for Wicklow, and if I make a mistake, he will correct me.
§ MR. GOSCHENI think the hon. Member for Wicklow will bear me out that the figure of £75,000,000 was erroroneously quoted, and that it was £55,000,000
§ MR. M'COANsaid, that he had not intended to take any part in the discussion that evening, and was not, therefore, prepared to do so; but within the last two or three hours he had jotted down a brief note of the figures, which showed that the whole of the nine loans negotiated between 1862 and 1879 amounted to a nominal total of £77,000,000, and that the net proceeds of those loans were £55,589,000. It 318 was due, however, to the contractors to state that he never meant to say that they had pocketed the difference between the nominal and the net amount.
§ MR. T. P. O'CONNORIf the right hon. Gentleman wishes to make a correction, I will sit down and let him make any explanation he pleases.
§ MR. GOSCHENThe hon. Member quotes from a speech delivered by the hon. Member for Wicklow. He also quoted from that speech the last time he addressed the House upon the subject. He quoted the figures given by the hon. Member for Wicklow as £75,870,000, instead of £55,870,000. The hon. Gentleman has now given the same figures again instead of £55,870.000. It is a clerical error of the hon. Member.
§ MR. T. P. O'CONNORsaid, the hon. Member for Wicklow made two speeches on this question. In one of those speeches the bon. Member stated that the amount was £77,000,000 odd. The hon. Member also made the statement that the actual sum received by the Egyptian Treasury was not £77,000,000, but £55,850,000. The hon. Member for Wicklow admitted that he had correctly quoted his speech. He would now say a few words with regard to the character of these loans. The nominal amount of the first of the three loans issued by the firm of Erühling and Goschen was £3,292,000, and the actual amount received by the Egyptian Treasury was £2,500,000. The nominal amount of the second loan was £5,704,000, while the amount actually received by the Khedive was £4,864,063, and the third loan "was of the nominal amount of £3,000,000, while the amount actually received by the Khedive was £2,640,000. He had put down on the Notice Paper a reference to two other firms, and he wished to call particular attention to two other loans which wore commented upon by the hon. Member for Wicklow. In 1868 there was a loan of the nominal value of £11,890,000, and of that nominal amount the Egyptian Treasury received £7,193,334. Again, in 1873, there was an immense loan of £32,000,000 also issued by an English firm, and the Egyptian Treasury received £20,740,077, of which £9,000,000 were in the shape of depreciated floating stock. The House must not be under the misapprehension that this charge against these houses was I that they received the entire difference 319 between the nominal amount of the loans and the actual amount received by the Egyptian Treasury. He would point out the manner in which these loans were repaid. There were various expedients by which the indebtedness of Egypt was increased. First of all there was the enormous difference between the nominal amount of the loans and the real amount the Treasury received. Secondly there was the exorbitant interest, the minimum rate being 12½ and 13 per cent, and the maximum 30 per cent. Thirdly, there was this transaction of the £9,000,000 of depreciated stock. The result, according to Mr. (Stephen Cave's book, entitled Spoil-my the Egyptians, was that the more money Egypt paid back the larger her debt became. Mr. Cave stated that the sum of £34,898,000 had been paid away as interest in 10 years, and that, nevertheless, the principal of the debts was greater than over. Of course, the main portion of these burdens fell upon the unfortunate fellaheen, who were crushed by the taxation and most cruelly treated. Thousands of broken hearts and blasted lives cursed the day when I smail became acquainted with the resources of Occidental finance. He now came to the part which had been played in this matter by the English loanmougers. The name of the right hon. Gentleman the Member for Ripon ran through this whole sad history like a silver, or, should he say, a golden thread. It was the firm with which he was associated which first introduced lsmail Pasha to the European markets. It was the right hon. Gentleman who had the doubtful honour of being the initiator of European control in the finances of Egypt, and in all the discussions on the Egyptian Question he had boon the principal preacher of the Jingo gospel of British intervention in that country. When taken to task by the hon. Member for Wicklow (Mr. M'Coan) the right hon. Gentleman said the nominal value of the loans was of no particular importance, and he gave the instance of a Portuguese loan which was taken up at 50 per cent. If it were true that the loans which Frühling and Geschen negotiated were taken up at 50 per cent, there would, of course, be an easy way of accounting for the difference between the amount of the loan and the amount received by the Khedive. But this was 320 not the case in regard to these loans. The first, of £2,195,200, was taken up at 82½ per cent; the second, of £1,097,600, was taken up at 84½ the third, of £5,740,000, was taken up at 98; and the fourth, of £3,000,000, at 92. The first loan at 82* produced £1,811,040, and the second at 84½ £927,472, making together £2,738,512. Of this sum the Khedive received £2,500,000, and in respect of these two loans the firm of Frühling and Goschen therefore received £238,512. On all the loans the differences between the sum realized by them and the sum paid to the Khedive was £899,355. In other words, in the negotiating of loans amounting to about £11,000,000, the firm of Frühling and Goschen retained nearly £1,000,000. This was a pretty handsome commission. Then it was that, under the direction of Lord Derby, the officials of this Empire were instructed to use all their exertions for the purpose of wringing money out of the unfortunate Egyptian peasants, so that the interest on these loans might be paid. He was not addressing an assembly of bondholders, loanmougers, or financial agents, and he thought he should carry the general assent of the House with him when he said that this was a grossly exorbitant rate of interest to charge; and that if there were any reduction in the sums charged to the Treasury of Egypt on account of her financial embarrassments, there should be a refund of a portion of this money by the firm of Messrs. Frühling and Goschen. It might be that the Egyptian people had no legal claim upon these gentlemen, but assuredly they had a strong moral claim; and if he were the right hon. Member for Ripon he thought his mind and conscience would be disturbed by the reflection that the scourged backs, bastinadoed feet, the impoverished wives and children, and the broken homes of hundreds of thousands of Egyptian peasants were too large a price at which to purchase even enormous wealth. He passed on to another transaction in which the right hon. Gentleman and his firm were involved. He went to Egypt in 1876, he went there in the interest, as he himself stated, of 2,000 holders of Egyptian Stocks, he went there to enforce the carrying out of the flagitious bargains that had been made between the Egyptian Killer and European financiers, and 321 he (Mr. T. P. O'Connor) had to complain very strongly not merely of his conduct in this matter, but still more of the conduct of the Government. The Consul General who had given the terrible pictures he had already quoted with regard to the misery experienced from the interest on these loans amongst the peasants, the man who described how the peasants were obliged to pay one or two, and then three years' taxation in advance, who described the fellaheen as in many cases reduced almost to starvation, who had declared that the taxes were wrung out of them by torture, this same official did everything he could to induce the Khedive to believe that behind Mr. Goschen and his 2,000 bondholders of Egyptian Stock stood the might and influence of this great Empire. In other words, the political position of the right hon. Gentleman was used for compelling the fellaheen to pay more taxes, to undergo more starvation, and to have additional applicatioa of the courbash, to back and to feet. What did the right hon. Gentleman do? He (Mr. T. P. O'Connor) failed to see any proof whatever of any sentiment in what the right hon. Gentleman did except that of securing the last farthing for the bondholders that the Egyptian peasant could be pursuaded or tortured into giving. More than that, the right hon. Gentleman made himself a partner in perhaps the most scandalous transaction of the ruin of Ismail Pasha. He had informed the House of the nature of the Law of Moukabala. On the strength of the pledges made under that law, £12,000,000 had been raised from the peasants between 1872 and 1875, and by 1879 £17,000,000 were raised. Yet the right hon. Member for Ripon, as part of his stipulation in his arrangements with the Khedive, consented to deprive the landholders of the reduction of the rent to which they were entitled in consequence of having paid these taxes in advance. Finally, on this part of the question the right hon. Gentleman, who had, he (Mr. T. P. O'Connor) believed, the deserved reputation of financial ability, estimated the Revenue of Egypt at £10,000,000. Everybody now knew that this estimate was proved to be far above the amount that Egypt could produce, and the result of the extortion of the Revenue of Egypt was that the bondholders were able to 322 secure more favourable terms, and the hapless peasants were more cruelly taxed. He believed the defence made for the right hon. Gentleman was that he was deceived by the Khedive. It looked as if he had no objection to being deceived. The right hon. Gentleman had been, whenever Egypt had been discussed in this House, one of the foremost, as he was admittedly one of the ablest, advocates of the policy of intervention in that country. He had no hesitation in saying that the right hon. Gentleman had a large share of responsibility for the invasion of Egypt by this country, which had cost so many thousands of lives and so much treasure, and was now bringing such a tragic Nemesis to all who were concerned in it. He had laid the materials before the House, which would enable it to form a judgment as to the title that the right hon. Gentleman had to take up such a position, and he hoped the remarks which he had made would help to awake the consciences of the people of England and the consciences of Members of this House to the odious and terrible responsibility upon the Ministry—upon any country—upon any Parliament which would perpetuate the extortions of loan-mongers and bondholders and the miseries and sufferings of the Egyptian people at large. Already he thought he saw signs of a better and healthier state of feeling on this question in the country and in this House, and in the rise of that better feeling he saw the share of the right hon. Gentleman the Member for Ripon in the affairs of Egypt receiving their due and proper estimate. The time he hoped had passed, and passed for ever, when he and his like would have any influence over the decisions and resolves of this country in her Egyptian policy.
§ MR. M'COANsaid, that in justice to the firm of Frühling and Goschen he should point out that of the nine loans negotiated by the Egyptian Government during the last years of Said Pasha down to the abdication of Ismail Pasha in 1879, that firm had negotiated only three —namely, those of 1862, 1864, and 1868. No doubt, £900,000 was a large sum to be charged as commission on these loans; but the expense attending the issue of such operations was always great, and the commissions on many of the other loans were even higher. They must 323 bear in mind that in Egypt 12 per cent was the legal and ordinary rate of interest. The average rate of interest on the loans negotiated by the firm of Frühling and Goschen was 8½ per cent, which in Egypt was a very low rate. The loan issued by the Anglo-Egyptian Bank cost the Treasury 11 per cent, and that issued by the Ottoman Bank cost 12 per cent. The advances made at the same time by the Anglo-Egyptian Bank rose in some instances as high as 28 per cent. It was true that these Frühling-Goschen loans were in some sort exceptional, as they had the advantage of being well secured, and they had a very high sinking fund. By the operation of those sinking funds more inconvenience, however, was caused to the Egyptian Treasury than by some of the loans that paid a higher rate of interest. Passing from the loans of Messrs. Frühling and Gosohen to those of Messrs. Oppenheim in 1868 and 1873, he reminded the House that the latter amounted to the nominal sum of £32,000,000, but that the net amount received by the Egyptian Treasury was only £17,810,000. That sum, again, was represented by only £11,000,000 in cash and £9,000,000 of "depreciated Treasury bonds, which were bought in the market at 65, and paid into the Egyptian Treasury at 93. In face of those facts, he thought a great deal too much had been said of the Frühling and Goschen loans, while those other transactions had received much loss comment than they deserved. Then, again, there was the Rothschild Loan, negotiated in 1879, of £8,500,000 nominal, which produced only £5,992,000. It was, however, due to this firm to say that the balance between these two sums in no way represented their share of the profits. Their commission was the ordinary and moderate one of 2½ per cent; nor was even that all clear profit. In connection with the issue of a large loan, great expense had to be met in advertising, in various commissions, in "squaring" the City editors, and other diplomacy of various kinds. He thought that in regard to the loans from 1862 to 1873 a great deal of censure attached to all those contractors who had pandered to the vanity, the extravagance, and what might even be called the financial vices of Ismail Pasha. At the same time, he felt bound to say, of the whole of those concerned, the firm of Frühling 324 and Goschen, in his opinion, came out of the business with the cleanest hands.
§ MR. GOSCHENsaid, the House would probably expect him to say a few words on this subject, seeing that it concerned him personally. He wished to begin by referring, first, to the mission which he undertook in 1876. The hon. Member had referred to the question of the Moukabala, and had charged him with, if he understood him rightly, having changed as against the fellaheen the arrangements that had been made with regard to the Moukabala.
§ MR. T. P. O'CONNORI said that the statement was made by Mr. Seymour Keay.
§ MR. GOSCHENsaid, that all the statements of the hon. Member had been founded on second-hand authorities, and that he had not quoted a single case from original documents. The fact was, that as regarded the Moukabala he insisted and made it a condition of going to Egypt that the engagements towards the fellaheen taken under the Moukabala laws should be respected. Under the previous decree they had been tampered with, and before he went to Egypt he had the statement of the Viceroy that in no case would any arrangement be made which would upset the Moukabala. A change was made in 1880; but with that he had absolutely nothing to do. So far as the Moukabala was concerned, he took a very different line from that which he understood the hon. Member for Galway to charge him with. He would not make any defence with regard to the engagements and the arrangements made in 1876. That he had done often before; but he wished to address himself to one or two mistakes which had been made by the hon. Member with regard to figures and to facts. He wished to remind the House that since 1866 the firm with which he had formerly been connected had neither directly nor indirectly anything to do with the negotiations of Egyptian loans. They had had no such transactions with the Egyptian Government for 18 or 20 years. With regard to the charges which the hon. Member had brought forward respecting the negotiation of those loans, this was not the first speech which the hon. Member had made upon the subject. He made a speech on the 19th of February, and in that speech he had relied, as he had 325 done that night, upon the speech of the hon. Member for Wicklow (Mr. M'Ooan) on the 25th of July, 1882; but in. his speech of the 19th of February, strange to say, the hon. Member for Galway misquoted two figures given by the hon. Member for Wicklow, making a mistake in one case of £20,000,000. ["No, no!"]
MR. T. P. O'CONNOEsaid, that the figures he had quoted were those which he had found in a speech of the hon. Member for Wicklow, and that hon. Member had confirmed those figures again that night.
§ MR. GOSCHENsaid, it was not so. The hon. Member said that, although the nominal amount of the loans was £75,870,000, the actual sum received by the Egyptian Treasury was £35,000,000. That figure of £35,000,000 did occur in the speech of the hon. Member for Wicklow; but the hon. Member for Wicklow had contrasted it, not with £75,870,000, but with £55,870,000.
§ MR. M'COANexplained that it referred to the period up to 1875.
MR. GOSOHENsaid, that the hon. Member for Galway had clearly made a mistake in quoting the hon. Member for Wicklow. A five slipped into his speech instead of a seven. There was another mis-quotation from the hon. Member for Wicklow (Mr. T. P. O'Connor). In the samespeech, the hon. Gentleman said that the second loan issued in 1864 had been of a nominal amount of £5,704,000, and the actual sum received by the Egyptian Government was £2,500,000. That night he had stated the figures as £4,860,000. Thus, the last time the hon. Member spoke he gave the figures as £2,500,000, instead of £4,860,000.
§ MR. T. P. O'CONNORsaid, that he never revised his speeches for Hansard.
§ MR. GOSCHENNo; but the hon. Member had repeated his mistake.
§ MR. T. P. O'CONNOR, said, that the figures he had given that night were quoted from the hon. Member for Wicklow, who had just stated that they were perfectly accurate.
§ MR. GOSCHENsaid, that the hon. Gentleman had not yet heard him out. When the hon. Gentleman asked the Question of the Prime Minister, whether there should not be a refunding of the commission beyond the difference between the amount received by the contractors from the public and the amount 326 given to the Egyptian Treasury, did he remember that he put his Notice on the Paper without giving any figures at all; but that he sprung the figures upon the Prime Minister, and to elucidate his Question, he gave £12,000,000 as the nominal amount, and £7,640.000 as the amount received by the Khedive of Egypt? That involved a repetition of the mistake he had made before—amis-take of more than £2,300,000, by giving £2,500,000 instead of £4,860,000. That was the way in which the hon. Member put Questions intended as an attack on the character and reputation of a firm. When a Motion was made in order to attack private character and reputation, surely one had a right to demand that care should, at least, be taken in examining the figures that were put before the House. When the hon. Member put his Question the other day, he alluded to the nominal amount of £12,000,000, and contrasted it with £7,500,000 received by the Khedive. Now he had reduced the figures; but the hon. Member had spoken to-night of £900,000 as commission. That figure was incorrect. Another hon. Member had made a calculation which put it at £800,000.
§ MR. DIXON-HARTLANDsaid, he had taken it as £799,000.
§ MR. GOSCHENsaid, that the hon. Member had stated that that sum had gone into the pocket of Messrs. Frühling and Goschen; but he had not given a tittle of proof of anything of the kind. Messrs. Frühling and Goschen were not the contractors for those loans, but were the London agents for them. The terms of those loans, and the whole arrangements, had been made before they were submitted to his firm; and it was the contractors who came to them and asked them to issue those loans in the London market. No such sum as thatof£800,000 which had been mentioned by the hon. Member had ever gone into the pocket of the firm, nor any sum in any way approaching to it. He wished to say one word in confirmation of what had fallen from the hon. Member for Wicklow as to the rate at which those loans had been issued. It must be remembered that 22 years ago the whole position of the Money Market was totally different. It was somewhat of ancient history, but the House might be interested to know that when the 1864 Loan 327 was issued, the Bank rate in England itself was 8 per cent. In January, 1866, when the Railway Loan was issued, the Bank rate was again 8 per cent; and at that time Italy was borrowing at an interest of 6⅔ per cent, and Austria at over 7 per cent. Again, by one example, he would show that there was no criterion in the difference between the amount of nominal value and cash received, which was so constantly alluded to. Austria had had to give £14,800,000 Stock for £10,000,000 in 1865, while Egypt had given £12,000,000 for £10,000,000. Such figures proved nothing. In conclusion, he was quite content to make this declaration to the House, that the commissions given to the firm on the loans in question had been strictly within the limits of commercial usage and custom, and he would be prepared to justify them to anyone.
§ Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.
§ Supply considered in Committee; Committee report Progress; to sit again upon Monday next.