COTTON IN EGYPT AND THE SUDAN. 47 



.annum, and these loans were transferred to the Agricultural Bank 

 of Egypt that was established on July 1st, 1902, with a capital of 

 ;6E2, 500, 000. The fellaheen now had to pay only 9 per cent, instead of 

 10 per cent, interest per annum, and the loans were up to 50 per 

 cent, of the value of the property. The advances are divided into two 

 kinds, namely, small advances or " A " loans not exceeding ^E20, 

 against ordinary receipt, and repayable within 15 months in one 

 sum; secondly, larger advances, or " B " loans, not exceeding 

 ;E500, guaranteed by first-class mortgage on the land, 

 .at least double its value ; such loans were repayable by 

 instalments within, at the most, 20J years. The interest upon this 

 kind of loan was reduced, on January 1st, 1907, from 9 to 8 per cent, 

 per annum. 



The advances are partly used for buying land, and for the 

 purchase of agricultural implements, and cattle, partly for the hold- 

 ing back of the cotton crops with the object of obtaining a better 

 price, partly also for the repayment of old debts and other unpro- 

 ductive purposes, even for luxuries. The Egyptian peasant in the main 

 does not know how to calculate. 



As long as the tendency of the land prices was upward, 

 .all went well, but the financial crisis of 1907, the low cotton 

 prices of 1908, and the poor crop of 1909, rendered the situation of 

 the borrowers very unfavourable, and at the end of January, 1911, 

 the Agricultural Bank had in its books more than ^E500,000, 

 divided between 49,000 borrowers, overdue. Consequently the loans 

 were more carefully given out, and a more reserved policy was intro- 

 duced. Already, in 1910, the Bank had tried to obtain from the 

 'Government cheaper and shorter proceedings of expropriation, as the 

 Egyptian peasant must not be made to take credit too easily. 



With a view to increasing and strengthening the position of 

 the small land holders, the Egyptian Government guarantees the 

 entire capital lent by the Agricultural Bank against payment of 

 3 per cent, per annum ; the bonds issued since April, 1906, are 

 guaranteed at 3^ per cent. The Government collects the interest 

 and the instalments for repayment of the advance through its 

 representatives along with the land taxes, and the Seraf or tax- 

 collector receives i per cent, for this work. The bank has only to 

 pay the general expenses and perform the work at the 

 head office. In July, 1912, the total sum of the " A " loans 

 amounted to E 102, 000, and those of the " B " loans to 

 E7, 108,000. 



In the year 1905 the Land Bank of Egypt was established in 

 Alexandria with a capital of ^E 1,000, 000. It is authorised to issue 

 bonds five times the amount of its share capital. 



In 1908 followed the establishment of the Mortgage Company 

 of Egypt, which was allowed to issue three times the amount of its 

 capital in bonds ; it makes advances on land up to 60 per cent, of 

 the value. 



On the basis of a concession granted in 1911 to the German 

 Orient Bank, a mortgage bank with German capital was called 

 into being, its style is the " Egyptische Hypothekenbank " ; it has 

 a capital of ^TE500,000, and is authorised to issue ten times the 

 amount of its capital in bonds, whilst generally in Egypt limited 



