E. 600 a-year. The balance of £ E. 7,080 would be economized at the expense of affecting the interests of 724 persons and their families. We think that the amount is too small to make it worth while incurring the very great unpopularity which would attend this measure. We propose, therefore, to leave all existing pensions alone except those enjoyed by the fifteen persons drawing more than £E. 600 a-year. These latter should, in our opinion, be reduced to £E. 600 a-year, thus effecting an economy of about £ E. 6,000.

4. The list of those who are now in receipt of pensions, not by reason of any rules, but in virtue of an "ordre supérieur," should be carefully scrutinized, and reductions made wherever they are possible. We estimate that the total amount of these pensions, which is now £ E. 42,000 a-year, may be reduced to about £ E. 20,000 a-year.

5. There are 51€ officers and employés en disponibilité, of whom seven receive pay at the rate of more than £ E. 600 a-year. We propose that the salaries of these seven officials should be reduced to £ E. 600 a-year, thus effecting an economy of about £ E. 3,000 a-year.

6. Turning to the question of the pensions to be granted to the families of the officers and men who have recently fallen in the Soudan, it is to be observed that the proposals of the Egyptian Government (see Appendix No. 4, p. 59) are as follows:

(1.) The heirs of officers of the rank of Captain and under to receive twothirds of the pay of the deceased officer.

(2.) The heirs of Majors, Commandants, and Lieutenant-Colonels to receive onehalf the pay of the deceased officer.

(3.) The heirs of Colonels and officers of higher rank to receive one-third of the pay of the deceased officer.

(4.) The heirs of non-commissioned officers and soldiers to receive an indemnity calculated as follows, with the option of being pensioned according to the Regulations in force:-

(5.) The surviving officers to receive a pension equal to one-fourth of their pay, always respecting their acquired rights should the latter be more favourable to them. (It is to be observed that as all officers have a right to be placed en disponibilité and to receive half-pay, this rule will practically be inoperative in so far as the grant of à pension equal to one-fourth of the pay is concerned.)

(6) Pensions and indemnity to be calculated on the pay due to each grade, not taking into account field allowance received during the recent campaigns.

We think that these proposals may be accepted with this modification, viz., that, in the case of the non-commissioned officers and men, commutation should be made compulsory. It is estimated that there will be no less than 40,000 persons who will have claims to pension by reason of deaths during the recent campaigns in the Soudan. It would be practically almost impossible to provide for the proper financial control of such numerous small pensions.

The cost involved in carrying this plan into execution may be estimated at £ E. 60,000 a-year, and a lump sum of £ E. 150,000 on account of commutations.

We think it necessary to provide a further sum of £ E. 15,000 a-year for pensions on account of civil employés, who will either return from the Soudan, or whose families will, in the event of their death, acquire a right to pension.

We have already explained (p. 7) that Colonel Fraser's proposals in connection with the reorganization of the army will include an increase of £ E. 5,000 in the cost of military pensions.

The general financial effect of our proposals will, therefore, be as follows:

In addition to this amount, a lump sum of £ E. 150,000 will have to be provided for commuting the pensions of non-commissioned officers and private soldiers.

We wish to draw special attention to the fact that whatever changes are made in the Pension Law must be effected, so far as Europeans are concerned, by a Law accepted by all the Powers who are parties to the Mixed Courts, and, so far as the natives are concerned, by a Khedivial Decree, which will be binding on the native Law Courts.

TOTAL OF ADMINISTRATIVE EXPENDITURE (INCLUDING TRIBUTE).

It will be observed that the totals compare as follows:

Our estimate is therefore £ E. 146,980 in excess of the estimate framed in 1880, on which the Law of Liquidation was based, but £ E. 64,213 less than the estimate of the Egyptian Government for 1884.

In making the comparison between our estimate and that of 1880, it is to be borne in mind that the Budget of 1880 provided for expenditure to the extent of £ E. 347,000 under the head of Reserve Fund, including expenses connected with the Soudan, whilst our estimate only provides £ E. 100,000 under this head.

In comparing our estimate with that of the Egyptian Government for 1894, it is to be borne in mind that we have made provision for Soudan pensions to the extent of £ E. 75,000 a-year, whereas the estimate of the Egyptian Government left those pensions out of account.*

EXPENDITURE ON ACCOUNT OF DEBT OF ALL KINDS.

Having now disposed of the question of administrative expenditure, we proceed to state the charges on account of debt of all descriptions. There are seven charges of this nature, viz. :

1. Interest on the Suez Canal shares.

2. Annuity for the service of the Preference Stock.

3. Interest on the Unified Debt.

4. Annuity to persons who paid the Moukabala.

5. Annuity of the Daïra Khassa.

6. Payment to make good the interest and sinking fund on the Domains Loan. 7. Payment to make good the interest on the Daïra Sanieh Loan.

In addition to these charges, the present Law of Liquidation provides that all the surplus of the assigned revenues, after payment of interest and sinking fund on the Preference Debt and of interest on the Unified Debt, shall be applied to the redemption of the Unified Debt by the purchase of stock in the market.

We proceed to deal with each of these items separately.

It is to be observed that the interest on the £ E. 150,000 which it will be necessary to raise in order to commute pensions (see above) will appear under the head of Debt. The capital sum will form part of the new loan

Suez Canal.

The Egyptian Government pays to the English Government 5 per cent. on the Suez Canal shares held by the latter. The total charge amounts to £ E. 193,858 (198,8281.) a-year. This payment will cease in 1894.

Preference Stock.

The outstanding capital of the Preference Stock on the 31st December, 1883, amounted to £ E. 21,841,755 (22,401,8001.). The rate of interest is 5 per cent. A fixed annuity, amounting to £ E. 1,158,534 (1,188,2407.) is devoted to the payment of interest and sinking fund on this Debt. The annuity was calculated on the basis of the total extinction of the Debt in 1941.

On the 1st January, 1884, the annuity was divided in the proportion of about £ E. 1,091,259 (1,119,2401.) for interest, and £ F. 67,275 (69,000l.) for sinking fund.

The revenues of the Railways, the Telegraphs, and the Port of Alexandria are specially pledged to the payment of the annuity on the Preference stock. The annuity also constitutes a first charge on the revenues pledged to the Unified Debt.

Unified Debt.

The total capital of the Unified Debt at the time the Law of Liquidation was framed was £ E. 56,567,784 (58,018,2407.). Since that time £ E. 1,974,356 (2,024,9801.) have been redeemed by purchases of stock in the market. The outstanding capital amounts, therefore, to £ E. 54,593,428 (55,993,2601.).

The rate of interest is 4 per cent. per annum.

amounts at present to £ E. 2,183,737 (2,239,7301.).

The interest charge, therefore,

There is no sinking fund except by purchase of stock in the market.

The revenues of four provinces (Garbieh, Menoufieh, Behera, in Lower Egypt, and Siout, in Upper Egypt), less 7 per cent. for the cost of administration, as well as the Customs revenue (including the duty levied on imported tobacco), are pledged to the service of the Unified Debt. In the event of these revenues not yielding a sum sufficient for the payment of the interest, the Egyptian Government is under an obligation to make good the deficit from the non-assigned revenues.

Moukabala.

When, in 1880, the Law of the Moukabala was abrogated, it was provided that an annuity of £ E. 150,000 (153,8467.) should be assigned to those persons who had paid the Moukabala. This annuity is payable till 1930, that is to say, for forty-six years from the present time.

Daira Khassa.

When the Law of Liquidation was framed certain bonds of the Daïra Khassa (Civil List of the Khedive), amounting in all to about £ E. 680,000, were converted into Daïra Sanieh stock. At the same time, the Egyptian Government undertook to pay to the Commissioners of the Daïra an annuity of £ E. 34,000 (34,8721.) a-year.

Domains Loan.

The Domains Loan was raised in 1878 through the agency of Messrs. Rothschild. The nominal capital of the loan was 8,500,0007. (£ E. 8,287,500).

Through the operation of the sinking fund, and by sales of land, the proceeds of which have been applied to the extinction of debt, the nominal capital of the loan has been reduced to 7,702,3407. (£ E. 7,509,781).

At the time the loan was contracted the property of the Domains consisted of about 425,000 feddans* and some house property. The greater part of the house property and 15,000 feddans of land have now been sold. Of the 410,000 fed dans remaining in the hands of the Commissioners of the Domains, 362,000 are cultivated and 48,000 are uncultivated.

Of the 362,000 feddans of cultivated land, 203,000 are leased, 32,000 are held by labourers on the estates on payment of the taxes only, in lieu, to a certain extent, of wages, and 127,000 are cultivated under the supervision of the Commissioners themselves.

* A feddan is as nearly as possible equal to an acre.

The cost of administering the Domains since 1878 is shown in the following Table:

The expenditure of the year 1881 was high, owing to some exceptional causes. It would appear, however, from the figures given above, that the cost of administration is diminishing.

The charges which have to be borne by the Domains after paying for the cost of administration and cultivation are as follows:

1. Taxes

2. Interest at 5 per cent. on the loan

3. Sinking fund of per cent. on the outstanding nominal capital

4. Mortgage of His Highness Tewfika Hanem, which will expire in nine years

The charge amounts to an average of P. T. 187 per feddan of cultivated land, of which about P. T. 65 is for taxes and about P. T. 122 for interest and sinking fund on the loans.

If the proceeds of the Domains are not sufficient to pay the interest (5 per cent.) and sinking fund (per cent.) on the loan, the Egyptian Government is under an obligation to make good the deficit. The deficit is made up either by a direct payment from the Government to the Commissioners, or by a remission of taxation, or by combining these two systems. On one occasion, in 1881, the deficit was partially made good by diminishing the cash balance in the hands of the Commissioners. The revenues of the Province of Keneh are pledged as a collateral guarantee towards making up the deficiency.

The following Table shows the general result of the administration of the Domains since 1880:

It will be seen from the figures given above that the aggregate amount of the deficits during the last four years is about £ E. 675,000, or, on an average, little short of £ E. 170,000 a-year.

It is, however, satisfactory to observe that since 1881 the deficit has been steadily diminishing. In 1882 it was £ E. 52,014 less than in 1881, and in 1883 it was £E. 45,667 less than in 1882. This diminution is probably in part due to improved management, and in part to the fact that a greater proportion of the land is now let than was heretofore the case.

It is to be observed that the Domains consist largely of Ouchoury lands. In 1880 the tax on these lands was raised. At the same time the Law of the Moukabala was abrogated. The result of these two changes was to increase the Land Tax payable by the Domains by about £ E. 80,000.

The Commissioners of the Domains estimate their normal deficit at £ E. 135,000. This estimate is based on the average of the past five years. It brings to account the

*The figures for the year 1879 are not given, because the following circumstances rendered the administration of that year altogether exceptional:-(1) The revenue and expenditure of fourteen months were brought to account; (2) only one coupon had to be paid, the amount of the other coupon having been deducted from the capital of the loan; (3) the surplus of the year, amounting to about £ E. 295,000, was, for the most part, kept in hand to constitute a working cash balance.

results of the year 1879, which, as we have already observed, was affected by some exceptional circumstances. In view, however, of the facts (1) that the expenses of management are decreasing; (2) that it may be anticipated that as time goes on more land will be let or sold; and (3) that the principal crop on the Domains lands is cotton-we think we may accept this estimate as the basis of our calculation.

Daira Sanieh.

The nominal capital of the Daïra Sanieh Loans at the time the Law of Liquidation was framed, and after adding the nominal capital of the Daïra Khassa (685,4007.) as prescribed by that Law, was 9,386,7401. There is no sinking fund, unless the proceeds of the property enable a rate of interest to be paid in excess of 5 per cent., a case which up to the present time has not occurred. But certain lands and houses have been sold since 1880, and the proceeds of the sales applied to the reduction of debt. On the 31st December, 1883, the outstanding nominal capital amounted to 8,795,4407.

The Report of the Daïra Sanieh for the year 1883 has not yet been received. According to the Report of 1882, the property in the hands of the Commissioners was 490,671 feddans. Of these, 157,748 feddans were uncultivated, and 333,323 cultivated.

Of the 333,323 cultivated feddans, 235,866 were let, and 97,457 feddans were cultivated under the direct supervision of the Commissioners.

The charges to be borne by the estates, after paying the cost of management and cultivation, are—

£ E.

225,000

346,000

571,000

The cost of management and cultivation is shown in the following Table :

Sugar is by far the most important product of the Daïra estates.

The estimated increase of expenditure in 1884 is due to the fact that a large sugar crop is expected, and thus the cost of purchasing the cane from the cultivators will be increased. There will, of course, be a corresponding increase of revenue.

The following Table shows the quantity and value of the sugar crop of the Daïra estates since 1880: