'File 11/32 Royal Commission on Palestine' [‎11v] (22/308)

Chapter VIII.- Financial and Fiscal Questions
Until recent years the public finances allowed no great scope
for development in the social services. The accumulation of a
considerable surplus was a feature of the four years beginning 1932,
and there were grounds for a conservative attitude towards this
development. The conclusion that the existence of a large surplus
reflects undue parsimony is not borne out by close analysis, since
the entire surplus is found to be so heavily mortgaged that it i:
little more than a reasonable provision for existing commitment^
If the inward flow of capital, which is the most singular feature
of the economy of Palestine, were to be arrested, there is no reason
why the removal of exceptional advantages should result in pem^-*
though there might be some reduction in the standard of livrfig
until the new economy was established. In the event of a prolonged
period of economic stagnation the danger of an exodus of capital
cannot be altogether excluded.
It is not possible in the absence of adequate statistics to measure
the truth of the Arab complaint that industrial protection chiefly
benefits the Jews and that its burdens are chiefly borne by the
Arabs. It is hoped that the new Department of Statistics may soon
enquire into the incidence of taxation and that new duties will be
considered in relation to the whole burden of taxation and not merely
as affecting the particular industry.
There is no question of the need of increasing the export trade
and finding markets for the ever increasing citrus output. After
examining various possible expedients for overcoming the difficulties
which result from the non-discrimination in tariff policy required
by Article 18 of the Mandate, the Commission conclude that the
provisions of Article 18 are out of date. Without an amendment
of that Article Palestine must continue to suffer from the restrictions
which hamper international trade, and negotiations should^be
opened without delay to put the trade of Palestine on a fairer bR^
Chapter IX.—The Land
A summary of land legislation enacted during the Civil Adminis
tration shows the efforts made to fulfil the Mandatory obligation
in this matter. The Commission point to serious difficulties in
connection with the legislation proposed by the Palestine Government
for the protection of small owners. The Palestine Order in Council A regulation issued by the sovereign of the United Kingdom on the advice of the Privy Council. and,
if necessary, the Mandate should be amended to permit of legislation
empowering the High Commissioner to prohibit the transfer of
land in any stated area to Jews, so that the obligation to safeguard
the rights and position of the Arabs may be carried out. Until
survey and settlement are complete, the Commission would welcome
the prohibition of the sale of isolated and comparatively small
plots of land to Jews. They would prefer larger schemes for the