this loan amounts to 210,000l. per annum, leaving a balance of 72,000l. per annum not required for this loan.

The Guaranteed Loan of 1855 is the second mortgage upon the same tribute, and receives the balance of 72,000l. per annum, the remainder of the money required for payment of the annual interest and sinking fund of this Guaranteed Loan being supplied by the Turkish Government from other sources.

The sinking fund of the 1854 Loan is cumulative, and it is annually augmented by the interest of its drawn bonds.

By means of this sinking fund the 1854 Loan will become extinguished in 1889, and thereupon the Guaranteed Loan will become the first and only mortgage upon the tribute of 282,000l. per annum. If the sinking fund of the 1854 Loan be in any way reduced, then the extinction of the 1854 Loan will, of course, be prolonged beyond 1889, and the Guaranteed Loan will be debarred from the accession to the 210,800l. per annum in 1889, and will still remain the second mortgage on the same tribute.

It is, therefore, clear beyond doubt that any surrender by the bondholders of the 1854 Loan to the Turkish Government of either the interest or the sinking fund of that loan could not fail to prevent the Guaranteed Loan succeeding to the 210,000l. per annum in 1889, and would thus exclude the British and French Governments from acquiring in that year very nearly three-fourths of the security granted to them by their Convention with Turkey and confirmed by the above-mentioned Act of Parliament.

And it is equally clear that such surrender would be a serious trespass upon that Convention and Act of Parliament.

I have therefore, I trust, clearly shown that the inclosed terms of arrangement would be a great encroachment upon the security of the Guaranteed Loan (whilst the 1854 Loan will be robbed of 111,000l. per annum), and these terms could not legally be carried out without a special Act of Parliament for that purpose.

As a bondholder of the 1854 Loan, I beg of you to make these facts officially known to the Turkish Government before that Government proceeds to divert part of the tribute upon which the Loans of 1854 and 1855 are secured.

Terms of Arrangement proposed by the Imperial Ottoman Government to the Holders of the Bonds of the 1854 and 1871 Ottoman Loans.

1. That the bondholders shall consent to a reduction in the rate of interest and sinking fund to 5 per cent. per annum (including per cent. sinking fund)* on the 1854 Loan, and a reduction of the interest of the 1871 Loan to 4 per cent. per annum (including per cent. sinking fund); such interest and sinking fund to be calculated and payable on the existing nominal amounts of the respective loans, say, 1,800,300l. of the 1854 Loan, and 5,378,7001. of the 1871 Loan.

2. That on the extinction of the 1854 Loan, the whole of the annual sum thereto. fore applicable to the service of that loan shall be applied as an additional sinking fund on the Loan of 1871.

3. That in consideration of such reduction of interest and sinking fund, the payment of so much annually of the Egyptian tribute as will be sufficient to meet such reduced interest and sinking fund shall be secured inalienably to those objects, entirely free from the control or interference of the Imperial Ottoman Government, as follows:

The Imperial Government will, by an Imperial Firman, direct the Khedive of Egypt to remit the necessary portion of the tribute for such a number of years as will be sufficient to extinguish the loans, to whomsoever the bondholders may direct, free of all control and interference by the Imperial Government. And the Khedive of Egypt, on his part, will acknowledge such direction, and will bind himself so to remit that portion of the tribute.

The Imperial Government will officially notify this, its irrevocable act, to the British Government; and the Khedive of Egypt will, at the instance of the Imperial Government, undertake to permit, through the Financial Commission lately established in Egypt, the amount of the tribute, which is the first charge on the entire revenues of Egypt.

5 substituted at meeting of July 24.

4. That the existing bonds of the 1854 and 1871 Loans shall be exchanged for substituted bonds, on which all these acts shall be fully set forth,

(No. 2.)

Memorandum.

Turkish Tribute Loan of 1854.

Present amount pledged to this loan, viz., 108,0007. interest and 102,0007. sinking

£

210,000

£

90,000

9,000

99,000

111,000

To be annually surrendered

N.B. This sinking fund will be 200 years extinguishing the loan.

No. 24.

Lord Tenterden to Mr. W. H. Smith, M.P.

Foreign Office, August 31, 1877.

Sir, I HAVE laid before the Earl of Derby your letter of the 28th instant, forwarding a copy of a letter addressed by Mr. E. A. Barrett to the Chancellor of the Exchequer, in regard to the arrangement proposed by the Special Financial Commissioners of the Turkish Government to the bondholders of the Tribute Loan of 1854; and I am to request you to move the Lords Commissioners of the Treasury to favour his Lordship with their opinion on this letter, and to inform him what answer it is proposed to return to Mr. Barrett.

I am, &c.

(Signed)

TENTERDEN.

No. 25.

The President of the Ottoman Syndicate to the Earl of Derby.--(Received October 15.)

Excellence,

Paris, le 10 Octobre, 1877. NOUS avons l'honneur de remettre ci-joint à votre Excellence le projet définitif de l'unification et de la conversion de la dette Turque, afin que vous en preniez connaissance.

Ce projet a été arrêté entre notre mandataire, M. le Comte de Kératry, et M. le Ministre des Finances de Turquie, après que communication en a été donnée tant à Mr. Layard, Ambassadeur de Sa Majesté Britannique, qu'à M. de Moüy, Chargé d'Affaires de France à Constantinople.

Nous osons compter sur l'appui bienveillant et puissant de votre Excellence dans une œuvre si éminemment réparatrice, et avons l'honneur, &c. Le Président,

Sir,

No. 26.

Lord Tenterden to the President of the Ottoman Syndicate.

Foreign Office, October 20, 1877. I AM directed by the Earl of Derby to acknowledge the receipt of your letter of the 10th instant, inclosing a copy of the scheme of the Ottoman Syndicate for the conversion and unification of the Turkish Debt.

Sir,

No. 27.

Mr. Cole to Lord Tenterden.-(Received October 31.)

Treasury Chambers, October 30, 1877.

I AM directed by the Lords Commissioners of Her Majesty's Treasury to request you to state to Lord Derby, in reply to the questions asked in your letter of the 31st August, that the receipt of Mr. Barrett's letter of the 17th August, on the subject of the Turkish Loan of 1854, was acknowledged.

That gentleman, as a bondholder of the 1854 Loan, would naturally prefer that the conditions under which that loan was originally contracted should be maintained, and he would be glad if, for that purpose, he could induce the English and French Governments to interfere upon the plea that their eventual rights are endangered. This, however, is a question which my Lords would not undertake to discuss with any private individual, and they do not propose to address any further communication to Mr. Barrett.

Upon the general question involved in Mr. Barrett's letter, viz., the bearing which the arrangement made between the bondholders and the Porte will have upon the Guaranteed Loan of 1855, my Lords will remark that that arrangement has been formally made known by the Secretary of State to the French Government, and the course to be pursued by Her Majesty's Government will, it may be presumed, in great measure depend upon the reply which they receive from France.

I am, &c.

(Signed)

JAMES H. COLE

No. 28.

Mr. Cole to Lord Tenterden.-(Received November 9.)

My Lord, Treasury Chambers, November 8, 1877. I AM directed by the Lords Commissioners of Her Majesty's Treasury to acknowledge the receipt of the copy of the project for the unification of the Turkish debt, together with the copy of the covering letter which accompanied it, from the Ottoman Syndicate.

In reply, I am to request that your Lordship will state to the Earl of Derby that, so far as my Lords are aware, no application has been made to the Government by the English bondholders with reference to this scheme, and that their Lordships do not feel called upon to offer any opinion upon the project.

I am, &c.

(Signed)

JAMES H. COLE.

My Lord,

No. 29

Mr. Vivian to the Earl of Derby.-(Received December 22.)

Cairo, December 14, 1877. DURING my late absence from Egypt on leave it appears that an arrangement, to which the Khedive was a party, was come to between the Porte and the Imperial Ottoman Bank, by which His Highness has bound himself to pay directly to Messrs. Glyn, Mills, Currie and Co., of London, on account of the 1877 Loan, that portion of the Egyptian tribute, amounting annually to 280,6187., which has not been already mortgaged to the creditors of Turkey.

The inclosed despatch from Mr. Borg gives some particulars of the arrangement, the details of which your Lordship will have probably received from Her Majesty's Ambassador at Constantinople.

Inclosure in No. 29.

Mr. Borg to Mr. Cookson.

I have, &c.

Sir,

Cairo, October 20, 1877.

I THINK it my duty to inform you that under date of to-day, His Highness the Khedive has given an undertaking, under orders from the Sublime Ottoman Porte, to pay into the hands of Messrs. Glyn. Mills, Currie and Co., of London, towards the loan made to the Turkish Government by the Imperial Ottoman Bank, and known as the 1877 Loan, that portion of the Egyptian tribute not already mortgaged to the creditors of Turkey, viz., a sum of 280,6187.

The undertaking is signed by His Highness, but the date of the Porte's order is left blank. The Khedive's signature is legalized by the Minister for Foreign Affairs and the latter's by me.

The payments are to be made as follows:

Foreign Office, December 27, 1877.

WITH reference to your despatch of the 14th instant, I have to instruct you to procure, if possible, a copy of the undertaking by which the Khedive binds himself to pay on account of the Ottoman Loan of 1877 that portion of the Egyptian tribute which has not been already mortgaged to the creditors of Turkey.

I am, &c.

(Signed)

DERBY.

(No. 3. My Lord,

No. 31.

Mr. Vivian to the Earl of Derby.-(Received January 12.)

Political.)

Cairo, January 5, 1878. IN compliance with the instructions conveyed to me in your Lordship's despatch No. 170 of the 27th ultimo, I have the honour to inclose a copy of the undertaking dated the 22nd November last, by which the Khedive has bound himself to pay directly to Messrs. Glyn, Mills, Currie and Co., on account of the Ottoman Loan of 1877, and until its extinction, the unpledged portion of the Egyptian Tribute, amounting to 280,6221. 18s. 4d.

Undertaking by His Highness the Khedive to pay the Unpledged Portion of Tribute on account of Ottoman Loan.

SON Altesse Ismail Pacha, Khédive d'Egypte, informé par la Sublime Porte de la conclusion par contrat en date du 19 Septembre, 1877, d'un emprunt entre la Sublime Porte et la Banque Impériale Ottomane, sous titre d'Emprunt 1877, pour la défense de l'Empire Ottoman, et obéissant à l'ordre Impérial en date du 14 Ramazan, 1294 (22 Septembre, 1877);

Déclare, par les présentes, s'engager pour lui-même et ses successeurs, envers les Sieurs Glyn, Mills, Currie et Cie., banquiers, résidant à Londres, qui lui ont été désignés par le susdit ordre Impérial à payer entre leurs mains la partie sous-mentionnée du tribut dont elle est redevable envers Sa Majesté Impériale le Sultan, et qui se trouve actuellement dégagée de son affectation primitive par l'effet d'arrangements intervenus entre la Sublime Porte et les souscripteurs des emprunts Ottomans de 1854 et de 1871.

En conséquence Son Altesse le Khédive payera désormais jusqu'à l'extinction de l'emprunt sus-mentionné aux susdits Sieurs Glyn, Mills, Currie et Cie., à valoir sur le tribut qu'elle et ses successeurs doit et devront à Sa Majesté Impériale le Sultan, la dite partie s'élevant actuellement à la somme annuelle de 280,6221. 18s. 4d. sterling. Cette somme sera payée aux échéances indiquées dans le tableau ci-dessous; le premier paiement après cette date aura lieu le 31 Janvier, 1878.

My Lord,

No. 32.

Mr. Guedalla to the Earl of Derby.-(Received January 30.)

Hanover Square Club, London, W., January 30, 1878. AS Chairman of the English Committee of the General Debt of Turkey Five Per Cent., 1865-74, amounting to 80,000,000l., of which nearly half is held in the United