Printed papers on the political situation and military policy in Egypt [‎42v] (84/176)

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following on a rise to abnormal heights, left a legacy of trouble and liabilities i ioni
which the country has been slowly extricating itself during the past \ear. ihe
process of liquidation has been accompanied by a further draft on the resources
accumulated during the period of war activity and inflated prices.
115. These additional resources have been employed partly in repayment ot
debt, but the bulk of them has been kept liquid in the form of paper currency
(covered by securities), of bank deposits and of realisable investments. Their total
was estimated two years ago at some 150 million pounds, and a year ago then had
been diminished to upwards of a 100 millions. The further inroad which has been
made in them during the past year may be estimated at some 15 millions. This is
reflected, on the one hand, in the excess of imports over exports, and, on the other, in
the fall in the note circulation and in bank deposits, it is noteworthy, however that
private investments in Egyptian securities have increased by purchases from
holders abroad.
116. The value of the cotton crop of 1920—21 has been estimated at
£E. 47,429,000. This compares, of course, very unfavourably with that of the
preceding season, which was estimated at £E. 107,057,000. A season of inflated
prices such as that of 1919—20 cannot, however, be used as a jnst standard ot
comparison. When compared with the estimated value of the three preceding ciops.
which averaged £E. 45,000,000, that of last season appears slightly superior, and it
is largely in excess of those of pre-war crops. Were the 1921—22 season s ciop to
equal last season’s in value, the country would be surmounting its difficulties with
far more ease than is actually the case. Unfortunately, however, while prices are no
higher on the average than those of last season, the yield is considerably lower, owing
not merely to reduced acreage, but also largely to late sowing, careless cultivation,
unseasonable weather, and the ravages of the pink boll-worm. The crop is estimated
to attain only 3,300.000 kantars.* as against 6,036,000 last season. The resulting
depression is only partly attenuated by the tact that a considerable poition of last
season's crop is being disposed of during the present season.
117. On the other hand, general commodity prices have been falling, as in other
countries, and the index-number of wholesale prices ot local articles ol consump
tion in Cairo stood at the end of the year at 170, as against 238 at the beginning,
pre-war prices being taken at 100. The fall in prices of goods of both local and
foreign origin has brought sensible relief to all classes of consumers, and has favour
able affected costs of production, agricultural and industrial.
118. The gradual approximation to normal and stable conditions which appears
to be taking place is of good augury for the economic health of the country. Despite
tne natural disappointment among producers at the disappearance of inflated prices,
the real interests of the country are better served by a regime which allows produc
tion and commerce to be carried on with assured, if moderate, profits than by one
which exposes them to violent vicissitudes of fortune.
119. To view the situation in proper perspective, it is essential to compare it, on
the one hand, with that which existed before the war, and, on the other hand, with
world conditions generally. A country whose material prosperity has improved and
whose debt has been diminished during a period of consumption of the world's
resources and impoverishment of whole populations, is in a distinctly enviable
position among the nations.
120. I referred in my last report to the various measures adopted by the Govern
ment to mitigate the difficulties caused by the fall in price of cotton and the glut on
the market. It is now possible to review the effects of the more important of these
measures. A table is appended showing the area and yield of the Egyptian cotton
crop for the years 1910-21.
(a.) Restriction of Cotton-Growing Area.
121. During the w^ar, and also in the years immediately following the war, the
area figures were affected by special circumstances, and to arrive at an estimate of
the effect of the Cotton Restriction Law in the past year, the comparison of the 1921
acreage should probablv be made w ith the average acreage of the five years 1910-14,
whiclTis 1.710.806 feddans. This comparison show's a reduction of 24 per cent, in the
1921 acreage. The area figures of 1921 follow' fairly closely those of 1918, when the
cotton crop\vas under similar restriction. As in 1918, considerable areas, mainly in
the north of Egypt, were exempted, comprising land which was not considered
* There is, however, reason to suppose that this estimate will prove to have been considerably too
low.