Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-01-21
EGYPTIAN BANKING.
Institutions Young, but Numerous and
Prosperous.

The banks now operating in Egypt
are numerous and without exception
very prosperous, says Moody's Maya
zine. They are Of comparatively re-
cent formation, as previous to 1856 the
banking business was quite without
organization or efficient direction and
was entirely in the hands Of charafs
(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 or the
bill brokers travelled continuously be-
tween the various towns buying and
selling foreign exchange bills.
During the time of Mechanically, who
was Khedive Of Egypt from 1899 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 trans
mitted through government officials,
while among merchants of the same
town or .icinity bills of exchange were
safely handled and conditions were
safeguarded through their intimate
knowledge of each other by constan;
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 American by the
name of Alexanian, who, in 1S4S, was
granted by the Khedive Abbas Pasha
the privilege of utilizing in banking
operations the capital which for many
years had lain idle in the hands Of the
Beid ell Nal Ga department Of the gov
ernment having custody of the con-
tested inheritances and patrimony of
incompetent 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 Khedive and to the
government; second, loans to agricul-
turists; third, discounts Of country and
foreign bills of exchange to assist
commerce. But this plan met with
the opposition of the Ulema (the pro-
fessors of law and religion) who pro-
tested against the interest because It
offended their Interpretation Of the
paragraph on integrity 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 man.
ufactured by God and God does not ac-
cept 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 lend
err"
The unscrupulous fellahs took ad-
vantage of this Interpretation of an
assumed religious principle and sub
verted its 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 banking
institutions in Egypt is the National
Bank of Egypt, established June 25,
1896. 1t is the only depository bank
of the government, also Of the Sudan
and of the international courts, known
as the Mixed Tribunals. 1t controls
the privilege of the issue of paper
money for fifty years, from 1898 to
194S, which is secured by the de-
posit of SO per cent of the issue in
gold coin in its vaults and so per cent
in securities, whose value is taken at
par and which must be acceptable
to the government.