No. 636.
Mr. Farman to Mr. Evarts.
Cairo, February 14, 1880. (Received March 15.)
Sir: I have the honor to transmit herewith a copy and a translation of a dispatch dated February 8, 1880, which I have received from His Excellency Mustapha Pasha Fehmi, minister of foreign affairs.
His excellency asks my intervention in obtaining the assent of the Government of the United States for the immediate and full payment, from the balance of the funds remaining from the Rothschild loan, of the arrears of the tribute and the arrears of pension and pay of the government employés in such cases as the annual amount of such pensions or pay does not exceed the sum of £1,000.
On referring to article 3 of the decree relating to the domanial loan, a copy of which I inclosed with my dispatch No. 351 of November 27, 1879, you will notice that it was therein decreed that the balance of the money remaining from this loan be devoted entirely and exclusively to the payment of the non-consolidated debt (floating debt) and intrusted to the special commissioners of the public debt, with the proviso that it should not be disposed of by them except according to the instructions that should be given by the commission of liquidation that should be established by virtue of an international understanding, or, in default of this commission, according to the instructions that should be given them by the Khedive with the concurrence of the powers.
These provisions were inserted in the decree on the demand of certain European governments.
No commission of liquidation has as yet been constituted, and the Egyptian Government, expecting soon to receive the balance of the Rothschild loan, ask the assent of the powers to apply a portion of these funds in the manner above stated.
There has been paid since the making of said decree from the proceeds of this loan £1,150,000 upon judgments which had become liens upon the mortgaged lands prior to the record of the Rothschild mortgage, but there still remains in the hands of these bankers about £2,200,000 ($11,000,000).
The amount of arrears of tribute is £280,000, and the arrears of pension and pay of the classes named £500,000. If these amounts are paid in Ml from the £2,200,000 it will leave only £1,400,000 to be paid to the ordinary creditors, or about 25 cents on a dollar of their claims.
Several of the European powers have already signified their assent to the payment from this fund of the sums due on account of arrears of pension and pay. Some have also given their assent to the payment of the arrears of the tribute from the same source. One or two powers [Page 1000] who are opposed to thus paying their arrears of the tribute have given their agents and consul-general instructions to act with the majority, and it may be that all the European powers will finally give their consent to the payment of all these sums as asked by the Egyptian Government.
Knowing as I do the position taken by our government in relation to this country, and its reluctance to interest itself in, or have anything to do with, the details of its internal affairs, I should consider myself authorized to state that the Government of the United States have no objection to the application of the funds in the manner mentioned, if it did not seem to me entirely unjust to pay in full from the source named the arrears of tribute. The object of this is to keep intact the funds that are pledged to the payment of the interest on the bonded debt. The two controllers general, one English and the other French, who now virtually govern Egypt, so far as relates to its finances, are only or principally interested in the payment of this class of indebtedness.
The proper manner to dispose of the whole question would be by a commission of liquidation, but as yet no definite arrangement has been made in relation to such a commission, for the reason that the English and French do not wish to share in any manner the financial control, now exercised by them, with the other powers. It however now looks, from the complications that have arisen, as if they would be compelled to do so.
It is evident that the commissioners of the public debt will have no right on its receipt to dispose of the money mentioned without the assent of the powers, including the United States.
I was asked by the minister of foreign affairs, as you will notice in his dispatch, to obtain an answer from my government by telegraph, but I did not think it expedient or necessary to telegraph you on this subject, as it may yet be some time before moneys are obtained from the Rothschilds on account of the difficulties mentioned in the commercial report which I have just sent to the Department.
I would, however, thank you to send me, on the receipt of this dispatch, a telegram stating whether or not you have any objection to the application of the funds by the Egyptian Government in the manner specified. I see no objection to this, so far as relates to the back pay and pensions.
His excellency the minister of foreign affairs in transmitting to me the domanial decree, stated in his letter, a copy of which I also sent you, that he believed it to be his duty to call my attention to the fact that it remained well understood that the employés and the pensioners of the government to whom were due arrears of pay formed a part of the creditors of the non-consolidated debt and would be treated in conformity with the principle established by the commissioners of inquiry. This principle was that this class of creditors was to be considered as privileged and to be paid first and in full.
Hoping to receive an immediate answer by telegraph, so that I may not be embarrassed in case all the other powers give their assent as requested, I have, &c.,