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II. Great Britain and the Beginnings of the Ottoman Public Debt, 1854–55

Published online by Cambridge University Press:  25 March 2010

Olive Anderson
Olive Anderson
Affiliation:
Westfield College, University of London
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Extract

In 1929 the historian of European financial control in the Ottoman Empire—that most significant factor in the affairs of the Near East at the turn of the nineteenth century—found ‘the seed of the idea’ of European control in the second Turkish foreign loan, raised in 1855. Nevertheless, he added virtually nothing to the brief and rather inaccurate account of this transaction given in 1903 by that able retired official of the Ottoman Bank, A. du Velay. It may therefore be worth while to discuss, from the profusion of evidence now available, the circumstances in which this loan and its predecessor of the year before were raised, and the extent and significance of the foreign control which these transactions introduced into Turkey.

Type
Articles
Information
The Historical Journal , Volume 7 , Issue 1 , March 1964 , pp. 47 - 63
Copyright
Copyright © Cambridge University Press 1964

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References

1 Blaisdell, D. C., European Financial Control in the Ottoman Empire (New York, 1929), 28Google Scholar.

2 See his Essai sur I/Histoire financière de la Turquie (Paris, 1903), 142–7Google Scholar.

3 Palmenton to Ponsonby, no. 279, 30 December 1840, Public Record Office, London, MSS., Foreign Office (afterwards cited as F.O.), 78/391. The incident is discussed in Rodkey, F. S., ‘Lord Palmerston and the rejuvenation of Turkey, 1830-41’, Journal of Modern History, II (06 1930), 219Google Scholar.

4 Du Velay, p. 138.

5 7 April, 1854, Public Record Office, London, Privtte Stratford Papers (afterwards cited

6 F.O. 351), F.O. 35a/38.

7 Clarendon to Stratford, F.O. 352/40.

7 Gladstone to Stratford, 24 December 1853, F.O. 352/39. Palmerston and Sir Charles Wood did not share Gladstone's ideas. At the beginning of March 1854 they were urging ‘certain men of money’ to lend to Turkey (Public Record Office, London, Private Cowley Papers (afterwards cited as F.O. 519), F.O. 519/170, Clarendon to Lord Cowley, British ambassador in Paris, 7 March 1854).

8 See A. H. Layand's reproaches in die House of Commons on 33 July 1855 (Great Britain, 3 Hansard, CXXXIX, 1298).

9 Reschid to Musurus, a March 1854, F.O. 78/1047.

10 Hansard, CXXXI, 374.

11 Gladstone to Clarendon, 18 March 1854, British Museum, London, Additional MSS. (afterwards cited as Add. MSS.), 44529, fo. 67; Clarendon to Stratford, 3 April 1854, F.O. 352/40. Rothschild agreed to make an attempt on aa March and had failed by ao March.

12 In the early summer of 1854 their attitude also prevented Lord John Russell and Clarendon from carrying the Cabinet in support of the French proposal for a subsidy treaty with Sweden.

13 Clarendon to Stratford, 8 June 1854, F.O. 352/40.

14 Cf. Stratford to Gladstone, 10 June 1854, F.O. 352/39.

15 Wood to Clarendon, end. in Clarendon to Stratford, 14 June 1854, F.O. 352/40.

16 Clarendon to Gladstone, 2 July 1854, Add. MSS, 44133, fo. 21.

17 Clarendon to Cowley, 30 June 1854, F.O. 519/170.

18 Aberdeen to Clarendon, 6 July 1854, Add. MSS. 43189, fo. 99; Clarendon to Cowley, 7 July 1854, F.O. 519/170. Aberdeen disliked ‘haggling about securities which are worth nothing’.

19 Gladstone to Clarendon, 6 July 1854, Add. MSS. 44529, fo. 114. Gladstone's anxiety to avoid upsetting his Ways and Means arrangements probably explains his consent to a guarantee at this juncture. At other times he preferred the plan of a subsidy.

20 Clarendon to Russell, 5 July 1854, Public Record Office, London, Russell MSS. (afterwards cited as P.R.O. 30), P.R.O. 30/22/11; Clarendon to Stratford, 8 and 13 July 1854, F.O. 352/40.

21 Stratford to Clarendon, no. 441, 10 August 1854, F.O. 78/1000; D. Revelaky to Stratford, 2, 9 and 12 August 1854, F.O. 352/40.

22 Clarendon to Russell, 8 August 1854, P.R.O. 30/22/11.

23 Clarendon to Stratford, 18 August 1854, F.O. 352/40. Clarendon thus pursued precisely the middle course which Palmerston denounced in 1840, and had in fact been prepared to do so as early as February 1854 (Clarendon to Cowley, 17 February 1854, F.O. 519/170).

24 Clarendon to Stratford, 12 August 1854, F.O. 352/40.

25 Full particulars of the terms are given in the Econotmtt, 19 August 1854. 4-2

26 Clarendon to Stratford, 12 and 18 August 1854, F.O. 352/42.

27 Clarendon to Gladstone, 20 September 1854, Add. MSS. 44133, fo. 23; Gladstone to Clarendon, 22 September 1854, Add. MSS. 445*9, fo. 148; and Clarendon to Stratford, 23 September 1854, F.O. 352/40.

28 Pisani (the English dragoman) to Stratford, 29 August 1854, F.O. 352/42; Stratford to Clarendon, no. 477, 31 August 1854, F.O. 78/1000.

29 Stratford to Clarendon, no. 481, 4 September 1854, F.O. 78/1001.

30 Revelaky to Stratford, 29 September 18541 F.O. 352/39; Cowley to Clarendon, 3 November 1854, F.O. 352/37.

31 Clarendon to Stratford, 3 November 1854, F.O. 352/40.

32 Reachid's official denial of these claims had to be posted at the stock exchange (cf. die Economist, 2 September 1854).

33 Stratford to Clarendon, 16 August 1854, F.O. 352/40.

34 18 August 1854, ibid.

35 Stratford to Clarendon, no. 481,4 September, and no. 493,10 September 1854, endoting hit proposals, F.O. 78/1001.

36 ‘Always assuming,’ added Gladstone, revealing his complete ignorance of Turkish circumstances, ‘that there will be a good Gustos of the money in the shape of some trustworthy Banks (Gladstone to Clarendon, 23 September 1854, F.O. 352/40)’. ‘There is no “bank” wherein to place the produce of the Loan’, was Stratford's brief reply (Stratford to Clarendon, 5 October 1854, ibid.).

37 The Turks were Mehemed Bey (the president), Kabouli Effendi and Raahid Bey (controller of the finance department). D. Revelaky was nominated by die English embassy and David Glavany by the French. Both were ‘very respectable’ local bankers. Pisani to Stratford, 11 October 1854, F.O. 352/37; Stratford to Clarendon, no. 507,14 September 1854, F.O. 78/1001.

38 Revelaky to Stratford, 7 September 1854, F.O. 352/40.

39 Revelaky was chiefly concerned with checking the threatening rise in the rate of exchange and with providing for the secure custody of the loan money (cf. his reports to Stratford in October and November 1854, F.O. 352/40). The committee voted sums to the Turkish departments but knew nothing of their expenditure (Revelaky to Stratford, 10 March 1855, F.O. 352/43).

40 To the indignation of Horaley Palmer, Black (who was an ally of Revelaky) and Durand were appointed the London agents for accepting bills and forwarding bullion to Constantinople (Clarendon to Stratford, 3 and 23 November 1854, F.O. 352/40).

41 Cf. Bankers' Magaxine (December 1854).

42 F.O. 352/44.

43 Only 40 million piastres remained on 15 February 1855. and ‘the Seraskier ia constantly pouring new demands for money upon us’, Revelaky reported to Stratford (F.O. 352/42).

44 9 April 1855, ibid. The Sardinian alliance involved a British loan to Sardinia of £2 millions.

45 D. Revelaky to Stratford, 22 May 1855, F.O. 352/44; Fuad to Muslims, n June 1855 (where the point is made that a loan on bad terms would jeopardize reforming efforts in Turkey). The ousting of Black and Durand from the business is another indication of the decline of Stratford's influence in Constantinople at this time.

46 Clarendon to Cowley, 31 May, i and 2 June 1855, F.O. 517/171.

47 Clarendon to Stratford, 11 June 1855, F.O. 352/42.

48 The convention is printed in Du Velay, p. 142. Successive drafts with French alterations can be studied in F.O. 78/1157.

49 Clarendon to Stratford, a July 1855, F.O. 352/42.

50 Blsisdell, p. 52; Du Velay, p. 147.

51 Cf. Leaves from the Diary of Henry Grevile, ed. Enfield, Viscountess, and , ser. (London, 1884), 230Google Scholar.

52 The debates are to be found in Hansard, CXXXIX, 1212-68, 1283-1313, 1438-45. 1463-1513 (20, 23 and 27 July 1855).

53 After the last debate on the subject Gladstone felt impelled to expound his views at great length to the solicitor general (Add. MSS. 44337, fos- 150-8).

54 The Times, 24 and 28 July, Daily News, 23 July, Spectator, 28 July 1855. Of all the leading national and provincial newspapers only the Peelite Morning Chronicle was favourable.

55 27 July 1855, Add. MSS. 44163, fo. 199. Aa late aa February 1856 Disraeli felt it neces-lary to justify his opposition to the guarantee on much the same grounds ( Eckstaedt, C. F. Vitxthum von, St Peterdntrg and London (London, 1887), I, 190)Google Scholar.

56 Morning Post, 23 July 1855.

57 Punch, 28 July 1855.

58 Clarendon to Stratford, 28 July 1855, F.O. 352/42.

59 Cf. Economist, 18 and 25 August 1855.

60 Public Record Office, London, MSS., Treasury (afterwards cited as T.) 64/584, Clarendon to Stratford, no. 542, with enclosed memorandum, 6 July 1855. Cf. Clarendon to Stratford, 30 June, and Stratford to Clarendon, II July 1855, F.O. 352/42. The alterations made by the French can be studied in Cowley to Clarendon, 4 July 1855, F.O. 27/1071.

61 Clarendon to Stratford, 30 June 1855, F.O. 352/42.

62 On the French attitude cf. Cowley to Clarendon, no. 881, 5 July 1855, F.O. 27/1072. Fuad undertook to maintain the principle of control admitted in 1854 when he first applied for the guarantee.

63 ‘Statement of sums sent to the Porte under article 4 of the Convention’ (return to an order of the House of Commons of 4 February 1856), T. 64/384.

64 Clarendon to Stratford, F.O. 352/44.

65 Stratford to E. Hornby, 16 August 1856, T. 64/386.

66 Cf. Temperley, H. W., ‘The Last Phase of Stratford de Redcliffe, 1855-58’, English Historical Review, XLVII (04 1932), 216–31CrossRefGoogle Scholar.

67 Lord Hobart was not sent on this occasion (as stated by Bhisdell, p. 28 and Du Velay, p. 142).

68 Stratford to Clarendon, no. 757, 30 September 1855, F.O. 78/1157.

69 Spearman to Lewis, 26 October 1855, ibid.

70 Hornby to Clarendon, no. 4, 10 October 1855, ibid.. Cf. Homby, Lady, Constantinople during the Crimean War (London, 1863), 91Google Scholar.

71 Clarendon to Stratford, no. 909, 3 November 1855, T. 64/384.

72 Spearman to Lewis, 17 December 1855, ibid.

73 Clarendon to Stratford, no. 1072, 21 December 1855, ibid.

74 Clarendon to Stratford, ai December 1855, F.O. 352/42.

75 Piaani to Stratford, 8 January 1856, F.O. 352/43.

76 Stratford to Clarendon, no. 152, 8 February 1856. Hornby's ‘Observations on Sir Alexander Spearman's report of December 17’, dated 9 January 1856 (ibid.), givea a valuable account of all these proceedings at Constantinople between September 1855 and the following January.

77 Stratford to Clarendon, 22 September 1856, ibid.

78 SirHornby, Edmund, An Autobiography (London, 1929). 77Google Scholar.

79 Stratford to Clarendon, 12 September 1855, F.O. 352/42.

80 Hornby, p. 75.

81 Hornby to Clarendon, 5 May 1856, F.O. 78/1158.

82 To obey, Stratford and Hornby pointed out, would be to make the commission a nullity (Stratford to Clarendon, no. 401,7 April 1856, T. 64/385). The orders were inspired by reports of the urgent needs of the troops at Erzerum.

83 Stratford to Clarendon, no. 983, 29 November 1855 and enclosures, F.O. 78/1157.

84 Turkey did not actually default until 1876, though she gave grounds for alarm as early aa September 1856 (cf. F.O. 78/1158).