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| 1936–37 |
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| Expansion of the Egyptian army. A further measure established a new recruitment policy, which admitted candidates from the middle and lower classes to the officers' training school for the first time. Within the army, the new policy soon created divisions between junior officers, who came from modest circumstances, and their superiors, who had been born into elite families. The reform was to have important consequences for Egyptian politics in the early 1950s. | 1 |
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| 1937 |
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| Public rift within the Wafd Party over the terms of the treaty of 1936. Prominent politicians Ahmad Maher and Mahmud Fahmi al-Nuqrashi, unhappy with the settlement, broke away and formed the hard-line Sa‘dist Party in 1938. | 2 |
| New system of taxation. Concessions within the treaty of 1936 allowed the government unrestricted freedom in levying taxes. For the first time, members of minority communities and foreigners resident in Egypt assumed a full tax burden. These groups had formerly received fiscal protection from the Capitulations, which had denied the Egyptian government the additional revenues. | 3 |
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| May 8 |
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| Conclusion of the Montreux Conference, which formally phased out the Capitulations over the next 10 years and the Mixed Tribunals over a period of 12 years. | 4 |
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| Dec. 30 |
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| Dismissal of Nahhas's Wafdist government. The king replaced it with a minority government under Muhammad Mahmud. | 5 |
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