Egypt, his advice was that England should “establish a certain security of position in this connecting link between her European and Asiatic possessions” by administering Egypt as a leaseholder from the Sultan. In this way England, he thought, would attain her purpose, and yet escape a conflict with existing treaties, and “avoid putting France and other Powers out of temper.”[199] His counsel was not followed, which was the first affront. The feeble course actually adopted--that of attempting to govern Egypt by advice--had ended in a financial crisis that alarmed all the German bondholders, and they in turn put pressure on Prince Bismarck, that still further increased his irritation against England. Hence, when towards the end of 1884 he meditated a stroke of Colonial policy at the Antipodes, he showed little respect for British susceptibilities. In this new departure he was materially assisted by the incredible folly of Lord Derby. At the end of 1883 the Government of Queensland had sent a police magistrate to annex New Guinea, or rather that portion of it not claimed by the Dutch. It had already been annexed by wandering British navigators, but rumours of foreign designs on the island had quickened the apprehensions and action of the Australians. Lord Derby repudiated this act of annexation. As Lord Derby had been sedulous in warning the Colonists that in war they must defend themselves, it was not easy to understand why he objected to their occupying a territory which, if held by a foreign enemy, would give him a good base of operations against Australia. Ultimately, he nerved himself to the hazard of annexing the southern portion of New Guinea, east of the Dutch possessions, provided the Australian Colonies would enter into a federal engagement to bear part of the expense of holding and governing the country. Lord Derby had not, however, taken care in proclaiming in October, 1884, his intention of annexation to warn foreign Powers off other portions of the island and adjacent archipelago. He virtually invited rival Governments to slip in and seize what he had left untouched. The end of the year, therefore, saw the German flag flying over the unoccupied portion of New Guinea, and the archipelago of New Ireland and New Britain, and all Australia was in an uproar. These events stirred the sluggish heart of Lord Derby. He promptly forestalled a project of German annexation in South Africa by hoisting the British flag at Saint Lucia Bay and over the region between Cape Colony and Natal, known as Pondoland.