Excerpt from Das Staatsarchiv, Vol. 71: Sammlung Der Offiziellen Aktenstücke Zur Geschichte Der Gegenwart

Existing bondholders, and should remove all grounds of complaint whenever the conversion is carried through. H The Decree abolishes various other provisions of the old Law which experience has shown to be unnecessary and inconvenient. It will be sufficient to mention the two most important of these. In the first place, the consent of the Caisse will no longer be necessary in the event of the Egyptian Government desiring to raise further loans for productive expenditure or for other reasons. In the second place, the plan devised in the London Convention of fixing a limit to the administrative expenditure of the Egyptian Government has been swept away. The manifold inconvenience, and even loss, to which this system has given rise in a country which is in the process of develop ment, and where, consequently, new administrative needs are constantly making themselves felt, have been frequently pointed out by Lord Cromer. Your Excellency will not fail to observe that the Khedivial Decree in which these measures are embodied will require the consent of Austria, Germany, Italy, and Russia before it can be promulgated by the Egyptian Government. The amount of the Egyptian Debt held in these countries is, however, quite insignificant. France and Great Britain, indeed, between them hold nearly the whole of the Debt, with the exception of the small proportion which is held in Egypt itself. In these circumstances it is reasonable to hope that no serious difficulties will be encountered in other quarters regarding proposals which are considered by the two Governments as giving entire satisfaction to the legitimate interests of the bondholders, and which those two Governments are formally pledged to support. Should, however, unexpected obstacles present themselves, we shall, in virtue of our Agreement with France, be able to count upon the support of French diplomacy in our endeavours to overcome them. M It is necessary that I should add a few words as to the other points in which the internal rights of sovereignty of the Egyptian Government are subject to international interference. These are the consequences of the system known as that of the Capitulations. It comprises the jurisdiction of the Consular Courts and of the Mixed Tribunals, the latter applying a legislation which requires the consent of all the European Powers, and some extra-european Powers, before it can be modified. In Lord Cromer's opinion the time is not ripe for any organic changes in this direction, and His Majesty's Government have not, therefore, on the present occasion, proposed any alterations in this respect. At the same time, whenever Egypt is ready for the introduction of a legislative and judicial system similar to that which exists in other civilized countries, we have sufficient grounds for counting upon French co-operation in effecting the necessarychanges. N It will be observed that an Article has been inserted in the Agreement declaring the adhesion of His Majesty's Government to the Treaty of the 29th October, 1888, providing for the neutrality of the Suez Canal in time of war. In consequence of the reservation made by Lord Salisbury at the time respecting the special situation of this country during the occupation of Egypt, some doubt existed as to the extent to which Great Britain considered herself bound by the stipulations of the Convention. It appears desirable to dissipate any possible misunder standing by specifically declaring the adhesion of His Majesty's Govern ment. It is, however, provided that certain executive stipulations which are incompatible with Lord Salisbury's reservation should remain in abeyance during the continuance of the occupation.

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