No. 608.
Mr. Maynard to Mr. Evarts.
Constantinople, December 2, 1879. (Received Jan. 3, 1880.)
Sir: I had the honor, in my dispatch No. 36, of November 15, 1875, to discuss at some length the financial affairs of the Ottoman Government, brought to my notice officially by the Sublime Porte.
Although alluded to repeatedly since, I have not had the subject so presented that it seemed necessary to treat it formally. This morning, however, I have a note from his excellency the minister of foreign affairs, which I am requested to bring to the attention of our countrymen at home and abroad, and which, with its inclosures, is transmitted.
The decree of October 6, 1875, suspending for five years the payment in money of one half the accruing interest on the public debt, and promising for the other half debentures bearing interest at 5 per cent., proved highly disastrous to the grand vizier who promulgated it (dispatch No. 322, of July 7, 1879), and had much to do in hastening the downfall of his imperial master. Yet, from that day to this no interest has been paid, either in debentures or in money, and the daily quotations of the Turkish securities, both here and in London and Paris, scarcely exceed one-half the accumulated arrears.
The operations of the imperial treasury meanwhile have been a series of temporary expedients to seek relief for the moment against ever-increasing embarrassments. Debts, except unavoidable payments, are left to the care of the future. Official salaries are greatly behind, and also the pay of the army and navy. Even the daily supplies for the soldiers are difficult to procure. Small sums of money, a few thousand, hundreds it may be, are a subject of negotiation. * * *
The financial question subordinates all others, and the question of reforms, especially is subsidiary to it. * * *
The Turks, in their fiscal troubles, have not lacked abundant counsel.
During the last four years there have come numerous advisers, self-appointed for the most part, with schemes of the panacea order, for the rehabilitation of the. Ottoman treasury. They have been received graciously, listened to attentively, entertained hospitably, and sent away loaded with promises, sometimes with a present or two. But as the plans of one side looked to the outstretched hands of the creditors, while the other side were thinking of their own empty stomachs and emptier pockets, nothing ever ripened. Experience pointed the Divan [Page 969] to a foreign loan as the readiest Way to replenish an exhausted treasury. Such a loan guaranteed by the great powers or by one of them could not fail of success, ample for domestic wants, and a small percentage for distribution among the creditors. Failing this, small sums have been borrowed from time to time of the Galata bankers, whose names appear in the recent transaction, and secured by a pledge of the different revenues. Such loans are simply ruinous; to the Turks if they are repaid, to the bankers if they are not. The new agreement, if I comprehend its scope, embodies a series of dealings and gives more satisfactory security to the bankers; and at the same time relieves the custom-house of certain incumbrances and turns its proceeds into the public treasury.
This source, though constant, is small. The duties are nominally eight percent. A gentleman having the best possible means of knowing, recently assured me they do not exceed three per cent., and that brokers would undertake for three per cent., to secure the delivery of goods. Efforts have been made to place the collection of the customs revenues, as well as of the others, in the hands of a commission of foreigners. This proposal the Turks resist if they do not resent, and I am persuaded they will never submit to it except as the last resort of despair.
In my dispatch No. 290, of November 25, 1878, I represented the condition of the currency. The table giving the rate of exchange between the different kinds of money is reproduced, adding the rate for this day, viz:
Relative value of Ottoman moneys.
| Date. | Gold. | Silver. | Copper. | Paper. | Beshlik or metallik. |
| December 18, 1876 | 100 | 104.5 | 150 | 124 | |
| November 25, 1878. | 100 | 107 | 180 | 350 | |
| December 2, 1879 | 100 | 106.5 | 370 | 860 | 117,375 |
For the past eight months or more the paper money has been refused by the traders. It depreciated until by general consent the circulation was abandoned.
Various devices for retiring it have been adopted. Among them is one to receive one-fifth of certain taxes in paper at 25 per cent. of the nominal value. The Imperial Ottoman Bank superintended the issue, numbering, and registering of the notes, and the bank is now charged with the withdrawal. The latest report is up to the close of the last month and is a brief summary of this short-lived currency.
At first copper money took the place of the paper in the markets and the smaller retail trade. But for some unexplained reason it soon began to depreciate until it sunk to the level of the paper, and like it was discarded. This was not the result of increased coinage, for no copper had been coined during the last ten years. The only use made of it at present is in payment of tolls across the bridges between Galata and Stamboul. And as the bridges are constantly thronged, this use is considerable. Now the principal business is transacted with silver and an obsolete coinage called beshlik or metallik. The latter, of which none has been struck since about the fifth year of Sultan Medjid (1844), is silver with so much alloy as to disfigure it and to render the coins disproportionately large. A few specimens are inclosed. In considerable sums it is exchangeable for silver at fully ten per cent. discount. The smallest silver coin is a piece of twenty paras, a half piaster, equal in value to one English penny. There are also coins of one, of two, of five, often, [Page 970] and of twenty piasters, called the medjidieh, in honor of the Sultan Medjid, in the early part of whose reign it and the rest of the series were first coined. The five-piaster coin is called by the Turks sometimes the tcherek or quarter piece, sometimes the beshlik or piece of five; the others have no particular name, I believe.
The history of Turkish money would be instructive as illustrating the tendency generally prevalent to lower the value of the money unit. For years in Turkey the piaster has been the money unit; that is, the money of account has been reckoned in piasters. The piaster is divided into forty paras, and the latter was formerly subdivided into three aspers. In the fifteenth century the asper was a silver coin of considerable value. (See Gibbon, chapter lxv, where mention is made of an annual pension of 300,000 aspers, and the notes on the passage, Milman’s edition.)
Persons not very old remember to have heard their fathers describe the asper as a piece of money which in their early days was current in small traffic. The para was coined in silver at a comparatively recent period, and I have in my possession specimens of it. But this, like the asper, was debased until its value was too small to be reckoned in trade. The smallest piece now current is one of five paras, equal to a half a cent of our money, and, like the half-cent piece of our early coinage, of little use. In 1801, the reign of Sultan Selim III, the piaster contained 95.7 grains of pure silver, value $0,258, but during the reign of Sultan Mahmoud II, from 1808 to 1839, the coin was rapidly debased. In 1818 the piaster contained but 67.7 grains of pure silver, value $0.18¼. At length silver was supplanted by the adulterated beshlik, or metallik, just mentioned. Finally, when the coinage of silver was restored by his son and successor, Sultan Medjid, the piaster had fallen to $0.0.43 in value.
The restoration of the currency to a metallic basis has not counteracted the disorder in the public finances. On the other hand, the burden of the government seems to rest heavily on the general community. Although trade is stagnant, prices have increased enormously. Bents, food, fuel, and service of all kinds have risen in many instances forty per cent. higher than they were three years ago; and the cost of living is greatly enhanced. In a word, those who do not pay contrive to be supported at the expense of those who do. Many persons believe the end draws nigh. I think not yet.
I am, &c.,