Los Angeles herald., 1907-08-11
CRISIS ON
IN EGYPT
END COMES TO REAL ESTATE
BOOM
SUBURBAN LANDS SHOW SLUMP
IN VALUE
Lure of Quick Wealth In Speculation
on the Bourse Brings Many
Clerks to the Brink
of Ruin

Special Gable to The Herald
CAIRO. Aug. 1O.-Egypt has a spec
uIative town value land crisis on its
hands. The first phase of the storm has
broken and been weathered. For the
present, well informed investors declare.
there is a breathing spell, but it is not
fated to last long.
One of the signs of the crisis was the
temporary suspension of the Casa Ill
Sconto di Risparmio which was closed
fifteen days without being required to
declare itself bankrupt-so elastic are
Egyptian banking laws-and after being
assisted by a local syndicate of banks and
the Union Bank of Vienna, has again
opened to the public.
Thus far the situation has had to deal
with ordinary stock and land brokers, but
now a more serious stage has been
reached, and the country is entering on a
period when extreme difficulty will be ex-
perienced In covering long term bills in
Europe. At the same time installments
on land contracts are falling due, in which
phase lies the threat of the land crisis.
This crisis had its genesis in the drop
in suburban land values, which recently
began. The cause of this Is two-fold.
First, the share market got worse and
worse, so holders of town land have had
to put their holdings on the market in
order to provide cover. Little by little
all the available spare cash has been alb
sorbed, and now one has extreme diff
Guilty in disposing of ones holdings.
Again, in exceedingly few cases has the
purchase price been paid down in one
lump sum. The usual procedure has been
to spread the amount over several Install
ments and as failure to pay any one OF
these installments entails forfeiture OF all
moneys already paid, recent purchasers
who could not pay their installments have
preferred to sell at any price rather than
lose all they have paid.
Can it be wondered at, then, that a
crisis is imminent? The prospect for the
next few months is far from hopeful and
will provide food for great anxiety to
those who control the financial and COM
mercial interests of Egypt
Agricultural land should not be seri-
ously affected, however. Most of it is
held by the cultivators, who, as the
cotton crop gets more profitable every
year, steadily increase their holdings
In some isolated instances the cultivator
invests in town land but this will be
found to be more the exception than the
rule. Some of the agricultural land is in
the hands of the companies formed for
its exploitation, but the general impress
sion is that there will be no slump in
this direction.
The Easy Road to Ruin
There is no doubt that the brokers
have themselves to thank for the diff
culties they have got into. One has
been wont to look upon the Egyptian
share market as a 'bull" one, and the
brokers have fostered this idea. They
have also encouraged speculation to the
exetnt of absolute folly by carrying out
IL ,fV,rr
about $500 a year, in many instances
without cover, feeling certain to reim-
burse themselves at a profit.
Now of course, that the pendulum has
swung in the opposite direction, settle
ment day has come around and there is
no cover forthcoming The profits on
previous transactions have been spent in
pleasure ana luxury. Not only that, but
the fabulous profits made or said to have
been made in brokerage-and speculative
transactions-have infected every one
with the gambling fever, which enc usu-
ally only finds in gold bearing countries.
There has been a rush to go ION change"
Many young fellows have thrown up
lucrative positions in sound concerns in
order to make in a day on the bourse
what they previously earned in a year.
On the bourse any day can be found
all sorts of men lowering in and around
the inner precincts, from doctors and law
yers and former state officials to the
Junior office clerks-all have been at
tracted by the glitter of the gold said
to have been made. And the result for
the majority of them will be ruin, hope
less ruin. 1t is sad state of affairs
but far better that the crisis has come
now, instead of later. Egypt as a coun-
try, will recover from this blow to her
creditor inevitably her credit must be
affected.
Country Financially Sound
But the stability of the country is as
seonre as ever, and with fatherly gov
eminent, outstanding the revenues and
watching over the cotton crop, there need
be no fear for the general future of the
country. 1t is only a question of per-
sonal credit-it will take some time to
restore that, but with the government at
the back of the really sound establish
rnents of which there are many in the
country, this should not take long, and
then a long period of prosperity on bona
fde commercial lines for all concern ed
can be looked for.