, but
the bondholders received L85 of the new stock for every L100 of the old.
The capital of the debt was increased by L1,945,000 by these
conversions, while the annual economy to the Egyptian government
amounted at the time of the conversion to LE.348,000. Further, an
engagement was entered into that there should be no reimbursement of the
loans till 1905 for the Preference and Daira, and 1908 for the Domains.
By an arrangement concluded in June 1898, between the Egyptian
government and a syndicate, the unsold balance of the Daira estates was
taken over by the syndicate in October 1905, for the amount of the debt
remaining, when the Daira loan ceased to exist. The fund formed by the
accumulation of the economies resulting from the conversion of the
Privileged, Daira and Domains loan was known as the Conversion Economies
Fund. The fund could not be used for any purpose without the consent of
the powers, and the money paid into it was invested by the Caisse in
Egyptian stock. The fund therefore acted as a very expensive sinking
fund, the market price of the stock purchased being above par. Up to
1904 the consent of the powers to the employment of this fund for any
purpose of public utility was withheld. On the 31st of December of that
year the fund amounted to LE.6,031,000. It may be added that besides the
General Reserve Fund and the Conversion Economies Fund, there existed
another fund called the Special Reserve Fund. This was constituted in
1886 and was chiefly made up of the net savings of the Egyptian
government on its share of the annual surpluses from revenue. Of the
three funds this last-named was the only one at the absolute disposal of
the government. The whole of the extraordinary expenditure of the Sudan
campaigns of 1896-1898, with the exception of L800,000 granted by the
British government, was paid out of this fund--a sum amounting in round
figures to L1,500,000.

An era of prosperity.

Notwithstanding all the hampering conditions stated, the prosperity of
the country became more manifest each succeeding year. During the four
years 1883-1886, both inclusive, the aggregate deficit amounted to
LE.2,606,000. In 1887 there was practical equilibrium in the budget, in
1888 there was a deficit of LE.53,000. In 1889 there was a surplus of
LE.218,000, and from that date onward every year has shown a surplus. In
1895 the surplus exceeded, for the first time, LE.1,000,000. The growth
of revenue was no less mar