resumed in full, another
international commission was to be appointed to examine into the whole
financial situation. Lastly, the convention empowered Egypt to raise a
loan of nine millions, guaranteed by all the powers, at a rate of
interest of 3%. For the service of this loan--known as the Guaranteed
loan--an annuity of L315,000 was provided in the Egyptian budget for
interest and sinking fund. The L9,000,000 was sufficient to pay the
Alexandria indemnities, to wipe out the deficits of the preceding years,
to give the Egyptian treasury a working balance of LE.500,000 and
thereby avoid the creation of a fresh floating debt, and to provide a
million for new irrigation works. To the wise foresight which, at a
moment when the country was sinking beneath a weight of debt, did not
hesitate to add this million for expenditure on productive works, the
present prosperity of Egypt is largely due.

The provisions of the London Convention did not exhaust the restrictions
placed upon the Egyptian government in respect of financial autonomy.
These restrictions were of two categories, (1) those independent of the
London Convention, (2) those dependent upon that instrument. In the
first category came (a) the prohibition to raise a loan without the
consent of the Porte. The right to raise loans had been granted to the
khedive Ismail in 1873, but was taken away in 1879 by the firman
appointing Tewfik khedive. (b) Next came the inability to levy taxes on
foreigners without the consent of their respective governments. This
last obligation was, in virtue of the Capitulations, applicable to Egypt
as part of the Ottoman empire. The only exception, resulting from the
Ottoman law under which foreigners are allowed to acquire and hold real
property, is the land tax. (All taxes formerly paid by natives and not
by foreigners have been abolished in Egypt, but the immunity described
constitutes a most serious obstacle to the redistribution of the burden
of taxation in a more equitable manner.)

From the purely Egyptian point of view the most powerful restriction in
this first category remains to be named. In 1883 the supervision
exercised over the finances by French and British controllers was
replaced by that of a British official called the financial adviser. The
British government has declared that "no financial decision shall be
taken without his consent," a declaration never questioned by the
Egyptian government. This restriction, therefore,