The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1885-08-08 00:00:00

THE EGYPTIAN GUARANTEED LOAN.

A Parliamentary paper was issued on Monday con-
taining correspondence respecting the issue of the
Egyptian Guaranteed Loan. The following was the
letter sent to Messrs. Rothschild by Lord Salisbury,
with the concurrence of the Treasury, on July 25:

Her Majesty's Government has ertered into
arrangements with the Governments of. Austria-
Hungary, France, Germany, Italy. and Russia to
guarantee a loan to be issued by the Egyptian Govern-
ment, with the assent of the Sultan for the sum of
£9,000,000 sterling. The guarantee Of Great Britain,
France, and Russia is secured, and, pending the
approval by their respective Parliaments, th a Govern-
ments of Austria-Hungary, Germany, and Italy have
signified their acquiscence in the immediate issue of
the loan.
It is agreed that the loan is to be issued in equal
portions in London, Paris, and Berlin, and the Govern-
ment of Germany has nominated Messrs. Bleich-
roder as agents for the issue in Berlin. The arrange-
ments rendered necessary by this agreement are
exceptional and somewhat complicated in their cha-
racter. It appears to her Majesty's Government that
despatch is of the greatest importance, and that
despatch can be best secured by choosing as agent for
the loan in London and entrusting the negotiations to
a house having a large connexion on the Continent. I
have therefore to ask you wheth, r you would be pre-
pared to undertake, on behalf of the Egyptian
Government, the issue and management of the said
loan in concert with the house of Messrs. Rothschild
Freres in Paris, and with the house of Messrs. BleichrO-
roder in Berlin,
In the event of your compliance, I have further to
ask you to state, after communication with those
firms, the terms and condi+ions upon which you would
be willing to conduct the operations. Parliament
usually authorises the Treasury, in raising loans for
the service of the State, to pay reasonable incidental
expenses, and £5OO per million as remuneration to
the Bank of England for their trouble in acting as
agents for the issue of the loan.
I enclose for your information copies of the decla-
ration and of the Convention between the Powers,
of a draft decree of the Khedive, and of the Act
of Parliament enabling her Majesty to guarantee
the loan.
The following Treasury Minute, dated July 28,
1885, is included in the correspondence:
My lords read the letter from the Foreign Office,
dated July 25, 1885, covering a copy of a letter in
which Lord Salisbury asks Messrs N. M. Rothschild
whether they would undertake, on behalf of the Egyp-
tian Government, the issue and management of the
Egyptian Guaranteed Loan, in concert with the how :)
of Messrs. Rothschild Freres in Paris, and w_th thd
house of Messrs. Bleichriider in Berlin.
The Chancellor of the Exchequer informs the Board
that loe has been in communication with Lord Roth-
schild, on behalf of Messrs. N. M. Rothschild, and
with Mr. Vincent, the representative of the Egyptian
Government, and that he has also consulted Mr.
Daniell, the Government broker, upon the conditions
under which the said loan should be issued.
Three questions discussed in the course of these
coMmunications deserve special attention, viz.:
1. The method of proceeding, whether by tender
or by subscriptions at a fixed price.
2. The amount of the commission and the allow-
ance for expenses.
3. The price to be eventually fixed for the loan.
1. The Chancellor of the Exchequer would have
preferred proceeding by tender, as calculated perhaps
to secure the best price for the Egyptian Government,
and had it been a loan to be raised in London only
he would have had no hesitation in advising the rais-
ing of it by tender. Lord Rothschild, however,
pointed out that that method of proceeding is quite
unknown in Paris and Berlin, in which capitals the
loan was to be raised in the same proportions as in
London, and that under such conditions the opera-
tion would be practically impossible. In presence of
a positive statement to this effect by the responsible
agent for the loan in England, the Chancellor of the
Exchequer did not think it right to press his view
further.
r 2. It was agreed that the commission to the agents
of the loan should be .C5OO per million, the rate paid
to the Bank of England for issuing loans raised by
the English Government; and that the reaPonable
expenses of the issue would be allowed, including
stamps, printing, advertisements, &c., and per cent.
brokerage.
3. The Powers having assented to the immediate
issue of the loan, the preceding preliminaries having
been settled, and intimation received from Egypt
that the necessary decrees were ready for issue, Lord
Salisbury and the Chancellor of the Exchequer, with
Mr. Vincent, as representing the Government of
Egypt, met Lord Rothschild. The issue price of the
loan was fully discussed and was fixed at 95;71, with
the concurrence of the Government broker, Mr.
Daniell, and it was arranged that the price and main
terms of issue should be published on the following
morning.
The Chancellor of the Exchequer suggests that this
minute of proceedings should be put on record.
I My lords agree.