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THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOY
EGYPT AND SUDAN
CONFIDENTIAL.
July 25, 1
Section 1..
[J 2995/42/16] Copy No. 7 6
Sir M. Lampson to Viscount Halifax.—{Received July 25.)
(No. 823 E.)
My Lord, Alexandria, July 9, 1938.
WITH reference to my despatch N o. 444 E. of the 20th April transmitting a
copy of a note on the budget estimates for the financial year 1938-39, presented
to the Council of Ministers by Ismail Sidky Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. , then Minister of Finance, I
have the honour to enclose a copy of the Finance Commission’s report on the
budget,^) which has been laid before the Chamber of Deputies.
2. This report is, in general, merely a recapitulation of, and running
commentary upon, Ismail Sidky Pasha’s budget note. The Finance Commission,
however, whilst endorsing in their entirety the contents of this note, have supple
mented Ismail Sidky Pasha’s observations in respect of :—
{a) The stability of the Egyptian pound.
(5) Commercial relations with the Union of Soviet Socialist Republics.
{c) State functionaries.
3. As regards the Egyptian pound the Finance Commission add, in alluding
to Ismail Sidky Pasha An Ottoman title used after the names of certain provincial governors, high-ranking officials and military commanders. 's statement that Egyptian currency had remained stable
owing to its backing by the pound sterling, that the Egyptian currency also owed
its stability to the soundness of the State budget, the favourable commercial
balance, and to the facts that no loans have been contracted and that the reserve
fund has been preserved almost intact. The result had been to maintain the value
of Egyptian State bonds despite marked fluctuations in the value of public
securities in London and New York.
4. On the subject of commercial relations with the Union of Soviet Socialist
Republics, the commission stated that it was, in their view, incomprehensible that
no official commercial relations existed with the Union of Soviet Socialist
Republics, and that such relations ought to be resumed without delay in order to
explore the possibility of regaining the market for Egyptian cotton which formerly
existed in that country.
5. The Finance Commission have dwelt at great length on the question of
State officials, which has been in the past, and continues to be, a source of pre
occupation to successive Egyptian Governments ever since the general revision of
grades of State officials carried out in 1921, which had the effect of increasing
the range of salaries attainable by each grade and of providing for automatic
annual increases, with the result that the State budget has been heavily over
weighted in respect of civil service salaries.
6. This question was examined by the Zaghlul Cabinet in 1924, and in 1926
a commission was appointed by Parliament to enquire into the number of State
employees and the distribution of their duties, with the object of reducing as far
as possible the existing expenditure on salaries.
7. In 1928 the same commission was charged by the Chamber of Deputies
with the duty of drawing up a new cadre reducing the number of grades and the
scale of annual increases of salaries, and in 1931 a new T cadre was actually drawn
up which reduced the range of Government salaries and scaled down the rate
of annual increases, but these changes were attended by so many qualifying
conditions that the work of revision failed of its full effect.
8. The Finance Commission in its report on the budget for 1936-37 stated
that the policy of the Government in regard to State officials was inspired by the
following principles :—
(1) To leave untouched the acquired right of existing officials as regards their
salaries.
[357 bb—1]
(9Not printed.