'On July 3rd Barrère called and explained to me a scheme of his on Egyptian finance, in which he was now highly skilled, having been French Agent in Egypt for some time. I put the matter before Lord Granville, who sent it to Mr. Gladstone and Childers. Barrère argued that it was not necessary to reduce interest, or, to use the slang of the moment, to "cut the coupon." We called a meeting of the Commons Ministers, and Chamberlain announced that he should resign if the coupon were not cut. 'July 18th, 1884.--We had virtually decided on declaring Egypt bankrupt in order to force the hands of the French, but Waddington, at a meeting with Childers, had broached a plan, which had originally been suggested by the Germans, for a temporary reduction of interest, to be reconsidered at the end of a certain number of years.' (These proposals were discussed at the Conference, which met in the latter half of July, held seven sittings, and then broke down without arriving at a conclusion on August 1st.) 'The question now raised was--at the end of what number of years? The French said three, and we decided to propose ten; but with a willingness to take six or even five; we advancing 4 1/2 millions instead of 8, or, in other words, leaving out the indemnities due by Egypt. If this arrangement failed, then we were to fall back on bankruptcy. Harcourt was much against declaring bankruptcy, and in favour of the policy of "scuttle." Hartington was against bankruptcy, and for paying the differences ourselves; so as to force us into annexation. Spencer, Childers, Chamberlain, and I, were for bankruptcy or for a strong threat of bankruptcy. 'On July 21st there was a meeting of members of the Cabinet after questions, at which Mr. Gladstone, Lord Granville, Hartington, Harcourt, Childers, and I, were present. The French had backed out of their proposals, and we considered a new scheme of Childers's to put all administrative charges in Egypt before interest of debt, a scheme which it was certain that the French would refuse. Harcourt was again violent against bankruptcy, which he announced he thought grossly "illegal," as if there were such a thing as illegality in such affairs.