- 20 -Book One On Finance 2 - Financial Situation "Egypt's economic situation in 1913 was a reaction that arose directly from the decrease in the value of the cotton crop in 1911 compared to the value of the crop in the preceding year. It was a natural consequence of this that they estimated the price of the 1911 cotton crop to be... £269,863 E.G., a sum barely less than the price at which the crop was sold before 1910, but it was about £600,000 E.G. less than the price of the 1910 crop, which surpassed all previous crops. The main reason for this decrease was the fall in prices, as the crop did not decrease from the 1910 crop by more than about 150,000 qintars.

"Since almost all the cotton, and the larger part of the seed, is exported to foreign countries, it is not surprising that the effect of the decrease in the crop's value was felt in the accounts of the country's foreign trade. In fact, the value of exports in the 1911-1912 season decreased by about £500,000 E.G., met on the other hand by a decrease in the value of imported goods amounting to £150,000 E.G., and a net cash inflow of £350,000 E.G.

"The decrease in imports is evident in most major goods, especially textiles and grains. However, imports of meat, tobacco, and some other goods increased. The high cost of transportation partly led to an increase in the value of goods upon arrival.

"The net cash inflow was... £500,000 E.G. in 1910-1911. It then exceeded £1,500,000 E.G. in 1911-1912. It has become apparent in recent years that a significant increase in the value of the cotton crop leads to a substantial increase in the amount of wealth stored in the country. The year 1910-1911 was no exception to this rule. Although the increase in wealth partly indicates the amount of profit, it is regrettable that profits are confined to this aspect, rather than being reinvested. The large sums borrowed by companies and individuals from foreign sources are estimated to be increasing, not decreasing, beyond the government's debt interest, as it appears.

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