but they are said to have cost the Khedive as much as 5,200,000 francs, including the interest he has been obliged to give for the money he borrowed to pay for them. As the dividends for nineteen years on these shares have been renounced, the interest due from the Khedive to Great Britain, on four millions at 5 per cent., rests on no security whatever. It is simply a loan to a foreign ruler, granted at the discretion of the Government, and without the sanction of Parliament, in exchange for the benefits we may obtain nineteen years hence from our shares in the Suez Canal. Stated in this plain language the transaction is one which in private life would hardly be consistent with financial principles. Who on earth would lend a hundred pounds, as a matter of business, to an embarrassed and all but insolvent individual, upon the security of a deferred annuity, to take effect nineteen years hence, having in the meantime nothing to rely upon but the promise to pay of the borrower? We have no doubt that the Khedive will continue to pay us his 200,000l. a-year if he can, and as long as he can. But who that knows anything of the financial condition of Egypt can place the slightest reliance on her ability to pay? This recent emergency rose out of the most pressing necessity. The four millions went in a moment to release a portion of her floating debt, and to pay the interest on the remainder. Six months hence matters may be just as bad, although the Government have taken the extraordinary step of sending a member of the Administration and an English Privy Councillor, Mr. Stephen Cave, to control the Egyptian exchequer; and we observe that this gentleman, who is well known from his former connexion with the bank of Grote, Prescott, & Co., is to be accompanied by a staff of British officials, as if we were about to conduct the finances of the Egyptian treasury. But nothing is so hopeless as the attempt to introduce order and economy into the finances of an Oriental State by advice and interference, when we have not the absolute control of its expenses and resources. We have never been able to accomplish the task even in India, with feudatory princes dependent on us by treaty; much less can we hope to effect it in Egypt. At this very moment of supreme distress the Khedive has plunged into the folly and expense of an Abyssinian war, an expedition which we totally disapprove, and has had his own yacht (a vessel of 5,000 tons) pulled to pieces to transport troops. The greater probability is that the excessive extravagance and corruption of the Viceroy's government will bring about their natural punishment and the punishment of those foolish persons who

have trusted him. We certainly were not prepared to see the British Chancellor of the Exchequer in the number.

If the Khedive should be compelled or tempted to follow the example of his suzerain, the Sultan, and suspend or reduce the payment of interest on his debt, Sir Stafford Northcote, or rather the British Treasury, will be in precisely the same position as every other Egyptian bondholder. Our Government can have no fair claim to priority for the interest on this debt, nor can it take measures to enforce the payment of it, for that would be to reduce the assets on which the creditors of Egypt have a common lien, and many of those creditors are its own subjects. If the Khedive pays us 200,000l. a year for nineteen years, he will have repaid the four millions (all but one year), in interest; if on the contrary, the interest is not paid, we may lose a sum in interest almost equal to the capital we have advanced. We have no desire to place these proceedings in an unfavourable light, and, as a great national interest is at stake, we should scorn to misrepresent them for a party purpose, but really the more we examine their true financial character the more are we filled with amazement. Did ever an English Chancellor of the Exchequer loose his hold on four millions of public money on such terms as these, except when in a paroxysm of war we were subsidising half the Powers of Europe? Did ever Chancellor of the Exchequer stand in such a position to a needy State, except when we guaranteed a loan of much smaller amount to the Kingdom of Greece, and had of course to pay the interest on it, if not to pay off the principal when drawn by lottery? But those subsidies and loans had the authority of Parliament. This large advance has been made not only without the authority of Parliament, but without an explanation to the House of Commons. Nothing, we venture to say, can justify such a proceeding, except the possession by the Government of exclusive information of a most extraordinary nature. Even then such information, like the secret articles of the Treaty of Tilsit, ought to be communicated to Parliament without delay.

The relation of the Khedive to the Suez Canal Company was twofold; first, as a large shareholder, having renounced his dividends for 19 years; secondly, as the ruler of the territory in which the Canal is situated, and the potentate who granted the concession under which it was made. His interest as a shareholder the Khedive has sold to Great Britain for a consideration, and financially we stand in his place in respect to those shares; but his political and legislative authority over

the territory remains unaltered; he has not parted with that; we have not acquired it; it is in fact an inalienable part of his sovereignty, and if it did not belong to the Khedive and his family, it would revert to the Ottoman Porte, which indeed claims even now to exercise it. He is also still entitled eventually to 15 per cent on the net profits in consideration of the lands ceded to the Company without any other payment, and this charge is also in the market, but as it produces at present nothing, no purchaser has been found for it. No Power has more vehemently supported the authority of the Porte over Egypt, as a part of the Ottoman Empire, than Great Britain. Five and thirty years ago we very nearly went to war with France because we suspected her of a design to render Egypt independent of Constantinople; and down to the last mission of Lord Dalling, when he visited Egypt, the same policy has been, by Tories and Whigs, uniformly pursued. It is therefore impossible for the British Government to repudiate the principles on which this country has acted for so many years, and to invade or contest the power and authority established by treaties and firmans, of which we ourselves were the chief promoters.

There are, we suspect, a great many persons in England and other parts of Europe who imagine that, although it must be acknowledged that the financial and commercial results of this purchase are embarrassing and indefensible, yet that the political results to be anticipated from it are of such a nature as to demand and justify the sacrifice. Indeed, there are those who think that unless the British Government had clearly discovered some grand political results beneficial to England, no such financial sacrifice would ever have been made. We should ourselves admit and agree that if a political object of first-rate importance, such as the perpetual command of the military and naval route to India, and of the Red Sea, had been obtained, and peacefully obtained, by the purchase of shares in this Canal, we should not have paid too dear for them. It is certain that in directing the policy of a great Empire, mere financial considerations must give way to grand national interests; and we should be ashamed to depreciate a vast public benefit by a sordid calculation.

But upon a closer examination we find it extremely difficult to discover and to define what are the novel and peculiar political advantages which this purchase has secured to England. Whatever they are, they are certainly not exclusive, for they must be enjoyed in at least an equal proportion by our French, Swiss, and Belgian co-shareholders; and we cannot

'

understand how, by purchasing a large number of shares in a French or Egyptian commercial company, we acquire any political rights whatever. The Company itself claims none. The political authority of the Egyptian Government over the whole territory is not shared in by the Company; insomuch that when M. de Lesseps resisted the new tariff of dues, the Khedive, as a measure of policy, sent down troops to seize and work the Canal, if necessary. The same thing could be done again, whoever might be the shareholders. But in truth the fundamental principle on which the Canal was constructed, and for which M. de Lesseps has uniformly contended, is that it should be, in the words of the concession, perpetually open as a neutral passage to the mer'chant ships of all nations, without any distinction whatsoever. Obviously this neutral principle, which we ourselves have been the first to claim and to recognise, absolutely excludes the notion of the exercise of political rights over the Canal or the Egyptian territory by ourselves or by any other Power. Nothing could be more fatal to the large and liberal principles on which so great a work should be administered, than the pretension of any State to control its affairs or to establish a protectorate over Egypt under the guise of a large investment in shares. Such a pretension would be resisted, and justly resisted, by the whole civilised world; and we are satisfied from the language Lord Derby has repeatedly used in advocating the strict neutrality of the Canal, that no such idea or design ever crossed his mind. Although the project and the Company were French, and Lord Palmerston accused the French Government of a scheme for using

* Since this was written Lord Derby has repeated the same sentiment in his speech at Edinburgh, and has entirely repudiated the notion that this was a grand stroke to acquire political influence. 'In our diplomacy, so far as the action of this country is concerned, there 'will be no mystery and no reserve. You may have seen in the news'papers that there has been a good deal of sensation both abroad and 'at home created by the transaction into which we have entered by 'buying up some of the shares of the Suez Canal. I hold that to have 'been a wise step-it has certainly been a popular one, and I am pre'pared to defend it if necessary. But I must add that it would not have been a wise step nor an honest one if it had borne the construction which has been occasionally placed upon it. It is hardly necessary to disclaim any such notions as those which have been imputed to us-a wish to establish a protectorate over Egypt, an interested ' reversal of our policy on the whole Eastern Question, or an intention to take part in a general scramble for that which does not belong 'to us.'

VOL. CXLIII. NO. CCXCI.

T

the Canal as a means of subduing and annexing Egypt, the result has shown that these charges and suspicions were false, and that since the opening of the Canal French influence at Alexandria and Cairo has rather declined than augmented. It would be monstrous to suppose that British Ministers are labouring to effect the very thing which they vehemently denounced, when it was erroneously attributed to their allies on the other side the Channel. The French Government have honourably maintained the neutrality of the Canal, and we are bound by principle and interest to do the same.

Lord Derby's own account of the transaction to the Marquis d'Harcourt, the French Ambassador, on November 27th, was in the following terms:

'It was only at the beginning of the week that we knew the intentions and need of the Khedive to sell his shares. My wish, and I expressed it, was that he should keep them. But, on the one hand, he had urgent need of obtaining resources for repayments which admitted of no delay, and on the other hand, we knew that negotiations were going on between the Société Générale and the Egyptian Government for the acquisition of those same shares. Therefore, we had either to allow the scrip to pass into other hands or to buy it ourselves. I can assure you that we have acted solely with the intention of preventing a larger foreign influence from preponderating in a manner so important to us. We have the greatest consideration for M. de Lesseps. We acknowledge that, instead of opposing him in his great work, we should have done better to associate ourselves with him. I deny, on behalf of my colleagues and myself, any intention of predominating in the deliberations of the Company, or of abusing our recent acquisition to force its decisions. What we have done is purely defensive. I do not think, moreover, that the Government and English subjects are proprietors of the majority of shares. I said some time ago in the House of Lords that I would not oppose an arrangement which would place the Suez Canal under the management of an international syndicate. I will not propose this, but I in no way withdraw my words.'

Not

This is precisely the statement which we should have anticipated from Lord Derby's moderation and good sense. a word about the acquisition of political influence; but simply that the British Government took what they conceived to be the least mischievous of two alternatives, and that their policy was defensive. To ourselves it appears that they overrated the danger of this scrip, without dividends, passing into other hands; but on this point the Government may have information to which we have no access. On November 20th (five days before the purchase), Lord Derby had said to M. Gavard, the very able French Chargé d'Affaires

'I should be very glad to see the time come when it would be possible