British Mandate: A Survey of Palestine: Volume II - Page 1014

CHAPTER XXVI.

were accentuated. The comparative level of c.i.f. prices in Palestine in 1943 is illustrated by the following figures

(1939-100)

Cotton yarn 35G

Wool yarn 800

Rayon yarn 950

Cotton cloth, grey 860

Cotton cloth, bleached 7 50

Cotton cloth, printed 01• dyed 650

Woollen cloth 265

Rayon cloth 900

Cotton goods represented before the war 75% and during the war 80% of Palestine's textile consumption.

81. As a first step in textile control the Defence (Control of Cotton Yarn) Order:*, was enacted in March, 1942. The main provisions of this Order were that (a) all manufacturers of, and merchants in, cotton yarn should be licensed, (b) all stocks should be declared, and (c) every transaction in cotton yarn involving more than 45 kgs. should be subject to a permit issued by the Controller. Some 1,200 firms, manufacturers and merchants, owning a total of some 3,000 tons of cotton yarn, either in stock or on order, were involved. Prices of Indian cotton yarn in Palestine had risen after the outbreak of war with Japan in December, 1941, by more than 100% above c.i.f. costs. Although, however, the control Order did not prescribe price limits, its immediate effect was a drop of more than 50% in yarn prices. But the Order bad also an adverse effect, namely a tendency on the part of the importers to cancel outstanding orders or to divert shipments to other countries, thus causing to Palestine a loss of a part of expected supplies. Stocks of yarn were gradually used up and not replenished; prices in India were on the upward trend, and measures with a view to securing a regular supply of yarn for the country at reasonable prices had to be taken.

82. Accordingly, in the summer of 1942, arrangements were made to introduce effective Government control over the cotton yarn market. The leading yarn merchants were organised into two companies, one Arab, handling 25%, and one Jewish, handling 75% of all imports; these percentages were based on the industrial capacity of the respective sectors. The companies received a monopoly to import yarn or to acquire it from local merchants' stocks and to sell to manufacturers. The managements of the companies were approved by Government and supervision was maintained over all their transactions. Selling prices for yarn already in the country were fixed at a level of 5% to 10% above average
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* Laws of 1942, Vol. II, page 523 subsequently replaced by the Defence (Control of Yarn) Order (Laws of 1942, Vol. III, page 1378).

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