Economic conditions: trade and banks

04Economic conditions: trade and banks

• As a result of the restrictions on local production and its marketing, the foreign commercial agencies rose in importance, and the government kept no control over the internal markets except what concerned public security.
• Capital accumulated from trade began to be invested in companies and banks, especially those connected with mortgages.
• The most prominent and most dangerous investment for the Egyptian economy was the founding of the National Bank (June 1898): an English enterprise that monopolised the issue of Egypt's paper money and all banking business, so the Egyptian currency was tied to the English pound — any shock to the pound affected the Egyptian currency.
• Foreign investment in agriculture — lending and land purchase — brought landowners, small and large, into the grip of the banks; when peasants could not repay on time, foreign creditors took the land in settlement of the debts — the so-called forced or conditional sales (al-buyu' al-jabriyya / al-wafa'iyya).
• At the beginning of the twentieth century the capital of the foreign joint-stock companies in Egypt reached 45 million pounds, of which only four million was in industry.