The policies of control and their effects

04The policies of control and their effects

• The policies of control produced the first discontent and anger against Riad's ministry. Among them:
  • Selling Egypt's share (January 1880) in the profits of the Canal, amounting to 15%, to the Financial Union of Paris in payment of debts. Isma'il had already been forced to sell Egypt's shares in the Canal, so Egypt now owned nothing at all in the Suez Canal.
  • Abolishing the Muaraza Law (January 1880): the peasant resumed paying the full tax to the government, so that it could collect the largest possible amount of tax to repay the debts — and its abolition was a cause of the grievance of the landowners.
  • The International Liquidation Commission (March 1880): of the states holding most of the debt — France, England, Germany, Austria and Italy — to examine the financial situation and define the relations of the government, the Daira Sanuya (Isma'il's personal property) and the Domain (the family's property) with the creditors and the method of liquidating the debts.
  • It issued the Law of Liquidation (July 1880), which remained the basis of Egypt's financial system until 1904.

The most important provisions of the Law of Liquidation

• The government's annual expenditure was fixed at less than half of revenues, and the remainder assigned to the public debt account.
• The properties of the Daira Sanuya and the Domain were earmarked as security for the Daira's debt, for which the borrowing had been done, and were placed under international administration.