No. 641.
Mr. Farman to Mr. Evarts.
Cairo, April 22, 1880. (Received May 17.)
Sir: I have the honor to inform you that the Russian consul-general, in accordance with instructions received from St. Petersburg, presented this morning to the Egyptian Government a note in which he stated that his government made a formal reserve as to any action that might be taken by the commission of liquidation. This note has not been made public, but it has been read to me by the consul-general, M. de Lex. This is intended, in connection with what has taken place, as a polite protest to the manner in which the commission has been formed.
Some time since the Russian Government sent to the five great powers of Europe a circular in which it stated, in substance, that it had not heretofore taken any prominent part in the affairs of Egypt, but that as it was now proposed to form a commission of liquidation to regulate Egyptian finances, and to give to the acts of such commission the force of law, it would be necessary, in the opinion of the imperial government, that all the powers that participated in the formation of the new tribunals should be represented.
Notwithstanding this circular, the Khedive, under the advice of England and France, issued his decree of the 31st ultimo, establishing a commission to be constituted only of the representatives of the five powers, and giving to France and England a majority of the members, and, consequently, full and absolute control of the action of the commission.
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The opinion of the Russian consul-general is that his government will leave it entirely to each of its citizens having claims against Egypt to decide for himself whether he will accept the conditions that maybe offered by the commission or resort to the tribunals.
A decision just rendered by the international court of appeals at Alexandria very much diminishes the present necessity for a commission of liquidation, and if it were not already formed I doubt whether it would be.
As I have heretofore had the honor to inform you, the government [Page 1008] paid in May last only 2½ per cent. instead of 3, the amount of its semiannual interest as fixed by the Khedival decree of November, 1876, Issued under what is usually known as the Goshen-Joubert contract, and in November last only 2 per cent.
An action was lately brought in the court of first instance at Alexandria to recover £10,033, being balance of one-half per cent. unpaid on coupéons of May last on £694,200 bonds and 1 per cent. balance unpaid on coupéons of November on £656,240 of bonds, and the court held that it had under the Egyptian codes no jurisdiction in such a case, and yesterday the court of appeals confirmed this decision.
This leaves the government free to reduce its interest on its consolidated debt at its pleasure, without any interference on the part of the courts.
The commission may, however, in this new and unexpected phase of the case, become very important to the bondholders by fixing the interest at a certain per cent., thus making a kind of international agreement of which the courts could take cognizance, according to principles they have already enunciated.
I have, &c.,