The Second Chapter Finance The Financial Crisis (8) The financial crisis that recently afflicted Egypt has stopped many financial and commercial developments in recent years, causing great losses and severe hardship for those engaged in business and trade. This crisis, in its causes and consequences, is not unlike the crises that have befallen other countries, but it is worth my while to briefly describe its different manifestations.

In the year 1900, cotton prices rose to unprecedented levels. The value of exports, mostly cotton, increased significantly, and the value of imports also rose. New banks were established, and real estate mortgage companies were formed. Old banks and companies increased their capital with funds largely drawn from abroad. The prices of agricultural lands rose rapidly, with a large volume of sales from the Daira, the Domains, and land reclamation companies. The cost of living increased, wages rose, local stock prices increased, and the formation of companies proliferated. Speculation began to spread and expand to an enormous extent.

Cotton maintained its high prices, and its good seasons followed each other, until the year 1909, which was unprecedented. The country received 10 million pounds from it, which was one of the promoters of the market. They began to bring money from European markets easily and spend it in Egypt easily, which led to excessive dealings and confidence. As the demand for housing in the major cities increased, wages rose, which affected the prices of building lands. People rushed to buy them in the cities and their suburbs. Large companies were formed to trade in buildings, and some of them distributed large profits in a short time, despite some obstacles they encountered, such as the bankruptcy of the Egyptian Company. Speculation continued until the year 1907.

In the year 1907, some began to anticipate the reaction as soon as new funds arrived. The financial circles began to feel the unsoundness of the situation. The banks were liquidated in early 1907.