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ing thro' the Cabinet - but it strikes me, that the system of communicating such information among ourselves is not a very convenient one.

The whole correspondence is in print at the F. O. by this time, and a copy will, of course, be sent to each Cab. Minister. This by the way.

It seems to me, that a private communication to you from the Viceroy should be treated as a private letter from an Ambassador to the For. Secy. of State. It is always forwarded to the P. Minister, but not circulated, unless it leads to questions of instant business and responsibility.

In the instance of Northbrook's letter, had it been sent ou to me immediately, I should have requested you and Lord Derby to have met me at D. S. and then we would have ascertained exactly how we stood. There ought to be some system, especially in these times, when the Secretaries of State for F. O. and India should be able to communicate with more promptitude, and, if necessary, reserve, than at present seems the habit. I do not, at this moment, see any better system, than that which I have intimated - but we will talk the matter over together, and I doubt not will arrive at a sound conclusion.

I question, also, the expediency of sending despatches, like Lord Northbrook's, in a common circulation box, except marked 'strictly confidential.' In these days, every private secy. has a Cabinet key, I believe -perhaps I might add, I fear; and we should encourage some processes of reserve.

I feel confident you will not be offended by the frankness of these remarks. They are literally currente calamo, and are jotted down rather for our future joint consideration, than in any spirit of pedantic over-regulation. . . .

Not merely the Central Asian question, but also that of the Suez Canal, was forced on Disraeli's attention immediately on assuming office. Ferdinand de Lesseps, the great Frenchman who had conceived and executed the work, had hitherto failed to make it remunerative, and had in consequence given the Gladstone Government those opportunities of securing British interests in the Canal which they had neglected to utilise. His latest resource had been to increase the tonnage duties from which the company derived its revenue by levying them on a novel basis which the maritime nations, and especially Great Britain, con

sidered not to be warranted by the terms of the concession, and which, early in 1874, had been condemned as illegal by an International Commission. Lesseps defied the Commission and the British Admiralty, insisted that no ship should be let through the Canal which did not pay on the higher scale, and was only reduced to reason by the mobilisation by the Khedive of 10,000 men to evict the company.

To Lord Derby.

WHITEHALL G., April 23, 1874.— The Lesseps affair is getting serious; he has gone to Jerusalem to get out of the way, but there is little doubt he intends mischief, at least what we call mischief, for, so far as I can judge, the law is on his side.

I do not like to contemplate the Canal being shut up for months, wh. will probably be the case.

Could we advise the Porte to postpone the enforcement of their regulations for one month; and, in the interval, make an arrangement? Lesseps is toujours prêt de negocier sur la base du droit.' His self-love would be spared and soothed, if you took the matter in hand, and you would gain European glory.

My own opinion is that the ultimate and proper solution would be an International Commission, like that of the mouths of the Danube.

From Lord Derby.

Private. F. O., April 24, 1874.- Read Col. Stokes's mem. on the Suez Canal. . . You will see in this the true explanation of Lesseps's conduct. The surtax question is little more than a pretext. Our engineers were right as to the difficulty of keeping up the Canal when made. Port Said is silting up, and cannot be maintained in a state of efficiency without an outlay greater than the company can afford, except at an absolute sacrifice of profit for years to come. In fact, the undertaking is all but bankrupt: and M. Lesseps] is probably well pleased at having an excuse to get out of it.

We cannot let the Canal go to ruin: it is too useful to us. Stokes suggests buying out the shareholders, by guaranteeing them a fixed dividend, and working the Canal through the agency of an International Commission. There are difficulties in the way, obvious and grave; but things really look as if this were the only way out of the scrape.

...

Our course is plain. Lesseps has put himself in the wrong, all the Powers are agreed in saying so (even France): and we

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must maintain our decision. That does not preclude his being fairly, and even generously treated. But you must bear in mind, in considering his recent sayings and doings, that the thing is a commercial failure, utter and hopeless, and that he knows it.

Disraeli did not rest content with solving the immediate difficulty. He made up his mind to secure British interests in the new waterway by obtaining some control over the company, whose bankrupt' state seemed to provide an opportunity. He went to work, not through the regular diplomatic agency, but by the private methods which he had used in the Government of 1858-1859, when he had sent Earle on a mission to Napoleon III. It was, on one side, a financial matter, and he invited in May the aid of the prince of financiers, his old friend Baron Lionel de Rothschild; with the result that Rothschild's eldest son, M.P. for Aylesbury, and afterwards Lord Rothschild, went over to Paris to intimate to Lesseps that the British Government were prepared to purchase the Canal if suitable terms could be arranged. The mission was a failure. French patriotic feeling, then reviving after the disasters of the war of 1870, was not disposed to tolerate any surrender of French rights over a French canal; and Lesseps, after his repeated rebuffs by England in past years, and his quarrel with the British Government and British shipowners over the tonnage question, was in no mood to renew his previous offers. Disraeli was disappointed, but waited his time, keeping constantly in touch with the Canal authorities. 'On more than one occasion,' he told the House of Commons in 1876, M. de Lesseps came over here himself, and entered into communication with us as he had before with our predecessors, but there was no possible means of coming to any settlement which would be satisfactory to the proprietary.'

In the comparative calm of the first eighteen months of the Disraeli Administration, a few episodes in foreign affairs attract attention, and may serve to indicate the Prime Minister's aims and methods. A visit to London,