Report of the Special Mission to Egypt under Lord Milner, and related papers [‎10r] (19/473)

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been under the consideration of Lord Allenby, who is asking for details of expenditure.
In view of the very large sum involved, time devoted to detailed investigation at the
present stage seems likely to be unprofitably spent.
9. The view of the Dominion Governments, expressed officially through the
Colonial Office, is that the Dominions are entitled to a refund of the expenses thrown
upon them, whether the Imperial Government succeeds in recovering the money from
Egypt or not. This position has been communicated to the treasury by the Colonial
Office (November, 1919).
10. It is to be observed that in the early years of the Egyptian annual Military
Contribution (,s*ec paragraph 15 below), the principle was adopted that while extra military
expenditure incurred on Imperial objects, such as the relief of Gordon, was wholly
British, that incurred for the security of Egypt against raids by Dervishes, &c., should
be paid by Egypt in addition to the normal annual contribution.
C.—War Gratuities to British Personnel with the Egyptian Army.
11. The Egyptian Government, in September, 1919, had agreed that war gratuities
paid on the British scale to British officers and men attached to the Egyptian Army
during the war should be refunded by the Egyptian Government. The amount
involved is about 250,000/. The High Commissioner, in a dispatch to the Foreign
Office dated 21st February, 1920, now desires to withdraw from this undertaking on
the ground that such payments would give rise to claims to similar gratuities for all
native officers and men, the refusal of which would greatly aggravate the difficulties of
the present local political situation.
12. It is not denied that there may be force in this argument, but it is considered
that a way should be found of making an equivalent contribution in some other form
to the British Exchequer.
D.— Egypt’s Annual Military Contribution to Army Funds.
13. From the year 1882 onwards, Egypt lias annually made a payment to Army
Funds in respect of the cost of the British troops in the country. This contribution
has at different times been assessed in different ways, having at first been worked out
on the basis of the numbers of troops actually maintained during the year, and at a
later period having been fixed by estimate at a commuted figure for a series of years ;
but in principle it has always represented the extra cost of maintaining troops in Egypt
as compared with home. The liability of Egypt was defined by the Treasury in 1885
as covering “ all extra expenditure which the retention of the Queen’s troops in Egypt
for police purposes is calculated to entail on the Exchequer of the United Kingdom,
in this respect differing from the liability of a Crown Colony, such as Hong Kong or
Singapore, where the limit of the Colonial military contribution is not the extra, but
the whole, cost of the garrison. In this connection, extra cost has been interpreted to
mean the difference in cost (between Egypt and home) of the numbers of officers and
men on the Home Establishment of an infantry battalion or other unit, together with
the whole cost of any officers and men added to the Home Establishment in order to
bring the unit up to “ Colonial” establishment.
14. Thus, at the base of the whole calculation lies the theory that the British
Army contains a fixed number of battalions and other units which, if not employed
in Egypt, would be maintained (though it may be on a lower establishment) at home.
This theory - no longer holds good under present conditions. Apart from any question
of possible reductions in the pre-war numbers of British cavalry regiments, infantry
battalions, &c., there are now, in addition to some 10,000 British troops, about
20,000 Indian troops in Egypt which, if not so employed, would be returned to India
for immediate disbandment. Allowing for the intended reduction of the latter to
half these numbers during the year, the extra cost of the garrison to the British
Exchequer, for Indian troops alone, will still be at least 4 millions this year.
15. The contribution originally assessed in 1882, after Arabi’s. rebellion, was
278,000/. for the period October, 1882, to March, 1883. For 1883—84 it was 334,000/.
From 1885 to 1888 the strength of the garrison averaged about 0,000, and the contribution
was 200,000/. a year. Deduction of the garrison to about 3,300, and rising prices at
home, then brought the contribution down to about 87,000/. a year. Nothing was paid
by Egypt for the troops employed in the Gordon Relief Expedition of 1885 ; but on
the other hand an additional payment was made in 1889-90 in respect of the cost of
a Dervish raid. In the early years of the present century the extra cost began to rise
again, and in 1907, on the recommendation of Lord Cromer, the contribution was
fixed at 150,000/. a year, representing (at then price levels and rates of pay) the extra