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Al-Ahram Weekly 4 -10 February 1999 Issue No. 415 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 4 -10 February 1999 Issue No. 415
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Book Fair Economy Opinion Culture Features Living Travel Sports People Time Out Chronicles Cartoons Letters Al-Ahram:
A Diwan of contemporary life (271 )
"Today's Ministry of Supply and Foreign Trade had its beginnings in 1914 in the early days of World War I. A "supply board" was established then to ensure the availability of foodstuffs and other essential commodities and to control their prices. The system was not effective and triggered many complaints on shortages and high prices. The board was scrapped and replaced by the "supply control authority" which catered to popular needs as well as the requirements of the British occupation forces. This authority gradually grew into a ministry. Dr Yunan Labib Rizk * traces the progress of supply control during the difficult years of World War I and its aftermath as depicted by Al-Ahram"
Illustration by Makram Henein
Among the most enjoyable areas of historical inquiry, and one which has not received its due share of attention, is that which delves into those loci where basic human needs and government policies intersect, where the interplay between these two factors sometimes produces harmony and where the complexities that arise frequently give rise to discord. One such locus in Egyptian history can be found in the story of a government institution that would later evolve into the Ministry of Supply. The story, which we can follow in the pages of contemporary editions of Al-Ahram, lays to rest many common factual errors.
It is commonly believed that the idea of creating a ministry of supply was first proposed under the Hassan Sabri government formed on 28 June 1940 and that its powers were delineated by a royal decree promulgated three years later, on 1 July 1943. The circumstances of war were a determining factor in the creation of this ministry, but the war in question was not World War II, but World War I. As prices began to spiral with the outbreak of war, the government instituted pricing commissions in Cairo and provincial capitals authorised to "set the upper limits on prices of food supplies and essential primary materials." This was followed, on 24 August 1914, with the act creating a "Supply Board" with the remit to "research the state of the nation with respect to the supplies of foodstuffs and other essential primary materials and to investigate the means by which to safeguard the institutions of the nation in this aspect."
These measures nevertheless failed to curb the avarice of many merchants who took advantage of wartime scarcity and spiraling prices to stockpile goods and sell them at exorbitant prices. It was not surprising to come across numerous reports on prosecutions of violators such as the following: Mohamed Fayid, a wheat merchant in Old Cairo and owner of a flour mill, sold a sac of wheat to Mohamed Ahmed Daoud for 390 piastres, one hundred piastres over the set price of 290 piastres. He was pronounced innocent due to lack of sufficient evidence.
A butcher, Abdel-Khaleq Gumaa sold 111 pounds of mutton at eight piastres a pound, a half a piastre over the set price. The court found him guilty and fined him LE15, or a month's imprisonment in the event of non-payment. The court also ruled to appropriate the income he made from the meat he sold.
In view of the virtually daily repetition of such stories Al-Ahram observed that the government's pricing policies had failed. It ascribed the failure to two shortcomings: "Firstly, the existence of different pricing commissions for the various governorates and provincial capitals does not conform with the need for uniformity in prices. Secondly, in order to set retail, and, indeed, wholesale, prices the government must first determine the yield of agricultural produce in the farms themselves." A vivid indication of failure was the numerous complaints that poured into the offices of Al-Ahram. One enraged reader protests, "Such is the greed of merchants that they now rob people openly, a practice which is encouraged because these thieves rarely get their hands slapped. As a result, seldom does one receive the full measure of goods, particularly from bread merchants, who, in addition to selling the bread incompletely cooked because it weighs heavier, also cheat on the weight."
Another third reader complains that meat and fowl have become too expensive to afford. However, he suggests, in order to circumvent the butchers, the government "should facilitate the activities of fishermen by granting them permits to fish in some of the areas from which they had been barred under military pretexts."
Ultimately, the government had to recognise that its pricing policies were ineffective. Its admission came in the form of a royal decree, issued on 26 September 1917, for the creation of a "Supply Control Authority" which was charged with "assessing all the issues relevant to supplying the country with food and essential needs and adopting all measures necessary to alleviate the difficulties of the hard times through which we are passing."
These "difficulties", Al-Ahram explained to its readers, were the result of the problems in importing primary materials to meet the needs of the people and to support the British army in the country. The new authority was established to guarantee closer cooperation between the civil and military authorities and was, therefore, "accorded all the powers it needs for the immediate implementation of its proposals whereby both authorities shall retain their supervisory powers to the degree necessary to safeguard the institutions of the nation under their respective jurisdiction." However subtly phrased, with the presence of large numbers of British forces in Egypt and the demands that placed on the country's resources, there could be no concealing whose interests the new authority was established to protect. It was hardly a coincidence, therefore, that the new Supply Control Authority would be entirely administered by British officials. True, Prime Minister Rushdi managed to include two Egyptians on the Supply Authority board, but their membership was restricted to a purely advisory capacity. It was this authority that would prove the nucleus of the enormous Ministry of Supply which eventually would also oversee many of the tasks of foreign commerce.
The first act of the new Supply Authority was to issue an ordinance instructing everyone in Cairo or Giza who had more than 10 ardebs (the ardeb varies from 120 to 155 kilogrammes) of wheat or flour in their possession to send to the nearest police station "a signed, written statement specifying the amount of these two substances. All quantities of these two substances that have not been declared by the deadline or the declaration of which is incorrect shall be confiscated."
A grain merchant in Boulaq and his mother, a merchant as well, were the first to be penalised under the ordinance. The son had a stock of some 100 ardebs of wheat which he refused to sell at the set prices and his mother had stockpiled a large quantity of corn. Al-Ahram reports, "When the Boulaq police learned of this, they brought the two merchants to trial. The son was sentenced to a week in prison with a bond of LE5 while the mother was sentenced to a fine of 50 piastres. Their stocks of wheat and corn were put up for compulsory sale at the prices stipulated by the Authority for Supply Control."
Many other merchants entered a battle of wills with the new authority, as Al-Ahram's correspondents in Cairo and Alexandria reveal.
The Supply Control Authority admitted to the phenomenon of hoarding by merchants in a public statement in which it said that, in spite of an abundant wheat crop, only small quantities appeared in the market. "This is because some individuals possessing no conscience have hidden large quantities of wheat and flour in the hopes of gaining illicit profit." In order to redress the situation the supply authority would obtain from the Ministry of Agriculture quantities of wheat to distribute to owners of flour mills and bakeries and retail merchants. Evidently this measure failed as well, for shortly afterwards the Supply Control Authority was forced to stop supplying the more affluent areas where the residents could afford to buy wheat at unofficial prices and "to restrict supply to those areas of the city which are teeming with the poor, particularly Boulaq and Old Cairo."
In a last-ditch effort to bring the wheat merchants under control the government decided to enlist their cooperation. Towards the end of May 1918 the head of the Supply Control Authority invited prominent grain merchants in Cairo and Alexandria to a meeting at which he proposed that the merchants "form a syndicate with the purpose of investigating the means necessary to restore the market to its normal state." Then, on 6 June 1918, the Legislative Assembly voted to create a committee consisting of four prominent grain merchants to draw up a draft charter for a central grain merchants' syndicate with subsidiary branches. The draft charter, which appeared within a week, stated that the aim of the syndicate was to "register the grain merchants in the country and to provide them with permits so as to distinguish them from illegitimate dealers and to prevent the illegal trade and speculation in grain." The syndicate would also issue guidelines to its members and work to prevent those merchants "with a reputation for violating prices and tampering with the weights and measures" from practising this profession. There would be a 15-member board of directors and membership in the syndicate required certification of good character, an annual fee of LE2 and "a pledge to obey the laws of the syndicate and respect its system."
The Supply Control Authority was also quick to offer the new body numerous incentives. In particular it offered to facilitate purchases from the provinces and to facilitate transportation of produce between the various syndicate members.
The charter was quickly ratified and, on 9 August 1918, in the Legislative Assembly hall, the general assembly of the Syndicate of Grain Merchants held its first meeting. According to the Al-Ahram correspondent on the scene, a total of 173 delegates were present representing Cairo, Alexandria and the various governorates in Upper Egypt, the Delta and the Suez Canal zone. Addressing the assembly, Ross Tiller, the authority's chairman, conveyed his faith that the new syndicate would work with the Supply Control Authority in that "difficult task of curbing selfish greed and rapacity." He asked the members to combat rumours which constituted the most devastating means to undermine the aims of the syndicate. Of more tangible concern to the members were the Authority's pricing policies which Tiller described as "reasonable and fair to both the producer and the merchant, as they were carefully calculated to permit both the opportunity to earn a generous profit."
Although none of the assembled delegates voiced a single objection, subsequent events demonstrated that they harboured thoughts of their own. It was not long before the Al-Ahram correspondent in Alexandria reported on the continued grain shortage there. The reason, he said, was that certain merchants who were also members of the syndicate had instructed their agents in the countryside to ship only small quantities "because they believe that they will not be able to earn as much profit as they had before the official prices took effect." As a result, the sack of flour in Alexandria was selling for 320 piastres, 30 piastres above the set price. The Cairo correspondent reported a similar shortage. In Cairo, however, bakeries and flour mills were exporting their goods to the countryside. "The best means to prevent this is to issue an order forbidding the transport of flour from one city to another," the correspondent advised.
It would not be long, however, before the magic turned against the magician. With so much wheat and flour stockpiled, supply soon outstripped demand and prices began to plummet. One individual, referring to himself as "the voice of the poor", commented, with malicious glee, "The merchants have fallen victim to their own evil doings after having been so rapacious in their pursuit to pile profits upon profits without the slightest compassion for the people."
Within a year, the Syndicate of Grain Merchants was dissolved. The Supply Control Board had won the battle against the merchants and, with the end of the war, the market would quickly return to normal in accordance with the laws of supply and demand.
* The author is a professor of history
and head of Al-Ahram History Studies Centre.
