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Printed for the use of the Cubinet. February 15, 1886.

[2759.] CONFIDENTIAL.

No. 1.

Sir H. Drummond Wolff to the Marquis of Salisbury.—¿Received January 19.) (No. 13. Most Confidential and Secret.) My Lord,

Cairo, January 7, 1888. COUNT D'AUNAY, the new French Diplomatic Agent, whom I met at a party on Monday, asked me on my return visit to discuss at length with him the whole

situation of affairs here.

I consequently called on him by appointment this morning, and stayed with him some time.

He told me that he had arrived here with the most conciliatory instructions from M. de Freycinet. At present the relations between France and England were of the most cordial character. He was, he said, a great friend of M. Waddington, who at this moment conducted the policy of his Government as regards Egypt. His mission was to co-operate with me in every manner, with the object of carrying out the policy of the Convention, so as to hasten the evacuation of this country by England. He asked me many questions, especially as regards the reorganization of the army and the creation of a state of things which should enable Egypt to act independently.

I told him that the first two points of importance were the establishment of an equilibrium in the finances, and the settlement of the frontier difficulties. These were preliminaries on which every other question hinged. In treating them I would always endeavour to communicate with him in the most friendly and confidential manner, and I hoped that no jealousies of the Colonies would prevent a cordial under- standing between us.

IIe replied that he was perfectly prepared to act in the same manner, and that everything depended on my good faith.

I did not think it necessary to take any notice of this remark, which was repeated more than once, beyond saying that my good faith required no protestation, but could only be judged by results. I told him, however, that in all my dealings with the Representatives of other countries at Constantinople, to which Court I was accredited, I had scrupulously told them the object of my mission, and that I believed the Marquis de Noailles had been perfectly satisfied on this head. He asked me whether I would act in a friendly spirit to France, not only here but at Constan- tinople; and I assured him that my own wishes, as well as your Lordship's instruc- tions, prescribed such a course.

M. d'Aunay then asked me what was proposed for the reorganization of the army. To this I replied that it was impossible at this moment to form any idea of the future. First, the state of the frontier would prevent any forecast of the future; secondly, the reorganization of the army depended on the financial condition of the country. I explained to him the latter question, and told him that until we had settled the equilibrium of the Budget it was impossible to enter on the revon- struction of the army, which would entail, to make it efficient, an increased expen- diture. I gave him, generally, the figures of the Budget, showing him how far they depended on the administration of the Domains and Daïra; and I expressed the hope that I should receive his support in the economical measures that might be proposed. M. Bouteron was in favour of the scheme I advocated for the diminution of the Domains and Daïra deficits, and I trusted that he would examine the question and support any measure calculated to remedy this weakness in Egyptian finance. I also added that there were some other items in the Budget which might admit of economies, which I should be happy to explain to him.

He then asked me whether any step had been taken for the appointment of an Egyptian Commissioner. I explained that the Convention did not contemplate the nomination of such a functionary. I showed him that the appointment of an.

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