According to the most common periodization of Ottoman and Egyptian histories, the late 1830s and early 1840s mark a significant rupture. The Ottoman Empire, including Egypt, was already part of the capitalist world economy before reaching the middle decades of the century. However, a series of momentous events, most notably the conclusion of the Anglo-Ottoman Commercial Treaty in 1838, left no doubt that the Empire, including Egypt, had become also an “open market.” In Egypt, this development meant that Mehmed Ali’s modern state’s role, as an actor in the world economy would diminish. In its place would emerge a space to be filled by countless private merchants; subjects of the Ottoman Empire and of various European powers. In this paper, I will focus on a central feature of this new commercial realm, which was dominated by private merchants: commercial debt. During the middle decades of the 19th century, money-lending, advance sale and other forms of credit-driven capitalist activities in Egypt came under heightened scrutiny from Mehmed Ali’s (and his successor’s) government. In light of this critical development, the relationship between the newly acquired roles of private merchants and government bureaucrats is yet to be understood. Through studying a wide range of documents including contracts, petitions, consular correspondence and court records, I aim to uncover this vibrant connection. I will do so through addressing the following questions: If the state in Egypt has indeed withdrawn from the commercial sphere starting in the 1840s, how did private merchants enforce mutual debt obligations, which were so central to the functioning of a capitalist economy? To what extent were government bureaucrats knowledgeable of and able to intervene in the operation of private credit-driven activities?