Chapter XI: Marshal Macmahon's Presidency (2)

May 4. The conversation about Belgium in the House of Lords
last night led to no result. I think I see a growing feeling,
indicated by the language of the press, that the German demands are
not necessarily unreasonable, and that we should at least hear more
of the case before pronouncing judgment.

To judge by the reports which Nothomb sends to his own
Government, he has been thoroughly frightened, and is ready to
advise unconditional acceptance of German proposals. Is he disposed
to be an alarmist? Or has Bismarck established a personal hold over
him?

We are quiet at this office, busy in Parliament; the Session
threatens to be long, but it will not be eventful.

On May 6, Lord Odo Russell reported that Count Schouvaloff, the Russian Ambassador in London, had just arrived at Berlin from St. Petersburg, and was the bearer of important tidings.

The good news he brought respecting our relations with Russia
filled me with delight after the dark allusions made to me here
at Court and by the Chancellor during the winter. As regards
Germany and the war rumours, Count Schouvaloff gave me the most
satisfactory and welcome news that the Emperor of Russia is coming
to Berlin on Monday next, will insist on the maintenance of peace
in Europe, even at the cost of a rupture with Germany, and that he
can reckon on the support of Austria in doing so.

How Bismarck will meet the humiliating blow of being told by
his allies, Russia and Austria, that he must keep the peace with
France, when he has proclaimed to the world that France is ready to
take her revenge, it is difficult to foretell. But we must not be
surprised if it hastens on the outburst it is intended to prevent.
I hope not, and do not expect it, but I shall not be surprised if
it does, because Austria has really joined Russia. She has become
an obstacle in the way of German development, which Bismarck will
try to remove.

It had, of course, been the object of Bismarck to sow dissension between England and Russia, and he had taken elaborate pains to convince the British Government that Russia was animated by the most hostile feelings. Consequently the extremely frank and friendly sentiments expressed by Count Schouvaloff were in the nature of an agreeable surprise, but the effusion of the Russian Envoy was so great that he seems to have slightly overdone the part.

* * * * *

_Lord O. Russell to Lord Derby._

Berlin, May 8, 1875.

I did not report Schouvaloff's conversation because he was
going to tell you all he had to say in great detail as soon as he
reached London. His frankness is fascinating, but on reflection it
does not inspire absolute confidence. I feel at first inclined to
believe all he says; but when I think it over, it appears too good
to be true.

If all he represents himself to have said to Bismarck about
the power of Russia to coerce Germany under certain circumstances
be strictly true, Bismarck would scarcely want him to succeed
Gortschakoff, as he does, if he did not feel that he could make a
tool of him (Schouvaloff).

According to Schouvaloff, the Czar and Gortschakoff are
to tell Bismarck next week that a new war must not take place,
and that if he does not submit and agree, Russia, with the
concurrence of Austria, is prepared to side with France to render
war impossible. In all probability, their conferences will end
in mutual assurances of peace and good will, and we shall hear
no more of war rumours and French armaments until those of
Germany are ready; and as Bismarck is a match both for the Czar
and Gortschakoff, I shall not be surprised to hear that he has
persuaded them to let him have his own way in the end. But this is
mere conjecture; we shall know more about it all a week hence.

The whole of Bismarck's policy now tends to produce a
coalition of the peaceful Powers against Germany, and his Church
policy, to produce dissensions in Germany and arrest the progress
of unification. It is therefore evident that he seeks a conflict
for purposes of his own.

I may be wrong, but I cannot but think that he wants to
mediatize the smaller German Powers and weaken Austria so as to
render her alliance useless to Russia, France, and Italy.

If I understand Schouvaloff correctly, Bismarck endeavoured to
set Russia against us, as he attempted to set us against Russia,
and he seemed to expect that Bismarck would make Gortschakoff
various offers in return for Russian co-operation or neutrality.
Indeed, he insinuated that he thought Bismarck a little out of his
mind at times.

The importance of the Czar's language and attitude at Berlin
is so great that I look forward with anxious interest to the
results of next week's conferences. For my part I have been careful
to hold the language you tell me you hold at home on these matters
in a friendly spirit to Germany and in the interest of European
Peace.

On the same date (May 8), the Emperor Alexander and Prince Gortschakoff started on the journey to Berlin from which so much was anticipated, and the British Government addressed a despatch to Lord Odo Russell which was also circulated at Paris, Vienna, St. Petersburg, and Rome, instructing him to use all his power to put an end to the misunderstanding which had arisen between France and Germany. It is worthy of note that when this despatch was communicated to the Austrian Government, that Government alone declined to instruct their Ambassador at Berlin in the sense desired, on the ground that it would irritate Bismarck.

The Emperor Alexander and Gortschakoff arrived at Berlin on May 10, and the question of peace or war must have been decided with extreme rapidity, for Lord Odo Russell dined with Bismarck on that night, and the latter took the opportunity to express his thanks 'for the very friendly offer, which he highly appreciated, as a proof of good will and confidence on the part of Her Majesty's Government.' At the same time he expressed some naïve surprise at the offer, maintaining that all his efforts tended in the direction of peace; that the war rumours were the work of the stockjobbers and the press, and that France and Germany were on excellent terms! Under the circumstances, it is highly creditable to Lord Odo Russell that he received this communication with becoming gravity.

Gortschakoff who made his appearance after the dinner professed great satisfaction at Bismarck's language; but in conversation with Lord Odo Russell on the following day (May 11), Bismarck spoke with much irritation of Gortschakoff's intervention, which he attributed to senile vanity, and stated that he had refused Gortschakoff's request for a categorical promise not to go to war, because such a promise would have implied the existence of an intention which he repudiated.

On May 12, Gortschakoff sent a telegram to St. Petersburg which gave dire offence: _La paix est assurée:_ and the Emperor of Russia requested Lord Odo to inform Her Majesty's Government that he felt certain of the maintenance of peace. Bismarck, secretly furious at the frustration of his plans, outwardly betrayed no ill-humour and put a good face upon his failure.

* * * * *

_Lord O. Russell to Lord Derby._

Berlin, May 15, 1875.

Although Bismarck is as civil, confidential, and amiable
to me as ever, I fancy that he must be frantic at our combined
action with Russia in favour of peace, which took him by surprise.
However that matters little, and he will get over it, as he wishes
to keep well with us. But he will seek an opportunity of paying
out Gortschakoff for having come the Peacemaker and Dictator over
Germany again.

For my part, I was delighted at the course pursued by Her
Majesty's Government and at the instructions you sent me, which I
feel sure will do good, both at home and abroad.

The old Emperor William, whose bodily health is wonderful, but
whose mental powers are declining, will have been surprised and
grieved at the Queen writing to the Czar instead of to himself.
Bismarck thinks it is due to an intrigue of the Empress Augusta
to spite him. His hatred and abuse of the Empress is a perfect
mania. The Crown Prince sent for me to talk the incident over. He
asked many questions, but was himself reserved, beyond deploring
Bismarck's nervous state and policy which had been the cause of
such useless alarm. He asked whether I saw any likely successor to
Bismarck if his health broke down. I said plenty would be found
in Germany when there was a demand for them, which Bismarck's
popularity at present excluded. The Prince, though reserved, was
very cordial and very anxious for information.

Your conversation with Schouvaloff is word for word what he
said to me. I note one mistake on his part. He spoke with certainty
of Austrian co-operation, which failed us at the last moment.

I was much impressed by the warmth and eloquence of the
Czar's utterances of friendship for England. He seemed really
to feel deeply what he said, and to wish with all his heart for
an alliance with us. Gortschakoff was less ardent: it is not in
his nature; but he was persuasive and consistent in his friendly
assurances. Schouvaloff's attitude and language will show whether
my impressions are correct or not.

Münster's assurances to you in regard to the German army are
quite correct, I believe; only it is better prepared for war than
any other army in the world, and at ten days' notice. But when
Bismarck tells him to lament the alarm he has created himself, and
to ascribe it to Ultramontane influences in the press, Münster must
feel rather ashamed of his master.

We may certainly reckon on peace for this year. Next year
peace must depend on the state of Bismarck's combinations for
the completion of his task--the unification of Germany--Russia
permitting. He left for Varzin this morning, which will do him
good; but he returns on the 27th instant to receive the King and
Queen of Sweden who stay three days in Berlin.

I did not mention in my official report that the Czar asked
me to tell him frankly, if I was at liberty to do so, whether I
thought Bismarck had designs on Austria. I told him what the wishes
of the National Party were, and what they expected of Bismarck
their leader, and that I believed he contemplated weakening Austria
to strengthen Germany. The Czar thanked me and said that although
suspicion had been suggested to him from many sides, he could not
get himself to believe in so much perfidy.

Such then in brief is the story of the great war scare of 1875, a tale which has been told by many writers with embellishments suggested by either Anglophil or Russophil proclivities. Which of the two countries, England or Russia, contributed most towards the preservation of peace will probably always remain a subject of discussion, but Bismarck at all events never forgave Gortschakoff his vainglorious telegram, and he used afterwards to maintain that, whereas the English had 'behaved like gentlemen,' the conduct of the Russian Government came under a distinctly opposite category. It is a remarkable fact that in spite of the indisputable evidence furnished not only by the foregoing correspondence, but from other sources, Bismarck subsequently had the hardihood to assert that the war scare of 1875 was a myth invented partly by Décazes for stockjobbing purposes and partly by the Ultramontane press--even the English press being according to his assertions under Ultramontane influence. In the authoritative work 'Bismarck: his Reflections and Reminiscences' it is lightly dismissed as an elaborate fiction. 'So far was I from entertaining any such idea at the time, or afterwards, that I would rather have resigned than lent a hand in picking a quarrel which would have had no other motive than preventing France from recovering her breath and her strength.' Busch, in his better-known narrative, is also discreetly reticent on the subject, and the only reference to it occurs in some notes dictated to him by Bismarck in 1879. 'As far back as 1874 the threads of the Gortschakoff-Jomini policy are to be found in the foreign press--oglings and advances towards an intimacy between Russia and France of _la revanche_. The rejection of these addresses is due rather to France than to Russia. This policy does not appear to have originated with the Emperor Alexander. It culminated in the period 1875-77, when the rumour was circulated that Gortschakoff had saved France from us, and when he began one of his circular despatches with the words, _Maintenant la paix est assurée_. You remember Blowitz's report in the _Times_. Read it again and mention the matter. His account was correct, except when he spoke of an anti-French military party in Prussia. No such party existed.'

It is instructive to compare with these passages the statements made in the 'Memoirs and Letters of Sir Robert Morier.'

The crisis was definitely passed when Lord Lyons returned to Paris, and he found the French overflowing with gratitude for the exertions of Her Majesty's Government in favour of peace. Both Marshal MacMahon and the Duc Décazes were profuse in their expressions, and the latter, in particular, said that he attached immense importance to the fact that the same sentiments in favour of peace had been expressed simultaneously at Berlin by England and Russia. At the same time, while much encouraged at the thought that the danger of an attack from Germany had been averted, he affirmed very positively that he should not on this account relax his endeavours to avoid giving umbrage to the German Government. On its being pointed out to him that it was obvious that the vast and increasing sums which figured in the Budget of the French War Department had produced in Germany a very general impression that France was preparing for an immediate retaliatory war, he gave the somewhat unconvincing assurance that a vote for clothing the reserve would be struck out, but would be replaced by a supplementary vote introduced in the winter, when a vote for clothing might seem 'natural and unimportant.' According to Décazes, both the Emperor of Russia and Gortschakoff had, on more than one occasion, used language which showed that they viewed with satisfaction the efforts of France to restore her military power, and he endeavoured to impress upon the Ambassador that Holland first, and then Belgium, were next to France most in danger from German ambition. Finally, he pointed out with great satisfaction that Russia had not lent an ear to the offers which had, he presumed, been made to her at Berlin, to forward any ambitious views she might have in the East, and he said that he considered this particularly important, because it removed the only obstacle which might have interfered with a cordial co-operation, on the part of the British and Russian Governments, for the preservation of the peace of Europe. Whether any such offers were made or refused is not known, but as the next few years were to show, Décazes's conclusion was about as faulty a one as could well be imagined.

'As regards public opinion in this country,' said Lord Lyons.
'I find no diminution of the conviction that at the present moment
a war with Germany would be fatal to France, and that very many
years must elapse before France will be able to undertake such
a war with any prospect of success. All Frenchmen are earnestly
desirous that their army should be as speedily as possible placed
upon such a footing as to give them some security against attack,
and some influence in the world--but few look forward to there
being a time when they can contend with Germany, unless they have a
powerful ally to fight beside them in the field.

'In the meantime I must confess that the gratitude towards
England, which I hear expressed by men of all parties, far exceeds
anything that I could have expected. On the one hand it shows
perhaps the greatness of the terror from which the French have just
been relieved; but on the other, it is, I think, an indication of a
sincere disposition to accept heartily and ungrudgingly any proof
of good will from England.'

The insurrection in Bosnia and Herzegovina, which broke out in the summer of 1875, and the Turkish bankruptcy which followed a little later, provided the French with fresh cause for apprehension, as it was realized that the Eastern Question was once again reopened, and that any differences that might arise between England and Russia would be to the disadvantage of France. The French, who now saw the hand of Bismarck in everything, believed that he had a plan of sending the Austrian army into the Herzegovina, and the Russian army into some other part of Turkey, with a view to sending the German army into France, and much as the Government would have liked to have done something for the French bondholders, and at the same time to have recovered some of the influence formerly enjoyed at Constantinople, it was afraid to take any action which might irritate the omnipotent chancellor. Perhaps this was just as well, as far as England was concerned. The project of a European Conference at Constantinople, which had been already mooted, did not appear in any way to be conducive to British interests. Austria and Russia were not in agreement as to the policy to be pursued. The former had every reason to fear a Slav development on the frontier. On the other hand, the Emperor of Russia could not, even if he wished it, afford to disregard the feeling of the Russians in favour of their fellows in race and in religion. Both Andrassy and Gortschakoff foreseeing that neither could obtain a solution entirely acceptable to opinion in his own country, desired apparently to throw a part of the responsibility on a European Conference. But in such a Conference Russia would be supreme. France and Germany would bid against each other for her favour. Austria would be afraid to set herself against her, and if England had any different views, she would always be outvoted.

Attention was shortly, however, diverted to another quarter. On November 17, Lord Derby learnt that it was absolutely necessary for the Khedive to procure between three and four millions sterling before the end of the month, and that he was preparing to sell his Suez Canal Shares.

* * * * *

_Lord Derby to Lord Lyons._

10, Downing Street, Whitehall, Nov. 17, 1875.

I am not quite easy in my mind about a story I hear, to the
effect that the Khedive is negotiating with a French Company for
the sale of his interest in the Suez Canal. If the telegram has not
been sent to you officially, I will enclose it. Now his bias has
always hitherto been against the pretensions of Lesseps, and he has
been of use to us in keeping that rather irrepressible gentleman in
order. If he withdraws from the concern, and a French Company takes
his place in it, our position will be very unfavourably altered.
Have you heard anything of the negotiations in question? I really
think the matter very serious, and it is one of which the English
public will fully understand the importance.

I think I am not violating any confidence in enclosing to you
for your personal use only an extract from Odo Russell's letter to
me received on Monday which seems to throw light on the situation.
I can add to it nothing in the way of comment.

Your information as to the position of the French Government
is satisfactory. It looks as if the worst of their troubles were
over.

P.S.--Since I began this note I have received further details,
which I send you, and, I may add in strict confidence that we are
prepared ourselves to take over the Viceroy's interest, if it
cannot be kept out of French hands by other means.

I find Lord Odo's letter is with the Prime Minister, so the
extract I promised must wait till next messenger.

The result of Lord Lyons's inquiries, which had to be made very discreetly, so as not to create suspicion, was the discovery that the Khedive was actively negotiating with a French Company, but it was believed that he wanted to mortgage, and not to sell the shares. Lord Derby's next letter to Lord Lyons shows how reluctantly he took action.

* * * * *

Nov. 19, 1875.

From General Stanton's[14] telegrams it appears that the
Khedive has no intention of selling his interest in the Suez Canal,
though he may be obliged to mortgage it for a time. He has promised
to give us notice, if, from any cause, he should change his mind,
and to give us the option of purchase.

I sincerely hope we may not be driven to that expedient. The
acquisition would be a bad one financially, and the affair might
involve us in disagreeable correspondence both with France and
the Porte. But there is a strong feeling here about not letting
the Canal go still more exclusively into French hands, and as we
contribute nearly four-fifths of the traffic, it cannot be said
that this jealousy is unreasonable. There are intrigues of all
sorts going on at Cairo, but I think we may reckon on the Khedive
being true to us, if not tempted too strongly. I rely on you to
tell me all you hear on the subject.

The memorandum of Lord Odo Russell referred to by Lord Derby is a lucid exposition of the European situation at the time and of Bismarck's attitude with regard to the other Powers, more especially Russia.

* * * * *

Berlin, Nov. 12, 1875.

Bülow is loquacious and straightforward on most subjects; but
his reticence on Oriental affairs is remarkable. I have repeatedly
tried the experiment of talking over what the newspapers say, to
draw him out, but he becomes silent and embarrassed, and seeks to
change the subject, and when questioned, replies that he has not
lately received any information from Constantinople.

I have in consequence tried to find out through confidential
sources what it all means, and putting two and two together, I
make out that Bismarck feels uncertain of Russia, and does not
wish to be committed too soon. Since Gortschakoff assumed the post
of peacemaker between France and Germany, Bismarck has failed to
re-establish confidential relations with Russia. In regard to
Oriental affairs, Gortschakoff, instead of being satisfied to act
with his German and Austrian allies exclusively, has sought to
keep up an equally balanced understanding with England, France and
Italy: from which Bismarck suspects that Gortschakoff does not mean
to let him have his own way and wishes to control Germany through
the united action and agreement of the other European Powers. This
does not suit his book, and above all, he fears that Russia wishes
to keep on good terms with England and France; which would, in his
opinion, neutralize the exclusive action of the three Northern
Powers, over which he hoped to establish his own influence to the
exclusion of all other Governments. By lending his assistance to
Russia in the East, he calculated on Russian neutrality in regard
to his own plans, as was the case during the late war with France.

The joint action of Russia and England last May, in the
interest of peace, took him by surprise, destroyed his fondest
calculations, and left him isolated and disappointed to reflect
on the possibility of a peace coalition against Germany, which he
could not break up without the certainty of Russian neutrality
or assistance. He feels that Gortschakoff has abandoned him for
the time being, that he has lost the confidence of the Emperor
Alexander, and that while they live, there is but little hope of
a change of policy in Russia, favourable to his plans--viz. the
breaking up of Austria and the neutralization of the minor German
sovereignties.

Bismarck reckoned much on his friend Schouvaloff, but
Schouvaloff turned traitor last May, and is less German in England
than he was in Russia, which Bismarck cynically attributed to the
influence of wine and women.

Now Bismarck, I am told, affects honest indignation at the
manner in which Russia is deceiving and misleading Austria in
regard to Turkey; but in what that consists, I do not yet clearly
understand.

When he returns to Berlin he may possibly speak to me on these
subjects, and I should be glad to know whether there is anything in
particular which you may wish me to say, or not to say.

On the whole the present situation of affairs seems to me
favourable to the maintenance of peace.

Of course we must be prepared for an occupation of some
portions of European Turkey by Austria and Russia, but that need
not necessarily lead to war.

I have also endeavoured to find out what the views of
the National Party in regard to the East really are, and I
find that the breaking up of European Turkey would be received
with satisfaction, for the Turk has no friends in Germany. The
German provinces of Austria are looked upon as the natural and
inevitable inheritance, sooner or later, of the German Empire,
for which Austria might be compensated in Turkey, with or without
Constantinople. Some people talk wildly of giving Constantinople
to Greece, as less likely to be objected to by the Western Powers.
But even Russia might take possession of Constantinople without
objection on the part of Germany. Anything calculated to break the
influence of France in the East, which is still thought to be too
great, would be popular in Germany, and more especially if the
interests of the Latin Church could be injured by it.

England may have Egypt if she likes. Germany will graciously
not object.

Since May it has become manifest that Russia has the power
to hamper the movements of Germany and arrest her progress
effectually, and that Germany can undertake nothing new without
the passive consent of Russia. This power must be so intolerable
to Bismarck that he is sure to exercise all his skill in drawing
Russia out of the combined arms of the Great Powers, back into
his own exclusive embrace. This, a difference between Russia and
Austria about Turkey, might enable him to achieve.

Bismarck's endeavours last winter to make us suspicious of
Russia, and _vice versâ_, are now fully explained. His failure must
add to the general irritation he suffers from.

The situation will become clearer when he returns to Berlin in
the course of the winter.

Lord Odo Russell's view of the situation tallied with what Gortschakoff had said to Décazes, Thiers, and other people at Vevey, earlier in the year. The preservation of peace seemed, therefore, to rest largely on Russia, and it was unfortunate that the Eastern Question presented itself in a form which certainly favoured Bismarck's efforts to create differences between Russia and Austria, and between Russia and England.

Further inquiries in Paris with regard to the Khedive's action seemed to confirm the view that he was seeking to mortgage the shares, but to whom they were to be mortgaged was unknown. On November 27, there arrived through Lord Tenterden, Under-Secretary at the Foreign Office, the intelligence that Her Majesty's Government had bought the shares.

* * * * *

_Lord Tenterden to Lord Lyons._

Foreign Office, Nov. 25, 1875.

Lord Derby is ill and at home. I am not sure therefore whether
he is writing to you to-night to tell you about the Suez Canal.
General Stanton telegraphed that Lesseps (supposed to be backed
by French Government) was offering four millions sterling (fr.
100,000,000) for the Khedive's shares, but that the Khedive would
sell them to England for the same sum. Thereupon he was instructed
to offer this amount, and the Khedive accepted this morning. The
contract was signed to-day, as we have just heard by telegram.
Messrs. Rothschild advance the money on the security of the shares,
£1,000,000 in December, and the rest by instalments, the Khedive
to pay 5 per cent. on the shares while they remain without bearing
interest (the interest being hypothecated for the next twenty
years).

Her Majesty's Government are to apply to Parliament to take
the bargain off the Rothschilds' hands.

Practically, therefore, subject to Parliament's assent, Her
Majesty's Government have bought the shares.

I am writing in the greatest hurry but the above is a correct
outline of the case.

I suppose the French will make an ugly face.

P.S. It has all been kept very secret so far, so pray be
supposed to be ignorant till Lord Derby tells you.

The action of Her Majesty's Government was taken none too soon, for as Lord Lyons reported, the shares very nearly fell into the hands of the French. On November 26 the purchase of the shares was publicly announced, and on the following day Lord Derby had an interview with the French Ambassador on the subject.

* * * * *

_Lord Derby to Lord Lyons._

Foreign Office, Nov. 27, 1875.

I have seen d'Harcourt. He came to hear what I could tell him
about the Suez affair, and I told him the whole story exactly as it
is.

He says that there will be some soreness in France, and I am
afraid he is right. You know the facts, and I need not therefore
repeat them. The points which I dwelt on were these:

We did not wish that the Khedive would sell, nor was there on
our part the slightest desire to alter the _status quo_. But we
could not help his selling, and as he had decided on doing so, we
took the only effectual steps to prevent the possibility of the
shares falling into hands whose possession of them might not be
favourable to our interests. The suddenness of the whole affair was
not our doing. If we had delayed, other purchasers would have come
forward. We had to take the opportunity as it offered itself or
lose it altogether.

It is not in the power of the British Government to act
as Continental Governments can, through third parties--banks,
financial companies, and the like. What we do, we must do openly,
and in our own names, so that Parliament may judge of the whole
transaction. This I said in answer to a remark made by d'Harcourt,
that the act would have had less political significance if done
through some company, or otherwise, and not directly in the name of
the State.

We hold even now a minority of the canal shares. The question
for us is not one of establishing an exclusive interest, but of
preventing an exclusive interest from being established as against
us.

I have always expressed my opinion that the best arrangement
for all the world would be the placing of the Canal under an
International Commission, like that of the Danube; and I think so
still. I knew, I said, that the French Government were not prepared
to entertain any such idea, and I therefore did not put it forward;
but if France and other Governments altered their way of thinking,
I did not think any difficulties would be made by England.

M. d'Harcourt expressed some fear, or at least thought that
some would be felt, lest the Khedive should be unable to pay his
promised £200,000 a year, and we in consequence should use some
means to coerce him, which would practically establish England in
authority in Egypt. I assured him that nothing was further from our
thoughts. We wanted the passage through Egypt as free for ourselves
as for the rest of the world, and we wanted nothing more.

The purchase of the Suez Canal shares has always been surrounded with much glamour and mystery, but in reality it seems to have been a perfectly straightforward and business-like proceeding, to which no reasonable objection could be taken. So far from being a profound political _coup_ long calculated in advance, the action of Her Majesty's Government was totally unpremeditated, and as far as Lord Derby was concerned, it was undertaken with reluctance, and under the conviction that England was making a bad bargain. So little confidence did Lord Derby feel, and so averse was he from incurring any further responsibility in Egypt, that he unhesitatingly declined a new proposal of the Khedive that he should sell to the British Government his contingent interest in the profits of the Suez Canal above five per cent., and informed the French of the fact. The British public, which warmly approved the transaction, seems to have been a better judge of the Foreign Secretary's action than he was himself. The four millions' worth of shares acquired by the British Government represented nine-twentieths of the entire amount, and it is interesting to compare these figures with the estimate put upon the value of the Canal by Lesseps. On July 11, 1874, the latter called upon Lord Lyons and said that two persons from England had sounded him about the sale of the Canal; one a member of the English branch of the Rothschild family, and the other a Baron Emile d'Erlanger, a well-known banker living in Paris.

The Rothschild was no doubt Nathaniel,[15] M.P. for Aylesbury,
who was here in the beginning of June. Lesseps said that on being
pressed by him to state a sum, for which the Canal might be
purchased, he had said a milliard (£40,000,000) and he declared
that although this sum had startled even a Rothschild, it was only
a fair one. His object with me seemed to be to give the impression
that the shareholders would not sell the Canal for any sum.[16]

Although the French could hardly be expected to approve of the action of the British Government, which, if it had occurred some years earlier, would have caused a storm of indignation, they were, under existing circumstances, forced to accept it with tolerable equanimity, as it was of no use to add a coolness with England to their other difficulties; and, in addition, they gained a great deal by the rise which took place in Canal shares and Egyptian securities. Lesseps professed himself to be delighted and Bismarck sent a message to say that the policy adopted by Her Majesty's Government had met with the support of the German Government.

FOOTNOTES:

[Footnote 7: French Military Attaché at Berlin before the war of 1870.]

[Footnote 8: French Ambassador at St. Petersburg.]

[Footnote 9: Finance Minister.]

[Footnote 10: Lord Lyons to Lord Granville, Jan. 16, 1874.]

[Footnote 11: Blowitz.]

[Footnote 12: British Minister at Brussels.]

[Footnote 13: German Ambassador at London.]

[Footnote 14: British Consul-General at Cairo.]

[Footnote 15: Now Lord Rothschild.]

[Footnote 16: Lord Lyons to Lord Derby, July 11, 1874.]