Mr. Beardsley to Mr. Fish.
Cairo , August 31, 1874. (Received September 23.)
Sir: To continue the subject of my dispatch No. 226, of the 26th instant, in relation to the finances of Egypt, I have the honor to inform you that the balance of the thirty-two million loan of last year has been taken by the house of Oppenheim, Neveu & Co. on the same terms as they took the first half of the same loan in July, 1873.
The conditions of that loan and the manner in which it was placed on the market were given in dispatch No. 117, of July, 1873. The loan was placed on the market simultaneously here and in Europe, and, as you already know, was a failure.
The Oppenheims took £16,000,000 at 75, fixed, with the option of taking the balance within sixteen months if not taken by public subscription before that time.
In the mean time but a limited amount has been taken by the public, and within a few weeks final arrangements have been made with Oppenheim, [Page 1202] Neveu & Co., by which they take the balance of the loan, about £16,000,000 nominal, on the same terms as they took the first £16,000,000 that is to say, at 75, fixed.
As a matter of fact, they had already advanced the government about £7,000,000, leaving only £5,000,000 to be arranged for.
The large floating debt has been nearly extinguished by this operation, but it is to be observed that while the obligations of the government have been issued to the amount of £32,000,000, the treasury has only realized about £23,000,000 from the loan.
The present condition of the finances seems to be as satisfactory as could be expected. The remainder of some of the old loans have been extinguished, and the floating debt has been reduced to about £3,000,000.
To meet all the engagements of the government to the end of next December, however, £3,000,000 are required; and an arrangement for a reissue of treasury bonds has been made, on which, as security, the Anglo-Egyptian Bank is to advance the required amount. These bonds, as well as all the balance of the bonds of the floating debt, fall due next year, 1875.
Five or six millions of bonds, that is to say, the entire floating debt, will thus fall due next year. To meet that demand, it has been proposed to issue an irredeemable national loan of £5,000,000, and invite native subscriptions.
The loan will be issued to natives at par, in bonds of small amount, bearing nine per cent, interest, and payable in monthly installments, extending from the 1st of November, 1874, to the 1st of November, 1875.
To render the loan popular with the natives, the bonds will be registered at the rouznameh, or religious divan.
The rouznameh is a divan or department, having charge of religious estates and of all contracts of a sacred or peculiarly permanent nature.
Any contract registered at the rouznameh partakes of the religious nature of the divan, and is secure from arbitrary action on the part of the civil authorities.
Many Egyptians deposit their money and valuables at the rouznameh for safety, deriving no interest or benefit therefrom. It is believed that many who now deposit at the rouznameh without benefit will gladly avail themselves of the national loan, which will be equally safe as a permanent investment, and will yield them 9 per cent, interest, in semiannual payments.
Reference to this loan has been made in various European newspapers during the past summer, and it has been stated that the loan has not only been placed on the market, but that it has been more than covered already.
Such is not the case, however. Not a single bond of the loan has been issued, and its success is considered by many as extremely doubtful.
I am, &c,