For the purposes of the new settlement the loans raised by Ismail on his private estates, those known as the Daira (i.e.
Daira Sanieh loan 9,513,000
The rate of interest was, on the Privileged debt and Domains loan, 5%; on the Unified debt and DaIra loan, 4%.
These charges included the services of the Privileged and Unified debts, the tribute to Turkey and the interest on the Suez Canal shares held by Great Britain, but excluded the interest on the Daira and Domains loans, expected to be defrayed by the revenues from the estates on which those loans were secured.
Besides the Caisse there was the Railway Board, which administered the railways, telegraphs and port of Alexandria for the benefit of the bondholders, and the DaIra and Domains commissions, which administered the estates mortgaged to the holders of those loans.
In June 1890 the assent of the powers was obtained to th conversion of the Preference (Privileged), Domains and Daira loans on the following conditions, imposed at the initiative of the French government:
The Daira loan was to be reimbursed at 85%, instead of 80%, as provided by the Law of Liquidation.
The sales of Domains and Daira lands were to be restricted to E.300,000 a year each, thus prolonging the period of liquidation of those estates.
As regards the Daira loan, there was no apparent reduction in the rate of interest, which remained at 4%, but the bondholders received 85 of the new stock for every 100 of the old.
Further, an engagement was entered into that there should be no reimbursement of the loans till 905 for the Preference and Daira, and 1908 for the Domains.
Byan 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 theaccumulation of the economies resulting from the conversion of the Privileged, Daira and Domains loan was known as the Conversion Economies Fund.
This new fund started with a capital of 13,376,000 and was replenished by the surpluses of subsequent years, by the interest earned by its temporary investment, and by the sums accruing by the liquidation of the Daira and Domains loans.
During 1905 and 1906 about 3,000,000 was paid into the fund through the liquidation of the DaIra loan.
It will be convenient here to summarize the position of the Egyptian debt at the close of 1905, that is at the period immediately following the liquidation of the DaIra loan.
This reduction was brought about by surplus revenue, and by the operation of the sinking fund in the case of the Guaranteed loan, while Is,729,000 had been wiped out by the sale of DaIra and Domains property.