Papers of the Interdepartmental Conference on Middle Eastern Affairs [‎18v] (36/290)

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financial adviser, and the Western through a Frenchman, while the
Northern was a newly constituted district. He asked for Colonel
Gabriel’s opinion on these areas.
Colonel Gabriel said, with regard to O.E.T.A. South, he did
not anticipate that any provision would be required for the coming
year. The present system was being worked under military law.
Things were going smoothly, and a complete balance might be hoped
for by the end of the year. Financial administration had only
been in existence in this area for five months, and there had been a
good deal of capital expenditure. There was consequently a deficit.
But the deficiency was small, and, such as it was, it was due to our
having had to hand over to the Ottoman Public Debt moneys which
would ordinarily be used as revenue. Otherwise we should have
had a small credit balance. These moneys had been handed over
under a long-standing arrangement.
O.E.T.A. East, was under General Allenby, but there was an
Arab official in charge, and the French had appointed a financial
adviser.
O.E.T.A. West, was directly controlled by the French, and in
both these areas the French were spending our money while we had
no local control. This was, in his opinion, a state of matters that
required immediate jiI teration.
The Chairman said the situation in these areas was most
complex. He could not attempt to enter upon an explanation of it
without first expressing the sorrow he knew every member of the
Conference must feel at the sudden death in Paris of Sir Mark
Sykes. Sykes had been a most faithful public servant, full of
ardour in the service of Government, with a power of insight into
things Eastern that amounted almost to genius. An exceedingly pro
mising life had been cut short, and the news had brought a feeling,
not only of public, but of personal loss, which everyone who had
known Sir Mark Sykes must share.
It was the Sykes-Picot Agreement which rendered the present
situation so difficult. Until we could get away from that agree
ment we dared not ask the French to contribute a penny towards
the expenditure. Any step taken by us to thrust the financing of
these areas upon the French, would be tantamount to an admission
of their claims. We would have to find the money for the present,
and must do our best to recover it later on. Further, with regard
M. Moulin, M. Piepape, and Colonel Bremond, the French had,
under the Sykes-Picot Agreement, the right to financially advise
these areas. Therefore we were not free in this matter. Our
hands had been tied, and the problem was to find the best solution
possible in these difficult circumstances.
Colonel Gabriel said he feared there was no real administration
either in the French or in the Arab area. Expenditure was settled
by the local French officer, and there was a liaison officer at head
quarters. Attempts had been made to establish a financial adviser
at headquarters. Sir Archibald Earle had been sent out for that
purpose, but at that time only the Southern Area was in question.
He himself was now in the place occupied by Sir Archibald Earle,
and was doing the work in that area.
Mr. Water field said the Treasury would like a general financial
adviser to be appointed to headquarters at Haifa. He should be in
supreme control, and should have the right to report direct to the
Secretary of State for Foreign Affairs without control by the
General Officer Commanding-in-Chief. Under him would be local
advisers in each district, with the same right of reporting direct to
the financial adviser at headquarters without restriction by the local
military authorities.
The Chairman said that the Treasury, in their Minute
(Appendix I), had proposed as an alternative to this arrangement