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No. 22.—THE LORD LIEUTENANT OF IRELAND.

We would respectfully submit that Her Majesty's Government and that of His Highness the Khedive should make over to the Company, after the completion of some of the preliminary works, the vessels of the Nile flotilla, the plant of the Upper Nile Railway, and such forts and other buildings as would properly belong to the Government of the Soudan provinces.

The arms, ammunition, and stores necessary for the equipment of the said vessels, and such police or other forces as it would be necessary to maintain, might also, in the first place, be furnished by Her Majesty's Government.

As the expenses connected with the restoration of order would be necessarily at first very heavy, we think that Her Majesty's Government, in consideration of being relieved from the expenses and embarrassment entailed by the present condition of affairs, might properly advance to the Company a sum of 2,000,000, to form a portion of the amount they are permitted to borrow, free of interest for five years, and after- wards to bear interest at the rate of 4 per cent. per annum, the expenditure of this sum to be subject to the approval of Her Majesty's Government.

As the country now produces no revenue, and the restoring it to a condition in which it will become self-supporting requires time, it would be necessary that for a certain period a subsidy should be granted to defray the costs of Government, and we would respectfully submit that this subsidy should be fixed for the first year at 240,0007., and that it should diminish at the rate of 40,0001. a-year.

Permission should be granted to the Company to recruit the police and other forces necessary in the dominions of Her Majesty the Queen and His Imperial Highness the Sultan of Turkey.

Officers of Her Majesty's naval and military services should be permitted to serve under the Company on terms similar to those on which they are now permitted to enter into the service of His Highness the Khedive or that of the British Colonies.

Any assistance rendered by Her Majesty's Government and that of His Highness the Khedive, military or other, should, under terms to be hereafter agreed upon, rank as a portion of the 10,000,000/. the Company would be empowered to borrow.

Great advantage would result to this country in the establishment of such a Company as the Government would be relieved of the expenditure of men and money now necessitated in the defence of Egypt, and a great impulse would be given towards the revival of trade and commerce by opening up a new outlet for our manufactures. A Company would be able also to use many agencies which the Government is debarred from availing itself of, such as the subsidising of Native Chiefs, and entering into direct commercial relations with the inhabitants of the country, and in a few years it may be confidently anticipated that not only would peace and order be established, but also a large trade created with the provinces lately under the rule of Egypt, and with the Mahommedan States of the Tehad Basin and the Upper Niger.

Another benefit which would result would be the utter and entire suppression of the Slave Trade in Equatorial Africa, and the opening up of yet unexplored regions to Christianity and civilization.

The financial prospects of such a Company are very good, and would depend not only on the direct returns from revenue and commercial undertakings in the strict sense, but also from the irrigation and cultivation of the vast tracts of fertile land lying on the Nile and its tributaries above Khartoum.

The present is a most fitting time to enter into negotiations with the Caliph Abdullah and his Chiefs, and a Company which would appal to their material interests would be more likely to obtain Concessions from them than a Government which can only act by the sword or by the promise of letting them alone.

We again most respectfully request that you would move the Marquis of Salisbury to give these our suggestions a favourable consideration, and in the mean- time we will proceed to the best of our power in organizing a body with which Her Majesty's Government may enter into direct relations.

The amounts mentioned in this letter, and the course of action which should be finally adopted, would largely depend upon the results of the preliminary investigation and negotiations which we trust Sir Charles Warren will be commissioned to make.

We are, &c.

(Signed) V. LOVETT CAMERON, C.B., D.C.L.,

Commander, R.N. FRANCIS WM. FOX.

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