the Christians. The Firman confirms the powers granted to the Patriarchs and other ecclesiastical authorities for managing the affairs of their communities, and for the free profession of their religious belief. Every official rank and all public functions are to be accessible to non-Mussulman subjects. The tax for exemption from military service is to be paid only by Christians between the ages of 20 and 40 years, and it is to be reduced. All nonMussulman subjects may acquire landed and house property, and their testamentary dispositions will be respected. The people may, without hindrance, address themselves to the Porte for all legitimate wishes and complaints.

At the close of the year Herzegovina was still in active revolt, but the position of Servia and Montenegro towards the rebellion was still uncertain. The Turkish Government complained that both Principalities gave it aid substantially, but without the permission of Austria and Russia they were unable to declare themselves on the side to which their sympathies disposed them. It is said that between the two Principalities themselves some difficulty exists as to reconciling their competing claims to a share in any territory which may by their own efforts or through the success of the insurgents be wrested from the Turks; that Prince Milan, who has from the first adopted a system of neutrality, has probably an understanding with the Powers which still profess to desire the maintenance of the Turkish rule. Of late the language of Montenegro has become more warlike, while little has been heard of the policy of Servia. Both Principalities contain a warlike population hereditarily hostile to the Turks; but, since the practical acquisition of independence, the Servians have no ground of quarrel with the Turks, and they have themselves a territory sufficient for their wants. The Montenegrins have long desired to occupy a portion of the fertile plains which adjoin the highlands of the Black Mountain. If they were not held back by Russia, it is more than probable that they would give open aid to the insurgents, at the risk of an invasion of their own territory.

EGYPT.

In Egypt we have to record the opening of the new International Court in June, by the Khedive, whose energies had long been employed in simplifying and reforming the judicial procedure of his country. The scheme was promoted by the British Government which helped to bring about the acquiescence of other nations also; but France continued to hold aloof till the end of the year, when M. Rouvier having failed to bring to pass a condemnatory vote in the Chamber, the Duc Decazes, as Foreign Minister, gave in the adhesion of his Government.

The Suez Canal transaction has been sufficiently dwelt upon in our English history, but we may here elucidate from a money

market article in the Times, the financial embarrassments connected with his shares, in which the Khedive had entangled himself previously to making them over to the British Government. But for the sacrifices that Egypt has made-little to her own individual interest as it has turned out-the canal would never have been made at all. Obligation after obligation was thrown on Said Pasha and the present Viceroy by the French concessionnaires. From first to last, the Khedive's Government spent about 17,000,000l. on the Canal, the works connected with it, and the festivities with which it was opened. The 176,602 shares which the Khedive sold to the English for 4,000,000l. cost him 5,280,000l., principal and interest included, according to a calculation published by M. Dervieu in 1871, and that is putting the price at the lowest. Then the Emperor Napoleon III. decided that Egypt should pay a heavy indemnity to the Company, no less than 3,360,000, for taking back again certain concessions which had been granted to it for nothing. M. Dervieu calculates that this award cost Egypt 4,600,000l. to start with, and it may well have cost more, for the interest charged by the Government against the Company was always very high. Further, the Khedive was at great outlay in constructing the Fresh Water Canal from Cairo to Ouady, the concession for which was originally granted free to the Suez Canal Company, and bought back for 400,000, when it was at its wits'-end for means to carry on the works. A port and dock were constructed at Suez by the Khedive; he built lighthouses and bought back sundry privileges until, altogether, his stake in the concern became larger than that of all the shareholders combined.

His last great sacrifice for the benefit of the Company was that involving the cutting off of 25 years' coupons from the shares that England has bought. The Company being in want of money entered into another operation with the Egyptian Government, whereby it once more managed to get that Government to pledge one of its dearly-bought assets in order to raise further cash. The Company ceded its right to navigate and levy tolls on the Fresh Water Canal-the power to make which it had previously permitted the Khedive to buy back for 400,000l., interest included,

it ceded the right of fishing in the Suez Canal and the lakes it traverses, as well as all special privileges connected with the working and maintenance of that Canal, and for these various concessions it charged 800,000l. Further, it ceded to the Government for another 400,000l. all the establishments which it possessed on the Isthmus, such as hospitals and their furniture, its maga zines and establishments at Boulac and Damietta. This was 1,200,000Z which the Khedive had to pay or to enable the Company to raise, and he had to pay interest on it at 10 per cent. until it was paid. He had not got the money; and a fresh loan was not expedient, so, in order to enable the Company to get its funds, the Khedive cut off 25 years' coupons from his shares,

beginning with the coupon payable on the 1st of January 1870. This arrangement was a most costly way of meeting the obligation, and as usual the Khedive sacrificed with readiness a great deal more than the Canal Company ought to have taken. Ten per cent. interest was charged to the Government on this capital sum of 1,200,000l., and as the Khedive could not pay either the one or the other at the time, the Company accepted the 25 years' coupons instead, which M. Dervieu calculates represented a capital sum of 1,600,000l. But that did not, it would seem, relieve him from the necessity of paying interest. He has still apparently to pay 10 per cent. to the Company, because he has not yet paid the money he owes for these reconceded concessions, unless on this point M. Dervieu may be in error. Having got the coupons, the Company capitalized them by issuing against them 120,000 "obligations," which were to receive the 5 per cent. which the coupons were entitled to for the 25 years, provision being made for their amortization within that period either by part of that 5 per cent. or by the share of the surplus profits falling to the coupons they represent under the Company's statutes.

The Khedive held a Council of Ministers on November 14, at which the Minister of Finance submitted a statement of the expeuditure and revenue for the year commencing September 1874 and ending September 1875. The Council, after having examined the accounts, approved them. The Budget showed the following results-Expenses of administration, 4,269,3207. sterling; loan account, 5,036,6657.; interest on the floating debt, 1,490,3897.; total, 10,796,3747. sterling; receipts, 10,812,7877. sterling.

Now this statement, which was received with pleasure at first by English speculators in Egyptian funds, was considered after a little time suspicious in the exact balance it exhibited, and the fund holders derived their only solid satisfaction from the Khedive's request that an experienced English financier should be sent out to supervise his accounts. The Right Honourable Stephen Cave, Paymaster General, accompanied by Colonel Stokes, of the International Suez Canal Dues Commission, Mr. Victor Buckley, of the Foreign Office, and Mr. White, Deputy Accountant of the War Office, set out on this mission, and arrived at Cairo early in December.

The financial embarrassments of the Khedive happened to be enhanced by a war in which he was engaged with John, the Christian Monarch of Abyssinia. Just after the conclusion of the Canal shares purchase, it transpired that a force of 2,000 Egyptians, finding itself suddenly in presence of 30,000 Abyssinians, had been utterly routed. Their leader was killed, and it was with difficulty that a remnant escaped to the coast. On receiving news of this reverse the Khedive lost no time in taking sufficient measures to retrieve his defeat. Five thousand men were despatched at once, and still larger numbers were ordered to

follow as soon as means of transport could be found. But all at once a telegram announced that the English Government had interfered, and had invited him not to pursue any further his schemes of ambition or revenge. A subsequent statement on the part of Egypt alleged that she had no intention of annexing Abyssinia or any of its provinces, but that the Abyssinians for the last five years had made constant incursions across the frontier, and the object of the Egyptian Government was to compel King John to restrain his subjects and to prevent them from pillaging Egyptian territory. The Khedive's troops (it was added) had orders not to enter Abyssinia if King John would consent beforehand to give the necessary assurances to this end.

When it was announced that, at the demand of the British Government, the Egyptian ships had been recalled from Zanzibar, and that as to Abyssinia, the expedition-which the imagination of stockholders had enlarged into a heavy campaign, costly, and, judging from the past, disastrous-would be confined to the exaction of satisfaction, or, possibly, to only a military demonstration, after which the army would return, considerable satisfaction was felt in England, for misgivings concerning the military operations of the Khedive were exercising a decidedly depressing influence on Egyptian securities. The fact that Mr. Cave had started on his mission did not counteract this depression; but the moment news arrived of decisive interference on the part of England, the prospects of the country were held to brighten, and there was, for a few sanguine days, a rebound in the confidence of the money market.

The simultaneous recall of the Egyptian troops from Zanzibar, whose Sultan or Seyyed had complained to England of the infraction of his territory for the Khedive's military purposes, was another consequence of the new relations into which Ismail Pasha had placed himself towards the Government of Queen Victoria.

As against these abortive movements on the Khedive's part, it may, perhaps, be augured that the operations conducted by Colonel Gordon, as successor to Sir Samuel Baker, on the Upper Nile, afford prospect of the extension and consolidation of Egyptian power in that region.

1875.]

Despatches on St. Petersburg Conference.

[285

CHAPTER V.

RUSSIA. Notes about St. Petersburg Conference-Expedition in Central AsiaAnnexation of Khokand-Saghalien-Russian Ironclads-Church MovementUniversities-Socialism-Dr. Strousberg's Bankruptcy-Eastern Question-Suez Canal-Emperor's speech.

PERSIA. Unprosperous Condition of Country.

CHINA.-Death of Emperor-Embroilment with British Government.

JAPAN.-Reforms.

UNITED STATES.-Louisiana State conflict-Action of Congress-Rejection of CanadaReciprocity Treaty-President Grant on Specie Payments--Civil Rights Bill and Force Bill-End of Forty-third Congress-Preparations for next Presidential Election-Autumn State Election-Governor Tilden-" Canal" and "Whisky Rings-"Boss Tweed"-W. Ralston of San Francisco-Bunker's Hill Centenary-Deaths of ex-President Johnson and Vice-President Wilson-Opening of Forty-fourth Congress -President's Message - Church Question - Currency Question-Summary of Year's Events.

MEXICO.-Disturbances.

SOUTH AMERICA.-Earthquakes.

BRAZIL.-Emperor's Speech-Religious Warfare.
ECUADOR.-Assassination of President.

MISCELLANEOUS SOUTH AMERICAN REPUBLICS.

RUSSIA.

THE proposal of the Russian Government to the other nations of Europe to follow up the tentative Conference of 1874 at Brussels on the usages of war, by a formal Conference at St. Petersburg for the purpose of ruling practice on the points at issue, met with a decided refusal from England; Lord Derby, in a despatch of the 20th of January 1875, declining to enter into any agreement which might facilitate aggressive wars, and be an obstacle to the patriotic resistance of the parties attacked. The position which England thus took up in face of Russia, and especially of the Emperor Alexander, the real initiator and energetic promoter of the scheme, caused no little sensation at St. Petersburg. From the beginning Russia had protested against this interpretation, as if her object was anything else but to further a work of humanity; while England now declared, in tolerably plain language, that the projected Code of War was likely to favour the strongest party, and to facilitate aggressive wars. The Cologne Gazette observed that England had thereby placed herself at the head of the second-rate Powers, which looked with mistrust on the Russian proposal. "She fears," added the Gazette," that the great military Powers, which as a rule would be the aggressors, wish to weaken the defensive forces of the smaller States by the understanding to be arrived at; but we think that this mistrust is carried too far. It is known that the philanthropic Emperor Alexander II. has started this question. He wishes to