HC Deb 05 August 1885 vol 300 cc1200-28
MR. LABOUCHERE

, in moving— That this Bill should not be proceeded with until the Government has explained to the House the policy of the Government with regard to Egypt, and the condition under which the recent guaranteed loan was issued. said, that although he had not been a very staunch supporter of the late Government with regard to their Egyptian policy he had a general confidence in their administration of affairs, and thought it would compare favourably with that of the present Government. The views of the late Government in respect to Egypt were set forth in The Fortnightly Review, he thought in the year 1878, by the right hon. Gentleman the Member for Mid Lothian (Mr. Gladstone), and they practically amounted to this—that we should have nothing to do with Egypt. The House had since then been perpetually told that the Egyptian policy of the late Government was one of evacuation, that they were to leave Egypt as soon as possible, but there had always arisen something to prevent their leaving. At one time it was the rising under Arabi, at another it was some particular business in the Soudan, and so on; but the practical outcome of it all was that at the end of four years they were still in Egypt and had a larger army there than when the late Government took Office. There were two pleas put forward for that. The first was that the previous Government had entered into pledges to support the Khedive on the Throne; but he did not think they were bound to support Tewfik against the will of his own subjects. The second plea was that, being in Egypt, they ought to establish a sound Administration there and do something for the Egyptians. Now, it would, he believed, be admitted that the Administration of Egypt was not a whit better than when they went there; it was as rotten and corrupt as ever it was. All that they could say was that they had in some way improved the prisons—that they had, in fact, whitewashed the prisons; but that was hardly a sufficient reason for interfering with the rights of the Egyptians to rule themselves and to establish the form of Government which they preferred. They talked of having set up a Representative Assembly in Egypt; but he was unable to discover whether there really was any such body at all. Certainly the Chamber of Notables seemed not to do anything, nor was its advice ever asked for. There now existed in Egypt a special Oriental despotism tempered by a number of European officials, who did good if they could to Egypt, but who certainly did good to themselves by taking largo salaries. Just before they resigned Office, the late Government entered into a Convention with the European Powers for guaranteeing a loan of £9,000,000 to enable Egypt to pay the bondholders and loan-mongers. He did not see why we should give a guarantee in order that the loan-mongers should not suffer. The present Government, however, when they took Office, found that the Convention had been concluded, and no doubt the situation was a difficult one for them. They had determined to send out to Egypt the right hon. Member for Portsmouth (Sir H. Drummond Wolff). A Notice of Motion objecting to that proceeding had been given by an hon. Member. If that Motion had been made, he himself should not have voted for it. The Government had a perfect right to send out someone to see what was going on in Egypt and to give them advice; and he did not think they could have chosen a better man than the right hon. Member for Portsmouth, who had been brought up in the Diplomatic Service, and had distinguished himself in various ways in it. The right hon. Gentleman had acted in Bulgaria with great independence of judgment and not as a Party man, and was as good a man as could be sent out. But before Parliament broke up, the House ought to know what the intentions of the Government were with regard to his Mission, and what were his instructions. Was the right hon. Member for Portsmouth going to give advice to Her Majesty's Government, and to tell them what their policy in respect to Egypt ought to be; or was he going to carry out any policy for them? For himself, he desired that the situation should not be compromised in any way, and that no fresh pledges should be entered into until the new Parliament met. He did not anticipate that they would withdraw from Egypt before the next Parliament assembled; but the House ought to have some assurance that the intention was to withdraw, to put Egypt under some sort of European guarantee, and to neutralize the country. That appeared to have been the intention of the late Government, although their intentions might have been carried out in rather an extraordinary way. Another point to which he wished to refer was the issue of the loan. A few days ago he had asked the right hon. Gentleman the Leader of the House whether, on assuming Office, he had learnt that it was the intention of the late Government to bring the loan out by tender. The right hon. Gentleman replied that that was the intention of the late Government, but that the present Government had altered that and had brought it out at a specific price. He supposed the reason of that alteration was that Prince Bismarck objected to the loan being brought out by tender, and he did not deny that there were, perhaps, reasons why the Government should yield on that point. It was stated in the Correspondence that Lord Rothschild informed the Government that applications by tender for loans were not known on the Continent. He thought he had a right, to ask why the price at which the loan was issued was so low? He did not blame Lord Rothschild in the least; he was perfectly right to make as good a bargain as he could; but it was somewhat curious that it appeared from the Correspondence that Lord Rothschild and Mr. Daniell, who, they were told, were consulted as to the price, came to the conclusion that 95½ was the price at which the loan should be issued. Why was that not done? Why was it afterwards brought out at 94¾? When the loan was brought out, it immediately went to 3 premium, and on a loan of £9,000,000 that meant no less a sum than £270,000. It was clear that if a loan brought out at 94¾, with the guarantee of the English Government, at once went to 3 premium, in the opinion of investors and bankers it was brought out too low. The House, therefore, had a right to complain that this money was taken from the Egyptians and given to other persons. A portion of it went to Germany and France, and a portion—a much larger portion—of it was distributed in the City of London. The profit on the issue of the loan was large and immediate, and the House ought to know into whoso pocket it went. They all knew the City of London was a thorough Conservative nest, and it appeared to him that one of the objects of bringing out the loan so low was not only that Prince Bismarck and his banker, Mr. Bleichröeder, might have their share of the plunder, but also that the Conservative nest in the City of London might have their share. The right hon. Gentleman the Chancellor of the Exchequer had said that Lord Rothschild only received £500 per £1,000,000 as commission for negotiating the loan. [The CHANCELLOR of the EXCHEQUER: And reasonable incidental expenses.] He had at once asked the right hon. Gentleman whether brokerage was included in that sum, and it turned out that there was a brokerage besides incidental expenses, of ¼ per cent, or £22,000 on the whole loan. The house of Rothschilds gave ⅛ per cent brokerage to any broker who obtained applications from his clients; and he could not under stand on what grounds a broker, simply for sending in applications from his client, was to receive ⅛ per cent, unless it was felt that no loan could be brought out in this country when a Conservative Government was in power without giving the Stock Exchange some little sop in order to keep them sweet for the elections. No wonder, under all the circumstances, this loan, as announced by the Conservative organs, was a great success. The origin and source of our trouble in Egypt was loan-mongering, which had now reached a state of things which, in his opinion, constituted a public scandal. He contended that the Government was bound in honour to do for Egypt precisely as they would have done for any other Dependency. What would be said in India if a loan were brought out in this country for India 3 or 4 per cent below the price of Consols, and the market price immediately went up to Consols, all the premiums being distributed among a large number of City people? Any Government would be denounced if they did such a thing; but, simply because the cost was thrown on the wretched fellahs of Egypt, it was considered reasonable that City gentlemen should get as much out of them as they could. The hon. Gentleman concluded by moving the Resolution of which he had given Notice.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "this Bill should not be proceeded with until the Government has explained to the House the policy of the Government with regard to Egypt, and the conditions under which the recent guaranteed loan was issued,"—(Mr. Labouchere,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

SIR GEORGE CAMPBELL

said, he agreed with the observations of the hon. Member for Northampton with regard to the Egyptian Loan, and hoped that some explanation would be forthcoming I from the Chancellor of the Exchequer. When people in England first heard of the Mission of Sir Henry Wolff to Egypt they said—"Good heavens! how can the Government want more information?" But he must say that, under the present circumstances, he was inclined to agreed with his hon. Friend that they could not denounce the Government for sending out a man like Sir Henry Wolff to get more information, for hon. Members had for some time been astounded at replies given to their Questions about Egyptian affairs. The Foreign Office, indeed, seemed at the present time to be a blank in regard to what was going on in Egypt. He had asked the Under Secretary as to the autonomous institutions of Egypt, and as to whether, in regard to the loan, the requirements of the Egyptian law had been complied with, whether the Legislative Council had been called together as required, and as to whether the elected Members had really been elected according to law; and the answer of the Under Secretary for Foreign Affairs was that he knew nothing about these matters. The hon. Member for Water ford (Mr. Villiers Stuart) inquired whether the abuses with which the late Government promised to deal were still in existence; and the reply was that the Foreign Office had no information whatever on the subject. This was astounding. What were we paying our agents in Egypt £5,000 or £6,000 a-year for if they gave the Foreign Office no information on such important points as these? He hoped that the Government would insist on obtaining substantial information with regard to what was going on in Egypt. It was certainly very desirable that before the House separated Her Majesty's Government should give some inkling of what their policy in Egypt was to be. He admitted that a fully developed policy in all its details could not at the present moment be expected. The Chancellor of the Exchequer had explained that Sir Henry Wolff was not going direct to Egypt, but would proceed first to Constantinople; and he added that Sir Henry Wolff's object in going to Constantinople had something to do with the defence of Egypt. It seemed as if Her Majesty's Government had some idea of calling in the aid of the Sultan for the defence of Egypt. That seemed to be an intelligible policy; whether it was a practicable one might be open to doubt. If that was the policy of the Government, he hoped they would take care that it was carried out in a way which would not work evil. The situation was really so bad that it could not be worse; it was a situation injurious to the country; and he, for one, would welcome almost any plan that would extricate us from our difficulties. Long ago, when we first went to Egypt, he had said that the effect of our going there would be that we should be the best-hated people in Europe by the Egyptians. And that had come to pass. We had piled up loan on loan, and had made no substantial reforms for the benefit of the country. He should be prepared to entertain even the plan of bringing in the Turks, though the moral sense of Europe would revolt against that being done without adequate safeguards for the autonomous institutions of Egypt. He did not object to the Turks as a people; he thought the Turks were an excellent people, and none the worse for being Mahomedans; but the Turkish Government was execrable. If autonomous institutions were given to the Turkish Provinces, it might be possible to give similar institutions to Egypt, and make that country an effective part of the Turkish Empire, employing Turkish troops for the defence of Egypt. But before anything was done in the direction of calling in the Turk the autonomous institutions of Egypt must be made a reality, so that Turkey might not be able to treat Egypt as it had treated Turkish Provinces hitherto. He hoped that Her Majesty's Government would not adopt the nonsensical view of the Sultan's power as Caliph and head of the Mahomedan religion throughout the world. It might as well be said that the Emperor of Russia was the head of the Christian religion. The present Sultan was inclined to exaggerate his semi-religious personal power, and this was the worst feature of the present Turkish Government. If Her Majesty's Government resolved to make use of the Sultan in Egypt, he should be treated, not as Caliph, but as head of a great political State and of a fine people. The condition of things in Egypt was so bad that almost any change must be for the better. He would not condemn by anticipation anything Her Majesty's Government might do; he believed they were desirous to do their best; they had succeeded to a most arduous task, and he, for one, wished them well.

SIR WILFRID LAWSON

said, that this was probably the last opportunity they would have of discussing those Egyptian matters; and as this year would be known as the £100,000,000 Budget year, it was due to the House and the country that it should be fully considered whether the Expenditure had been for the benefit of the people of this country or of any other country. The great bulk of the additional Expenditure had been incurred for slaughter in different parts of the world, or in preparations for slaughter. Some of the Members of the present Parliament would feel that they could not look back upon its proceedings with any great satisfaction. When the Liberal Party came into power it was understood that one of its great doctrines was that henceforth we were to respect the rights of nations, and that the weak nations were to be put on the same footing as the strong. Yet never had so many annexations been made as during the last live years, nor had there ever been a series of more unjust, wicked, cruel, contemptible wars. Whatever might have been the domestic policy of the late Government, their foreign policy seemed to have been nothing less than odious and revolting.

MR. SPEAKER

said, he must recall attention to the fact that there was a specific Amendment before the House, which dealt exclusively with the policy of the Government in Egypt and the conditions of the loan. The remarks of the hon. Member were more appropriate to the general question of the third reading of the Bill.

SIR WILFRID LAWSON

said, he was obliged to the Speaker for calling him back to the right path; but he objected to the whole policy that had given rise to the loan. What was the object of that policy? He supposed it was to uphold the Government of one of the most contemptible despots who had over appeared even in the East. We had brought all this evil upon ourselves by preventing people abroad from making efforts to be as free as we were. If the people of this country desired such a policy, he did not at all object to their paying £100,000,000 or £200,000,000 a-year for it. He trusted the present Government would not follow in the steps of their Predecessors. He would not say that he hoped they would not do worse, because that would be impos- sible; but he hoped they would not be equally bad. In his opinion the Government ought, before the House broke up, to state what was the object of the Mission of Sir H. Drummond Wolff. It was said that he was going to confer with the Sultan. Well, no good could come of that, or of any intrigue to prop up his power. Then Sir H. Drummond 1 Wolff was going to the Khedive. That was to go from bad to worse; and he I could not have two worse counsellors. If Sir H. Drummond Wolff went out I with a definite purpose to do good to the people of Egypt his Mission would not be objected to. Arabi was the man who had the support of public opinion in Egypt, and by his restoration we should do more good to Egypt than had been done by all the battles, and loans, and manœuvres of the last few years.

SIR JOHN HAY

said, he would like to know whether it was the intention of the Government that some portion of the £4,000,000 of the loan that was to be of immediate application would be given to those who had suffered from the cruel burning of Alexandria? It must be remembered that the destruction of life and property in Alexandria was due to the fact that the late Government neglected to land troops immediately after the bombardment. No time should be lost in reimbursing those unfortunate persons who had been ruined by the action of the Government.

MR. LABOUCHERE

said, he wished to ask the Chancellor of the Exchequer whether Messrs. Rothschild might not be able to obtain the £1,200,000 they had advanced out of the loan at the price of issue instead of in cash? because, if that was the case, they would be able to make a clear profit of £45,000, besides any previous commission.

THE CHANCELLOR OF THE EXCHEQUER

Of course, it is not at all my intention to go back upon the question which was partly raised by the hon. Baronet the Member for Carlisle (Sir Wilfrid Lawson), although I think I may express, on behalf of the Government, my thanks to the hon. Baronet for the anticipation he has formed that our action in Egypt will not be worse than that of the Government he has supported. [Sir WILFRID LAWSON: It cannot be worse.] It would not be at all desirable that we should on this occasion enter into any discussion of the past in Egypt. What I think the House has a fair right to ask for is some general statement such as I am about to make of our views with regard to the future, and especially with regard to the Mission of Sir H. Drummond Wolff, and some explanation of the circumstances of the issue of the Egyptian Loan. With regard to the Mission of Sir H. Drummond Wolff, I was glad to hear the expressions of satisfaction, so far as the personal nature of that appointment is concerned, which have fallen from several hon. Members. I may venture to say, on behalf of the Government, I think there is no one in the country to whom we could look with greater hope for good service in this matter, having regard to the diplomatic abilities which he has displayed, to the experience he possesses, and to the great success which he has achieved in a similar undertaking in Eastern Roumelia. The House will recollect the duty which he undertook in that Province; and anyone who has followed its history will be able to realize how well Sir H. Drummond Wolff performed a very difficult and delicate task, and what great benefits he conferred upon the inhabitants of that country. We may look with great hope, indeed, to the services which my right hon. Friend may be able to render in negotiations with other Powers which are not less concerned than we are in the welfare of Egypt. Sir H. Drummond Wolff will be accredited as a Special Envoy to the Sultan. I hope the House will recognize what I and other Members of Her Majesty's Government have frequently stated in the past—that we fully admit, in the first place, that we have certain obligations with reference to Egypt, which have been increasing almost weekly with every step which has been taken by this country during the past five years in that part of the world, and which entail upon us duties that cannot be neglected in the way the hon. Member for Northampton (Mr. Labouchere) would wish them to be. Well, in the second place, we also recognize the fact that we do not stand alone in Egypt, but that other Powers besides ourselves have rights and interests there, and that it is not only our duty, but an absolute necessity, for us to endeavour to act in concert with them. Now, there is one Power which has especial rights there —that is, the Porte, which is recognized by the Treaty of Paris, in which all the European Powers concurred, as having sovereign rights over Egypt. Therefore it is that we think it essential to do what we can to secure that which I am afraid has been rather neglected in the past, the goodwill of the Porte in dealing with these affairs. Sir H. Drummond Wolff will, therefore, in the first place, go to Constantinople, and, being accredited as our Special Envoy in matters of this importance and delicacy, it is not in my power to state to the House the precise instructions with which he will be provided. But I may venture to say that the object of Sir H. Drummond Wolff's Mission and of our policy in Egypt is this—to put the Egyptian Government upon a footing, with respect to the external defence of the country, to its finance, and to its internal administration, such as will gradually give security and freedom to its independent action in the future. That is a policy which I hope may recommend itself to this House. I will say nothing about the evacuation of Egypt. I think nothing could be more fatal to the success of our endeavours than to make any promises or references of that kind. We have a great task to perform, and we must endeavour, acting in the spirit I have described, to do that duty to the best of our power. Let me say one word as to the defence of Egypt. The House will, I think, be of opinion that nothing more unsatisfactory than the present conditions under which we have undertaken the defence of part of the Sultan's Dominions in that part of the world—namely, the port of Suakin, can well be conceived. Is it possible for us to enter into any arrangement with the Turkish Power by which, retaining to ourselves all necessary control, we may make such arrangements for the future as may be eventually more satisfactory to the country, and, at the same time, more in accordance with the rights of the Sovereign of that part of the world than those which exist at present? I throw that out as one of the points with which Sir Drummond Wolff will have to deal. Then with regard to matters of internal administration, in which, as we know, the hon. Member for Waterford has taken a great and philanthropic interest. We are as anxious as our Predecessors were to reform the internal administration of Egypt, and to make such changes as may be conducive to the real interests of the country. But we feel that this must be a work of time, and can only be done gradually, though I think it might be done rather more quickly than the progress already made would seem to indicate. The only way in which any progress can be made in this important work is to make it thoroughly well known to the world that we intend to remain in Egypt in order to perform it, and not to talk about immediate or early evacuation. Now, Sir, I think it will be admitted by all who have studied this question that the financial condition of Egypt is the key to the whole situation. How shall we deal with that matter? When we came into Office we found this country bound by the Convention which was practically ratified by the House in the Spring. That Convention provided for a loan of £9,000,000, to be raised on the security of an International Guarantee, for the present settlement, at any rate, of the finances of Egypt. That Convention was an inheritance from our Predecessors. We expressed our opinion as to the policy of it freely at the time. I do not wish to go back to past debates; but I see no reason to recede from the position we then took up. But when we assumed Office it had been accepted by Parliament, and this country was bound by it, and our duty was to do our best to carry it out. What was the position in which we found this matter? We found that, although the Act authorizing the English guarantee was passed in the early Spring, weeks and even months had passed, and no practical step had been taken towards issuing the loan. That was a serious state of affairs. The Government of Egypt was stated by the late Prime Minister, when pressing this Convention upon the consideration of the House, to be in the most imminent danger of bankruptcy. Before Easter we were even refused a few days' delay for the proper consideration of the subject on account of the imminence of that danger. The Egyptian Government was only saved from bankruptcy by monthly advances of a few hundred thousands made by Messrs. Rothschild on no legal security whatever, but simply on the faith of a private note from the late Foreign Secretary. That was not all. The pro- visions of the Convention for taxing the Coupons and suspending the Sinking Fund could not be carried out so long as the loan was not issued. The indemnities to which my right hon. Friend referred could not be paid. There was great distress suffered by those to whom these indemnities were owing, and constant pressure was being brought to bear on the Egyptian Government in order that these indemnities should be paid. I do not think anyone can doubt that the greatest dangers and difficulties must have occurred if the issue of this loan had been longer delayed. Why was it delayed so long? I am sorry that hon. Members are hardly yet in possession of the Correspondence issued by the Foreign Office on this subject. But they will find in No. 81 a despatch from Lord Granville to Sir Edward Malet, dated the 14th May, which shows the last offer made by Her Majesty's late Government to the German Government with reference to the issue of the loan. The question had arisen as to the mode in which the loan should be issued—whether it should be issued, as was probably originally intended, only in London, or whether it should not also be issued in Berlin and Paris; and this is the last proposal made to the German Government on the subject— I have to inform you that Her Majesty's Government are anxious to meet the wishes of Prince Bismarck, as far as possible, regarding the mode of issue of the new Egyptian Loan, and are prepared to propose the following plan to the guaranteeing Powers:—(1.) To offer the whole loan to be tendered for simultaneously in Paris, Berlin, and London in pounds sterling, it being notified that the highest tenders, wherever they may be made, would be accepted to the extent of the required amount, not exceeding £9,000,000. (2.) The tenders to be accompanied by a deposit, which would either be returned in the event of the tender not being accepted, or retained in part payment of the first instalment. (3.) The tenders to be opened simultaneously at the three capitals, and the list of the applications received at Paris and Berlin would be sent by the banks at those places authorized to receive tenders to the Bank of England, the London list being similarly sent to the Paris and Berlin bankers; the Bank of England then to allot the loan to the highest tenderers irrespective of nationality, or the city at which the tenders were received. (4.) The Governments of France and Germany to indicate without delay the bank at which they would wish that tenders should be received (one at each capital), and the Bank of England to be instructed to communicate with them as to details. I have to request your Excellency to submit this plan to Prince Bismarck, unofficially, in the first place, for his concurrence. In the event of his accepting it, Her Majesty's Government will communicate it officially to all the Powers. I quite agree with, the hon. Member for Northampton (Mr. Labouchere) that it would have been an advantage to the Egyptian Government if this loan could have been issued by tender rather than at a fixed price; and had it been possible for the loan to have been issued in the London market alone under such conditions as the late Government suggested to the German Government, undoubtedly the issue ought to have been by tender. But what was the reply of the German Government to that proposition? It is contained in No. 98 of the Papers just issued, and is a despatch, dated May 27, from Sir Edward Malet to Earl Granville— Count Hatzfeldt spoke to mc yesterday on the subject of the proposal with regard to the mode of issue of the new Egyptian Loan contained in your Lordship's despatch of the 14th instant. He said that Prince Bismarck had taken advice on the matter, and that it appeared that the method proposed of offering the loan for tender was one unknown in Germany, and the result would not be that which he desired—that is to say, that a portion of the loan should be subscribed for in Germany. The Chancellor was anxious on the subject, because he believed that the Reichstag would not authorize the guarantee of the loan unless Germany had the opportunity of taking part in the subscription, and the proposal which he had put forward was made in the interest of the Convention. Count Hatzfeldt remarked that your Lordship's offer in no way met the wish that Berlin should be added to Paris and London for the payment of the coupon, or that a share of the loan should be issued at Berlin. Count Hatzfeldt added that it would be useless to present the matter to the Reichstag in its present form, and that the Chancellor was only seeking a means to make it acceptable. What did that reply really amount to? When the Convention had been agreed to by the Powers, to all appearances Germany was unwilling to be bound by it, and desired to re-open the whole question. What were we to do? We were face to face with the great dangers to which I have alluded. We felt that it was absolutely necessary that the loan should be issued at the earliest moment, and therefore we proposed to the other Powers that it should be issued at a fixed price in London, Paris, and Berlin, in anticipation of ratification by the Parliaments which had not ratified it, and that a statement should be made on behalf of those Powers whose Parliaments had not ratified it that the measure for procuring its ratification should be submitted to them on their re-assembling at the earliest possible moment. That proposition was accepted and the loan was issued. I do not think I need dwell, after what I have read to the House, upon the suggestion of the hon. Member for Northampton, that the loan should have been issued by tender. But the hon. Member also found fault with the price fixed for the issue of the loan. Of course, it is a very difficult matter indeed to settle the price of issue of a loan of this character. Any rumour of foreign difficulties might have momentarily disturbed the market, and led to the loan being received in a manner very different from the manner in which it was received. What appeared to us of great importance was that there should be no risk of the loan being a failure. It was not only all-important to meet the financial difficulties to which I have referred, but also to re-establish credit and freedom of enterprize in Egypt itself. Therefore we preferred to err, perhaps, on the safe side, rather than run the risk of failure. I do not hesitate to say that if circumstances had permitted emission by tender a higher price might have been obtained by the Egyptian Government. But I do not think we should have been justified, after consulting the high authorities named in these Papers, in fixing a higher price than 95½. It must be remembered that this loan is really depreciated rather than increased in value by the foreign guarantee. It cannot be considered in the same light as the English Funds or the Stocks of the Metropolitan Board of Works. It is a loan of small amount. It is a loan in which, being issued in bonds payable to bearer, trustees cannot invest; and all these circumstances together make it unreasonable to expect that it would command the same price in the market as our own funds. The hon. Member for Northampton has made some allusions to the gain which he seems to suppose Messrs. Rothschild may derive from the issue of this loan. Of course, reasonable profits must be made by a house which undertakes the issue of a loan involving, no doubt, some risk to themselves. [Mr. LABOUCHERE: What risk?] Surely the issue of a loan does involve some risk. The Egyptian Loan was entrusted to Messrs. Rothschild on commission on the same terms as it would have been entrusted to the Bank of England. It was impossible for them to repay the advance of £1,300,000 which they had made to the Egyptian Government by taking an equivalent amount of Stock firm, at 95½, as by the terms of the Convention of March 18 the first proceeds of the loan were to be devoted to the payment of the Alexandria indemnities; nor was there ever any suggestion of such an arrangement. Then the hon. Member suggested that the Messrs. Rothschild might make money by reserving a large part of this loan for themselves; but the applications for that portion of the loan reserved by agreement for the London market were on such a scale that, in order to make an allotment to the public on principles similar to those which Messrs. Rothschild have always adopted, and which, so far as I know, have given general satisfaction, they will be absolutely unable to retain any large amount of the loan, if any at all.

MR. LABOUCHERE

asked whether Messrs. Rothschild had a right to retain their advances out of the loan at the price of 95?

THE CHANCELLOR OF EXCHEQUER

No; they could not. Four millions were to go to the payment of these indemnities. I really do not wish to trouble the House with the different details; but we found it to be necessary, in the circumstances I have stated to the House, that this loan should be issued by a house closely allied with the two foreign capitals in which two-thirds of the loan were to be raised. We made arrangements with that house to issue this loan on the terms stated in the Papers. We made the best arrangements in our power with the best advice at our command. It may very likely be that, both with regard to the price of the loan and the sum paid for the issue of the loan, Egypt may be worse off than if we had had a perfectly free hand in the matter. But, bound as we were by the adoption of the principle of an International Guarantee to agree that the Foreign Powers should have a share of the loan, we were obliged to adopt the only arrangement by which this could have been carried into effect. The loan would not have been issued if we had merely adhered to the position taken up by our Predecessors, and the result would have been, eventually, a greater loss to Egypt than anything which can possibly occur from the arrangements which we have made. I must apologize to the House for the length of my statement. I have endeavoured to explain the reasons for our financial action. All I would add is this—that in our policy for the future we shall be guided by the principles which I have stated, in the hope that before long we may effect some real and important improvement in Egypt, now that this financial question has at last been settled to the benefit not only of the creditors of Egypt, to whom the hon. Member alluded, but, what is of infinitely greater importance, to the advantage of the inhabitants of the country.

MR. VILLIERS STUART

said, he thought the Government had obtained exceedingly good terms in the matter of the loan. Three weeks ago British Consols had touched 94½, another war-scare would send them down to the same figure again. The contractors, therefore, in bringing them out, the Guaranteed Loan at 95 had incurred a real risk; and we, in the present position of foreign affairs, had really obtained a better bargain than could have been expected. Turning to the general question of Egypt, he could observe that this was now a dying Parliament; it was upon its death-bed, and he thought it was appropriate that in its last hours its conscience should be haunted by at least one ghost, one subject of bitter remorse, and that was the fate of Egypt. How splendid had been the opportunity we obtained there three years ago by the battle of Tel-el-Kebir! It was in our power to secure the most commanding position in the world from a political and military and a commercial point of view, a position coveted by some of the greatest nations ancient and modern. It was in our power to show to the world the spectacle of good government, liberty, and prosperity conferred by us upon a country which had been misgoverned, ground down, and plundered for ages. Such a result would have justified our interference there and vindicated our character before the whole civilized world as the champions of liberty, enlightenment, and progress, Instead of that we had bound additional burdens upon the Egyptian people, and their last state was worse than their first. He had not the heart to paint the picture of the actual condition to which we had reduced that unhappy country within three short years. As he had said, this Parliament was on its death-bed. It could not undo the past, but it could insist upon pledges as to the future—pledges from the present Government that they would do their very utmost to make what amends remained possible, and to use their power to reform abuses and establish good government. It was not even now too late. We had been constantly told that the bankrupt condition of Egypt was the reason why certain important reforms could not be proceeded with. That obstacle was now removed, and he had hoped that now at last existing abuses would be redressed; but he was bitterly disappointed at the reply to his Question on Monday. He had hoped that advantage would have been taken of it to declare an earnest intention on the part of the Government to grapple with the Egyptian difficulty with the steadfast purpose of solving it. It was duo to this Parliament, if Her Majesty's Government had such a purpose, to give it the consolation of this parting assurance; but they had had instead a reply of which no one could make head or tail. The right hon. Gentlemen who now occupied the Treasury Bench had again and again, while in Opposition, twitted the late Administration with concealing their purpose; but their utterances on the subject of Egypt were luminous as compared with those to which we were now treated. We were told that no Papers had been found in the Foreign Office bearing upon the abuses which it had been our business to remedy, and which the honour and good name of England were concerned in reforming. There existed, at all events, the able Report of Lord Dufferin on those abuses, and suggestions for their remedy. Last Session he questioned the noble Lord the Under Secretary for Foreign Affairs as to whether any step had been taken to deal with the abuses of the forced labour system, and was told in reply that reform of those abuses must wait till the financial difficulty was removed. Well, now it was removed; but on appealing for information as to the intentions of the present Cabinet on that and similar subjects they were mocked with vain words. It would be impossible to travel over the whole field of misgovernment and mismanagement of the resources of Egypt; but he would like to point out with regard to that particular one of forced labour that it was not a mere question of the personal sufferings of the victims. It affected the productiveness and prosperity of all Egypt. The cruel waste of life and labour involved in requiring the victims to work without tools, or food, or shelter was a loss, and a very serious loss, to the country. With tools and food the work could be done by one-fourth the number of men, and the remaining three-fourths could be left to attend to their farms. No one who had not personally visited the farms of those Fellaheen who were absent on forced labour duty could have any idea of the loss in production caused by compulsory neglect of irrigation. The yellow blasted look of the crops spoke for themselves. But he must not take up the time of the House, and he could do no more than glance at this one item of misgovernment. But he appealed most earnestly to Her Majesty's Ministers to give now the assurance which they evaded giving the other day. If they did not intend to establish good government in Egypt, then it would be better to withdraw; but if we were now to march out of Egypt and leave it in its present lamentable condition we should deserve the scorn and contempt of the whole civilized world.

THE MARQUESS OF HARTINGTON

I have no desire to speak at any length upon the subjects that have been brought forward in this debate, or to criticize in detail the statements of the Chancellor of the Exchequer. I will only say of the statements that have been made by the hon. Baronet the Member for Kirkcaldy (Sir George Campbell) and by the hon. Baronet the Member for Carlisle (Sir Wilfrid Lawson), although they are very severe as a criticism of the late Government, yet they are of so vague and indefinite a character that it would be simply a waste of the time of the House to go into them. It is said that the condition of Egypt could not be worse. That is a statement which it is extremely easy to make, but it is not substantiated by any detailed argument. It may be admitted that the condition of Egypt is not so satisfactory as could be wished in many respects; but I absolutely deny it is so bad that it could not be worse under any circumstances. It might, on the contrary, be a great deal worse. What is the condition of Egypt? I am not aware that the position of Europeans in Egypt is in the slightest degree insecure; their property is safe, and they are pursuing their trades and avocations in safety. Their condition might be much less secure, and they might be far less certain of reaping the fruits of their industry. As to the condition of the people of Egypt, I cannot admit the contentions of my hon. Friends. Do hon. Members suppose there is heavier taxation or more misgovernment than before? Some hon. Members may assume that Arabi was an Egyptian patriot, possessing the confidence of the Egyptian people, and animated by nothing but the highest and most patriotic motives. It is quite competent to them to hold that opinion, and to believe that if we had allowed Arabi to become master of Egypt a better state of things would have been established. But in the opinion of the late Government he was nothing but a military adventurer, and his dominion would have meant insecurity for the life and property of Europeans and of Natives in Egypt. I say that if Arabi had been allowed to pursue his career unchecked a condition of things might have been brought about which would have been infinitely worse than anything which can be said of Egypt now. It is useless to attempt to discuss in detail charges of such a vague character which no attempt is made to substantiate in detail. I have no desire to follow in detail the statement of the Chancellor of the Exchequer. I have no complaint to make of the general statement of policy which he has made with regard to Egypt. I will only say that this statement does not appear to me to be much more precise, or to convey much more information to the House or to the country, than those statements of policy of the late Government which were so frequently and so severely criticized on this side of the House as wanting in accuracy, precision, and definitiveness. I notice that the right hon. Gentleman has said that the present Government recognize that we have incurred great obligations in Egypt. He also admits that other Powers have responsibilities and rights in Egypt. These are statements which have been frequently made by the late Government; but they were found to be extremely unsatisfactory, and wanting in precision. I do not know in what respect the right hon. Gentleman or any Member of the present Government has in the slightest degree assumed a more definite attitude than the attitude for which the late Government was so much attacked and complained of. I have no objection to the Mission of Sir H. Drummond Wolff, provided its character and scope are accurately understood and defined. I agree with all that has been said as to his personal fitness. I believe he has great knowledge of Eastern politics, and the result of his former Mission to Eastern Roumelia was greatly to the credit of the right hon. Gentleman. But I would remind the House that with regard to Egyptian politics Sir H. Drummond Wolff occupies a somewhat peculiar position. He is not only a person possessing great information, but he is also known as a Member of this House who has taken a definite and strong line in regard to Egyptian policy. He has made attacks somewhat exceeding the usual licence of debate, and he has associated himself with those who have not only attacked the policy of the present Khedive, but have also brought severe and grave charges against him. The right hon. Gentleman says that Sir H. Drummond Wolff is going to inquire and report and to advise Her Majesty's Government in their endeavour to bring about a more satisfactory state of things in regard to both the external defence and the internal administration of Egypt. But an important part of the internal administration is the position of the Khedive himself. It is not desirable to have it supposed that Sir H. Drummond Wolff has been selected for this Mission on account of the attitude he has taken up towards the Khedive. [The CHANCELLOR of the EXCHEQUER: That is not so.] I am glad the right hon. Gentleman says it is not so; but I think the House will see that something more than silence on this matter is required. Sir H. Drummond Wolff is known in former times to have been a very bitter enemy and a personal opponent of the administration of the Khedive. The Mission of Sir H. Drum- mond Wolff, without an explanation of his present position, is calculated to give rise to that which has always been one source of the difficulty of administration in Egypt—namely, political intrigue. There are intrigues in Constantinople, where he is going, and in Egypt, and in other parts of the East, the object of which is to upset the Khedive and to bring about some other form of government. The Mission of Sir H. Drummond Wolff, without explanation, is calculated, in my opinion, to give encouragement and assistance to all those persons who desire, for personal reasons, to upset the Government of the present Khedive. I believe Lord Salisbury has stated in "another place" the intention of the Government to support the Khedive as he has been supported by us. It would have been desirable, on the present occasion, when the right hon. Gentleman undertook to give us an outline of the character of the Mission of Sir H. Drummond Wolff, when he stated that that Mission had relation to the internal administration of Egypt, that he should have said it was no part of the intention of Her Majesty's Government to upset the Government existing in Egypt, or to take any action against it. It is not for me now to defend the Khedive; it may be that events have taken place under his Government which have weakened the position he occupies and have rendered him an unstable Governor. I do not say that, in my opinion, that is the case; but, if it was, it would be the duty of the Government to make up their minds on the subject, and openly to announce to the Khedive and to Europe that his Government was no longer a stable one, and there was no reason why it should be any longer supported. If that is not the case; if it is the opinion of the Government that, in present circumstances, no better Ruler than the Khedive can be found, if it is their opinion we are bound to him by honourable obligations, it seems to me they should have availed themselves of this opportunity to show that the Mission of Sir H. Drummond Wolff has no relation whatever to those former opinions which he has expressed respecting the Khedive, and that it is not their intention to countenance or give support to any underhand intrigues against the Government of Egypt. I will not enter into any discussion upon the subject of the loan. The Government have been in this matter guided by the best motives. It may be that in other circumstances better terms might have been obtained for the Egyptian Government; but I believe that we, in this House, have the most perfect and implicit confidence that questions of stock-jobbing, or of undue favour to any individual, never enter into transactions of this kind, to whatever Party the Government may belong. It is possible that in other circumstances better terms might have been obtained; but I have not the slightest doubt that the Government have done the best they could, and that nothing has been further from their intention than to favour any party whatever.

MR. W. E. FORSTER

said, he thought the explanation which had been asked by the noble Lord with reference to the Mission of Sir H. Drummond Wolff was one which the Government ought to give, and which he could not but suppose they would be glad of the opportunity of giving. He did not wish to go into the past. The resources of bad government in Oriental countries were very great, and it was possible things might have been worse. But there was one matter in which this country felt great interest, and it would be difficult for its position to be worse. He referred to the question of slavery and the Slave Trade. Undoubtedly what had happened in the Soudan had caused a great number of slaves to be taken, and the slave market had been glutted by prisoners captured from the tribes which had been friendly to us. In addition to that there was every reason to believe, and he believed the Foreign Office were in possession of proof of the fact, that the Slave Trade and slavery were connived at by men of high position in Egypt itself. He could not give proofs of this, because, as the right hon. Gentleman the Under Secretary for Foreign Affairs was well aware, it would be impossible to produce the proof publicly without greatly endangering those who had furnished it. He did not, however, doubt that Her Majesty's Government would, through their Special Commissioner, see that this matter was carefully looked into. What the Chancellor of the Exchequer had stated as to the earnestness of the Government to secure that the influence of this coun- try in Egypt should have some good effect and that reforms should be undertaken was, on the whole, satisfactory. The reason why he thought it satisfactory was that the present Government seemed to be aware that it was of no use pressing for reforms and immediately afterwards, or at the same time, saying that they intended to get out of Egypt. What did reforms mean, especially in Oriental countries? They must mean very considerable personal inconvenience, if not injury, to those who had thriven on abuses, and they would get no one to effect reforms and carry them out in anything like an effective or honest manner if he was under the belief that in a year or two he would be left to the mercy and revenge of those whom he had enraged by preventing them carrying on abuses. It seemed to him that it was utterly impossible that they could expect to get reforms on such conditions as these. Therefore he was glad to hear the Chancellor of the Exchequer state that the Government considered that if they were to do any good in Egypt there must be a clear understanding that they would see it actually done before they left. The Chancellor of the Exchequer also spoke of negotiations with the Turkish Government with regard to Suakin. The difficulties there were no doubt immense. No one denied that; but he did trust that we should not add to our other disasters in Egypt the disaster of replacing the country, either Suakin or Egypt itself, under Turkish rule. He did hope there was no such intention as that, for he believed that it would be better for us to clear out of the Soudan altogether than to introduce under our sanction and responsibility the Turks as governors. He did not deny that the question was beset with difficulties; but he hoped the House would excuse him for having stated from his present knowledge what really appeared to be true.

THE UNDER SECRETARY OF STATE FOR FOREIGN AFFAIRS (Mr. BOURKE)

said, the noble Lord opposite had expressed surprise at the fact that his right hon. Friend the Chancellor of the Exchequer had made no definite statement with regard to the support of the Khedive. The only reason why his right hon. Friend made no such statement was that he thought it was entirely unnecessary. The most definite assurances had been given by his noble Friend Lord Salisbury with regard to the support which it was the intention of the Government to give to the Khedive. There was no intention whatever on the part of the Government to withhold that support from the Khedive which he had always had from the British Government. There was one remark which he thought he might make with regard to the Mission of his right hon. Friend Sir H. Drummond Wolff, and that was that he was the one person in this Parliament who had from time to time pressed upon the late Government the importance of giving Parliamentary institutions to Egypt, and his desire to do so was recognized by the Prime Minister in the House. All he could say, in addition, was that the Government had every reason to believe that Sir H. Drummond Wolff would be welcomed by the Khedive in the most cordial manner; and with regard to His Majesty the Sultan, he had the highest authority for saying that the Sultan and the Porte were of opinion that the Mission of Sir H. Drummond Wolff could not but facilitate the bringing about of a better state of things in Egypt, and the Sultan was ready, he believed, to give to his right hon. Friend that welcome which might be expected. He wished now to make one or two remarks with respect to the observations of the hon. Members for Kirkcaldy (Sir George Campbell), and Waterford (Mr. Villiers Stuart). With regard to the remarks of the former, according to the Organic Law of Egypt, there were three Bodies to be brought into existence—namely, Provincial Councils, the Legislative Assembly, and the General Assembly. Of these three Bodies the only one that had come into being was the Legislative Assembly; and the hon. Member for Kirkcaldy (Sir George Campbell) contended that it had been illegally constituted, because it was to be partly made up of delegates from the Provincial Councils, which had no existence. All he could say on the subject was that the circumstances which gave rise to the question occurred two years ago, and Her Majesty's present Government were in no way responsible for what took place two years ago. He was told, however, that although the Provinces had not been regularly represented in the Legislative Assembly, yet, at the same time, they had sometimes sent Representatives. There was no information at the Foreign Office on the subject, and therefore he could not go into it further on the present occasion. The hon. Member for Waterford (Mr. Villiers Stuart) seemed to be disappointed with the answer he had given him as to the question of forced labour. He agreed with the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster) that these were questions which, no doubt, involved a complete change in the whole system of Egypt; and there was no use in giving expression to the aspirations and hopes of Her Majesty's Government upon them unless they were prepared to do their best to intervene by the suppression of such practices as were now prevalent in that country, and to stand by the persons who might help to put them down. As to the use of the kourbash, the late Government had often been interrogated on the subject, and they said they had reason to believe that its use had very much diminished in Egypt. So long as he himself held his present position, he should endeavour to avoid any answer that would mislead the House. If he had given an answer of the sort he had cited, it might very naturally have been said that the kourbash was not used. He was sorry to say that he could not. He had no doubt that the kourbash was abolished by law in Egypt; and although the late Government were right in saying that it was not used so much, yet he was quite certain that in out-of-the-way Provinces and in places where the present Administration could not reach the kourbash was used. He was not in a position to say that it was possible to abolish its use; they must first find out whether they could do so or not before making a statement to the House with respect to it. Then, as to the Slave Trade, when the present Government were in Office before they made very great strides towards its abolition; but they would have to begin that work all over again, and he had no doubt that the difficulties they would have to contend with now would be far greater than they were at that time; for it had been acknowledged by the late Government and by General Gordon that the abandonment of the Soudan must necessarily give an enormous impetus to the Slave Trade. He had no doubt the late Government took all that into con- sideration when they advised the abandonment of the Soudan. With regard to the loan, he did not think it necessary to add anything to the explanation given by the Chancellor of the Exchequer; but he might make two observations. The Four per Cent Guaranteed Loan of 1855 was now at £104 per cent, which was equal to £78 per cent for a 3 per cent loan such as that now being issued. The price of £95½ per cent could not, therefore, be deemed inadequate. It would have been perfectly impossible for the loan to have been issued under the conditions proposed, very properly and very justly, by the late Government, for the result would have been that three different scrips of this loan would have been floating about the world, issued at different prices.

MR. M'COAN

said, that when he first heard the announcement of the intended Mission of Sir H. Drummond Wolff he hailed it with hope as the sign of a new departure in our policy towards Egypt. He was well aware not only of the extensive knowledge of Egyptian politics possessed by Sir H. Drummond Wolff, but of his views as to what was a sound and just policy in relation to that country; and he ventured, therefore, to hope that any policy of which Sir H. Drummond Wolff was the active exponent would differ very widely and salutarily from the vacillating no-policy pursued by the late Government in Egypt. Notwithstanding the observation of the right hon. Gentleman the Under Secretary of State for Foreign Affairs that the selection of the right hon. Member for Portsmouth as our Envoy to Cairo did not import any departure from the policy of the late Government towards the Khedive Tewfik personally, he still clung to the hope that this new Mission had a weighty and a valuable meaning from which they might augur the best results. He must express his liveliest satisfaction that Sir H. Drummond Wolff had been specially chosen for that work. On neither side of the House could so competent an agent have been selected for it. He would go with a reputation already made in the East; he was a persona grata to the great majority of the Native population of Egypt, and to nearly the whole of the Europeans there; and, whatever might be the personal feelings of the Khedive towards him, he would be welcomed by all classes in Egypt. For himself, he adhered to the notion that there were only two policies which were practically possible for this country in Egypt, although probably neither of thorn was now popular. The first and best of them would be the policy of establishing our direct Protectorate over that country. We had interests, rights, and claims in Egypt that were equalled by those of no other Power in Europe; and he thought that those rights and interests could be upheld and maintained only by our having absolute and paramount authority in that country. To this, he believed, the only alternative was the restoration of the late Khedive. Of all the Governors who had arisen in the East during the present century Ismail was by far the ablest and the strongest. His administration had admittedly been marred by grave defects; he had made great mistakes in regard to finance, and had allowed himself to be led away by loan-mongers and others, who had reaped fortunes out of those mistakes. But during his Reign a traveller might have journeyed with his pockets full of diamonds from Alexandria to Khartoum without an Arab spear being raised against him. Under him the Soudanese Chiefs, who had baffled the skill of English diplomatists and defied the power of English Generals, had been effectually managed and controlled; and from the Mediterranean to Khartoum peace and relative prosperity had everywhere prevailed, the Slave Trade was being gradually checked, and Egypt, on the whole, was never better governed than it was during his 17 years' Reign. He had been essentially a strong Governor, and strength in the East was the first necessary quality in a Ruler. Therefore, he said that if the first and best solution—namely, either the annexation of Egypt or the establishment of a direct Protectorate over it—was not accepted, the second was well on the cards, and that before many months were over they would probably see the restoration of Is mail Pasha brought within the sphere of practical politics. Turning to the new loan, the immediate subject of the Amendment before the House, he thought the Chancellor of the Exchequer had made a complete answer to the objections of the hon. Member for Northampton (Mr. Labouchere). The new Government had inherited that loan as a part of the legacy left by their Predecessors; and he could not see how they could well have done better than they had done in the matter. Perhaps a rather bettor price might have been obtained; but that was a point on which he could not speak with any confidence. Anyhow, he thought they had acted in a way that deserved the recognition of the House; and, therefore, he was not disposed to support the Amendment.

Question put, and agreed, to.

Main Question again proposed.