GREAT BRITAIN AND EGYPT.

Globe, Volume V, Issue 528, 26 February 1876, Page 3

GREAT BRITAIN AND EGYPT.

An occasional correspondent of the Times, writing from Alexandria on Njvember 27th, The readers of The Times will already know that Egypt has sold to England for the sum of four millions sterling her shares in the Suez Oanal. The news of this operation, which was concluded on Thursday, produced an extraordinary agitation in the financial world here. It had been for some time known in well informed circles that Egypt would require assistance to meet the exigencies of her floating debt between this and April next. Various offers had been made by Alexandria bankers but the hardness of their terms made the Khedive hesitate in his acceptance. Offers were then made by Paris bankers, through a house in i Egypt, to advance money on the deposit of the Canal shares. This operation was almost concluded, when England came upon the scene a* a rival bidder, and, through the energy of our political agent, General Stanton, obtained an offer of the whole of the shares for four million*. The offer was at once accepted by the English Government by telegraph, and thus British interests in' the Oanal are definitely saved from an overwhelming French influence. The transaction, carried on as it was by the English Government though Parliament was not sitting, is considered here of great political importance, and as almost amounting to a declaration on the part of England that she will permit no foreign intervention save her own in any affairs of Egypt which may have a political bearing. A second view of the matter is current which U hardly less important. England, it is said, has stretched out her hand to save Egypt from following the wreck of Turkey. She needed money, and could not get it save at ruinous prices, and was drifting towards similar shipwreck. This is an extreme view, and the country was not, iu fact, »so hard pressed. But I note both opinions; anything like political opinion or prescience in Egypt, where, as a rule, to-morrow morning bounds each man's horizon, is so rare and curious. The effect of this operation on the Alexandria Bourse was instantaneous, and the 1873 loan, the most sensitive of Egyptian stocks, rose to 69, having a few days previously stood as low as 62J. Part of the original negotiations, before England stepped in, were for a conversion of the floating debt. It is to be hoped that they will not be abandoned, while this windfall of four millions will enable Egypt to consider them with more independence. The system of constant renewals has ruined Turkey, and Egypt ought to profit by the lesson, and consolidate her floating debt on such terms as shall seem fit to the English financiers she has summoned to her councils. Commercially speaking, England has made a tolerably fair bargain. She has obtained 176,602 of the 400,000 original Canal shares, issued at £2O, for which Said Pasha, the last Viceroy, paid three millions and a half. But these particular shares have been subsequently diminished in value by a renunciation on the part of Egypt of any claim for dividend on them up to the year 1894, which renunciation was in lieu of the payment of a debt to the Company of £1,200,000. This reduces the original price paid by Egypt to £2,300,000. Estimated, however, at the current quotations, the value of the share?, were they saddled by no condition, would be rather under five and a half millions. Deducting from this the result of the condition to renounce dividends—namely, £1,200,000, the current value of the shares is over four millions. England, therefore, has not done badly. But, at th? same time, Egypt has done exceedingly well. To sell for four millions what can produce nothing for nineteen years is a great stroke of policy in the present financial state of Egypt. Apart from the fact that in the present stage of the Eastern Question nineteen years is almost an eternity, this sum lifts Egypt out of the hands of the money-lenders who surround her, and gives her a breathing space, during which she may, if she is wise, place her affairs n the hands of men who can put them really in order. Egypt, however, has still a certain interest left in the Canal. She is entitled under the original Acte de Concession made with M. Lesseps by Said Pasha in 1856 to a first charge of 15 per cent on the net profits of each year, as the original owner of the site of the Canal, and 10 per cent as mevibre fondateur of the company. But hitherto this has been a barren right, and Egypt has had a very poor return for the money she has expended on the Canal. An official statement of the Government fixes the whole coat at over 15 millions sterling (352,827,000 francs). This includes loss of interest, coßt of lighthouses, portworks, &c. But the actual money expended amounts to over eight millions, as will be seen by the following figures :—£1,520,000 paid in lieu of labour undertaken to be supplied for construction of canal; £1,200,000 paid for resumption of land originally granted, 200 metres being left on either bank to the company ; £640,000 paid for the fresh water canal ; £400,000 paid for the tract of land called El Wady, sold to the company for £74,000 ; £3,500,000 paid for 176,602 shares ; £BOO,OOO paid for purchase of the company's right of free passage along the fresh-water canal; £400,000 paid for purchase of all buildings, works, and quarries ot the company. The last two items were not paid in cash, Egypt renouncing all claims for dividends for 25 years from 1869. This is a great outlay for a small country, and the return has been nil; indeed, there has been a large annual loss. The Canal has diverted from the Egyptian railways the whole of the Eastern transit traffic, which was a great source of profit. The political importance of the country as the great highway to the East has no doubt increased ; but to be a bone of contention over which other nations may quarrel is hardly an advantage to Egypt. ..