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2020 | OriginalPaper | Chapter

7. The Relationship Between Business and Government to 1945

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Abstract

This chapter explores the political and structural relationship between the Sudan Plantations Syndicate and the Sudan government across the years of their partnership, c.1907–1945. The chapter examines the technical aspects of the relationship, focusing in particular on the negotiations of the various agreements that established the framework for the governance of the Gezira Scheme and set the terms of the political-economic compact formed between the different parties, including the imperial government in London. The first section of the chapter looks at the structure of the loan agreements issued with a UK Treasury guarantee that were used to finance infrastructure projects, covering the period to 1919. The second section of the chapter then looks at the inter-war revisions to the agreements between business and government that were, in part, driven by the economic experience of the great depression. The third section of the chapter then turns to the issue of taxation and how the tax burdens were shared between the different parties to the Gezira Scheme, and how changes over time in those burdens reflected shifting political power, in this case away from business and to the state.

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Footnotes
1
Alexander Motyl, Imperial Ends: The Decay, Collapse, and Revival of Empires (New York: Columbia University Press, 2013).
 
2
This stretches back to the inception of the field of “International Business” as a discernable field in its own right. See Vernon, Sovereignty at Bay: The Multinational Spread of U.S. Enterprises (London: Longman, 1971).
 
3
Eden, Lorraine, Stefanie Lenway, and Douglas A Schuler. 2004. “From the Obsolescing Bargain to the Political Bargaining Model.” In Academy of International Business Annual Meetings, Stockholm, Sweden, July; Joel Hellman, Geraint Jones, and Daniel Kaufmann, “Seize the State, Seize the Day: State Capture and Influence in Transition Economies.” Journal of Comparative Economics 31, 4 (2003): 751–773; Abdelrehim and Toms, “The Obsolescing Bargain Model and Oil: The Anglo-Iranian Oil Company 1933–1951”; Vernon, Sovereignty at Bay: The Multinational Spread of US Enterprises, 46–59.
 
4
Kesner, Economic Control and Colonial Development: Crown Colony Financial Management in the Age of Joseph Chamberlain, 73; Havinden and Meredith, Colonialism and Development: Britain and Its Tropical Colonies 1850–1960, 140.
 
5
Mollan, “The ‘Impact’ of the First World War on Business and Economic Development in Sudan.”
 
6
SAD 417/2/2 ‘Memorandum of Contents’; SAD 417/2/104-109 ‘Draft Agreement Sudan Government—Sudan Plantations Syndicate’ (c.1940).
 
7
SAD 417/2/38-55 ‘Kassala Cotton Company Main Agreement 21st February 1933’.
 
8
B.E.V. Sabine, A History of Income Tax (London: Allen and Unwin, 1966); Soward and Willan, The Taxation of Capital (London: Waterlow and Sons, 1912); Josiah Stamp, Wealth and Taxable Capacity (London: PS King and Sons, 1922); Mollan and Tennent, “International Taxation and Corporate Strategy: Evidence from British Overseas Business, circa 1900–1965”; Eden, “Taxes, Transfer Pricing and the Multinational Enterprise”; Rixen, The Political Economy of International Tax Governance (Basingstoke: Palgrave Macmillan, 2008).
 
9
Gaitskell, Gezira, p. 63.
 
10
BUL CGA 2/1/3 ‘The Sudan Plantations Syndicate Ltd and the Kassala Cotton Company Ltd and their work in the Anglo-Egyptian Sudan’ (Reprinted from the 45th Annual Report of the British Cotton Growing Association, 1950) p. 4.
 
11
Gaitskell, Gezira, p. 64.
 
12
SAD 108/15/1-6 Stack to Wingate, 11 April 1912.
 
13
SAD 108/15/7-10 Wingate to Stack, 18 April 1912.
 
14
SAD 108/15/1-6 Stack to Wingate, 11 April 1912.
 
15
SAD 108/15/7-10 Wingate to Stack, 18 April 1912; SAD 108/15/49-52 Wingate to Stack, 6 May 1913.
 
16
BUL CGA 2/1/3 ‘The Sudan Plantations Limited and the Kassala Cotton Company Ltd and their work in the Anglo-Egyptian Sudan’ (Reprinted from the forty-fifth Annual Report of the British Cotton Growing Association, 1950), p. 7; Gaitskell, Gezira, p. 62; SAD 108/15/13 Stack to Wingate, 31 March 1913; SAD 108/15/17 Wingate to Slatin, 5 April 1913.
 
17
SAD 108/15/37-40 Wingate to Stack, 29 April 1913; SAD 108/15/44-48 Wingate to Stack, 4 May 1913; SAD 108/15/55-56 Wingate to Stack, 13 May 1913; SAD 108/15/68 Wingate’s copy of letter from Stack to Acting Governor General in Khartoum, undated; SAD 109/11/7 Wingate to Lovat, 22 July 1913; SAD 416/1/24. 6 Ordinary General Meeting of the Sudan Plantations Syndicate, 18 December 1913.
 
18
SAD 108/15/65 Wingate to Bernard, 6 June 1913.
 
19
SAD 109/11/6 Lovat to Wingate, 21 July 1913; Correspondence between Wingate and Eckstein, SAD 109/11/1-2, 5, 13, various dates July 1913.
 
20
SAD 109/11/6 Lovat to Wingate, 21 July, 1913; SAD 109/11/7 Wingate to Lovat, 22 July 1913; SAD 109/11/8 Lovat to Wingate, 23 July 1913; SAD 109/11/9-11 Wingate to Lovat, 24 July 1913.
 
21
SAD 109/11/9-11 Wingate to Lovat, 24 July 1913; SAD 109/11/21-22 Lovat to Wingate, 29 July 1913.
 
22
SAD 109/11/21-22 Lovat to Wingate, 29 July 1913.
 
23
SAD 109/11/28-29 Wingate to Kitchener, 30 July 1913.
 
24
SAD 109/11/34-35 Clayton to Wingate, 3 August 1913.
 
25
SAD 108/15/44-48 Wingate to Stack, 4 May 1913; SAD 109/11/28-29 Wingate to Kitchener, 30 July 1913.
 
26
SAD 109/11/33 Kitchener to Wingate, 3 August 1913.
 
27
SAD 109/11/36 Wingate to Lovat, 5 August 1913.
 
28
SAD 109/11/54-57 Wingate to Clayton, 17 August 1913.
 
29
SAD 109/11/86 Lovat to Wingate, 2 September 1913.
 
30
SAD 109/11/88-89 Wingate to Lovat, 3 September 1913.
 
31
SAD 109/11/92-98 Wingate to Clayton, 3 September 1913.
 
32
SAD 109/11/92-98 Wingate to Clayton, 3 September 1913.
 
33
SAD 109/11/112-113 Bernard to Wingate, 10 September 1913.
 
34
SAD 416/1/17 98th Meeting of the Board of Directors of the Sudan Plantations Syndicate, 10 September 1913.
 
35
SAD 109/11/112-113 Bernard to Wingate, 10 September 1913.
 
36
SAD 109/11/119-121 Davidson to Wingate, 11 September 1913; SAD 416/1/18 101st Meeting of the Board of Directors of the Sudan Plantations Syndicate, 9 October 1913.
 
37
SAD 109/11/112-113 Bernard to Wingate, 10 September 1913.
 
38
SAD 109/11/123 Wingate to Kitchener, 13 September 1913.
 
39
SAD 109/11/92-98 Wingate to Clayton, 3 September 1913.
 
40
SAD 109/11/12 J.W. Baird to Wingate, 24 July 1913; SAD 109/11/14 Wingate to Kitchener, 26 July 1913; T172/82 Wingate to Lloyd-George, 9 May 1913; SAD 101/11/135 Blackett to Bernard, 22 September 1913.
 
41
SAD 109/11/143 Davidson to Wingate, 24 September 1913.
 
42
SAD 101/11/135 Blackett to Bernard, 22 September 1913.
 
43
SAD 109/11/136-139 ‘Ordinance for the raising of 3 million pounds by the Government of the Sudan’; Government of the Soudan Loan Acts, 1913 and 1914; Parliamentary Bill (220) 1913 ii. 911; Parliamentary Bill. (271) iii. 97.
 
44
SAD 115/5/2-7 ‘Note as to the effect of war on the raising of capital required for the Gezira Irrigation Scheme’; NA FO 141/633/6 ‘Note on the Capital Required by the Sudan Government for the Gezira Irrigation Scheme and for other projects’ (14 May 1917), p. 2.
 
45
SAD 112/10/18 Sir Murdoch MacDonald quoted in ‘Minutes of evidence taken before the Board of Trade Committee on the Growth of Cotton in the British Empire’, 1 August 1917.
 
46
SAD 201/5/72 ‘Note as to the effect of war’.
 
47
SAD 112/10/18 Sir Murdoch MacDonald quoted in ‘Minutes of evidence taken before the Board of Trade Committee on the Growth of Cotton in the British Empire’, 1 August 1917.
 
48
NA FO 141/633/6 ‘Note on the Capital Required by the Sudan Government for the Gezira Irrigation Scheme and for other projects’ (14 May 1917), p. 3.
 
49
SAD 108/15/1-6 Stack to Wingate, 11 April 1912.
 
50
SAD 108/15/24-27 Wingate to Stack, 10 April 1913.
 
51
SAD 109/11/146-148 Memo relating to the Gezira Scheme, undated (probably 1913).
 
52
NA FO 141/633/6 Memo: ‘Guarantee of Soudan Loan: Clause 4’, likely January 1924, 3-4.
 
53
NA FO 141/633/6 The Sudan Guaranteed Loan Ordinance’, passed 11 October 1919.
 
54
NA FO 141/633/6 Sudan Loan Ordinance, 15 June 1922.
 
55
NA FO 141/633/6 Sudan Loan Ordinance, 15 June 1922.
 
56
NA FO 141/633/6 Lee Stack to Viscount Allenby, 4 January 1923; Egyptian Financial Adviser to the Chancery, British High Commission, Cairo, 10 January 1923; Stack to Allenby, 17 January 1923.
 
57
NA FO 141/633/6 Memo: ‘Guarantee of Soudan Loan: Clause 4’, likely January 1924, 9–10; GHL MS 18000/221B 22, Sudan Government Loan Stock Listing File, 12 January 1923, ‘Prospectus: Sudan Government £4½% Guaranteed Stock, 1939–1973’; GHL MS 18000/222B 180, Sudan Government Loan Stock Listing File, 18 February 1923, ‘Application for Listing’ issued by Mullens and Co, 26 February 1923; ‘Trade Facilities and Loans Guarantee Act, 1922’, Ch. 4 of which states: ‘An Act to amend section of the Trade Facilities Act, 1921, and the Overseas Trade Acts, 1920 and 1921, and to authorize the Treasury to guarantee certain loans to be raised by the Government of the Federal Republic of Austria and the Government of the Soudan respectively.’
 
58
Treasury position in October 1923 reported in NA FO 141/633/6 Lee Stack to Viscount Allenby, Cairo, 14 January 1924; NA FO 141/633/6 Otto Niemeyer (Treasury) to George Schuster, 3 October 1923.
 
59
NA FO 141/633/6 Lee Stack to Viscount Allenby, January 14; Lee Stack to Viscount Allenby, 17 January 1923.
 
60
NA FO 141/633/6 Lee Stack to the Secretary of State, Foreign Office, 22 October 1924.
 
61
SAD G//S1220 Extract from ‘Note on the Financial Control by Egypt over the Sudan Finances’ (1924); Stephen Constantine, The Making of British Colonial Development Policy, 1914–40 (London: Frank Cass, 1984), Table 9 (‘Loans raised by Colonial Governments in London Markets, 1919–1939’), 296–297.
 
62
SAD 415/3/6-11 ‘Agreement made this 17th day of October 1919 between Major-General Lee Stack, Governor General, Sudan Government and the Sudan Plantations Syndicate’.
 
63
SAD 415/3/25-28 Letter relating to Agreement of even date between the Sudan Government and the Sudan Plantations Syndicate Ltd, 17 October 1919.
 
64
SAD 415/3/6-11 ‘Agreement made this 17th day of October 1919 between Major-General Lee Stack, Governor General, Sudan Government and the Sudan Plantations Syndicate’.
 
65
SAD 416/2/19-22 188th Meeting of the Board of Directors, Sudan Plantations Syndicate, 9 May 1923.
 
66
SAD 416/2/46-49 Ordinary General Meeting of the Sudan Plantations Syndicate, 12 November 1924.
 
67
SAD 416/2/61-66 Ordinary General Meeting of the Sudan Plantations Syndicate, 28 October 1925.
 
68
SAD 415/6/25 ‘Addendum to Clause 7(ii)’, undated but likely 1926/1927.
 
69
SAD 415/6/3-4 George Schuster to Friedrich Eckstein, 6 November 1926; SAD 417/4/216-218 Sudan Government and Sudan Plantations Syndicate Ltd, Gezira Concession, 19 January 1929; SAD 415/6/3-4 George Schuster to Friedrich Eckstein, 6 November 1926.
 
70
SAD 416/6/10-12 Friedrich Eckstein to George Schuster, 8 November 1926.
 
71
SAD 415/6/13-15 ‘Note on Sudan Plantations Syndicate objections to the incorporation in the New Agreement of a provision whereby Sudan Plantations Syndicate must bear a proportion of any increase in the Tenants share’ (1926).
 
72
SAD 415/6/16 George Schuster to Friedrich Eckstein, 9 November 1926; SAD 415/6/19 Hugh Fraser to Friedrich Eckstein, 22 November 1926.
 
73
SAD 415/6/28-46 ‘New Gezira Agreement: Note of a Discussion held in the Finance Department on 8th and 9th March 1928 to consider various alterations proposed by Mr MacIntyre’.
 
74
SAD 415/6/28-46 ‘New Gezira Agreement: Note of a Discussion held in the Finance Department on 8th and 9th March 1928 to consider various alterations proposed by Mr MacIntyre’.
 
75
SAD 415/6/47-48 Alexander MacIntyre to George Schuster, 15 March 1928; SAD 415/6/55 A.J.C. Huddleston to Alexander MacIntyre, 22 March 1928; SAD 415/6/56 Alexander MacIntyre to A.J.C. Huddleston, 24 March 1928.
 
76
NA FO 141/826/1 Civil Secretary of the Sudan Government for the Governor-General to Foreign Office, 15 June 1935; NA FO 141/616/9 S.G. Symes, Governor General of Sudan, to the British Ambassador to Egypt, 24 May 1937.
 
77
NA FO 141/497/4 Copy of a Letter from the Financial Secretary’s Office, Sudan Government (H.E. Fass) to Secretary of the Governor General’s Council, 16 December 1933.
 
78
NA FO 141/497/4 ‘Minute Sheet, January 12th 1934’.
 
79
NA FO 141/497/4 Copy of a Letter from the Financial Secretary’s Office, Sudan Government (H.E. Fass) to Secretary of the Governor General’s Council, 16 December 1933.
 
80
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations with the Sudan Plantations Syndicate Ltd (and the Kassala Cotton Company Ltd), Summer 1933, p. 8.
 
81
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations with the Sudan Plantations Syndicate Ltd (and the Kassala Cotton Company Ltd), Summer 1933, p. 8.
 
82
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations’, 9–12.
 
83
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations’, 12–15; NA FO 141/497/4 G.S. Symes, Palace, Khartoum to Sir Miles Lampson, 7th March 1934’ NA FO 141/616/9 G.S. Symes to the British Ambassador to Egypt, 24 May 1937; NA FO 141/826/1 Civil Secretary of the Sudan Government for the Governor-General to Foreign Office, 15 June 1935.
 
84
NA FO 141/616/9 Copy of Sudan Plantations Syndicate—Sudan Government Agreement, 16 March 1937.
 
85
Martin, The Sudan in Evolution, 94–95; NA FO 141/687/8801, ‘Explanatory Note Traders Tax Ordinance 1919’; NA FO 141/687/8801, Telegram from High Commission, Cairo to Sudan Government, Khartoum, 16 March 1919.
 
86
NA FO 141/687/8801, Inland Revenue (Claims Branch) to Under Secretary of State, Foreign Office re ‘Sudan Trader’s Tax’, 30 August 1920.
 
87
SAD 415/3/6-11, ‘Agreement made this 17th day of October 1919 between Major-General Lee Stack, Governor-General, Sudan Government, and the Sudan Plantations Syndicate’.
 
88
SAD 416/1/67 150th Meeting of the Board of Directors of the Sudan Plantations Syndicate, 19 October 1916; SAD 415/3/6-11, ‘Agreement’, 17 October 1919; SAD 415/3/25-28, Letter relating to Agreement of even date between the Sudan Government and the Sudan Plantations Syndicate Ltd’, 17 October 1919.
 
89
SAD 415/6/13-15, ‘Note on Sudan Plantations Syndicate objections to the incorporation in the new Agreement of a provision whereby the Sudan Plantations Syndicate must bear a proportion of any increase in the tenants share’ (1926).
 
90
SAD 415/6/21 George Schuster to F. Eckstein, 12 January 1927.
 
91
SAD 415/4/49-51 E.E. Bernard, H. Fraser and R. Hewison (Sudan Government) to F. Eckstein (Sudan Plantations Syndicate), 8 November 1922.
 
92
SAD 415/6/28-46 ‘New Gezira Agreement: Note of a Discussion held in the Finance Department on 8th and 9th March 1928 to consider the various alterations proposed by Mr MacIntyre’; SAD 415/6/47-48 A. MacIntyre to G. Schuster, 15 March 1928; SAD 415/6/55 A.J.C Huddleston to A. MacIntyre, 22 March 1928.
 
93
SAD 415/6/56 A. MacIntyre to A.J.C. Huddleston, 24 March 1928.
 
94
SAD 415/3/6-11 ‘Agreement made this 17th day of October 1919 between Major-General Lee Stack, Governor General, Sudan Government and the Sudan Plantations Syndicate’.
 
95
SAD 417/4/21 Letter by Louis Bluen to unknown recipient, October 1928.
 
96
SAD 417/4/21 Letter by Louis Bluen to unknown recipient, October 1928.
 
97
SAD 417/4/341-354 A.E. Cutworth (Deloitte) to A.J.C. Huddleston, 23 July 1929.
 
98
SAD 417/4/206-207 Alexander MacIntyre to Friedrich Eckstein, 29 December 1928.
 
99
SAD 417/4/209-210 A.J.C. Huddleston to Hugh Fraser, 29 December 1928.
 
100
SAD 417/4/209-210 A.J.C. Huddleston to Hugh Fraser, 29 December 1928.
 
101
NA IR 40/7050 George Schuster to Sir Richard Hopkins, Treasury, 4 November 1927.
 
102
NA FO 141/687/8801 Foreign Office internal memo, 29 September 1923 mentions an Inland Revenue publication ‘Income Taxes in the British Dominions: A digest of the laws imposing income taxes and cognate taxes in the British Dominions, Colonies and Protectorates’, of which pp. 109–111 relates to Sudan.
 
103
NA IR 40/7050 Hugh Fraser, Sudan Government to G. Myrddin Evans, Treasury, 24 November 1927.
 
104
NA IR 40/7050 L. Charlton for the Controller, Sudan Government to The Inspector of Foreign and Colonial Dividends, 31 January 1931; See also SAD 417/4/216-218 Sudan Government and Sudan Plantations Syndicate Ltd, Gezira Concession, 19 January 1929, which indicates that there had been a ruling that ‘income derived from this country by the Government is exempt from British taxation.’
 
105
SAD 417/4/209-210 A.J.C. Huddleston to Hugh Fraser, 29 December 1928.
 
106
SAD 417/4/209-210 A.J.C. Huddleston to Hugh Fraser, 29 December 1928.
 
107
SAD 417/4/216-218 Sudan Government and Sudan Plantations Syndicate Ltd, Gezira Concession, 19 January 1929.
 
108
‘Sudan Plantations Syndicate: Continued Progress and Development’, The Times, Thursday 15 November 1928, p. 25, Col. A.
 
109
SAD 417/4/341-354 A.E. Cutworth to A.J.C. Huddleston, Financial Secretary, Sudan Government, 23 July 1929.
 
110
SAD 417/4/449-474 ‘Draft Agreement: Sudan Government—Sudan Plantations Syndicate’, 11 July 1929.
 
111
Indeed, a problem is that negotiation between the Syndicate and the Sudan Government simply ceased. For example, after a long meeting in the middle of July 1933 the Government heard nothing from the Syndicate for two whole months after. See: NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations’, p. 13.
 
112
NA FO 141/497/4 Copy of a Letter from the Financial Secretary’s Office, Sudan Government (H.E. Fass) to Secretary of the Governor General’s Council, 16 December 1933.
 
113
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations’, 7–8.
 
114
NA FO 141/497/4 ‘The Gezira: Summary of the Negotiations’, 9–11.
 
115
NA FO 141/826/1 Civil Secretary of the Sudan Government for the Governor-General to Foreign Office, 15 June 1935.
 
116
SAD 416/2/29-32 16th Ordinary General Meeting of the Sudan Plantations Syndicate, 8 November 1923.
 
117
In October 1924, for example, the Syndicate sought negotiation for the transformation of the pumping station at Hag Abdulla to supply water to 6,000 feddans of land south of the concession area that was above the gravitation level (i.e., that which would be supplied by water from the Makwar Dam). The Syndicate hoped that the Government would pay half of the £200,000 estimated cost. SAD 416/2/42-43 Minutes of the 193rd Meeting of the Board of Directors of the Sudan Plantations Syndicate, 1 October 1924.
 
118
SAD 416/2/29-32 16th Ordinary General Meeting of the Sudan Plantations Syndicate, 8 November 1923.
 
119
SAD 416/2/46-49 Ordinary General Meeting of the Sudan Plantations Syndicate, 12 November 1924.
 
Metadata
Title
The Relationship Between Business and Government to 1945
Author
Simon Mollan
Copyright Year
2020
DOI
https://doi.org/10.1007/978-3-030-27636-2_7