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able to submit to your Lordship later, and which he himself proposes to discuss with Her Majesty's Government and Messrs. Rothschild on his approaching visit to London.
I have, &c.
(Signed)
H. DRUMMOND WOLFF.
No. 2.
Sir H. Drummord Wolff to the Marquis of Salisbury,—(Received January 12.)
(No. 4.) My Lord,
Cairo, January 2, 1886.
I VENTURE to offer some remarks with reference to my despatch No. 1 of yesterday's date.
The present expenditure on the Domains Loan is as follows in round figures :
Coupon Taxes
Administration
The revenue
:::
:
:::
•
£
-400,000*
200,000
400,000
1,000,000
700,000
300,000
Deficit
..
My proposal is, that the lands should be sold for, say, 5,000,0001., by which bonds could be redeemed to the annual value of 250,0001.
The purchasers would have to pay the taxes, amounting to 200,000%.
They would, therefore, have a return of 250,0001., or 5 per cent. on the expenses of administration, plus any profit they might make. I fear the 5,000,000l. is rather too high a price, and will therefore reduce it to 4,500,000l., redeeming bonds to the extent of 225,0001. a-year, and thus leaving a deficit of 175,0001. on the coupon.
I propose to sell the lands-
1. To purchasers who can pay down.
2. To pensioners and holders of allowances from the Civil List, in commutation of their incomes drawn from the State.
With respect to the second category, among whom there are many who, it is believed, are ready to commute, the following system might be adopted, as the Govern- ment is not in a position to find the lump sum necessary for commutation. A calcu- lation being made of the number of years' purchase at which each individual pension or allowance can be commuted, the Government could undertake to pay the pensions annually for that number of years to the representatives of the bondholders, irrespective of the death of the pensioners.
Thus, if a pensioner were drawing 5001. a-year, and his term of life were con- sidered worth ten years' purchase, the 500l. a-year should be paid by the Government for ten years to the bondholders in exchange for, say, 5,0001. in Domains lands. Questions of interest must be, of course, calculated. Until this amount was paid the Domains Administration would hold a mortgage over the property.
The allowances to the Khedivial family amount to 208,0001, the pensions to 390,000.; total, 598,000l.
The temptation of a permanent provision for their families would induce many included in these lists to commute.
Assuming the amount realized to be 1,500,0001, this would redeem bonds to the extent of 225,000. Thus, an annual amount would be due to the bondholders of 175,000/., for which the only security would be the revenues of Keneh. This sum will be reduced at the end of eight years by the lapse of Tewfida Hanum's annuity of 21,000. The amount to be provided would, therefore, be 154,0007. annually, and would represent in bonds a capital sum of 3,080,0001.
I should propose to indemnify the bondholders in the following manner. They should either have bonds given to them at a higher rate, say, 5 per cent., secured on the revenue of Keneh alone, or an institution such as the Crédit Foncier should be found, which would pay to the Administration of the Domains on the occasion of each purchase the sum necessary to complete the margin between the amount actually * Including annuity for eight years of 21,000%, to Tesfida Harumn.
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