This matter is of great importance and requires careful and prolonged consideration. Since the works necessary to increase the quantity of irrigation water take several years, as previously stated, there is no need to rush the decision on those conditions. However, one of the most important objectives the government aims for in setting these conditions is that the lands be sold after they are improved, or leased, and the tenant is given the right to purchase them if they wish, at the end of the lease period.

(16) Banks The ongoing negotiations with the National Bank regarding increasing cooperation between it and the government have made great progress. However, there are still a few issues that have not been resolved as of January 21st. The bank is to be commended for its efforts last year to manage its affairs in a manner consistent with the government's demands.

All Egyptian banks faced great difficulty last winter due to the large amount of money requested from them to meet the needs arising from the cotton season. This season was unparalleled in terms of the quality of the harvest and its high price. As the season expanded and great demands were made on the banks from within the country, and the banks had not prepared for this, they faced severe hardship. This hardship lasted for several weeks due to the delay in the arrival of funds from Europe. However, the banks' resources ultimately proved sufficient for the demand, in addition to the scarcity of money in the London market at the time. This is not the only evidence of the stability and strength of Egyptian banks, as there are many other indications that the banks' operations are conducted on principles of wisdom and foresight more than they were previously.

(17) Cotton Worm A detailed statement was received from the Ministry of the Interior regarding the work carried out last year to combat the cotton worm. If it were not for the need to avoid excessive length, I would have included it in this report. However, it is sufficient to say that the area of land affected by the cotton worm in 1906 reached 243,273 feddans, compared to 169,212 feddans in 1905. It appears that the measures taken to combat it have been very successful.

Mr. Hornblower stated, after the worm was most effectively combatted in the province where its impact was particularly severe: "The measures taken to combat the cotton worm last year have..."