9 > j 7G: also prepared to support exchange by procuring credit in London during the dislocation of the balance of trade caused by the fsQling ofi in exports, and it old so tx) the extent necessary to meet its own obligations abroad and to provide the funds required for the service of the Public Debt on behalf of the Caisse de la Dette. For all these purposes the Eeserve Fund proved an invaluable resource. By means of the securities in which it was invested credits were raised in London which proved sufficient to meet all emergencies without external assistance, though His Majesty's Treasury generously agreed to provide additional credit if necessary in connection with the scheme for making advances on cotton.

The result of the revision of expenditure was to effect considerable economies on the estimates for the year 1914r-1915 and to reduce the estimates for the year 1915-1916 to a figure some 2 millions less than that of the preceding year. The greater part of this reduction was under the head of new works, which admitted of curtailing with far greatei’ facility than administrative expenditure. At the same time, appreciable economies were effected in stall and purchases of stores, as well as in expenditure on maintenance and renewals, the latter, however, constituting a postponement of outlay and not a real economy.

On the revenue side the measures taken in the financial year 191L-1915 included the raising of the first- and second-class fares on the State llailways by 10 per cent., the doubling of the inland telegraph rates, and certain increases in the postal rates. These were followed in 1915-1916 by moderate increases in the import duties on timber, alcohol and tobacco, and by an addition of 1 per cent, acl mlorem to the quay dues on exports, to which the consent of the authorising powers was obtained for the period of the war. Fresh sources of revenue were also provided by the profits on the National Bank of Egypt note issue under the regime of temporary i'nconvertibility, in which profits the Government secured a substantial share, and by the profit on the sale of the cotton bought from cultivators during the crisis.

The account for the year ended the 31st March, 1915, closed with a deficit of £E. 1,468,000, which was met by a draft on the Eeserve Fund, reducing it to £E, 3,635,000. By the end of the following year, however, a great improvement had been iDrought about in the economic situation of the country by the recovery in the price of cotton and the expenditure of the British forces. The revenue benefitted both by this improvement and by the additional resources already mentioned, while expenditure was kept well within the estimates, with the result that on the 31st March, 1916, it was possible not only to write off a substantial sum representing depreciation on securities, but to show a surplus of £E. 1,165,000, which, added to Eeserve Fund, raised it to £E. 4,800,000.

The year 1916-1917 was marked by a heavy increase in administrative expenditure, due principally to the rise in cost of materials, especially of coal. This increase was, however, more than counter-balanced by the expansion of the revenue, which benefitted directly and indirectly by a further improvement in the price of cotton and by the continuance of military expenditure. A portion of the increased revenue in this and the preceding year consisted of seignorage on the large quantities of silver coin which were issued in consequence of the preference of the people for metallic currency under the rdgime of forced paper currency. As this profit on seignorage could not be considered as real revenue, but rather as a liability which would have to be met when the silver eventually returned from circulation’ it was decided to pass the profit in question, amounting to £E. 996,000 to the credit of a Silver Eeserve Fund. After deduction of this amount, a surplus of £E. 1,690,000 remained, which was added to the General Eeserve Fund, and raised it to £E. 6,490,000.

In the following year, 1917-1918, the administrative expenditure was again largely increased By the higher cost of materials and stores, by the undertaking of some portion of the arrears of maintenance and renewals, by additional expenditure on the Egyptian army, and by war gratuities to the staff to meet the increased cost of living. Expenditure on new works, though still below the pre-war figure, was increased by the cost of certain irrigation projects of immediate utility and by the purchase of the telephone system. Finally, a sum of about £E. 3,000,000 was devoted to the taking on charge of certain expenditure incurred on behalf of the Egyptian Expeditionary Force, which had up to that time, been carried in a suspense account, but which was now definitely assumed by the Egyptian Government in recognition of the service rendered to the country by Great Britain in protecting it from the risk of invasion.

To assist in meeting these heavy charges certain new sources of revenue were [3437 y-2] C House of Commons Parliamentary Papers Online. Copyright (c) 2006 ProQuest Information and Learning Company. All rights reserved.