- 98 -And the sum of £330,000 must also be deducted from the aforementioned increase to ascertain the real increase in expenditure, for the reasons explained by Lieutenant-Colonel Corbett in his memorandum. The said sum is what remains of the special appropriations, most of which were for the construction year 1906, and were transferred to the accounts of this year. There is no doubt that an equivalent amount will remain unspent at the end of 1907.

The Legislative Council has not yet decided what it deems appropriate. It is possible to deduct two other sums when estimating the budget for the current year: one of £350,000 for the census, which is an expenditure that does not recur annually, and the other of £444,000, which was added to the expenses of the occupation army. Although this recurs annually, I hope it will not exceed its current amount. The total of these four sums is £1,740,000. If we deduct this from the total increase of £1,400,000, there remains £566,000. Thus, the real increase in administrative expenses did not exceed £553,500, which is what I previously mentioned as the average annual increase in revenue, with a slight increase of £130,000. It was not wise to increase expenditure beyond that.

I am aware that the person who does not go beyond the usual influential circles and who is not held accountable for what he says or does, often limits himself to elaborating on the reforms that should be implemented, but does not show the way to obtain the necessary funds for them. I do not complain about this approach. However, the person who speaks and acts, and who is responsible for his words and actions, will not be heard to address the latter matter, i.e., providing the necessary funds for reform. This is the extent of the discussion in this regard until the members of the Legislative Council clarify, especially the limits that the government should not exceed in responding to their desires and fulfilling their aspirations quickly, whether in terms of reducing taxes or increasing expenditure, because if they exceed those limits, the consequence will most likely be detrimental to them and to the nation they represent. I will separately address the possibility of reform in the specific matters to which the Legislative Council has drawn attention.

(3) Financial Relations with Sudan A very important new change is about to take place in the financial relations between Egypt and Sudan. A few years ago, there was doubt about the material benefit of possessing Sudan, but all such doubt is now disappearing, if it has not already completely vanished. I will elaborate in my report on Sudan.