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value of the Domain lands. If so I erred on the safe side, and any greater value will be to the benefit of the Government.

Nubar Pasha pointed out that the Domain lands are taxed very low, and that persons willing to purchase might fear that on becoming proprietors the taxes might be raised. This objection could be met by a legal provision that the taxes on lands purchased from the Domains should not be increased for a certain number of

I have, &c.

years.

:

(Signed)

No. 4.

H. DRUMMOND WOLFF.

Sir H. Drummond Wolff to the Marquis of Salisbury.—(Received January 19.)

(No. 20.) My Lord,

Cairo, January 11, 1880. WITH reference to my despatches Nos. 1, 4, and 5 of the 1st, 2nd, and 4th instant, I have now the honour to inclose copy of a Memorandum by M. Bouteron, submitting alternative schemes for the commutation of pensions, both on the Civil and Pension Lists, by the allotment of lands now charged with the Domains Loan.

I also inclose a copy of a private letter from M. Bouteron on the subject.

I further inclose a Memorandum by Blum Pasha, and a copy of a draft project of Decree previously drawn up for the commutation of pensions.

One

There will be, no doubt, difficulties in arranging the scheme proposed and in carrying it into execution, but I hope that these may not be insuperable. question to be considered will be the rights of the Khedivial family to their respective grants from the Civil List. Are these personal or hereditary? The Khedive, I understand, claims the right of distributing the grants on the death of existing holders. This claim is, however, contested, and is now being examined, but as in many instances the allowances to the Khedivial family were given in exchange for the surrender of the very lands now under discussion, it would seem that they cannot quite be considered in the light of merely life pensions.

Moukhtar Pasha has raised a point which will require examination. He suggests that if the Princes acquire these commutations in land in lieu of their allowances in money, they might sell or burden their property to an extent which might pauperize them, when they would expect again to come on the State for subsistence.

At present, I believe, though the point is not quite clear, that only one portion of their allowances is available to be pledged or seized by creditors.

This is a consideration which requires very minute examination, and must be adjusted with great care.

Prince Hussein, who is much interested in agriculture, and is anxious for this scheme to be carried out, called on me to-day and explained another difficulty which presents itself. As the Treasury is not able to provide money at once for the commutation, Messrs. Rothschild would require à mortgage over the properties till the annuities are wholly paid.

This, His Highness says, would expose the purchaser to two dangers :-

1. That of the Government arbitrarily ceasing to pay the annuities.

2. The difficulties of raising money on mortgage even for the necessary improve- ments and development.

The first objection is met by the argument that, if the Government were to stop the payment of the annuities to Messrs. Rothschild, it could, with equal justice and probability, stop payment of the Civil List annuities and the other pensions. But the holder of land would in such a case be better off than the mere pensioner or annuitant. It is not likely that the Government would, if ever, take such a step for many years to come, when the land-owners would at all events be in possession of an estate on which a portion of the purchase-money had been paid, while the annuitant, were he not of a saving disposition, would be deprived of all means of subsistence.

The second objection is certainly strong, but not, as it seems to me, insuperable, and means might be provided for meeting it.

After all, the annuitant or pensioner commuting would not be in a worse position than an ordinary purchaser who had undertaken, as is often the case in other countries, to pay off his purchase-money by annual instalments. I believe that

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