British Mandate: A Survey of Palestine: Volume II - Page 537

CHAPTER XIV.
end of the relevant financial year; they do not comprise bullion and specie. The indices are to be regarded only as a general guide to trends. No continuous series is available and that used in the table has been derived by the linking of three series of retail price indices and two series of wholesale price indices. The figures given represent the average for the calendar year in which the financial year began.

3. The left-band side of the table illustrates, summarily but sufficiently, the main features of the financial regime during the first twelve years of the mandatory administration : limited revenue with little margin between it and expenditure; exports and imports at a relatively low level; a very modest amount of currency in circulation; development by loan moneys begun. The right-hand side of the table does no more, however, than provide pointers to the course of events during the past ten years, influenced as they have been by the disturbances of 1936-39 and the world war. The erraticalness introduced by the former upset, in so far as the administration of public finance was concerned, is illustrated by comparing the figures of Government revenue and expenditure for the years 1934/35 and 1937 /38. This quality stultified the expectations, first, while revenue was substantially exceeding expenditure, that it would be practicable to finance development programmes from surplus balances and, alternatively, that it would be preferable to finance such programmes by an (overseas) loan. At the same time, as will be apparent from comparison of the values of imports and particularly exports, the general economy of the country was not in the same degree affected. When the disturbances were brought to an end in 1939, it appeared to Government that a co-ordinated scheme for development and welfare services should be drawn up, and a special committee was appointed to that end at the beginning of 1940. Notwithstanding the war it completed its survey and submitted a report embodying a comprehensive programme; at the values of that time the capital cost would have been approximately £P.9,000,000 and the recurrent cost between £P.500,000 and £P.600,000. Because of the war it bad to be deferred sine die. The war period bas a marked inflationary character but the public finances have displayed great resiliency. The degree of isolation enforced on Palestine in matters of supply bas produced an abnormality both in the general economy and the public finance which greatly complicates forward planning. The great increase, both absolute and relative, in local purchasing power, as reflected in the figures of currency and bank deposits in 1944/45, will be remarked and it may be noted that, as a percentage of this purchasing power, Government local receipts were

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