At the beginning of every year the Soudan Budget, with the estimates of receipts and expenditure for the year, has to be submitted to the Egyptian Council of Ministers. The total amount to be granted to the Soudan from the Egyptian revenues is then decided, and any consequent alterations in the Budget made. The Governor-General and the Financial Secretary are responsible for seeing that the total sum so granted by Egypt is not exceeded, but while this limit is observed, credits can be transferred from one head to another without reference to Cairo. Any special or unforeseen expenditure can be defrayed by Egypt by special grants sanctioned by the Egyptian Council of Ministers, and the Egyptian Minister of Finance has at all times the right of inspection, audit, and supervision of the Soudan Government accounts. Practically, of course, this means that the finances of the Soudan are subject to the control of the British Financial Secretary and the British Consul-General at Cairo, but that the Soudan Government exercises a very wide discretion as to the disposal of its revenues once realized.

The revenues of the Soudan are therefore at present made up from three sources: first, taxation, fees, licenses, etc.; secondly, the receipts of certain earning departments—e.g., railway, steamers, post, and telegraphs; and thirdly, the contribution from Egypt. Of these the third is still, it must be confessed, the most important, but the first is steadily growing. Strictly speaking, the second should not be included, for although the earnings of these departments are materially increasing, and although without them very little could be done, their annual accounts do not as yet show a profit, for various reasons that will be explained.

The principles of taxation are not new. Many of the taxes are the same in kind as those which were formerly in force not only under Egyptian rule, but also under the Khalifa’s. It was wisely decided that no innovations should be introduced based on Western notions, unless they were unavoidable. The taxes are of a kind to which the people have long been accustomed, but, of course, great care is taken that they shall be fixed at a moderate rate, and that no one shall pay more than is actually required by law. It was the uncertainty of the amount to be paid, the illegal imposts levied by the collector on his own account, and the dates at which they were collected, that made the old taxes so often cruel and ruinous. The uncertainty of the amount to be paid had, however, an attraction for the Oriental. It varied with the circumstances of the year. The Government wished to get all they could, and in a good year they exacted a most excessive amount; but in a bad year they took little or nothing at all. According to the Western system a fixed moderate amount has to be paid every year, and a whole or partial failure of the crop is not considered any excuse. The latter system is, of course, far the most just and economically sound, but it lacks the elasticity of the other. It is the constant endeavour of European administrators in Oriental countries to endeavour to combine the advantages of both systems. In the Soudan the system of petitions direct to the Governor-General is a means to secure this result. When adequate cause is shown, he is able to remit taxation wholly or partly, and there have been several cases in which he has done so, notably in Berber and Dongola Provinces in 1900, when the low Nile caused a great deal of land to be thrown out of cultivation. Of course, such remissions are inclined to play havoc with a Budget framed on careful estimates. It cannot be helped, and at any rate it is only one of many difficulties which have to be encountered in balancing a Soudan Budget. Unforeseen expenditure often becomes necessary, but happily during the last two or three years the receipts have been increasing unexpectedly also.

Although the taxes remain the same in principle, a comparison with the former state of things shows the difference in the methods of assessment and collection to be so great as to amount to a revolution. Then, as now, the Government in the Soudan was, according to the general rule in the East, the admitted owner of the soil, and the cultivator had to pay a tax amounting to one-tenth of the produce for its use. The actual sum to be paid included all other taxes, as house-tax, animal-tax, and so on. Each district was rated at so much in the Budget; this sum was divided among the villages and communes until the individual cultivator was reached. The nomad and other tribes which did not cultivate the soil were assessed at an annual tribute, according to their wealth in camels, cattle, and horses. In Berber and Dongola the tax was not on the produce of the land, but on the instruments of irrigation. It varied according to the instrument and according to the quality of land. One sakieh was calculated to be capable of watering 8 acres, and if more land was cultivated an increase was made in the tax. It has already been mentioned how these water-wheels were often taxed in a sum far beyond their possible earning capacity. It was the same with the assessment of the districts and the tribute of the tribes. The official estimates were seldom or never realized as far as the public exchequer was concerned (although the bullying tax-collectors took much more for themselves). Arrears accumulated, in spite of every effort, and became a direct incentive to discontent and revolt. In the year 1879 the deficiencies of the amounts actually received below those estimated ranged in the different provinces from 10 to 60 per cent. The figures of the Budget were, in fact, pure fancy, especially when the country was disturbed. But the thing was even worse than it looked. Districts and tribes, though they might not pay all that was asked, paid a great deal more than they could afford, and consequently, as the money had to be found somehow, they found it by indulging in the only prosperous trade—that of slavery. In other words, the Soudan lived largely by expending its capital.

Owing to the alteration in the boundaries of the Soudan, it is somewhat difficult to calculate what the amount raised in taxation from the present territories amounted to. As nearly as can be made out, it was about £360,000 a year nominally, with a nominal deficit on the whole administration in the same provinces of £70,000 a year. Absolutely nothing was spent in the development of the country; salaries, rations, and clothes for the army of occupation made up almost the whole of the expenditure.

As compared to this, the actual sums raised in the Soudan by taxation during the last four years have been as follows:

But the conditions are so different that nothing can really be deduced from this comparison. The figures show clearly that the country is advancing steadily. The burden is lightly borne. It would be very easy to exact far more than this without any positive discontent, but it would be a most unwise policy to do so, for it would be at the expense of its future progress.

The taxes are no longer assessed by the district. The tribute from the nomad tribes is the only exception to the rule that the Government deals directly with the individual taxpayer. They are no longer collected by irregular and irresponsible bullies; they are payable at the most convenient seasons, and they are moderate in amount. So great a difference in detail is almost a difference in principle; but the names are the same. Of the whole collected the receipts from land-tax and ushur are about a quarter—i.e., about £50,000 a year. The land-tax proper is no longer levied according to the instruments of irrigation, but, as in Egypt, according to the acreage and situation of the irrigated fields. Land irrigable by wells and foreshore land irrigable by flood pays 20 piastres (4s.) per acre; land on the mainland irrigable by water-wheels and shadoofs, 30 to 40 piastres; and land on islands similarly irrigable, 50 to 60 piastres. All other lands—that is to say, lands which depend for their water-supply not on irrigation, but on rainfall—are taxed at the rate of 10 per cent. ad valorem on their produce. This tithe is called ushur. At first it was paid almost entirely in kind, but it is now collected as far as possible in money, and, as the money in circulation increases, payment in kind—a most inconvenient form of payment—will be altogether abolished. The date-tax—2 piastres (5d.) on every date-palm that has begun to bear fruit—is akin to the land-tax. It produces some £15,000 a year.

The land-tax in some form will be the staple of the future revenues of the Soudan. Every year as population increases and more land comes under cultivation it will form a larger proportion of the total receipts. In many of the remote parts of the country, owing to the great distances and the small number of officials, it is hardly yet in working order, but with improved organization all may be expected to bear their just share of taxation, and the receipts will benefit accordingly. Any large scheme of irrigation and cotton culture will, of course, send up this branch of revenue by leaps and bounds. Second in importance to the land-tax, and for the time being exceeding it, come the royalties charged on exports of gum, ostrich-feathers, ivory, india rubber, and a few other articles, at the rate of 20 per cent. by weight. The extraordinary growth of the gum-trade is mainly responsible for this item, which makes up another quarter of the taxation revenue. Ivory receipts can hardly be expected to come to very much, but ostrich-feathers and rubber will probably show a marked increase in future years.

Other minor receipts were estimated in the Budget for 1902 as follows:

All these taxes are familiar in the Soudan. Some of them, especially those small in their results—and there are a good number more of less importance than those named—will probably be abolished as soon as the country is able to stand the immediate loss. But as yet even the most objectionable in principle do not act as restrictions to trade. They only distribute the burden of a very light taxation, so as to make all classes contribute something, and the Government is still so poor that even a few hundred pounds are of very great importance.

The Customs are set down as producing only £E5,400, and this demands a word of explanation. £4,500 of this is taken at the port of Suakin, the remainder on the land frontier in Kassala and Sennar. The Customs on the land side, small as they are, show a steady increase; those at Suakin have been constantly decreasing, as trade is more and more diverted to the Nile Valley route. But all Customs duties on goods coming to the Soudan on this side are levied at the Egyptian ports, and retained by Egypt. The duties are 20 per cent. per kilo on tobacco, and 8 per cent. ad valorem on all other goods. In the year 1903 it is estimated that the sum thus retained by Egypt will amount to £E70,000, but this has not been taken into account in calculating the Soudan revenues.

As for the profit-earning departments, their profits are as yet invisible—invisible, that is, as far as their accounts are concerned, though visible enough in the increasing prosperity of the country. Still, the actual takings of the railway and the post and telegraphs mark progress. They stand for three years:

But these receipts are far from being any criterion of the actual amount of work done. They exclude all that was done on Government account. Up till 1903 all passengers, goods, and messages on behalf of Government were carried free of charge. But it was found that this system tended to extravagance. A department, for example, wishing to buy dhurra for Khartoum, was apt to buy it at Dongola, possibly at a cheaper rate, and have it brought by rail for nothing, rather than buy it locally and disburse something for the cost of local camel or mule transport. This was good business for the department, which had only a certain credit allotted to it, but waste from the point of view of the railway, by which the cost of transport was borne. Now each department is charged in the books of the railway or post-office for all services actually rendered. The change is, of course, only one of book-keeping, but it is a good instance of the way in which good book-keeping works towards economy. With this alteration the working of the profit-earning departments makes a much better appearance. The estimates for 1903 are:

The maintenance of the army in the Soudan is the item most affected by this alteration. The sum to be paid to the Egyptian War Department is set down at £E193,658 for 1903 as against £E122,548 for 1902.

The Steamers and Boats Department has been too recently organized for an opinion to be formed upon its working, but the Railways are soundly and economically managed. The increase of traffic has made it possible to reduce the ratio of working expenses, though the high price of fuel is still a great obstacle. Besides the ordinary expenditure there has also been a good deal of capital expenditure, which was very necessary considering the haste with which the line was laid down as a purely military railway. These sums are: In 1899, a special credit of £E390,000 for the completion of the line from the Atbara to Khartoum; in 1900, a special credit of £E15,000 for culverts and bridges on the same portion of the line, and a loan of £E55,000 for general development and purchase of rolling-stock; and in 1902-1903, a loan of £E528,000 (spread over five years) for the same purposes; and a special advance of £10,000 for the survey of the proposed Suakin-Berber line. All these sums, together with an advance of £E31,000 for the improvement of the harbour at Suakin, have been found by Egypt. The Soudan pays 2½ per cent. on the loans.

The nature of the country makes it inevitable that the postal service should show a loss for some time; but the telegraph service would show a profit over actual working expenses, but for the fact that so much is expended every year on extension, and this is credited to ordinary expenditure. £E18,500 was, however, borrowed from Egypt in 1900 to meet a special difficulty. The wooden poles were sometimes devoured by white ants, and were also liable to rot. After various experiments it was found best to bolt the poles on to steel bases, and it was to meet this emergency that the loan was contracted. The new plan has been found to answer admirably, and it has also facilitated telegraph extension, because the shorter poles (12 ft. 6 in. instead of 18 ft.) make a much more convenient load for a camel. Besides the wires along the railway, there is now telegraphic communication from Berber to Suakin, Suakin by Tokar to Kassala, Kassala to Gedaref, and Gedaref to Gallabat. A line from Gedaref connects at Messalamia with a line down the Blue Nile from Khartoum by Wad Medani to Sennar, which then crosses over to Goz Abu Goma on the White Nile, and is continued to Fashoda. Another line runs from Khartoum to Duem, on the White Nile, and thence to El Obeid. In time the telegraph will be continued south to Uganda, and whenever this takes place the telegraph tariff convention arranged by Mr. Cecil Rhodes for through communication between Alexandria and Cape Town will come into force.

If the gross takings of the railways, post and telegraphs, and boats, are included in the revenues of the Soudan, the Budget wears a more imposing aspect than if only the net expenditure of each of these departments is included. The estimates for 1903 stand thus:

By starving the administration it would be possible to make this deficit a great deal less, and, on the other hand, it would be very easy to make it a great deal more. A country which has been going steadily, even rapidly, backwards for so many years affords unlimited opportunity for capital expenditure. Indeed, a large part of its ordinary expenditure is really capital, so far as it is incurred for permanent buildings, railways, telegraphs, and all the other machinery, not only of government, but of elementary civilization, which were all entirely wanting. The item of public works bulks very large in the civil expenditure. It is inevitable that the expenditure should increase with the development of the country, but it is a satisfactory symptom that it is not increasing so fast in proportion as the revenue. The civil expenditure, too, goes up, while the military expenditure goes down. In the following table only the net expenditure on railways, etc., is included:

Expenditure.

The richer provinces in the Soudan might prosper very much faster if they were allowed to devote the whole of their own revenues to the development of their own resources. But, of course, the whole receipts have to go into the common purse, and then be doled out again in the interests of the country as a whole. Naturally, there is a tremendous fight every year between the Mudirs, who are responsible for the provincial budgets, and the central Treasury. Two provinces stand out prominently in the matter of profits—Kordofan and Dongola. Dongola had pride of place at first, but then Kordofan passed in a stride, through the revival of the gum trade. But Dongola is still a good second, in spite of her railway difficulties, through the date-tax and the land-tax. Two-thirds of the whole amount raised by this latter tax is supplied by her. Halfa Province, or, rather, District, also shows a good profit by means of the land and date taxes. The Ghezireh Province, the kernel of the Soudan, makes a favourable appearance. Sennar just pays its way. The others all show a deficit. Khartoum, of course, stands in a different category, as also Suakin. But Berber and Kassala may soon be expected to redeem themselves. Fashoda is as yet very undeveloped, and naturally the Bahr el Ghazal, only just occupied, comes well at the bottom of the list. That this order of financial merit will be maintained unchanged is most unlikely.

It will be noticed that the estimated deficit for 1903 was some £E390,000, and this is Egypt’s contribution towards the current expenses of the year. The same sum was contributed in 1902, and it has been agreed that this subsidy shall be continued at the same figure for some years to come. The approximate amounts so expended in former years were: 1899, £E385,000; 1900, £E417,000; and the same in 1901. On the basis of this contribution, which is called ‘Insuffisance,’ the estimates for the Soudan are drawn up. Considering all the difficulties in the way of accurate calculations, it speaks well for the Soudan officials that their expectations have been so nearly realized. In 1899 and 1900, when the accounts were finally made up, there were found to be deficits of £E23,000 and £E40,000. But in 1901 the finances of the country took a great turn for the better, and, although expenditure exceeded the estimate, this excess was so much overbalanced by unforeseen increase of receipts that sufficient surpluses were realized in 1901 and 1902 to make good the deficiencies of the two previous years. During the years 1899-1903 Egypt has therefore expended close upon £2,000,000 in these annual grants; she has also paid over, partly as special credits and partly as loans, another £1,000,000 for capital expenditure on railways and telegraphs, as already mentioned. There are deductions to be made from this sum of £3,000,000 in calculating the actual cost imposed on Egypt by the Soudan; but as these are the actual amounts on which the Soudan Budget is calculated, they must be set down here.

It sounds, perhaps, a strange thing to say that the Soudan finances are in a sound condition when such sums have to be contributed by Egypt, but such is certainly the fact. The great feature is the recuperative power of the country, so markedly displayed since 1901, and there can be no doubt that if, with Egypt’s help, the two principles of low taxation and irrigation can be steadily applied, they will produce, if not as great, yet a similar result to that which they have produced in Egypt itself.

The Nile Valley presents some peculiar examples of political organization. At one end of it is Uganda, a British Protectorate under the administration of the Foreign Office. At the other is Egypt, nominally an independent despotism, tempered by international Boards of Control in several departments, notably finance, and paying tribute to a suzerain Power—Turkey—but in the military occupation of England. Between comes the Soudan, where, except at Suakin, the British and Egyptian flags fly side by side. It is ruled by a Governor-General, joint representative of the King and the Khedive, whose acts have to be approved by the British Consul-General at Cairo, and it is jointly occupied by the troops of both Powers. If it is difficult to decide upon the exact position of Egypt, what shall be said of the Soudan? International jurists have in it a fair field of problems on which to exercise their wits, not to mention the peculiar status of the Lado enclave. But whatever imaginary difficulties may be conceived, one thing is certain: the hoisting of the British flag leaves no doubt of the fact that the Soudan is not in any way a part of the Turkish Empire. The difficulties and complications which have been caused in Egypt by the Capitulations and the consequences derived from them definitely cease with the boundaries of Egypt. It is easy to see that those who framed the Convention of 1899 were thoroughly determined on this. Article VIII. lays down that the mixed tribunals shall not extend to the Soudan, except Suakin, and, to further preclude any chance of international trouble, it is expressly stated that no Consuls or other foreign representatives shall be permitted in the Soudan without His Britannic Majesty’s consent, and that no special privileges shall be accorded to the subjects of any one or more Powers to trade, reside, or hold property, within the limits of the Soudan.

Otherwise, there was no reason why the Soudan should not have been placed in exactly the same position as Egypt, whatever that may be. In every other respect it is, in fact, in the same position as though the Egyptian flag flew alone, especially in the matter of cost. When the British taxpayer is looking at a map of the world in order to get some satisfaction for his Imperial expenditure, and casts his eyes over Africa, he doubtless comforts himself with the reflection that in the Soudan England governs, but Egypt pays, and wishes that other portions of the Empire were managed on similar principles. England governs, and Egypt pays, but the division of labour is not unfair. If the Egyptian finds it hard to realize the meaning of a veiled Protectorate, the more unsophisticated Soudanese would find it totally impossible. The flag is a visible symbol which appeals to him directly, and contributes largely to the maintenance of peace. Many a tribe submits contentedly to British dominion, which would indignantly scout the idea of submission to Egypt alone. As a matter of fact, the British Government does contribute something in money, for it bears the cost of the British battalion at Khartoum and its barracks. Still, it is to the Egyptian Treasury, and not the British, that the Soudan has to look, and it is worth while to estimate rather closely the sums which Egypt has to find, and the advantages which it gains in return.

The cost of the Soudan Campaign from the opening of the Dongola Campaign in 1896 to February, 1899, was £2,345,345, made up as follows:

Since then, up to the end of 1903, the ordinary expenditure of Egypt in the Soudan has been, as was shown, about £2,000,000, and the capital expenditure about another £1,000,000. In other words, the Soudan has cost Egypt nominally about £600,000 a year for the last five years.

But as a matter of fact the real cost during the five years has been a good deal less than this. Various deductions ought to be made. In the first place, Egypt takes all the Custom duties on goods going through to the Soudan. These came to about £60,000 in 1902, and were estimated at about £70,000 for 1903, an estimate very likely to be below the mark. It is safe to reckon that during the five years they amounted to nearly £200,000. Then, the expenses of the Egyptian army of occupation in the Soudan are charged to the Soudan Government. During the first two years these amounted to about £300,000 per annum. Taking an average of £200,000, we get a sum of £1,000,000 under this head. If the Soudan had not been reconquered, Egypt would have had to maintain nearly as large an army as at present, and although the cost of maintenance is naturally larger in the Soudan, it would not be unfair to deduct another £800,000 as money that must have been expended in any case. Of the capital expenditure, £600,000 was in loans for railway and telegraph development. Although the prospect of repayment of these loans is somewhat remote, they ought not to be written off as pure out-of-pocket expenses, seeing that the Soudan Government pays 2½ per cent. per annum upon them. Two and a half per cent. on £600,000 is equal to 5 per cent. on £300,000. An investment with this return would be more advantageous to Egypt than extinguishing an equal portion of her debt, and it is therefore reasonable to deduct that sum from the total expenditure. All these allowances added together make up a sum of £1,300,000, bringing the average annual cost to Egypt during the five years down to £340,000; while in addition to all this the Egyptian revenues have also directly benefited through the Railways and Post-office by the extra passengers, goods, letters, telegrams, and money orders, passing to and fro.

Still, when all deductions have been made, it cannot be denied, especially as the Soudan still calls loudly for more capital expenditure, that the reoccupation of that country, from a strictly financial point of view, though in one aspect philanthropic, is not as yet philanthropy at 5 per cent. But there are certain solid advantages which, though their value to Egypt is difficult to calculate in terms of money, are worth to her many times over the actual sum which the Soudan costs her.

First of all comes the fact, so often insisted upon, that the whole of the upper waters of the Nile are now in the secure possession of those who are responsible for her welfare. This supreme and vital necessity overshadows all others, and would by itself have forced her to undertake almost any sacrifice. In fact, as all the water in Egypt comes through the Soudan, her contribution may be looked upon as a water-rate calculated at an exceedingly low figure. Secondly, she is relieved from all fear of foreign invasion. The frontier is once more at rest, and no longer troubled even by raids. There is a vast difference between a peaceful and comparatively prosperous neighbour and a horde of furious barbarians hammering at her gates.

Further, the pacification of the Soudan enabled the burden of conscription to be diminished. The army was reduced by 5,500 men, and the period of service was reduced from fifteen years to ten, of which five have to be spent with the colours, and five in the reserve or police. Considering how much the Egyptian fellah dislikes military service, those who are affected by this change probably regard it as the greatest benefit of all.

A new field has also been opened for Egyptian trade and the employment of Egyptians. A constantly expanding market at her door for sugar and other goods is no small advantage. A good deal of the money spent in the Soudan, though lost to the Egyptian Treasury, is not lost to Egypt, for it takes the form of salaries for numbers of Egyptians in the Government service, and the money orders passing from the Soudan to Egypt show that at least a portion of it returns immediately. Moreover, the Soudan is gradually losing its old traditional terrors, and more and more Egyptians, though as yet in small numbers, are returning to settle there when their period of service is over.

Lastly, the good name of Egypt has been restored; one of the evil pages in her history has been finally turned. The country which she once ruined by her misgovernment and oppression and by her greedy haste to share in the profits of the slave-trade, and then abandoned to barbarism, has been rescued, and set moving once more on the paths of civilization and good government. It is right that in the days of her prosperity she should do something to assist her less fortunate neighbour.

It has been said that for the present Egypt will continue her annual grant to the Soudan of £E390,000 a year. But she will also be called upon to find some large additional sums. The Soudan requires capital, but has no credit of her own on which to borrow. The British taxpayer ought not to be called upon, even if he had not borne his share already, since it is not his interests, but those of Egypt, which are primarily concerned. But Egypt herself is not in a position, owing to international complications, to contract new loans, nor is it at all desirable to impose additional taxation for the purpose. Private enterprise, even if it was possible to employ it, would in the end be too expensive. But the problem is not insoluble, though difficult. Lord Cromer in his last report gives a most admirable summary of the position: