Khedive Ismail, 1863-79

No ruler of Egypt, except Gamal Abdul Nasser, has provoked such controversy in the West as Ismail. At the time, the antiIsmail view was held mainly by British administrators like Evelyn Baring (Lord Cromer) and Lord Alfred Milner, who depicted him as squeezing the peasants for money by oppressive taxation and the whip, and "ruining Egypt" by his lavish spending and despotic ways. Journalists and the American consuls in Egypt such as Edwin de Leon held a more balanced view, arguing that Ismail inherited an unfavorable Suez Canal agreement and a significant public and private debt from his uncle, Said. They noted that although Ismail spent lavishly, much of the money he borrowed from European bankers was used for building or repairing the country's infrastructure. They also pointed out that European bankers and financiers loaned money to Egypt at usurious interest rates and, when it seemed Egypt would be unable to repay the loans, urged their governments to intervene to protect their interests.

Ismail's goals for Egypt were similar to those of his grandfather, Muhammad Ali. He wanted Egypt to become virtually independent of the Ottoman Empire, a political and military power in the eastern Mediterranean and an economic partner of Europe. Ismail achieved a considerable degree of independence from the Porte (from Sublime Porte, the term for the High Gate that came to be synonymous with the Ottoman government) by making large payments to the Ottoman treasury. For example, in return for increasing Egypt's annual payment to the Ottoman treasury from £175,000 to £400,000, Sultan Abdul Aziz allowed Ismail to change the rule of succession from the oldest surviving male heir of Muhammad Ali to direct male primogeniture in his family. The sultan also granted Ismail the formal title of khedive, which elevated his standing to a position closer to royalty.

Ismail's attempt to make Egypt independent foundered eventually because of the gap between the revenues the country could produce and the expenses necessary to achieve his goals. He attempted to generate more income by increasing agricultural productivity, chiefly by bringing more land into cultivation through expensive irrigation projects such as the construction of canals and dams. During his reign, an additional 506,000 hectares were brought under cultivation, representing a sizeable increase in both production and income.

To service the cotton crop, which was the basis of Egypt's prosperity, roads, bridges, railways, harbors, and telegraph lines had to be constructed. During Ismail's reign, 112 canals, 13,440 kilometers long, were dug; 400 bridges were built; 480 kilometers of railroad lines were laid; and 8,000 kilometers of telegraph lines were erected. Towns and cities were modernized by the expansion of public services such as water distribution, transport, street lighting, and gas supply. Public education was reorganized and expanded, and a postal service was established. The army and bureaucracy were expanded and modernized. In short, Ismail undertook the construction of the infrastructure of a modern state.

Ismail greatly expanded Egypt's revenues and exports during his reign. But the country's prosperity was tied to the export of cotton, whose price was set on a fluctuating world market, making income uncertain. Moreover, Ismail's infrastructure development entailed more expenditure than Egypt's income could provide, with the result that he was obliged to contract foreign loans. These loans, added to the expensive concessions that Said had made concerning the Suez Canal, meant that by 1875 Egypt was £100 million in debt. In that year, Ismail sold his shares in the Suez Canal Company, making the British government overnight the single largest shareholder in the company. The sale of Ismail's shares did not solve the country's financial problems, however, but merely staved off the crisis for another year.

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Source: U.S. Library of Congress