OBSERVATIONS. (Hansard, 18 September 1886)

§ SIR GEORGE CAMPBELL (Kirkcaldy, &c)

, in rising to draw attention to the announcement made by the Chancellor of the Exchequer towards the close of the previous day's Sitting, that it was intended to devote a sum of £200,000 towards the repayment of 5 per cent which had been deducted from the coupons of the Egyptian bondholders, said, that although the announcement of the noble Lord was undoubtedly of a startling character, it had not received the discussion which its importance demanded. He was inclined to believe that this sum was offered as a sort of bribe to the bondholders and the Foreign Powers, at the expense of the British taxpayers, for the purpose of securing a sullen acquiescence on their part in the British occupation of Egypt. His contention was that the surplus out of which it was proposed to make the payment was not 930 a real, but a sham surplus. He asserted, without fear of contradiction, that it was a sham surplus obtained by borrowing. There was, however, something much more serious beyond. He was afraid that the Egyptian fellahs had been very much squeezed in order to keep up a very severe revenue system, and that no allowance had been made for the depreciation of agricultural value. It might be possible in future years to make Egypt pay; but it could only be done on one condition, and that was that the expense of defending Egypt from foreign and other enemies was placed upon the British taxpayer. Such a course would, in his opinion, be most unjustifiable; but as long as the necessity existed it was improper to say that any surplus existed in Egypt. The expense of the British occupation of Egypt and of the employment of the military there was very large indeed. The extraordinary charges on account of Egypt exceeded £1,000,000; and, taking other matters into consideration, the cost would amount at least to £2,000,000 or £3,000,000 per annum. But we gave even more than that, because the Egyptian Revenue was swelled by the Customs duties and the cost of the transport of the Army by railway. All these things involved the expenditure of British money, and the cost of the movement of British troops in Egypt was a very large item indeed. If hon. Members would inquire into the matter, they would find that, in truth, not one farthing of the £200,000 paid in by Egypt was a reality; and, in point of fact, the major part of the money came from the pockets of the British taxpayer. He was sure the Secretary of State for War, of all persons, must be most anxious to substitute an Egyptian Army for the British Army, now suffering so much in health and costing so much. But if an Egyptian Army was to be substituted, somebody must pay for it. At present the Egyptian Budget only allowed for an expenditure upon a Native Army which would be altogether inadequate for the defence of the country. He failed to understand why we alone of all the nations of the world should be required to pay for the defence of Egypt, surrounded as she was by warlike tribes always ready to pounce upon her. Other countries had quite as much interest in the defence of Egypt 931 as this country, and ought to contribute to the necessary expenditure. The arrangement by which we received £200,000 for the expense we incurred in the defence of Egypt was not an international arrangement that bound us for any time, but was an arrangement during pleasure, which might be put an end to at any moment. In the present circumstances of Egypt we were bound to put an end to the arrangement, which was a most shameful one towards the British taxpayer, who had to pay an unreal surplus where there was no real surplus at all. Any surplus whatever ought to be applied to the relief of the burden upon the British taxpayers and to the cost of the Army engaged in the defence of Egypt, instead of being handed over to the bondholders. The bondholders were in the position of creditors to a bankrupt estate, and they should be bound to pay the cost of keeping the estate going. They were not entitled to receive the interest of the debt due to them in full, while others were paying for the defence of the country from which they derived all the benefit. Even if there were a real surplus, which he entirely disputed, it ought to be devoted to the relief of the British taxpayer from part of the burden imposed on him in defending the country. The announcement of the noble Lord, therefore, that the sum of £200,000 was to be surrendered in order to repay the 5 per cent deducted from the interest on the coupons of the bondholders was most startling, and it altogether reversed the principle laid down by the late Government, that the creditors in possession should pay something towards keeping the concern going. The principle was asserted by deducting the 5 per cent; and if we gave up that we should get absolutely nothing. To his mind, it was evident that it was only a bribe to foreign financiers to induce them to give a sullen acquiescence to our continued occupation of Egypt.

§ THE CHANCELLOR OF THE EXCHEQUER (Lord RANDOLPH CHURCHILL) (Paddington, S.)

The question which the hon. Gentleman opposite has raised is, no doubt, one of the highest importance, and I make no complaint whatever against the hon. Gentleman for having given expression to his views in this House. At the same time, I must point 932 out to him that today at half-past 12 he is simply repeating word for word what he stated earlier in the morning at half-past 2; and, moreover, that that which he stated at half-past 2 was completely and ably answered by my right hon. Friend the Under Secretary of State for Foreign Affairs(Sir James Fergusson). The hon. Gentleman seems to forget, or to be callous to the fact, that he, although a typical representative of "dear old Scotland," has been pouring volumes of censure on the head of the late Prime Minister, the right hon. Member for Mid Lothian. He has censured without stint, and without any measure whatever, the occupation of Egypt, the financial arrangements of Egypt, the Soudan Campaign, and everything connected with Egypt. [Sir GEORGE CAMPBELL: I always did so.] I must take entire issue with the hon. Gentleman upon that point. I was a close attendant in the last Parliament, and I have no recollection of hearing on the part of the hon. Gentleman anything so unlimited in the shape of censure. He is forgetful, or callous to the fact, that for neither the occupation, of Egypt, nor the financial arrangements of Egypt, nor the Soudan Campaign, nor anything connected with Egypt, is the present Government in the least responsible. The whole responsibility for the arrangement which the hon. Member holds up to execration as being the most infamous arrangement ever made by any country rests with the right hon. Gentleman the Member for Mid Lothian, of whom the hon. Gentleman professes to be so warm a supporter. Having made these remarks, I will now pass on to the particular point which seems more than any other to exercise the mind of the hon. Member. He declares that the repayment in 1887 of 5 per cont on the coupons deducted from the bondholders in 1885 would be an act of gross iniquity. It is not my business to pronounce an opinion on that matter. It may be so; I cannot say. All I have to point out to the hon. Member is that neither the Egyptian Government nor Her Majesty's Government have the slightest option in the matter. They are bound by international engagements with the Powers—engagements, again, concluded by the late Government and the right hon. Member for Mid Lothian. If the late Government—or, I would be more correct in saying, the right hon. Member 933 for Mid Lothian's second Government—made a bad bargain, that is no affair of the present Government. All that we have to do with is this—they entered into solemn and binding engagements, with the consent of Egypt, with the European Powers, and these engagements it is our duty to carry out, and we are not at liberty to repudiate engagements which are disagreeable to us, and to insist on carrying out only those which are pleasant to us. Our duty is to carry out all our engagements with Foreign Powers. The case stands thus—the Egyptian Government are bound to the Powers by the Declaration and Convention of the 17th and 18th of March 1885, and by the Khedivial Decree of the 27th of July, to keep the charge on the yearly Revenue for administration expenditure within £5,237,000. It is absolutely out of the power of the Egyptian Government, or of Her Majesty's Government, to increase the expenditure for administration over and above that sum. As a matter of fact, it is limited by Treaty; and any surplus on the year's receipts is to be paid over to the Commissioners of the Public Debt for the purpose of making good the deduction of 5 percent from the interest on the several Egyptian loans sanctioned by the Convention. Again, I would entreat the hon. Member to recollect that we have no power to escape from that engagement. Egypt is bound next year, if there is a surplus over this £5,237,000, and must automatically repay the deduction of 5 per cent on the coupons. We have absolutely no power in the matter. But I must point out to the hon. Gentleman what the alternative would be, because it may be considered by many persons that we have made a good bargain in the matter. What is the alternative of our not paying? Suppose the Egyptian Government goes to the Great Powers and says that it is unable to pay? In that case the only alternative is an International Commission to examine into the finances of Egypt. The hon. Gentleman is quite as entitled as I am to form an opinion upon that subject; but I will state to the House that, in my opinion, and in the opinion, I believe, of all my Colleagues, the alternative of an International Commission would be a much greater evil to Egypt than the course now proposed to be taken. An International Commission 934 might certainly represent in a very direct and aggressive manner the interests of those bondholders from whom the hon. Member is extremely anxious to protect the people of Egypt. From the whole tone of the hon. Member's remarks it is obvious to me that he has not examined the subject with that care which he should have exercised if he felt himself entitled to make such a sweeping condemnation of the course pursued by the late Government. He cannot have examined the legal position and obligations of Egypt to the Powers. He cannot have reflected for a moment on the absolute obligation imposed upon this Government by our presence in Egypt to support the Egyptian Government in fulfilling these obligations towards the Powers of Europe. At this period of the Session, I do not think it is desirable to enter into an elaborate review of the whole of this most melancholy story of our intervention in Egypt. We are not in any way responsible for anything that is taking place, and we cannot be held responsible. I certainly, for one, am not responsible, either directly or indirectly, because I have protested against the course which this country has pursued in reference to Egypt from beginning to end. But, being in Egypt, and having incurred enormous responsibility by our being there, the Government are perfectly determined to fulfil all the responsibilities and obligations imposed upon them by the Convention. We are bound to do so by honour and duty alike; and we will not give up our work or withdraw from our mission in Egypt until these responsibilities and obligations have been altogether and faithfully fulfilled.