The Sun.
London, England, 1861-08-12 00:00:00

STATE OF EGYPT.

(From the Correspondent of the Times.)
ALEXANDRIA, JULY 29.
A very great change, and I trust I may venture to
say a hopeful one, has taken place in the aspects of
Egyptian financial affairs since I last wrote.
Shortly after the despatch of my letter Draneht
Bey, the Viceroy's agent, returned from Paris, ac-
companied by two gentlemen, empowered by M.
Lafitte to explain the terms under which they were
prepared to furnish the loan.
The floating debts of the Government appear to
have been stated at about £7,120,000, comprising,
I am informed, the amount of last year's loan of
£1,120,000, but exclusive of £2,840,000, the Vice-
roy's present liabilites to the Suez Canal Company.
Messrs. Lafitte proposed that the Government
should deposit with them Treasury Bonds of 500 f.
each, bearing 5 per cent. interest to the amount of
£11,000,000 sterling. These bonds to be negotiated
at 40 per cent. discount, producing, therefore, 300 f.
each. A commission of 6 per cent. on the gross
amount of the stock, to be paid to the Comptoir
d'Escompte, and another of 1 per cent., to be paid
to Messrs. Lafitte, upon all sums passing through
their hands during the existence of the contract. A
sinking fund was to be formed, by means of which
the whole of tht debt, both principal and interest,
would be liquidated in the course of about 30
years. The Egyptian Government was to bind
itself to incur no further liabilities of any
kind whatsoever. Annual budgets were to

be' prepared, under the superintendence of two
commissioners, to be named for the purpose by
the Parisian bankers, or rather, I presume, by the
Comptoir d'Escompte, which on this occasion, as on
the previous one, would have been the real negotia-
tors of the loan. These commissioners were likewise
to exercise general supervision over all the financial
operations of the Government; and, finally, the
revenues of the Delta were to be specially reserved
and assigned over for the purpose of meeting the
annual charges, estimated at 16,000,000 f. during the
first 15 years, and at 23,000,000 f. per annum during
the remaining half of the time stipulated for the
redemption of the debt.
From the above it does not appear that the pro-
duce of the loan would have been sufficient to enable
the Government to free itself from the whole of its
present liabilities ; but I have heard some further
arrangements spoken of, by means of which Messrs.
Lafitte would have assumed to themselves the
liabilities of the Viceroy towards the Suez Canal

Company.
Looking at the proposals I have described from
simply a commercial point of view, it can hardly be
said that the conditions were more stringent than
the circumstances of the ease would justify, and,
indeed, it may be held that Messrs. Lafitte and the
Comptoir d'Escom pte, by thus practically indicat-
ing to the Egyptian Government the issue towards
which it has been drifting, have rendered the
country a real service. But the prospects thus
opened to the Viceroy's view have proved most
uninviting ; and he has determined upon having
recourse to some other remedy. All negotiations,
excepting those for the repayment of last year's
loan of 28,000,000 f., have accordingly been com-
pletely broken off, and a system of sweeping reforms
has been announced, which, if they are persevered
in with only one-half the energy that attends their
initiation, must beyond a doubt powerfully tend to
replace the affairs of the country in as flourishing a
position as they ever occupied before, or, indeed,
even more so. The army is to be reduced to a
standing force of at most 5,000 men, and the greater
number of the police zabtieths have been dismissed
and their duties at Alexandria and Cairo are hence-
forward to be performed by regular soldiers. No
supplies are to be commissioned excepting they be
articles of abs )lute necessity, and circulars have been
sent to the consuls (a significant hint to many among
them) to inform them that henceforward all stores
required by the Government will be advertised for
under a system of sealed tenders. Neither does the
palace escape its full share of necessary reform.
Said Pasha is reducing his household to the lowest
possible limits. His stud of horses is to be reduced
to a dozen or 15 animals ; all superfluous plate, even
the silver helmets of the Pasha's regiment of Cuiras-
siers, have been sent off the Mint to be converted
into coin ; in short, whether or not the example of
the Sultan has anything to do with the matter, it is
plain that here we are about fairly to outherod
Herod.
1 need hardly say that there are not a few per-
sons who shake their heads and predict a speedy
termination to the present mood, and, indeed, I
must in candour admit that they can quote only,
too many instances indicative of the extreme ver-
satility of the Viceroy's character. Already we
have a strange story that a large number of the
soldiers who, to their intense and somewhat tumul-
tuous joy, were disbanded on the 26th,. were re-
captured on the same and on the following days.
Orders had been sent off by telegraph to the several
stations along the line to stop them wherever they
could be found. They were accordingly brought
up to the stations, those among them who showed
any signs of opposition, chained together in the
usual manner, and, as an eye-witness described it,
wearing anything but an amiable expression on
their faces. I believe a few of the men were
deserters; but the real explanation of this strange
and deplorable proceeding seems to be that a far
greater number was dismissed than was actually
intended. There had been hopes that a portion
would volunteer, or at least, show some disposition
to remain, and be incorporated in the small force
which, as I have already stated, is to be retained.
These hopes were disappointed, and a number of
the soldiers have had to be reimpressed in the usual
manner.
The failure of the loan has necessarily reacted
upon the value of Government bonds and serdiss.
Under the anticipation that the Viceroy would be
in a position to recall them, the rates of discount
were rapidly declining. Since then they have
again risen to nearly their former rates, being now
at from 104- to 13 per cent. per annum..
Time will show whether Said Pashais seriously
bent upon seeking the means of extricating his
country from her truly dangerous situation. In
opposition to those who took a more despondent
view of the matter, it may be remarked that
the Viceroy, with many apparent inconsistencies,
is far from being deficient in shrewdness, and even
in solid good sense. The merit of the decision he
has come to is entirely his own, and every one must
feel that perseverance in the wise course to which
he has openly committed himself, though, perhaps
with as yet no further settled plan, will confer

upon him one of the strongest titles to respect which
a man in his high and responsible position can
acquire. How imperatively these reforms were re-
quired, and how great arc the difficulties with which
the Government is surrounded, is amply proved by
its increasing debts, in addition to which may be
placed the fact that the revenues of the next three
months have already been anticipated, two months
thereof being of the new financial year, which com-
mences on thtlOth of September.
Dr. Forbes and Mr. Haywood, the Seoretary of
the Cottori Sc tply Association, arrived here by last
mail, and in the course of the next day or two will
probably have an interview with the Viceroy.
There is no doubt that the production of cotton in

this country might be very greatly increased, though
I do not think there is any chance of attaining the
object by a displacement of uther crops. If it were
desired to introduce something entirely new, there
would no doubt be a large amount of obstinate pre-
judice to overcome, but it would be a mistake to
imagine that the Fellahs do not possess a lively
appreciation of the respective profits and
advantages they derive from the various crops
they are in the habit of growing, if the
balance were in favour of cotton, it would require
nopre
of pressure whatever from without to stimulate its
extent
culture in preference to grain, pulse, or other arti-
cles. I apprehend it will be found that the pro-
ductiontian cotton can be increased to any
material
by only two means—the one by
introducing the growth of short stapled ,cottons,
whereby a heavier crop would be gathered off the
same
m e
rel
breadth
ue
question
t ofn land;o f
profit and
an thed
loss,
s sother
upon
t byn
which, bringingas
fresh lands into cultivation. The first is, of course,
a
yet, opinionslare greatly diiined, and which can
only be settled by actual experiment. A fair trial
must, however, before long be made, and herein
the Viceroy, as well as some of the large landed
proprietors of his family, may be able to give some
useful assistance.
With regard to an extension of cultivation, the
obstacles arise chiefly from the scarcity of hands
and of capital. The want of labour might be par-
tially remedied by the introduction of improved
machinery, especially for separating the cotton
from the seed. The M'Carthy gin has already
been, to some small extent, brought into use upon
the estates of the large landholders, and with a
considerable degree of success ; but, whether it be
owing to mere prejudice or to some more substan-
tial reason, it is found that the greater number of
the Manchester spinners object to it, and although
there are a few who actually give it the preference
over cotton cleaned by the old method, upon the
whole the produce of the M'Carthy gin has to be
disposed of at lower prices, and is, moreover, of
much slower sale.

With regard to the want of capital, the difficulty
might be met by offering advances to the villagers
on fair terms. A system of supplying money to the
fellahs already exists, though to an insufficient ex-
tent. The business is chiefly carried on by Greek
and Levantine traders ; but owing perhaps partly
to the great difficulty that is often experienced in
obtaining reimbursements, either in money or in
goods, the advances are made at such exorbitant
rates that even 3 or 4 per cent. per month is con-
sidered moderate.
In this matter, should it be deemed proper to
enter into arrangements for the purpose, the Go-
vernment might possibly render some useful assist-
ance by enforcing and, to some extent, superintend-
ing the observance of the contract that might be
entered into by the villagers; but I believe that
any such undertaking would be altogether foreign
to the views of the Cotton Supply Association, and
it must be confessed that it would probably be found
difficult to carry it on under any system not open
to objection.