Papers Relating to Foreign Affairs, Accompanying the Annual Message of the President to the Third Session of the Fortieth Congress

Mr. Hale to Mr. Seward.

No. 124.

Agency and Consulate General of the United States of America, Alexandria, Egypt, June 6, 1868.

Sir: For the first time an official account has been published of the state of Egyptian government finances. A translation is contained in this dispatch.

The original publication forms an appendix to a report made to the assembly of representatives now sitting at Cairo, and covers the estimate for the year 1585 of the Coptic calendar, of which the beginning corresponds to 24th September, 1868. The original account is stated in “purses,” but it is here changed into dollars at the rate of twenty-five dollars in gold to the purse.^*

The expenses of the government for the year are set down as follows:

EXPENSES.

Civil list of the Viceroy	$1,500,000
Allowances to members of his family	553,638
Tribute to Constantniople	3,291,688
Department of the interior	67,251
Department of war and military schools	3,500,000
Department of finance	403,131
Department of foreign affairs	65,069
Civil and commercial tribunals	192,742
Provincial administration	860,592
Navy department and marine arsenal	1,002,680
Department of public works	27,345.
Board of health and hospitals	191,258
Governments at Cairo, Alexandria, Damietta, Eosetta, El-Arich, Suez, and of the canal	791,023
Police at Cairo and Alexandria	331,680
Department of public instruction—schools	369,230
Employés of customs	137,933
Pensions of widows and of the harems	208,633
Pensions of employés out of service	486,326
Pensions of persons en disponibilité, (retired list)	218,531
Pilgrimage to Mecca and the hospice of the Hedjaz, (entertainment of indigent pilgrims)	$372,704
Reserve fund for care of canals, &c	1,000,000
Payment due Bank of Saxony for loan	1,292,500
Payment on the loan of £5,000,000 sterling	3,023,933
Payment on the loan secured by the railway	3,375,938
Payment of treasury notes and medjidich coupons	266,850
	23,530,675
Surplus for the year	12,922,115
	36,452,790

The other side of the account is stated as follows:

RECEIPTS.

Land tax, tithes, personal tax, tax on palm trees, and product of various undertakings	$22,872,790
New tax of one-sixth additional of the amount of land tax and tithes, to be continued for four years altogether, namely, the Coptic years 1584 to 1587, inclusive, amount for one year	3,750,000
Customs	2,475,000
Railway	1,725,000
Locks and other public works	1,990,000
Net revenue of the Soudan	375,000
Income of government property, sheep, oil, and interests on shares in Suez canal	2,382,500
Petty and miscellaneous	882,500
	36,452,790

This estimate shows a surplus for the Coptic year 1585 of nearly $13,000,000. It is stated that the Coptic year 1584, of which three months remain, will show a surplus of half a million dollars.

I inclose a translation of the report of the committee to the assembly. The recommendations of the report were adopted by the assembly; but the suggestion for an internal loan appears to have been found inconvenient. Almost immediately after the Viceroy’s departure, as mentioned in my dispatch No. 122, it was announced that a loan for six millions sterling had been arranged by the Egyptian government with the banking house of H. Oppenheim, Neven & Co., on terms mutually satisfactory; the precise details of this financial operation are not yet known.

A good deal of outcry is made in the European press about the new tax imposing an increase of one-sixth, or 16⅔ per cent, on previous taxes; to continue for four years. If, however, this exceptional taxation be compared with the extra income tax assessed in Great Britain to defray the cost of the Abyssinian war, or with the still more exceptional measures of finance now pending in Austria, something of excuse may be found for a government like that of Egypt, which may be said to have learned foreign lessons of finance by beginning at the wrong end of the book. Who shall say that pupil is blamable more than preceptor for this inversion?

You will not fail to notice the comparatively small sum collected at the custom-house. Thirty-four millions of dollars internal taxes paid by less than five millions of people in Egypt, averages $7 a head. Taxed at that rate per head, the thirty millions of population in the United States would pay $210,000,000.

I have the honor to be, sir, very respectfully, your obedient servant.

CHARLES HALE.

Hon. William H. Seward, Secretary of State, Washington, D. C.

[Translation.]

Report of the Committee of the Assembly, consisting of Haggi Yousouf Abd-el-Taltah, Mohammed Saïd Bey, and Ibrahim Effendi-el-chekri.

The Egyptian government owes for debts contracted under the present reign and that preceding it, a total sum of £22,000,000 sterling, of which £2,400,000 sterling were borrowed by Said Pacha, payable by installments spread over tweny years; £5,000,000 sterling borrowed by the present Viceroy to cancel old debts payable by installments spread over fifteen years; besides £1,000,000 sterling which remains due to the Suez Canal Company.

But it is proper to take into consideration that during the five years which have passed since his accession, his Highness has paid £8,000,000 sterling for matters properly chargeable to the revenues of the government.

That which remains to be paid in the financial years 1584, 1585, and 1586 of the Coptic calendar, according to the statements of the minister of finances, amounts to £6,101,570 sterling, besides interest.

The committee has ascertained, moreover, that the government has spent for objects and works of general interest, various sums amounting to £6,000,000 sterling. These comprise the dry dock and harbor of Suez, the locks, bridges, and aqueducts in the provinces, one bridge and several streets in Alexandria, several lines and branches of railway, the settlement of various debts, military and naval stores now on hand, and steamships.

From what precedes, it follows that the government has paid for debts and interests of the preceding reign and works of public utility, a total of £14,000,000 sterling, and this has been done notwithstanding the decrease of the receipts from customs duties arising from the sliding-scale reduction from 12 per cent, to 1 per cent, which has taken place in the export duties.

For although the duties on imports are maintained at 7 per cent., the difference on that side is not less, on account of the small importance of the amount of imports compared to that of exports.

The amount which must be paid in these years, 1584, 1585, and 1586, after deducting the balance of the budget, is £6,000,000 sterling, besides interest. The committee accordingly has come to the conclusion that, for the good of the country, it will be best to avoid a foreign loan, by means of the following measures:

1. Establish an extraordinary tax equal to an addition of one-sixth of the present taxation on lands paying tax and tithe, on the palm trees, and on the personal tax, for four years, that is, 1584 to 1587, inclusive. This one-sixth is scarcely equal to what was formerly paid the government under the name of customs duty; for customs duties, although paid by the merchants, fall in the end upon the producers. This one-sixth, moreover, is only provisional, and will only continue for the four years already mentioned; it is to be understood that each year one-sixth will be collected in addition to the taxes already established, as above mentioned.

The collection of the one-sixth will be made by a new bureau, distinct from the ordinary bureau, and will be kept in a separate account. The one-sixth for the current year will be collected with taxes of this year, as yet unpaid, and during the remainder of this year. The one-sixth for the three following years will be collected with the ordinary taxes at the times fixed for their collection by the decree of last year to that effect.

2. A loan to cover what remains to be paid.

By these means and with the aid of God we may succeed to meet the obligations of the government.

[Report made to the assembly 16th May; printed 3d June, 1868.]

1. Exactly, the “purse” is worth $24 95½.