He reached Cairo in March, and was at once appointed by Ismail as president of a commission of inquiry into the finances, on the understanding that the European commissioners of the debt, who were the representatives of the bondholders, and whom Ismail regarded as interested parties, should not be members of the commission.
They undertook to carry out a general conversion of the consolidated external and internal debts by a considerable reduction of capital and interest, to which the bondholders assented.
His reorganization of the national debt was very complete; in fact, he exacted even more sacrifices from the bondholders than from other taxpayers.
Alone, the external debt held by foreigners continued to enjoy exemption from taxation, under the agreement made on the 28th of June 1882 between the Spanish government and the council of foreign bondholders, and its coupons were paid in gold.
The Cortes authorized the government to negotiate with the foreign bondholders with a view to cancelling that agreement.