'On August 2nd there was a full Cabinet, every member being present, and we had to consider whether, the Conference having broken down, Baring should go back to Egypt or remain at the Foreign Office and continue to advise us. Lord Granville proposed that he should remain, and that Malet should go to Egypt. Chamberlain proposed that Goschen should go. Childers proposed J. K. Cross. [Footnote: Under-Secretary for India.] Dufferin was mentioned; then Lord Granville proposed Northbrook. All other names were immediately withdrawn, and Northbrook took time to consider, but evidently meant to go, and decided, I think, in the course of the same evening. Baring was then called in, and we once more began to chop straw by considering the "ulterior consequences" of the collapse of the Conference--i.e., bankruptcy. Lastly, Gordon was dealt with, and it was decided that a supplementary estimate should be proposed, with the understanding that we should spend more if it was wanted. I wrote to Chamberlain: "We always have two subjects--(a) Conference, (b) Gordon." And he wrote back: "The first always taking up two or three hours; and the second five minutes at the fag end of business." 'On August 3rd I noted "we are going to send Northbrook to Egypt to put down Barrère." 'On August 5th we considered the instructions to Northbrook, or rather whether he should have any at all, and if so, what they should be. Northbrook read us a scheme which he had written, which attempted to conciliate Turkey and Italy, so as to have great naval strength in the Mediterranean and to prevent all chance of a sudden occupation of Egypt by France. We were to express our continued determination not to annex. We were to stay five years at the request of the Sultan. We were again to propose to the Powers those arrangements with regard to the Canal which we had proposed already. We were to pay the indemnities in stock; and the next coupon in full; and we were to promise for the future not less than 4 per cent, on privileged stocks, and not less than 3 per cent, on the Unified debt, while we were in Egypt. Indian troops were to hold Massowah. Harcourt, in reply, read a written counter-statement, again proposing to "scuttle," and again threatening us that we should have war with France. Hartington again spoke for a guarantee by us of the whole Egyptian debt. After Hartington's observations the discussion was, as usual, adjourned. Chamberlain and I decided that we would ask for our old term of three and a half years' occupation, as against Northbrook's five. Next came Gordon, and Hartington proposed that we should embody some militia.