Report of the Special Mission to Egypt under Lord Milner, and related papers [‎9r] (17/473)

This document is the property of His Britannic Majesty s Government.
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SECUKT.
G.P. 1 536 )!
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THE CABINET.
^NOTE^BY THE WAR OFFICE ON ITS FINANCIAL 0143
RELATIONS WITH THE EGYPTIAN GOVERNMENT. i6u3
MEMORANDUM BY THE SECRETARY OF STATE FOR WAR.
I circulate to my colleagues a Note prepared in the War Office on its finanical
relations with the Egyptian Government. It is beyond question, as the Financial
Adviser to that Government recognizes, that Lord Cromer’s fixed contribution ot
150,000/. a year to Army Funds is now completely out of date. It appears to me that
the ’practical question is not so much what sum Egypt is in principle liable to pay, as
what is the largest sum there is any real prospect of extracting from her. This, and
the question whether the present is an opportune time for opening a discussion of the
subject, are questions which go far beyond the sphere of the War Office and are for the
consideration of the Cabinet.
w. s. c.
The War Office,
2bth June, 1920.
1 There are several financial questions of importance now requiring settlement
with the Egyptian Government.
A. Egypt’s Contribution to the Charges of the Great War.
2. On the 6th November, 1914, when Turkey had entered the war, the General
Officer Commanding-in-Chief, Egypt, under instructions from the Foreign Office given
without reference to the War Office (though Lord Kitchener, who then still held the
post of High Commissioner, is understood to have been personally consulted), issued a
proclamation stating that “ Great Britain takes upon herself the sole burden of the
present war, without calling upon the Egyptian people for aid therein.”
3. In 1915, the possibility of some contribution from the Egyptian Exchequer was
mooted, and questions arose in the War Office as to the meaning, in this connection, of
“ the burden of the present wan,” which seemed to be interpreted by the Egyptian
Government as covering not only direct out-of-pocket expenditure on the war, hut also
charges constructively due to it. The then Financial Adviser to the Egyptian Govern
ment, in a report to the Foreign Office, said that while under the terms of the
proclamation no contribution could be claimed from Egypt, there were good prospects
of a substantial voluntary contribution and he himself would be prepared to advise one ;
that in the meantime large payments from Egyptian funds were being placed to a
Suspense Account instead of being reclaimed currently from the British Government,
and preferential treatment was being given to the British forces in respect of certain
customs dues, telegraphs and railway charges. The matter was thereupon left in
abeyance by agreement between the Treasury, Foreign Office and War Office, until the
question of incidence of the charges placed to Suspense Account should come up for
determination at the end of the war. . . .
4. In 1917, the High Commissioner again held out hopes of either a direct money
contribution by the Egyptian Government or an enlargement of the classes of items
whiclf were being placed to Suspense Account, with a view to their being borne in whole
or in part by Egypt.
5. In March, 1918, the Egyptian Government made a definite oner to accept the
whole of the items in Suspense up to 31st March, 1918 (about 3,000,000/E.), and to
provide a further 500,000/E. for similar items in 1918—19. It is to be noted that
this offer did not take either of the forms foreshadowed by the High Commissioner in
1917.
(B20/280) 100 6/20 H&S 8313wo
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