$2 *•••-'• i«i i ••"» . $ •-. •"• -} r- ;r-i-.No. 14. " •' '"' *'"•'' Telearam /wwn Lord Lloyd to Sir Austen Chamberlain, March, 4, 5,.,,;..^„.. • r .-:' js ;j rtii 1928. .. , ,. , •...,.„! .- ... ' • •'. • *i • * . My immediately preceding telegram. Following is translation from the French :— "Excellency, . .. "I have the honour to inform you that in accordance with tne wish expressed by his Excellency Sir Austen Chamberlain mthe \ message which he was so good as to address to me through you, I have submitted to my colleagues draft Treaty of Alliance which .- ' Egypt No. 2 (1928) resulted from our conversations last summer, at the same time acquainting them with different phases of these conversations ' as well as with the notes exchanged and discussions carried on • subsequently. •' "My colleagues have reached the conclusion that draft, Dy V : PAPERS reason both of its basic principles and of its actual provisions, is ' incompatible with the independence and sovereignty of Egypt <• respecting the • and, moreover, that it legalises occupation of the country by • British forces. '' . "My colleagues have accordingly charged me to mlorm Mis proposed Egyptian Law Britannic Majesty's Principal Secretary of State for Foreign Affairs that they cannot accept thisdraft. "I shall be grateful if your Excellency will be so good as to regulating Public Meetings communicate the above to his Excellency Sir Austen Chamber lain and will at the same time repeat to him my most sincere thanks for the friendly spirit in which his Excellency began and and Demonstrations carried on our conversations. "I take this opportunity..of thanking your Excellency also • for the cordiality which you have shown in the course of our • discussions,regarding draft treaty and to renew,', &c. , . .... ! : •~ ..-•-.• \i •••••• ••• • i ' ' " '• ••' •'' .-,,*••„! .•. .•• , i • •• • •'.'•' ' • Presented by the Secretary of State for Foreign Affairs • to Parliament by Command of His Majesty r 1; • .. .. •' •• . • LONDON: '• •.- I •PRINTED AND PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE . To be purchased directly from II.M. STATIONERY OFFICE at the following addresses: Adastral House, Kingsway. London, W.C.2; 120, George Street, Edinburgh; York Street, Manchester; 1, St. Andrew's Crescent, Cardiff; • 15, Donegall Square West, Belfast; or through any Bookseller. k .:• .• •••''.•• •• '"'• :-" " 1928 - - • •- -•• •• Price 6d. Net Cmd. 3097 r COLONIALISM RENEGOTIATED, 1920-1930 port the bank in 1920 but it also formed a powerful lobby CHAPTER FIVE the same year, the Egyptian General Agricultural Syndicate, Colonialism Renegotiated, 1920-1930 to pressure the government to follow policies favorable to its interests. The period between 1920 and 1939 made many of the con fl tradictions inherent in the growth of the cotton economy i manifest. The most obvious problem was the drop in the The establishment of the Bank Misr in April 1920, with a price of cotton. Using 1913 as a base of 100, the index reached share capital of£E 80,000 and its subsequent growth during 220in 1925 and 148in 1929. Taking 1934 as 100,prices reached the next two decades into an extensive holding company with a level ofjust over 90 during the early part ofthe Depression a share capital of over four million Egyptian pounds repre between 1930 and 1933, rose to 113 in 1937 and dropped to sented a remarkable achievement. The collapse of the Misr 92 in 1938. Through the Egyptian General Agricultural Syn Group at the outbreakof thesecond worldwar, whichbrought dicate, the large landowning class pressured the government its dynamic expansion to a halt, demonstrated that the in to restrict the amount of land planted with cotton and to dustrialization fostered by the bank was fraught with many purchase and store the cotton harvest until price levels im contradictions. What were the factors that facilitated the in itial expansion of the Bank Misr and its companies and what proved. Since the Egyptian crop represented only a small percentage of total world production, such efforts had little were the constraints that ultimately thwarted its aim of cre impact on the international cotton market. The importance ating a self-sustaining industrial sector in the Egyptian econ of cotton to the Egyptian economy can be seen in the fact omy? A key to answering this question is the realization that that it continued to account for the lion's share of export the two main social forces that accounted for the bank's ini receipts. In 1930, cotton represented 92 percent of total ex tial success were the same forces that later undermined its port receipts while in 1939 this figure still accounted for 72 economic viability. Most conspicuous in this regard was the percent of such receipts.1 support the Bank Misr received from the large landowning The figures concerning the total amount of cultivatable and class and the Egyptian nationalist movement. cropped land bear further witness to the inability of the agri An examination ofthe 125 original subscribers to the Bank cultural sector to sustain further growth following the first Misr shows that 92 percent of the share capital came from world war. Between 1877 and 1914, the amount of cultivat subscribers who were large landowners. The agrarian bourgeoisie's support of the idea of a national bank stemmed able land expanded by 5.6 percent while between 1915 and 1939 this figure was only one-half of one percent. Cropped from its desire to free itselffrom the control of foreign banks area increased 35.7 percent between 1877 and 1914 but only and to assure the availability of credit. However, it was the 7.4 percent between 1915 and 1939.2 difficulties besetting cotton cultivation following the first As a result of the rapid expansion of output during the late world war which intensified such support. Many landowners 1800s and early 1900s, Egyptian agriculture suffered a decline came to see the need to diversify their economic base by shifting a portion of their capital into industrial enterprise. in soil fertility during the inter-war period. Investment in new drainage systems did not keep pace with the construc- Their support of the Bank Misr in 1920 was not just an expression of personal ties with Tal'at Harb but rather was 1Zvi Hersclilag, Introduction to the Modem History of the Middle East (Lei part of an ever increasing awareness of their collective eco den: E. J. Brill, 1964), pp. 222-223. 2Samir Radwan, p. 270, percentages computed from Table A-10. nomic interests. Not only did the agrarian bourgeoisie sup- 109 108 f COLONIALISM RENEGOTIATED, 1920-1930 COLONIALISM RENEGOTIATED, 1920-1930 tion of new dams and barrages. The first crop to suffer from fable 5-1 these conditions was cotton. Since the root system of the Uiidownership for the al-Shuray'I, 'Abd al-Raziq and Khallfa-Marzuq-Ahmad-Isma'fl Families, cotton plant penetrates the soil more deeply than those of 1920-1940 Khallfa-Marzuq- Ahmad- Egypt's other major crops, cereals and sugar cane, it was al-Shuray'I Family 'Abd al-Raziq Family lsmau more adversely affected by the rise in the level of the water Faddans/ Faddans/ Faddans/ table. The cotton crop was harmed by two other factors. Year Land Owners Owner Land Owners Owner Land Owners Owner First, there was a tendency for many of the new varieties of 1920 1407 19 74.1 1182 16 73.8 1021 27 37.8 cotton which were introduced during the nineteenth and 1930 1650 41 40.2 1202 35 34.3 1139 34 33.5 twentieth centuries to lose their high quality yields ten to 1940 1364 40 43.1 1297 35 37.1 1081 46 23.5 fifteen years after their introduction. Secondly, cotton suf Source: Land registries for Abu Girg and BanI Ahmad, al-Minya Province, 1920-1941. fered in being the only crop which was subject to large-scale attacks by pests.3 All of these problems, which combined to bring about a 1930s. While land fragmentation was most pronounced among decline in cotton yields prior to 1914, were exacerbated by small landowners, the large landowning class was not im mune to it. Although the percentage of land owned by hold the war. V ers with less than five faddans increased from 19.9 percent in h •During the first world war most of the schemes set in 1896 to 31.5 percent in 1936, the amount of land held by motion to halt the decline in cottonyields came to a stand- owners with more than fifty faddans decreased from 43.8 ' still. Among these, the postponement of drainage projects percent to 36.6 percent during the same period.5 A popula in the north Delta was undoubtedly the most important. tion increase of29.1 percent between 1917 and 1937 affected ... At the same time, the war itselfinevitably produced the agrarian bourgeoisie as well as the lower classes as is an adverse effect on Egyptian agriculture as a whole. Peas evident from the patterns of landownership between 1920 ant cultivators, as well as their animals, were recruited into and 1940 for three ofthe most prominent families supporting the Egyptian Labour Corps; imports ofchemical fertilizers the Bank Misr. Although the data in Table 5-1 did not in declined, while fields received less manure than usual due dicate any drastic decline in the status of the large landown to a decrease in the numbers of cattle, and much of the ing family, they did point to a threatening future. dung which remained had to be used as fuel to compensate In addition to declining soil fertility and a tendency toward for a shortage of oil; the tendency to over-water the fields land fragmentation as a result of population increase, Egyp increased as a result of the wide use of free-flow irrigation tian cultivators suffered from a decline in demand in the world made necessary by the difficulty in running coal-powered market for Egyptian cotton.