CORRESPONDENCE

RESPECTING THE

FINANCES OF EGYPT.

Presented to both Houses of Parliament by Command of Her Majesty.

1884.

LONDON:

PRINTED BY HARRISON AND SONS.

To be purchased, either directly or through any Bookseller, from any of the following Agents, viz., Messrs. HANSARD, 13, Great Queen Street, W.C., and 32, Abingdon Street, Westminster; Messrs. EYRE and SPOTTISWOODE, East Harding Street, Fleet Street, and Sale Office, House of Lords; Messrs. ADAM and CHARLES BLACK, of Edinburgh;

Messrs. ALEXANDER THOM and Co. (Limited), or Messrs. HODGES, FIGGIS, and Co., of Dublin.

Correspondence respecting the Finances of Egypt.

My Lord,

No. 1.

Mr. Egerton to Earl Granville.-(Received May 20.)

Cairo, May 13, 1884.

I HAVE the honour to inclose a note presented to the Council of Ministers yesterday by Colonel Scott Moncrieff, urging that the state of the country is so serious that some prompt measure of relief, which would be felt by the people, would be of sufficient political value to greatly counterbalance the financial loss.

This measure of removing tolls is, in Colonel Moncrieff's opinion, a good one, and possesses also the advantage of being able to be carried into effect at once.

I have, &c.

(Signed)

EDWIN H. EGERTON.

Inclosure in No. 1.

Note for the Council of Ministers.

ABOUT two months ago I submitted a proposition for setting free the River Nile, and the canals of Egypt, from all tolls on the navigation. I need not repeat the arguments I then used, for I believe the Council generally agreed that they were just. It will be remembered that the proposition was refused on purely financial grounds. The Financial Adviser was about to start for England on an important mission, and it was considered inexpedient, until his return, to lighten the taxes in any way.

As no conclusion has yet been come to about the finances of Egypt, it may be said that the same argument still holds good, and that the taxes must not be interfered with. But history has shown before now that the welfare of a State cannot always afford to wait until a Congress in a distant capital has had time to regulate its affairs; and my conviction that the state of Egypt requires prompt measures to be taken must be my excuse for urging again upon the Council the expediency of removing this burden. As a foreigner possessing little knowledge of Egypt, and as connected with another Department than that of Finance, I may be told that this is no business of mine. But as Inspector-General of Irrigation I cannot remain uninterested in a matter so closely connected with the agriculture of the country.

I submit, then, that the state of the country is sufficient to arouse grave anxiety, if not alarm. The prices of agricultural produce are only from one-half to two-thirds what they were a few years ago. The cattle disease, the cotton-worm, and the cholera have all impoverished the people, and rendered them less capable of bearing their heavy load of taxation. Trade is nearly stopped; discontent is the certain result, a state of things sad enough at any time, but worse than sad at a time when a successful rebel is daily approaching the frontier, and appealing to the religious feelings of the people to join his cause.

I submit that it is highly desirable to give some immediate measure of relief which will be appreciated by the people, and that this measure of removing the Nile tolls is one that meets the wants of the case. It cannot relieve the distress of the country, but it will enable the peasant to obtain a better price for his produce, and it will remove what he thinks an unjust burden.

The anticipated receipts from the river tolls of last year were 97,5831., besides the licence fee on boats amounting to 26,6951. I do not propose to remove this licence tax, and if, as I anticipate, the number of boats in the river increases, the revenue from this source will increase also. In considering the loss to Government from removing the tolls, account must be taken of the saving to the Daïra Sanieh and State Domains, which transport yearly 95,000 tons of produce, and to the War and Public Works Departments, which pay largely for transport of materials. Some saving also will be effected from the abolition of the toll establishments. If some direct gain is demanded to go against the loss, I have already suggested the increase of railway passenger fares between Alexandria and Cairo, to the extent of P. E. 5, 4, and 2, for first, second, and

third class tickets, which will produce an increase of 19,000l. to the railway receipts. It is for the Council to decide whether the measure I advocate is not one of good policy.

I HAVE received from Colonel Scott Moncrieff the inclosed interesting note, which has reference to the financial condition of Egypt.

He thinks the land assessment, especially in Upper Egypt, too high. That by the proposed engineering works the productiveness of Lower Egypt will be much increased, and there may be some slight increase also in Upper Egypt.

That the cost of production in Lower Egypt, by the improvement in water supply and abolition of corvée, will be diminished; but this does not apply to Upper Egypt.

That the tolls on the Nile and on canals should be abolished, fares on railways lowered, and canals made navigable; these measures, again, would chiefly benefit Lower Egypt.

For Upper Egypt, he advocates the abolition of the date tax, and tax on the lands irrigated by the Ibrahimieh Canal, and that the licence tax on trades be lowered; that a deduction from the assessment should be made of that land occupied by canals, embankments, railways, or which has been swallowed up by the Nile.

Colonel Moncrieff thinks it necessary that the interest on the debt should be reduced.

I have, &c. (Signed)

Inclosure in No. 2.

EDWIN H. EGERTON.

Note on the Financial Condition of Egypt.

NUBAR PASHA, a few days ago, submitted to Messrs. Vincent, Gibson, and myself some statistics furnished by the Legislative Council, showing the outturn of agricultural produce per feddan in Upper Egypt, the present market price of produce, and the land assessment. These three sets of figures do not seem to admit of much argument. The state of the market and the land tax there can be no question about. The yield per acre is known with tolerable accuracy. The statistics took no account of the cost of production, about which there might be considerable doubt. Without asserting that a more intimate knowledge of the rural economy of Upper Egypt might not enable me to detect a flaw in the figures, I must express my conviction that they show the land assessment to be higher than at present can be borne. I believe that this is the case in parts of Lower Egypt also, but here it is not so bad as in Upper Egypt.

To restore the balance we must either

(1) increase the productiveness of the soil; or (2) diminish the cost of production; or (3) increase the selling price of the produce; or, failing all these, lastly, we must lower the taxation.

Let us consider these four heads as regards both Upper and Lower Egypt.

1. In Upper Egypt the productiveness of the soil would be increased if we could supply irrigation all the year round. The whole culturable area is estimated at 2,200,000 acres. There is one canal that gives perennial water, the Ibrahimieh, and it irrigates about 120,000 acres. This area might be doubled, I think, by an expenditure within reasonable limits, and three or four out of the eight provinces would then be greatly improved. But nothing whatever would have been done for the rest, including the three southern Provinces of Esneh, Keneh, and Girgeh; nor do I see any means of increasing their resources from the outlay of 1,000,000l. which, I am led to hope, we may have to spend in all Egypt. Yet there can be no question that it would be a profitable transaction if the Egyptian Government could give perennial irrigation generally in Upper Egypt, and there is no great engineering difficulty in the

way.

so far

Lower Egypt generally erjoys perennial irrigation, and our success in utilizing Mohammed Ali Pasha's great "barrage" gives me confident hopes that with the 1,000,000/. above alluded to we may insure and considerably extend cultivation. Generally, then, I would say that in the next few years we may look for a considerable increase to the productiveness of Lower Egypt, but only to a small extent in Upper Egypt.

2. The cost of production, as I have said, did not enter into Nubar Pasha's figures. There are two evident ways in which it might be lowered. If the fields could be watered without the use of machinery, the peasant would be saved sometimes as much as 20 piastres per feddan (4s. per acre). If so many of the peasants were not forced to toil on the corvée, more would be available for farm labour, and crops would be the cheaper raised.

Now, both these forms of relief will, I trust, be soon given in Lower Egypt, but only to a very small extent in Upper Egypt.

In the former there are above 2,000 steam-engines pumping water, besides innumerable water-wheels, "shadoofs," &c. I hope that by supplying the canals with water drawn from above the "barrage" at least two-thirds of these engines and waterwheels will be no longer required. Already, when we are only partially using the barrage," they say they have never had such a water supply at this season in Lower Egypt, and pumps and water-wheels are standing idle. The relief is the greater just now, since the cattle disease renders it all the more costly to raise water.

66

In all Upper Egypt there are not 200 steam-pumps, but there are water-wheels and "shadoofs" innumerable, and although the completion of the Ibrahimieh Canal will relieve the burden there, still it leaves whole provinces untouched.

The labour of the corvée is in the inverse ratio to the excellency of the canals. In Lower Egypt and on the Ibrahimieh Canal it will be greatly lowered. Generally throughout Upper Egypt I fear it will not be so much changed.

3. No action on the part of Government can prevent the produce of America and India from competing with that of Egypt and reducing its price. At the port of embarkation it must be regulated by the state of the foreign market, but Government may cheapen the cost of carrying it thither. Railway fares should be reduced to the lowest point practicable; the canals should be, as far as possible, rendered navigable, and I trust they will be so rendered ere long. I have twice pressed on Government the folly of placing heavy tolls on the boat traffic of the Nile and the canals. The reduction of railway fares, the improvement of the canals, the removal of the river tolls, will afford relief to all, but chiefly to Lower Egypt. There is one measure Government might take which would apply equally to all, viz., the removal of the export duty; but in the present state of Egypt it is to be feared that it is the merchant rather than the peasant that would reap the benefit of this change.

And this brings us to the last measure for relieving the country, viz., the reduction of taxation. I have tried to show that other measures contemplated will afford little relief to Upper Egypt. I am driven irresistibly to believe in the necessity for this measure. How can it best be done?

There are evident objections to an all-round reduction of so much per cent., leaving the burden to be borne as unequally as at present.

Mr. Gibson, whose experience as a Revenue Surveyor gives him a right to speak, considers that a temporary assessment, such as is common in India, might be made in any province of Upper Egypt in two months' time. When the cadastral survey is completed, this might be followed up by a more permanent settlement.

Nubar Pasha objects to the principle of such a temporary assessment. He says the Egyptian peasant would not understand it. He would believe it to be permanent, and if it were overturned in three or four years he would have no confidence that the next assessment would not likewise be overturned.

Mr. Vincent points out the uncertainty caused by such a temporary settlement, and the bad results it would produce in the land market.

Nubar Pasha thinks the whole of Egypt might be resettled on a satisfactory and equitable basis in six months' time. Indian experience makes it difficult for me to see how this can possibly be.

The best solution of the difficulty will be, perhaps, an all-round reduction of assessment, to be made at once, and to continue till the revenue settlement is completed; and I would urge that Mr. Gibson be supplied with funds to push on this work as fast as ever he can. In any case, there is one relief which, in common justice, should be afforded at once. I believe that the land tax is paid for thousands of feddans now occupied by canals and their banks, by railways and river embank.