Yet even when the subject is treated in the most
general way the difficulties which harass and impede the British
administrators and insult the sovereign power of Egypt - the mischievous
interference of a vindictive nation, the galling and almost intolerable
financial fetters in which a prosperous country is bound - may arouse in
the sympathetic reader a flush of annoyance, or at any rate a smile
of pitying wonder.
About half the revenue of Egypt is devoted to the development and
government of the country, and the other half to the payment of the
interest on the debt and other external charges; and, with a view
to preventing in the future the extravagance of the past, the London
Convention in 1885 prescribed that the annual expenditure of Egypt
shall not exceed a certain sum. When the expenditure exceeds this amount,
for every pound that is spent on the government or development of Egypt
another pound must be paid to the Commissioners of the Debt; so that,
after the limit is reached, for every pound that is required to promote
Egyptian interests two pounds must be raised by taxation from an already
heavily taxed community. But the working of this law was found to be so
severe that, like all laws which exceed the human conception of justice,
it has been somewhat modified. By an arrangement which was effected
in 1888, the Caisse de la Dette are empowered, instead of devoting their
surplus pound to the sinking fund, to pay it into a general reserve fund,
from which the Commissioners may make grants to meet 'extraordinary
expenses'; those expenses, that is to say, which may be considered
'once for all'(capital) expenditure and not ordinary annual charges.
The Dongola expedition was begun, as has been said, without reference
to the immediate internal condition of Egypt. The moment was a good one,
but not the best. It was obviously impossible for Egypt to provide for the
extraordinary expenses of the military operations out of revenue. The
Ministry of Finance therefore appealed to the Caisse de la Dette for a
grant from the general reserve fund. Here was an obvious case of
'extraordinary expenses.' The Egyptian Government asked for
500,000 Egyptian pounds (EP500,000).
The Caisse met in council. Six Commissioners - representing England,
France, Russia, Germany, Austria, and Italy - duly discussed the
application. Four Commissioners considered that the grant should be made.
Two Commissioners, those representing France and Russia, voted against it.
The majority decided. The grant was made. The money was handed to the
Egyptian Government and devoted to the prosecution of the war.
Egypt as a sovereign power had already humbly begged to be allowed
to devote part of the surplus of her own revenues to her own objects.
A greater humiliation remained. The Commissioners of France and Russia,
who had been out-voted, brought an action against their colleagues on the
grounds that the grant was ultra vires; and against the Egyptian
Government for the return of the money thus wrongly obtained.
Other actions were brought at French instigation by various people
purporting to represent the bondholders, who declared that their interests
were threatened. The case was tried before the Mixed Tribunals, an
institution which exists in Egypt superior to and independent of the
sovereign rights of that country.
On the part of the Egyptian Government and the four Commissioners it
was contended that the Mixed Tribunals had no competency to try the case;
that the attacking parties had no right of action; that the Egyptian
Government had, in applying, done all that the law of liquidation required;
and that the act of sovereignty was complete as soon as the Caisse,
which was the legal representative of the bondholding interest,
had pronounced its decision.
The argument was a strong one; but had it been ten times as strong,
the result would have been the same. The Mixed Tribunals, an international
institution, delivered its judgment on strictly political grounds,
the judges taking their orders from the different countries they
represented. It was solemnly pronounced that war expenses were not
'extraordinary expenses.' The proximate destruction of the Khalifa's power
was treated quite as a matter of everyday occurrence. A state of war was
apparently regarded as usual in Egypt. On this wise and sensible ground
the Egyptian Government were condemned to pay back EP500,000, together
with interest and costs. After a momentary hesitation as to whether the
hour had not come to join issue on the whole subject of the financial
restrictions of Egypt, it was decided to bow to this iniquitous decision.
The money had now to be refunded. It had already been spent. More than
that, other sums were needed for the carrying on of the war. The army was
by then occupying Dongola, and was in actual expectation of a Dervish
counter-attack, and it was evident that the military operations could not
be suspended or arrested. It was impossible to stop; yet without money
it seemed impossible to go on; and, besides, it appeared that Egypt
would be unable to repay the EP500,000 which she had been granted,
and of which she was now deprived.
Such was the painful and difficult situation which a friendly nation,
in the utmost exercise of her wit and the extreme compass of her legal
rights, had succeeded in producing in a country for whose welfare she had
always professed an exaggerated regard. Such was the effect of French
diplomacy. But there is a Nemesis that waits on international malpractices,
however cunning. Now, as before and since, the very astuteness of the
French Ministers and agents was to strike a terrible blow at French
interests and French influence in Egypt. At this period France still
exercised a considerable force on Egyptian politics.
