The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1913-02-20
ERG, S. c. THURSDAY, FEBRUARY co. 1913.
EGYPTIAN BANKING.
Institutions Young, but Numerous
and Prosperous.

The banks now operating in Egypt
are numerous and without exception
very prosperous, says Moody's Maga-
zine. They are of comparatively re-
cent formation, as previous to 1886
the banking business was quite with
out organization or efficient direction
and was entirely in the hands of
charaffs (money changers.)
The charaffs reaped large and il
legitimate profits, as the volume Of
business handled was enormous and
necessitated the exchange of great
quantities of gold and silver coins Of
different nations. A large class of
the bill brokers travelled continuous
ly between the various towns buying
and selling foreign exchange bills.
During the time of Mehamet-Ali,
who was Khedive of Egypt from
1893 to 1S41, it was the prevailing
custom for merchants who wished to
send money to the interior of the
country or to Syria to deposit it at
the moudirich (perfecturs,) whence
it was transmitted through govern
ment officials, while among merch-
ants of the same town, or vicinity
bills of exchange were safely han
died and conditions were safeguard
ed through their intimate knowledge
of each other by constant intercourse.
The original example of what may
be called the beginning of the plan
for real banking business in Egypt
is found in the scheme of an Ameri'-
can by the name of Alexanian, who,
in 1S4S, was granted by the Khedive
Abbas Pasha the privilege Of utiliz-
ing in banking operations the capital
which for many years had lain idle
in the hands of the Deid ell Nal "a
department of the government hav-
ing custody of the contested inher-
itances and patrimony of incompe-
tent persons) upon a basis of 10
per cent. annual revenue.
The banking operations for the
use of these funds were limited to-.
first, advances to the Khediye and
to the government; second, loans to
agriculturalists; third, discount of
country and foreign bills of ex-
change to assist commerce. But this
plan met with the opposition of the
Ufema (the professors Of law and re-
ligion) who protested against the in
terest because it offended their inter-
probation of the paragraph on in
tegrity and honesty in the Koran,
by which they explain the meaning
of the salary thus:
1T is forbidden to loan money at
interest because the metal is manu-
factured by God and God does not
accept interest, but it is allowed to
loan money on mortgages on any
kind of property under the express
condition that the borrower shall
lose the use of that property during
the time of the loan and the sole use
of the property shall belong for that
time to the lender
The unscrupulous fellahs took ad-
vantage of this Interpretation of an
assumed religious principle and sub
verted it's meaning to suit their own
interests and thereby make void their
loans and refused to pay them. Alex
anian, thus rendered unable to fulfil
his engagements, was imprisoned and
did not regain his liberty until re-
leased by the succeeding Khedive,
Said Pasha, who also restored to him
a part of his own fortune.
The most powerful of all the bank
ing institutions in Egypt is the Ma
tional Bank of Egypt, established
June 25, 1896. 1t is the only de-
pository bank of the government,
also of the Sudan and of the interna-
tional courts, known as the Mixed
Tribunals. 1t controls the privilege
of the issue of paper money for so
years, from 1898 to 1948, which is
secured by the deposit of so per cent.
of the issue in gold coin in it's vaults
and so per cent. in securities, whose
value is taken at par and which must
be acceptable to the government.
Olar News.