orvee_
has been practically abolished. Law and order everywhere reign supreme.
The _curbash_ is no longer employed as an instrument of government." So
little danger to internal peace was apprehended that during this year
Arabi Pasha, who had been in exile in Ceylon since 1882, was permitted
to return to Egypt. This happy condition had been brought about largely
as the result of giving fiscal reform, accompanied by substantial relief
to the taxpayers, the first place in the government's programme, and
with the abolition of octroi duties in 1902 disappeared the last of the
main defects in the fiscal system as existing at the time of the British
occupation. In these conditions the machinery of government, despite its
many imperfections and anomalies, worked smoothly. Land increased in
value as irrigation schemes were completed, and European capital was
increasingly eager to find employment in the country. The bulk of the
fellahin enjoyed a material prosperity to which they had been strangers
for centuries. In the midst of this return of plenty Lord Cromer (in his
report for 1903) sounded a note of warning:--

"As regards moral progress (he wrote), all that can be said is that it
must necessarily be slower than advance in a material direction. I
hope and believe, however, that some progress is being made. In any
case the machinery which will admit of progress has been created. The
schoolmaster is abroad.... Every possible facility and every
encouragement are afforded for the Egyptians to advance along the path
of moral improvement. More than this no government can do. It remains
for the Egyptians to take advantage of the opportunities offered to
them."

The Anglo-French understanding of 1904.

The facilities enjoyed by the British and Egyptian governments for
securing the material if not the moral development of Egypt were greatly
enlarged in 1904, as the result of the understanding then come to
between France and Great Britain. The natural irritation in France
arising from the British occupation of the Nile valley, and the
non-fulfilment of the pledge to withdraw the British garrison from
Egypt, which had grown less acute with the passing of years, flamed out
afresh at the time of the Fashoda crisis, while the Anglo-Boer war of
1899-1902 led to another access of irritation against England. During
1903 a great change came over public opinion on both sides of the
Channel, with the result that the sta