The Press WEDNESDAY, OCTOBER 3, 1956. “Plundering” Egypt

Press, Volume XCIV, Issue 28089, 3 October 1956, Page 12

The Press WEDNESDAY, OCTOBER 3, 1956. “Plundering” Egypt

A correspondent, Mr Ralph S. Wheeler, persists in his attempts to put Britain’s record in Egypt in the worst possible light. In particular, he condemns Lord Cromer (Evelyn Baring before he was raised to the peerage) as a tool of British moneylenders, and one w’ho extracted money from the Egyptian fellahin for the benefit of his family’s • banking firm, Baring Brothers. Mr ; Wheeler takes a jaundiced view of I this period of history—a period in [which Egypt occupied a vital j geographical place in the expansionist (and containment) schemes of many of the European Powers in the 1870’s and 1880’s, when the financial dealings of the Khedive Ismail plunged his country heavily into debt with European bondholders—mostly French, but German, Russian, and Austrian as well as British. The harsh terms these bondholders extracted from a creditor who became progressively more unreliable is a matter of history. From the time (in 1876) when European bondholders began to intervene in Egyptian affairs until 1904, an international committee representing the bondholders (the Caisse de la Dette) possessed powers over Egyptian expenditure. It is a fact that in 1877, Captain Baring (as he then was) was appointed to be the first British commissioner of the Caisse. It is also true that, from the first, Baring offered the French the unpleasant spectacle of a British controller openly preferring the fellahin to the bondholders. Baring left Egypt in protest in March, 1879. He was persuaded by Gladstone to return; but after six months he was offered a post on the Viceroy’s council in India which his Government, by then committed to dual control with France in Egypt, would not let him decline. Baring did not return to Egypt until September, 1883—that is, a year after the defeat of Arabi Pasha at Tel-el-Kebir. From that time, with Britain now in sole control, Baring exercised a consulship which continued for 23 years. Of his dealings with the bondholders during this period, the consensus of historians is clearly that he was very far from being their, friend. From the many opinions available, those of a modern historian of high standing and extensive scholarship may be quoted briefly. Mr C. E. Carrington (a New Zealander who was at school in Christchurch, and is now Professor of British Commonwealth Relations at the Royal Institute of International Affairs) says of Britain’s regime in the 1880’s, “ whatever she was doing, she was “ certainly not acting as the agent “of cosmopolitan finance ”. Speaking of a British mission in 1884, headed by Baring’s cousin, Lord Northbrook, which sought ways to lift Egypt out of bankruptcy, Professor Carrington says that, on Baring’s advice, Northbrook proposed a guaranteed British loan to Egypt of £9,000,000 which, after paying off the deficit to the bondholders and the reparation for the damage due to Arabi’s plunderings, would still allow a modest £ 1,000,000 for irrigation. “ But to this proposal “ the other Powers would not agree. “ Northbrook was then sent to make “ a further report, which provoked “ the French to fury, since he “ actually suggested that interest “ should be withheld from the bond- “ holders for the urgent needs of “ administration. This shocking “ proposal was checked by the “ French members of the Caisse, now “ supported by the German and “ Russian representatives, who cited “ the Egyptian Prime Minister “ before a mixed tribunal and com- “ pelled him to pay to the last “ farthing Patient efforts by British diplomats eventually produced a “ modus vivendi ” that worked until 1904. The political status of the British in Egypt was not defined but was tacitly accepted. The loan of £9,000,000 was raised and guaranteed jointly by the Powers, but in such a form that the Caisse could and did exercise a veto over the spending of any surplus in the Egyptian Budget. Baring plugged away at reforms in the administration with the handicap that every item of new expenditure was questioned by other members of the Caisse.

In 1903, Baring, then Lord Cromer, rendered an account of his 20 years of stewardship. The population of Egypt had almost doubled; the revenue had increased from £9,000,000 to £12,000,000; the external trade had trebled. The national debt still stood at

£101,000,000, mostly held abroad; but the £9,000,000 borrowed under Cromer’s regime had brought more good to the Egyptian people than the £91,000,000 borrowed by Ismail in the bad old days. Furthermore, the

bonds which had paid 5 per cent, on a market value of 87 now paid 3 \ per cent, on a market value of

99. But the expense was /hocking. No less than £79,000,000 had been paid to the bondholders as interest on loans (made to the Khedive

Ismail) which were largely unproductive. Less than two-fifths of the national revenue had been spent for the benefit of the people, including £11,000,000 on irrigation. With this meagre sum, Professor Carrington observes, “ and in spite of the drain “to the avaricious and obstructive “ bondholders, Cromer had made “ Egypt orderly, prosperous, and ‘ progressive