Part 14

The rise of the Nile is naturally the occasion of annual customs, some of which are doubtless relics of antiquity; these are observed according to the Coptic calendar. The commencement of the rise is commemorated on the night of the 11th of Bauna, the 17th of June, called that of the Drop (Lelet-en-Nukta), because a miraculous drop is then supposed to fall and cause the swelling of the river. The real rise begins at Cairo about the summer solstice, or a few days later, and early in July a crier in each district of the city begins to go his daily rounds, announcing, in a quaint chant, the increase of water in the nilometer of the island of Roda. When the river has risen 20 or 21 ft., he proclaims the Wefa en-Nil, "Completion" or "Abundance of the Nile." On the following day the dam which closed the canal of Cairo was cut with much ceremony. The canal having been filled up in 1897 the ceremony has been much modified, but a brief description of what used to take place may be given. A pillar of earth before the dam is called the "Bride of the Nile," and Arab historians relate that this was substituted, at the Moslem conquest, for a virgin whom it was the custom annually to sacrifice, to ensure a plentiful inundation. A large boat, gaily decked out, representing that in which the victim used to be conveyed, was anchored near, and a gun on board fired every quarter of an hour during the night. Rockets and other fireworks were also let off, but the best, strangely, after daybreak. The governor of Cairo attended the ceremony, with the cadi and others, and gave the signal for the cutting of the dam. As soon as sufficient water had entered, boats ascended the canal to the city. The crier continues his daily rounds, with his former chant, excepting on the Coptic New Year's Day, when the cry of the Wefa is repeated, until the Salib, or Discovery of the Cross, the 26th or 27th of September, at which period, the river having attained its greatest height, he concludes his annual employment with another chant, and presents to each house some limes and other fruit, and dry lumps of Nile mud.

The period of the hot winds, called the khamsin, that is, "the fifties," is calculated from the day after the Coptic Easter, and terminates on the day of Pentecost, and the Moslems observe the Wednesday preceding this period, called "Job's Wednesday," as well as its first day, when many go into the country from Cairo, "to smell the air." This day is hence called Shem en-Nesim, or "the smelling of the zephyr." The Ulema observe the same custom on the first three days of the spring quarter.

Tombs of saints abound, one or more being found in every town and village; and no traveller up the Nile can fail to remark how every prominent hill has the sepulchre of its patron saint. The great saints of Egypt are the imam Ash-Shafi'i, founder of the persuasion called after him, the sayyid Ahmad al-Baidawi, and the sayyid Ibrahim Ed-Desuki, both of whom were founders of orders of dervishes. Al-Baidawi, who lived in the 13th century A.D., is buried at the town of Tanta, in the Delta, and his tomb attracts many thousands of visitors at each of the three festivals held yearly in his honour; Ed-Desuki is also much revered, and his festivals draw together, in like manner, great crowds to his birthplace, the town of Desuk. But, besides the graves of her native saints, Egypt boasts of those of several members of the Prophet's family, the tomb of the sayyida Zeyneb, daughter of 'Ali, that of the sayyida Sekeina, daughter of Hosain, and that of the sayyida Nefisa, great-granddaughter of Hasan, all of which are held in high veneration. The mosque of the Hasanen (or that of the "two Hasans") is the most reverenced shrine in the country, and is believed to contain the head of Hosain. Many orders of Dervishes live in Egypt, the following being the most celebrated:--(1) the Rifa'ia, and their sects the 'Ilwania and Saadia; (2) the Qadiria (Kahiria), or howling dervishes; (3) the Ahmedia, or followers of the sayyid Ahmad al-Baidawi, and their sects the Beyumia (known by their long hair), Shinnawia, Sharawia and many others; and (4) the Baramia, or followers of the sayyid Ibrahim Ed-Desuki. These are all presided over by a direct descendant of the caliph Abu Bekr, called the Sheikh El-Bekri. The Saadia are famous for charming and eating live serpents, &c., and the 'Ilwania for eating fire, glass, &c. The Egyptians firmly believe in the efficacy of charms, a belief associated with that in an omnipresent and over-ruling providence. Thus the doors of houses are inscribed with sentences from the Koran, or the like, to preserve from the evil eye, or avert the dangers of an unlucky threshold; similar inscriptions may be observed over most shops, while almost every one carries some charm about his person. The so-called sciences of magic, astrology and alchemy still flourish.

AUTHORITIES.--The standard authority for the Moslem Egyptians is E. W. Lane's _Manners and Customs of the Modern Egyptians_, first published in 1836. The best edition is that of 1860, edited, with additions, by E. S. Poole. See also B. Saint-John, _Village Life in Egypt_ (2 vols., 1852); S. Lane Poole, _Social Life in Egypt_ (1884); P. Arminjon, _L'Enseignement, la doctrine, el la vie dans les universités musulmanes d'Égypte_ (Paris, 1907). For the language see J. S. Willmore, _The Spoken Arabic of Egypt_ (2nd ed., London, 1905); Spitta Bey, _Grammatik des arabischen Vulgardialektes von Ägypten, Contes arabes modernes_ (Leiden, 1883). For statistical information consult the reports on the censuses of 1897 and 1907, published by the Ministry of the Interior, Cairo, in 1898 and 1909. (E. S. P.; S. L.-P.; F. R. C.)

_Finance._

The important part which the financial arrangements have played in the political and social history of Egypt since the accession of Ismail Pasha in 1863 is shown in the section _History_ of this article. Here it is proposed to trace the steps by which Egypt, after having been brought to a state of bankruptcy, passed through a period of great stress, and finally attained prosperity and a large measure of financial autonomy.

In 1862 the foreign debt of Egypt stood at £3,292,000. With the accession of Ismail (q.v.) there followed a period of wild extravagance and reckless borrowing accompanied by the extortion of every piastre possible from the fellahin. The real state of affairs was disclosed in the report of Mr Stephen Cave, a well-known banker, who was sent by the British government in December 1875 to inquire into the situation. The Cave report showed that Egypt suffered from "the ignorance, dishonesty, waste and extravagance of the East" and from "the vast expense caused by hasty and inconsiderate endeavours to adopt the civilization of the West." The debtor and creditor account of the state from 1864 to 1875 showed receipts amounting to £148,215,000. Of this sum over £94,000,000 had been obtained from revenue and nearly £4,000,000 by the sale of the khedive's shares in the Suez Canal to Great Britain. The rest was credited to: loans £31,713,000, floating debt £18,243,000. The cash which reached the Egyptian treasury from the loans and floating debt was far less than the nominal amount of such loans, none of which cost the Egyptian government less than 12% per annum. When the expenditure during the same period was examined the extraordinary fact was disclosed that the sum raised by revenue was only three millions less than that spent on administration, tribute and public works, including a sum of £10,500,000, described as "expenses of questionable utility or policy." The whole proceeds of the loans and floating debt had been absorbed in payment of interest and sinking funds, with the exception of £16,000,000 debited to the Suez Canal. In other words, Egypt was burdened with a debt of £91,000,000--funded or floating--for which she had no return, for even from the Suez Canal she derived no revenue, owing to the sale of the khedive's shares.

Soon after Mr Cave's report appeared (March 1876), default took place on several of the loans. Nearly the whole of the debt, it should be stated, was held in England or France, and at the instance of French financiers the stoppage of payment was followed by a scheme to unify the debt. This scheme included the distribution of a bonus of 25% to holders of treasury bonds. These bonds had then reached a sum exceeding £20,000,000 and were held chiefly by French firms. The unification scheme was elaborated in a khedivial decree of the 7th of May 1876, but was rendered abortive by the opposition of the British bondholders. Its place was taken by another scheme drawn up by Mr (afterwards Lord) Goschen and M. Joubert, who represented the British and French bondholders respectively. The details of this settlement, promulgated by decree of the 17th of November 1876, need not be given, as it was superseded in 1880. One of the securities devised for the benefit of the bondholders in the abortive scheme of May 1876 was retained in the Goschen-Joubert settlement, and being continued in later settlements grew to be one of the most important institutions in Egypt. This security was the establishment of a Treasury of the Public Debt, known by its French title of _Caisse de la Dette_, and commonly spoken of simply as "the Caisse." The duty of this body was to act as receivers of the revenues assigned to the service of the debt. To render their powers effective they were given the right to sue the Egyptian government in the Mixed Tribunals for any breach of engagement to the bondholders.

The Law of Liquidation.

The Goschen-Joubert settlement was accompanied by guarantees against maladministration by the appointment of an Englishman and a Frenchman to superintend the revenue and expenditure--the "Dual Control"; while a commission was appointed in 1878 to investigate the condition of the country. The settlement of 1880 was effected on the basis of the proposals made by this commission, and was embodied in the Law of Liquidation of July 1880--after the deposition of Ismail. For the purposes of the new settlement the loans raised by Ismail on his private estates, those known as the Daïra (i.e. "administrations") and Domains loans, were brought into account. By the Law of Liquidation the floating debt was paid off, the whole debt being consolidated into four large loans, upon which the rate of interest was reduced to a figure which it was considered Egypt was able to bear. The Egyptian debt under this composition was:

Privileged debt £22,609,000 Unified debt 58,018,000 Daïra Sanieh loan 9,513,000 Domains loan 8,500,000 ----------- £98,640,000

The rate of interest was, on the Privileged debt and Domains loan, 5%; on the Unified debt and Daïra loan, 4%. Under this settlement the total annual charges on the country amounted to £4,500,000, about half the then revenue of Egypt. These charges included the services of the Privileged and Unified debts, the tribute to Turkey and the interest on the Suez Canal shares held by Great Britain, but excluded the interest on the Daïra and Domains loans, expected to be defrayed by the revenues from the estates on which those loans were secured. The general revenue of Egypt was divided between the bondholders and the government, any surplus on the bondholders' share being devoted to the redemption of the capital.

The 1880 settlement proved little more lasting than that of 1876. After a brief period of prosperity, the Arabi rising, the riots at Alexandria, and the events generally which led to the British occupation of Egypt in 1882, followed by the losses incurred in the Sudan in the effort to prevent it falling into the hands of the Mahdi, brought Egypt once more to the verge of financial disaster. The situation was an anomalous one. While the revenue assigned to the service of the debt was more than sufficient for the payment of interest and the sinking fund was in full operation, the government found that their share of the revenue was altogether inadequate for the expenses of administration, and they were compelled to borrow on short loans at high rate of interest. Moreover, to make good the losses incurred at Alexandria, and to get money to pay the charges arising out of the Sudan War and the Arabi rebellion, a new loan was essential. On the initiative of Great Britain a conference between the representatives of the great powers and Turkey was held in London, and resulted in the signing of a convention in March 1885. The terms agreed upon in this instrument, known as the London Convention, were embodied in a khedivial decree, which, with some modification in detail, remained for twenty years the organic law under which the finances of Egypt were administered.

Provisions of the London Convention.

The principle of dividing the revenue of the country between the Caisse, as representing the bondholders, and the government was maintained by the London Convention. The revenue assigned to the service of the debt, namely, that derived from the railway, telegraphs, port of Alexandria, customs (including tobacco) and from four of the provinces, remained as before. It was recognized, however, that the non-assigned revenue was insufficient to meet the necessary expenses of government, and a scale of administrative expenditure was drawn up. This was originally fixed at £E.5,237,000,[6] but subsequently other items were allowed, and in 1904, the last year in which the system described existed, it was £E.6,300,600. The Caisse was authorized, after payment of the coupons on the debt, to make good out of their balance in hand the difference between the authorized expenditure and the non-assigned revenue. If a surplus remained to the Caisse after making good such deficit the surplus was to be divided equally between the Caisse and the government; the government to be free to spend its share as it pleased, while the Caisse had to devote its share to the reduction of the debt. This limitation of administrative expenditure was the cardinal feature and the leading defect of the convention. Those responsible for this arrangement--the most favourable for Egypt that Great Britain could secure--failed to recognize the complete change likely to result from the British occupation of Egypt, and probably regarded that occupation as temporary. The system devised might have been justifiable as a check on a retrograde government, but was wholly inapplicable to a reforming government and a serious obstacle to the attainment of national prosperity. In practice administrative expenditure always exceeded the amount fixed by the convention. Any excess could, however, only be met out of the half-share of the eventual surplus reached in the manner described. Consequently, in order to meet new expenditure necessitated by the growing wants of a country in process of development, just double the amount of revenue had to be raised.

To return to the provisions of the London Convention. The convention left the permanent rate of interest on the debt, as fixed by the Law of Liquidation, unchanged, but to afford temporary relief to the Egyptian exchequer a reduction of 5% on the interest of the debt was granted for two years, on condition that if at the end of that period payment, including the arrears of the two years, was not resumed in full, another international commission was to be appointed to examine into the whole financial situation. Lastly, the convention empowered Egypt to raise a loan of nine millions, guaranteed by all the powers, at a rate of interest of 3%. For the service of this loan--known as the Guaranteed loan--an annuity of £315,000 was provided in the Egyptian budget for interest and sinking fund. The £9,000,000 was sufficient to pay the Alexandria indemnities, to wipe out the deficits of the preceding years, to give the Egyptian treasury a working balance of £E.500,000 and thereby avoid the creation of a fresh floating debt, and to provide a million for new irrigation works. To the wise foresight which, at a moment when the country was sinking beneath a weight of debt, did not hesitate to add this million for expenditure on productive works, the present prosperity of Egypt is largely due.

The provisions of the London Convention did not exhaust the restrictions placed upon the Egyptian government in respect of financial autonomy. These restrictions were of two categories, (1) those independent of the London Convention, (2) those dependent upon that instrument. In the first category came (a) the prohibition to raise a loan without the consent of the Porte. The right to raise loans had been granted to the khedive Ismail in 1873, but was taken away in 1879 by the firman appointing Tewfik khedive. (b) Next came the inability to levy taxes on foreigners without the consent of their respective governments. This last obligation was, in virtue of the Capitulations, applicable to Egypt as part of the Ottoman empire. The only exception, resulting from the Ottoman law under which foreigners are allowed to acquire and hold real property, is the land tax. (All taxes formerly paid by natives and not by foreigners have been abolished in Egypt, but the immunity described constitutes a most serious obstacle to the redistribution of the burden of taxation in a more equitable manner.)

From the purely Egyptian point of view the most powerful restriction in this first category remains to be named. In 1883 the supervision exercised over the finances by French and British controllers was replaced by that of a British official called the financial adviser. The British government has declared that "no financial decision shall be taken without his consent," a declaration never questioned by the Egyptian government. This restriction, therefore, is at the same time the chief safeguard for the purity of Egypt's finances.

In the second category of restrictions, namely, those dependent on the London Convention, were the various commissions or boards known as Mixed Administrations and having relations of a quasi-independent character with the ministry of finance. Of these boards by far the most important was the Caisse. As first constituted it consisted of a French, an Austrian, and an Italian member; a British member was added in 1877 and a German and a Russian member in 1885. The revenue assigned to the debt charges was paid direct to the Caisse without passing through the ministry of finance. The assent of the Caisse (as well as that of the sultan) was necessary before any new loan could be issued, and in the course of a few years from its creation this body acquired very extensive powers. Besides the Caisse there was the Railway Board, which administered the railways, telegraphs and port of Alexandria for the benefit of the bondholders, and the Daïra and Domains commissions, which administered the estates mortgaged to the holders of those loans. Each of the three boards last named consisted of an Englishman, a Frenchman and an Egyptian.

The race against bankruptcy.

During the two years that followed the signing of the London Convention, the financial policy of the Egyptian government was directed to placing the country in a position to resume full payment of the interest on the debt in 1887, and thereby to avoid the appointment of an international commission. By the exercise of the most rigid economy in all branches this end was attained, though budgetary equilibrium was only secured by a variety of financial expedients, justified by the vital importance of saving Egypt from further international interference. By such means this additional complication was averted, but the struggle to put Egypt in a genuinely solvent position was by no means over. It was not until his report on the financial results of 1888 that Sir Evelyn Baring (afterwards Lord Cromer) was able to inform the British government that the situation was such that "it would take a series of untoward events seriously to endanger the stability of Egyptian finance and the solvency of the Egyptian government." From this moment the corner was turned, and the era of financial prosperity commenced. The results of the labours of the preceding six years began to manifest themselves with a rapidity which surprised the most sanguine observers. The principal feature of the successive Egyptian budgets of 1890-1894 was the fiscal relief afforded to the population. From 1894 onward more attention was paid than had hitherto been possible to the legitimate demands of the spending departments and to the prosecution of public works. Of these the most notable was the construction (1898-1902) of the Assuan dam, which by bringing more land under cultivation permanently increased the resources of the country and widened the area of taxation.

Reserve funds.

With the accumulating proofs of the financial stability of the country various changes were made in connexion with the debt charges. With the consent of the powers a General Reserve Fund was created by decree of the 12th of July 1888, into which was paid the Caisse's half-share in the eventual surplus of revenue. This fund, primarily intended as a security for the bondholders, might be drawn upon for extraordinary expenditure with the consent of the commissioners of the Caisse. Large sums were so advanced for the purposes of drainage and irrigation and other public works, and in relief of taxation. The defect of this arrangement consisted in the necessity of obtaining the consent of the commissioners--a consent sometimes withheld on purely political grounds. At the same time it is believed that but for the faculty given by the decree of 1888 to spend the General Reserve Fund on public works, the financial system elaborated by the London Convention would have broken down altogether. Between 1888 and 1904 about £10,000,000 was devoted from this fund to public works.

In June 1890 the assent of the powers was obtained to the conversion of the Preference (Privileged), Domains and Daïra loans on the following conditions, imposed at the initiative of the French government:--

1. The employment of the economies resulting from the conversion was to be the subject of future agreement with the powers.

2. The Daïra loan was to be reimbursed at 85%, instead of 80%, as provided by the Law of Liquidation.

3. The sales of Domains and Daïra lands were to be restricted to £E.300,000 a year each, thus prolonging the period of liquidation of those estates.