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1885.] in the investigations of the famous Foreign Loans Commission of ten or eleven years ago. Messrs Fruhling and Goschen, the bankers for the first two loans – those of 1862 and 1864 – came out of the ordeal unscathed, all their transactions having been legitimate and above-board; but their successors seem to have had peculiar methods of business, to say the least of it. The regular agency commissions, which should have satisfied most men, were the smallest part of their spoil. They manipulated the markets at the expense of the public, and they extracted from the ex-Khedive all the usual extras that a professional money-lender levies on his spendthrift clients.

An Egyptian loan of this period generally passed through three stages. In the first, advances were required by the Treasury for current; expenses. They were obtained from the banks or wholesale usurers at Cairo, who charged from 12½ to 25 per cent interest on them, according to the necessities of the Government. As the Treasury bonds accumulated they declined in value, and at times of severe financial pressure they have fallen as low as 65. This was the chrysalis stage of the loan, generally distinguished as the "floating debt" period. The second stage opened with the negotiations in Paris and London for "funding the floating debt," as it was humorously called. The financiers, while they were driving the hardest bargain they could with Ismail's agents, bought up in Cairo the depreciated Treasury bonds, which they knew, of course, would be paid off if the intended new raid on investors should succeed. To minimise risk and simplify matters, it was sometimes stipulated that the Treasury bonds should be received as cash in payment of subscriptions. As compared with the innocent bonâ fide subscriber, the syndicate had, in the third stage of the transaction, various material advantages. If the price to the public was 93, the syndicate would have secured beforehand an option to take all it wanted at, say, 88. While the public paid their 93 in cash, the syndicate would pay their 88 in paper purchased at 65. When the loan was a success, the syndicate behind the scenes could quietly increase their subscriptions, and compel the public to buy in the open market at an artificial premium. In other words, they could fleece the lenders with one hand, and the spendthrift borrower with the other. Under this pleasant system Ismail Pasha borrowed, between 1862 and 1873, rather more than 68 millions sterling, – fully as much as the total revenue of Egypt in the same period. But, as has been said, he received only some 45 millions in hard cash; and when he defaulted in 1875, there had been repaid in interest more than 35 millions sterling. Meanwhile the capital of the debt had increased to 72 millions sterling.

It is due to the Egyptian people, as well as to bonâ fide bondholders, to have these facts distinctly understood. In its inception and growth the public debt of Egypt was one of the greatest political iniquities known to this generation. It was contracted without the slightest reference to the wishes or the interests of the Egyptian people. Only 16 millions out of a total of 68 millions was expended on what has any claim to be considered a work of public utility. Many millions of it went into the privy purse of the ex-Khedive, and was spent, as we have indicated, in bribery, to say nothing of the "ropes of pearls" gallantly bestowed on opera-singers. In 1875 the bubble burst. Ismail Pasha, shut off from