as a set-oll‘ against the still larger amount for which she is yet a debtor to foreign countries, ft is true that the interest on the credit balance operates as a set-oh against the interest on the debit balance, that several millions of debt have been actuafly repaid to banks, mortgcige companies and others, and that the embarrassmenis of the situation which preceded the war no longer exist. But the fundamental fact remains that Egypt is still debtor for a large sum (apart from the Public Debt), which, consisting chiefly of loans on mortgage and capital invested in industrial, transjjort and other companies, will not be repayable for many years, while, on the other hand, she is a creditor for an amount, the bulk of which is repayable practically on demand, and can be employed as purchasing power at any moment.

From the Egyptian point of view, the position is, of course, a satisfactory one, though the extent to wdiich the accumulation of funds during the war will ultimately benent the country wall depend on the manner in w'hich it is employed. If it is largely devoted to the hoarding of unproductive gold and expenditure on luxuries, its beneficent power will be so far diminished. If, on the other hand, it is employed in the repayment of debt and in productive expenditure, the economic well being of the country will be enhanced, the country will be in a position to withstand the effects on its revenues of a future fall in the price of cotton, and it will be in a fair way of achieving financial independence.

The accumulation of w'ealth has been accompanied by a great and rapid rise in iJie cost of living, and the resulting economic distress among the poor is a source of grave concern to the Government and to all those who are interested in the welfare of the country. The matter is dealt with in some detail by the Financial Adviser in his note on the Budget, from w'hich I quote the following passages:— “ Although the increased wealth acquired from the agricultural industry has inevitably dispersed itself to some extent over the industrial and mercantile population, and although the heavy disbursements of the British army in Egypt have likewise been widely distributed, the population presents extreme contrasts of ease and want. For there can be little doubt that the high prices, the causes of which will be discussed later, have acted with extreme severity upon the poorer classes of the population, and that except in so far as wages have risen in direct proportion with the cost of essential foodstufis, those Classes have suffered and are suffering acutely from a reduction of their standard of living.

“ The following index numbers of the wholesale price of certain staple commodities in Cairo in 1919, the average price from the 1st January, 1913, to the 31st July, 1914., being taken as 100, afford some indication of the increased cost of living of the poorei classes Wheat ... ... ... ... ... ... 234 Lentils ... ... ... .. ... ... 207 Maize ... ... ... . . ... ... 184 Sugar ... ... ... . . ... ... 294 Wiieaten flour ... ... ... ... ... 251 Maize flour ... ... ... ... ... 200 Native butter ... ... ... ... ... 218 Soap ... ... ... ... ... ... 373 “ A careful estimate by Dr. Wilson, of the School of Medicine, of the monthly expenditure of a small family of the poorest class in Cairo shows an increase from P.T. 109 as cost of food alone in February 1914 to P.T. 305 at the present day. There is, moreover, reason to fear that the substitution of a larger proportion pf m.aize for wheat in the food of the poorer part of the population, owing to the deficiency of protein in the former, may have a serious effect on the health of that part of the community.

“ The high prices of commodities in Egypt, notably of foodstuffs and clothing, are probably due in the main to the increased purchasing power available in the country applied to a restricted supply. The war has operated in various ways, through diminished production, scarcity of shipping, destruction of available stocks, to reduce very severely the quantities of the various necessary commodities at the disposal of the Egyptian market; this difficulty-has been accentuated in the case of Egypt by the tendency to extend the area under cotton at the expense of the cultivation of cereals.

“ The attempt to regulate the prices of commodities by fixing a tariff of maximum prices was found to do rather more harm than good. It tended to [3437 y—2] B 2 House of Commons Parliamentary Papers Online. Copyright (c) 2006 ProQuest Information and Learning Company. All rights reserved.