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Xerox Umversify Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 74- 10,973 HOELL, Margaret Stevens, 1921- THE TICARET ODASI: ORIGINS, FUNCTIONS, AND ACTIVITIES OF % E CHAMBER OF COMMERCE OF ISTANBUL, 1885-1899. The Ohio State University, Ph.D., 1973 History, modem

University Microfilms,XEROX A Company, Ann Arbor, Michigan

© 1974

MARGARET STEVENS HOELL

ALL RIGHTS RESERVED

THIS DISSERTATION HAS BEEN MICROFIIMED EXACTLY AS RECEIVED. THE TICARET ODASI: ORIGINS, FUNCTIONS, AND ACTIVITIES

OF THE CHAMBER OF COMMERCE OF ISTANBUL, 1885-1899

DISSERTATION

Presented In Partial Fulfillment of the Requirements for

the Degree Doctor of Philosophy in the Graduate

School of Ihe Ohio State University

By Margaret Stevens Hoell, B.A. in Ed., M.A.T.

The Ohio State University

1973

Reading Committee: Approved By Dr. Sydney N. Fisher Dr, Michael W. Curran

Dr. Samuel C. Chu

rtment of History ACKNOWLEDGMENTS

For his invaluable observations which have helped to shape this study I am indebted to Dr. Sydney N, Fisher, \àio was instrumental in obtaining the microfilm of Iæ Journal de la Chambre de Commerce de Constantinople from Istanbul University and the British Museum, I am grateful as well for the technical help of Dr, Carter V,

Findley of The Ohio State University; for the courtesies extended by the present Chamber of Commerce of Istanbul; and to the traders and shippers in many lands who from very early years have sparked my interest in international exchange. Finally, I thank my husband for his unfailing good humor and my children for their patience and encouragement.

i i VITA

November 7» 1921 , . , B o m - Vengurla, Maharashtra, India

19 ^2 ...... B.A. in Bd., University of Arizona, Tucson, Arizona

19*9 -1 9 5 3 ...... Residence, Calcutta, India

1 9 5 3 -1 9 5 7 ...... Spice Trade, N.V, Internationale Crediet-en Handels-Vereeniging “Rotterdam", New York, New York

1 9 6 6 -1 9 6 7 ...... Secondary school teacher, social studies , Gallon, Ohio

1969 ...... M.A.T,, The College of Wooster, Wooster, Chio

I9 7I-I973 ...... Teaching Associate, Center for Interna­ tional Studies and Department of History, The Ohio State University, Columbus, Ohio

FIELDS OF STUDY

Major Field: Kiddle Eastern History History of the Modern Middle East, Dr. Sydney N.Fisher History of China, Dr. Chang Hao

History of Japan, Dr. James R. Bartholomew History of Russia and the Soviet Union, Dr. Michael W. Curran

i i i TABLE OF CONTENTS

Page ACKNOWLEDGMENTS...... 11

VITA ...... Ill

INTRODUCTION ...... 1

Chapter

I. ECONOMIC ANTECEDENTS ...... ,

II. INSTITUTIONAL ANTECEDENTS ...... ,

III. LEGISLATIVE ANTECEDENTS ...... , IV. THE FORMATION OF THE CHAMBER ...... V. THE CHAMBER'S JOURNAL ......

VI. ADMINISTRATIVE FUNCTIONS ...... VII. RECOMMENDATIONS ...... VIII. RELATIONS WITH THE TRADESMEN ......

IX. THE CHAMBER AND THE BAKERS ...... X. BUREAUCRATIC CONFLICTS ......

XI. CONCLUSION ...... APPENDIX

1 210

II...... 212 III...... 220

IV...... 222

BIBLIOGRAPHY ...... 224

Iv INTRODUCTION

On January JO, 1879/ 6 Safer 1296, His August Imperial Majesty the Sultan Ahdulhamid II decreed by irade the organic law for a Chamber of Commerce in Istanbul,^ This Chamber was to be composed of twenty-four members of good repute chosen from among the qualified 2 merchants of the capital for a term of three years. Their election by majority vote on secret ballot would take place in an electoral assembly of twenty members, of which half would be nominated by the Ministry of Commerce and Agriculture and the remainder by the quali­ fied merchants themselves. The Minister of Commerce was to preside over this assembly,^

Upon formation of the Chamber, the members would elect a

^Le Journal de la Chambre de Commerce de Constantinople (Istanbul Ticaret Odasi Mecmuasi), January 5 p 1885» P» 2, Hereafter JCCC, Cf, George Young, Corps de droit ottoman; recueil des codes, lois, règlements, ordonnances et actes les plus importants du droit Interleur, et d 'etudes sur le droit coutumier de l'Empire ottoman (7 vols,} Oxford; Clarendon Press, 1 905-I9 0 6), IV, 3* which gives the date as 6 Safer 1297, or January 19, 1880, Young's sources are the Dustur-l Hamidlye, IV, 673» S'Oci the Kodikes Ottomanikol, p, 3288, a Greek translation of the Dustur, However, Young also states that a translation of this irade was communicated to the foreign missions by memorandum of April 3» 1879. This would substantiate the earlier date given by the Journal of the Chamber, 2 Young, Corps de droit, IV, 3”^» arts, 1, 2, and 7, See below, Appendix I, for English translation of Young's organic regula­ tion,

^Ibid, p. 4, arts, 3 and 4, 2 president and vice-president from their group and proceed to draw up

internal regulations for their corporate body. Both the names of offi­

cers and the bylaws were to be submitted to the Ministry of Commerce

for approval. Either on its own initiative or upon demand, the Chamber was

to propose in writing to the Ministry of Commerce and Agriculture appropriate measures leading to the progress and development of skills and industry; modifications and reforms to be introduced to commercial

laws and customs duties; public works projects such as port construc­

tion, river navigation, extension of postal, telegraph, and railway

lines; the opening and repair of bridges and roads; the establishment

of trade exchanges; the publication of commercial journals; in sum,

measures leading to all that might contribute toward the progress of

trade,^ Furthermore, the Chamber was to maintain a systematic record

of merchandise, currency, and public titles of all kinds, as well as of any other articles relative to commercial operations. Upon demand by the Ministry of Commerce, the Chamber would deliver to it a statement of this register invested with its special seal,^ By Western definition, a chamber of commerce is a voluntary n board or council for some commercial purpose, A council established by Imperial decree with prescribed q.uadifications and duties would

^Ibid, pp, 4-5, arts, 6 and 10,

^Ibid, p, 4, art, 9, *Ibid. p, 5, art, 11,

"^Webster"^Webster*s *s New InteniatInternational Dictionary of the English Language, 2nd ed,; 1956, p, 446, 3 appear to be contradictory to the spontaneous institution of the West.

In the world of Haatidian absolutism, however, a decreed chamber of commerce not only followed the procedural standards of time and place;

it was also the logical development of an Ottoman institution which

contained its.own social and ideological justifications, The Chamber

of Commerce of Istanbul, therefore, might be expected to differ in form

and function from commercial chambers established in Europe. Moreover,

it mi^t also be distinguished from those chambers established in the

Ottoman Empire by European merchants bankers in the late nineteenth century.

In 1870 an Austro-Hungarian Chamber of Commerce formed an

autonomous section of its consular community in Istanbul. Reorganised

in I8 9 7-I8 9 8, it was governed by a council of twelve members and a

president. Annual and trimestral reports were published in the g Handels Museum of Vienna.

The French Chamber of Commerce, founded in 1884 and subsi­ dized by the government of France, contained at least a thousand mem­

bers by 1 9 0 6, among vdiom over half represented banking agencies.^ Its

monthly bulletin, the Revue Commerciale du Levant, began publication in 1886 under the direction of its president, Ernest Giraud, a resident of

the Levant for over thirty-five years. Circulation attained 1,700 by

1 9 0 6.^^ This Chamber was described as a "Permanent Union of delegates

O Young, Corps de droit, IV, 2. ^Ibid, pp. 2-3. ^^Paul Fesch, Constantinople aux derniers jours d*Abdul-Hamid (ParisI Marcel Riviere, 1907)» p. 6 3. 4

of foreign trade" for the purpose, according to article 1 of its by­

laws, "of defending the interests of foreign trade at Constantinople and also in the other provinces of Turkeyj to that end, to study all the questions relative thereto and, in support of its deliberations,

to submit to the foreign Missions its expressed wishes," An Italian Chamber of Commerce was established in 1885 auid

later reorganized as a council of twelve under a president. By 1906 12 it counted 240 members. The Chamber's organ, Ia Rassegna Italiana,

founded in 1888, was the only journal in Italian published in Istanbul

at that time,^^ The British Chamber, founded in 1887, was supported by assess­

ments upon its 125 members, of )Aom fifty resided in Istanbul in I9 0 6,

Annual dues of fifteen shillings per member were supplemented by a

duty of one shilling per British ship calling at the port of the capi- 14 tal. Not until 1908 did the British Embassy take official notice of this Chamber, at which time a representative was sent to attend its meetings,For some time, the Chamber was under the presidency of Sir William Whittall, of a prominent family with long-term and widely

l^Ibld, p, 488,

12Young, Corps de droit, IV, 3» The exact number of twelve recalls the ancient Genoese and Venetian councils of merchants resid­ ing in Galata and Pera, 13 Fesch, Constantinople, p, 68. In I906 appeared ^ Turchia, an Italian cation of the daily Turquie. Ibid, p, 62, 14 Young, Corps de droit, IV, 3.

^^Sidney Whitman, Turkish Memories (London and New York: Chas, Scribner's Sons, 1914), pp. 190-93* spread interests in the Levant

Established in I8 9I» the Hellenic Chamber of Commerce received a subsidy of 1,^00 francs Arom the Greek government in

1 8 9 6,^^ Its weekly bulletin, the Deltion Aghoron, had a circulation 18 of 700 in 1 9 0 7, a small figure considering the estimated Greek population of 300,000 in Istanbul, However, most of the latter were classified as Ottoman subjects, ineligible for the chamber for Greek nationals. No organized German Chamber of Commerce seems to have existed.

The weekly Konstantlnopler Handelsblatt. published by Baron Hugo von

Koeller in I8 9 6, was dispatched chiefly to Germany as a review of com­ mercial, Industrial, and financial activities in the capital of the 19 Ottoman Empire, Finally, whether as a result of the dollar diplomacy of Taft and Knox or as witness to the growing trade in rugs, tobacco, and licorice root, an American Chamber of Commerce was established in I9II "to aid American exporters and importers in every possible way," The membership of sixty-two increased to 429 in less than two years, with

Fesch, Constantinople, p, 516, Fesch relates that in 19051 Whittall*s firm installed a machine to break and crush old bones for export in the state of powder, "perhaps the sole example of intelligent struggle against German imports with regard to an article untapped in Constantinople,"

^^Young, Corps de droit, IV, 3* 1-8 Fesch, Constantinople, p, 66, Quoting Allgemeine Zeitung, however, the Journal of the Ottoman Chamber mentions two German cham­ bers abroad, one in Brussels, the other in Istanbul, JCCC, May 30« 1896, p, 2 5 3. '°Fesch, Constantinople, p, 68, branches in Salonika, Izmir, and Beirut, In August, 1911, appeared its house organ, the quarterly Levant Trade Review,20

The object of these commercial associations was the ameliora­ tion of trade and finance in the interests of their members. Journals reporting trade conditions and reliable statistics served the needs of the various foreign business communities. Although these periodicals were circumscribed by the press censorship laws of 1365 and 1875, 21 the other prerogatives and immunities of foreigners under the ancient principle of the personality of law, embodied and preserved in the

Capitulations, 22 produced a freedom of trade and jurisdiction not en­ joyed by Ottoman subjects. Such was the Islamic conception of hospi­ tality to foreigners that for centuries they had been guaranteed "civil liberty according to the law, and commercial liberty following the laws of nature and of reason," 23^

With the expansion of nineteenth century economic imperial­ ism, Europeans expected neither resistance nor reform by the Ottoman

20 Leland James Gordon, American Relations with Turkey, I83O- I93O: an Economic Interpretation (Philadelphia; University of Penn­ sylvania Press, 1932)» pp. 5 8, 1 5 6; John A, DeKovo, American Interests and Policies in the Kiddle East, 1900-1939 (Minneapoliss University of Minnesota Press, 1963), p, 41,

^^Young, Corps de droit, II, 321, 327# 22Capitulations; extraterritorial economic and legal priv­ ileges granted by means of capitula added to existing treaties between foreign powers and the Ottoman Empire. ^^An enlightened eighteenth century view offered by the Moniteur Ottoman, October, 1832, as quoted by Edouard Engelhardt, La Turquie et le Tanzimat, ou histoire des réformes dans l'Empire ottoman depuis 1826 jusqu'à nos jours, II (Paris; Librairie Cotillon, F, Pichon, 1884), 309, 7 Empire, now enfeebled by debt, corruption, and economic decline. The

Sultan was credited with little initiative or will for concrete efforts toward correcting these disabilities. Western diplomats and business­ men assumed that Turks were interested only in the occupation of gov­ erning their Empire and were incapable of handling those matters of financial and industrial nature imperative for reversing economic decay. One observer wrote that since foreign banks and mercantile firms were not obliged to observe legal formalities, any developmental action taken by the state toward self-strengthening would only enable these firms to establish themselves more firmly within the Empire and 24 profit at Turkish expense. Nevertheless, plans for the regeneration of the Empire had been drawn. While braking political reform, Abdulhamid was greatly interested in economic and institutional recovery and conscientiously studied a reform program which has recently been discovered in his palace archives,If the attempts which he ventured did not attain his fullest expectations, it was not for lawk of seed or cultivation or for productive soil, A major factor in their frustration was that the efforts were piecemeal, certain traditional elements being un­ touched or even reinforced by those which had been given the form of modernity.

Sir Charles (“Odysseus”) Eliot, Turkey in Europe (London; Edward Arnold, 1908), p. 142, 2< ^Stanford J, Shaw, "A Promise of Reform; Two Complimentary Documents," International Journal of Middle Eaist Studies, IV (July, 1973), 359-65. 8

Few monographs have appeared concerning indigenous institu­ tions in Turkey during the late nineteenth century. The Ottoman Cham­ ber of Commerce has been given no detailed study, nor have the artisans' guilds received the attention which they deserve for this later period. In order to expand the appreciation of an era during idiich economic imperialism from the West hindered the developmental efforts of an Eastern civilization, already impeded by Inherent obsta­ cles, the activities of Ottoman merchants should be granted a closer Inspection than has been accorded them to date. What was their role in promoting economic wealth for the state and their reaction to mod­ ernizing efforts from above? How did they cope with the flood of

Western products and capital which swept into their home markets? Who were these men, and of idiat significance, if any, was their position in Ottoman society?

An investigation will be made into the basic background and origins of the irade of 1879• Subsequently, the functions and activi­ ties of the Ottoman Chamber of Commerce will be described for the years

1885 to 1899 as they have been disclosed in the pages of the Journal de la Chambre de Commerce de Constantinople (Istanbul Ticaret Odasi

Mecmuasi). CHAPTER I

ECONOMIC ANTECEDENTS

Internal economic development of the Ottoman Empire appears

to have held little primacy in the thought of its rulers before the nineteenth century. Of foremost consideration had been the provi­ sioning of the capital, the center for the consumption, transforma­ tion, and distribution of the Empire’s products. To assure this ob­ jective, Mehmed the Conqueror assimilated those policies of the

former Byzantine government which had aided in the control of the

economic life of Constantinople,^ policies which were to remain operative for over four hundred years*

Protectionism for the benefit of the capital initially stimulated the development of trade and crafts. The encouragement of immigration to Istanbul not only imported new ideas and techniques, but also created an enormous market requiring both comestibles for the townsmen and raw materials for the artisans. Interdiction of the ex­ port of certain products, alluded to in the first commercial treaties

Robert Kantran, Istanbul dans la seconde moitié du XVII® siècle; Essai d ’histoire institutionnelle, économique et sociale, Bibliothèque Archéologique et historique de l’Institut frangais d'archéologie d ’Istanbul, No, XII (Paris; Librairie Adrien Maison- neuve, 1 962), pp, 182, 220-21, 3 5 1. Such policies included those of the obligatory direction to the capital of provincial production, es­ pecially vdieat; fixed prices of sale; and the control of all corporate organizations from production to retail. 10 2 with European states, conserved the capital's provisioning and defense resources.

After 1^75, the closing of the Black Sea to foreign vessels concentrated trade in the hands of Ottoman subjects, fdiether Turk,

Greek, Jew, Slav, or Armenian. Merchants idio supplied goods to the

capital through Interregional trade often amassed large fortunes.

Partnerships between those who traveled and the resident brought capi­

tal and enterprise together for the making of a profit not restricted by religious Injunction. Taking Interest In the form of dividends was legal, however subject to popular hostility.^ Although various mer­ chants* guilds existed, with the implication that the conduct of mem- Z). bers would be regulated, the lack of the application of hisba against fraud and speculation by the great merchants provided further oppor-

2 J. C. Hurewitz, Diplomacy in the Near and Middle East; A Documentary Record; 1535~191^. (2 vols,j Princeton; D. fan Nostrand Company, Inc., 1956), I, 2, for art, 2 of treaty with France, 1535. Grégoire Aristarchl Bey, Legislation ottomane, ou recueil des lois, règlements, ordonnances, traités, capitulations et autres documents officiels de l'Empire ottoman. (7 vols.; Constantinople; Demetrius Nicolaides, 1873-1888), IV, 92, for art. 23 of treaty with England, 1603. In no seventeenth century foreign document or cargo manifest Is the listing found of grains, minerals extracted in the Empire, or timber suitable for ship construction. Mantran, Istanbul, p, 6l6. 3 Halil Inalcik, "Capital Formation in the Ottoman Empire," The Journal of Economic History, XXIX (March, 1969), 98-101, 103. ^Ibid, p. 106. Hisba; the Islamic obligation to enjoin the good and reject the reprehensible. It was originally applied by the muhtesib, who as censor of public morals appeared >dien least expected at convivial gatherings, breaking musical instruments and bottles of wine. Later, he functioned as inspector of the market, to repress frauds, supervise price control, auid^assure good order by the guilds. See Louis Milliot, Introduction a 1*Etude du Droit musulman (Paris; Recueil Sirey, 1953), PP. 716-18, 11 tunlty for the accumulation of capital. With wealth In hand, these merchants were a useful source of public finance, vdiether for state loans or as guarantors for tax farmers. Indeed, Sinan Fa^a at that time had advised the Sultan to "look with favor on the merchants of the land; always care for them; let no one harass them; let no one order them about; for through their trading the land becomes prosperous, and by their wares cheapness abounds in the world. . . , The halt to Ottoman expansion brought a quiescent stagnation to the capital in the seventeenth century. Whether through demographic decline caused by wars or a decrease in the number of immigrant or con­ quered artisans,^ or lAether the strictly controlled guild structure 7 in Istanbul prevented innovation, lack of technical advance in the capital's industry began the deterioration of a formerly thriving econ­ omy. This was accelerated by the lack of state protection against an expanding European mercantilism through such agents as the Levant

^Sinan Paga, Ma'ârifnime, ed, by I, H, Ertaylan (Istanbul, 19 61), p. 2 7 1, quoted by Insdcik, ''Capital Formation," p. 102, ^Traian Stoianovich, "The Conquering Balkan Orthodox Mer­ chant," The Journal of Economic History, XX (June, I96O), 245-55i Mantreui, Istanbul, pp, 420-23. ^Mantran, Istanbul, pp, 378-79, 387-88, Obstacles to progress included the inability of the fixed structure of the guild to expand and the monopolistic spirit of vested interests. For the view that the fntuwwa ideology of world renunciation repressed acquisitive instincts, see Alfred Bonne, State and Economics in the Middle East; A Society in Transition (London: Kegan Paul, Trench, Trubner and Co., Ltd,, 1948), pp. 2 3 6-3 7. Both Claude Cahen and Gabriel Baer, however, distinguish between the professional and the religious associations, demonstrating that the institutionalizing of popular movements by the state decreased their ideological content and raison d'etre. Inalcik suggests that in an urban setting, a profit motive and competitive spirit would threaten the social order, and that the non-competitive guild system was in­ tended to ensure the harmony of society. "Capital Formation," p, IO5. 12 Company' of England and the Chamber of Commerce of Marseilles as well as by an apparent state disinterest in the encouragement of exports.

While a trade surplus in coinage developed from the export of hides, p woolens, and cotton y a m to the West, the interest of the Ottoman gov­ ernment lay mainly in the revenue from duties on imports zuid the trans- shipaent trade in spices and silks from the East. In order to retain this trade against competing new routes around Africa and across the

Atlantic, Ahmed Xupiulu, Grand Vezir to Mehmed IV, proved receptive to requests for further concessions to the European powers. Although a general three per cent ad valorem import duty was the rule, specific 9 duties on cloth enabled English merchants to compete against other trade in finer weaves subject to ad valorem, an advantage which height­ ened as prices advanced. However, the reforms of Colbert encouraged the Marseilles Chamber of Commerce, then menaced by oceanic competi­ tion,^® to the driving efforts which secured French hegemony in the Levant during the eighteenth century. At the close of this period.

O Stoianovich, "Conquering Merchant," p. 240. Mantran states that the introduction of debased coinage by Western merchants and the heavy tax exactions for military purposes were "les deux causes essen­ tielles de la degradation de la situation économique de 1*Empire otto- man." Istanbul, pp. 240^9 and 261-71. For an entertaining account of the seventeenth century mone­ tary chaos, tragic though it was for the Empire, tAien "the swindlers had the impudence to add ribaldry to injury by adorning their bastard coin with such legends as . . . 'De procul pretium ejus— Don't look at it too closely'," see G. F. Abbott, Under the Turk in Constantinople; a Record of Sir John Finch's Embassy, l674-lé3l, with a foreword by ' Viscount Bryce, O.M. (Londoni Macmillan and Co., Limited, 1920), pp. 233-45. ^Aristarchi, Legislation, IV, 104-05, arts. 62-68.

^®Msuitran, Istanbul, p. 6 3 6; Paul Masson, Histoire du Com­ merce français dans le Levant au XVIIie siecle (Paris: Librairie Hachette & Cie., 191ÏT, pp. 77-78. 13 Istanbul was no longer a great center of industry but of world trade, exchanging raw materials for manufactured and colonial products, Since military and administrative authority in the Empire had been reserved to Muslims, the non-Muslim minorities over centuries attained expertise in the one area of social mobility available to them, commerce and banking. As trade with the East had declined and that of the West increased, non-Muslim Ottoman subjects who had know­ ledge of Western languages and commercial practices acquired opportuni­ ties as agents for European interests. Through their familiarity with

Turkish customs and operations, they became indispensable to European commercial transactions. To safeguard their position, many wealthy

Greeks, Jews, and Armenians sought the protection of capitulatory privileges by purchasing berat-s 12 from European consuls Judicial immunities and exemption from the capitation tax were secured by these persons (beratli-s), who in effect were no longer Ottoman subjects.

They were enabled to pass the franchise to their descendants, vho also became foreign subjects while never leaving Ottoman soil. Most of them lived and worked in Galata and Pera (Beyoglu), from early times the

Stoianovich, "Conquering Merchant," p. 259, i.e. cotton yam, wools, wax, hides, for textiles, hardware, glassware, sugar, eind coffee.

12Berat; a sultan's order for the granting of franchise or office appointment, given to diplomatic missions for use by their in­ terpreters but abused by extension to local merchants through grant or sale. See Bernard Lewis, "Berât" and "Bferatli,” Encyclopaedia of Is­ lam, 2nd ed,, I, 1170-71 (hereafter El2J% The state attempted to end the practice by treaty with Britain in 1809 and again by law in 1863, but the problem of retroactivity remained. An interesting summary of the situation is found in Count Frederic M, J, van den Steen de Jehay, De situation legale des Sujets ottomans non-musulmans (Brus­ sels: Oscar Schepens & Cie,, 1906),pp. 501-13» Ik 13 "Infidel suburbs par excellence" ^ of Istanbul, Even those non-Muslims idio did not obtain berat-s were able to protect their fortunes by their own laws of inheritance, which did not require the Islamic equal divi­ sion of wealth at death. In time of war when Muslim subjects were called to arms, the economic activity of non-Muslims continued uninter­ rupted. Given these conditions, non-Muslim merchants and bankers enjoyed a prosperity against which other Ottoman subjects could not Ih. compete except under special conditions. Following the Napoleonic Wars, European machine products began to replace Ottoman handcraft industries, first in cotton weaving and y a m manufacturing, later in the silk and leather industries.

The Istanbul artisan, limited to production of traditional articles for which there was no great export demand, was plunged into conditions of hardship. Three centuries earlier, the state would have hastened to give him relief, to avoid a threat to the stability of the capital. Now the entire Empire was threatened, not only economically but terri­ torially as well. Against armed encroachment and revolt, defensive strength by military and administrative reforms appeared imperative. For this, increased revenues would be required from both trade imposts and land taxes. The Balta Liman Convention of 1838 raised import duties from

13 "^Mantran, Istanbul, p. 352. lif Such as the rcse-oil and drug trade in Istanbul, dominated by Turks and purely Muslim guilds. A. J. Sussnitzki, "Zur Gllederung wirtschaftslicher Arbeit nach Nationalit&ten in der Turkei," The Econ­ omic History of the Middle East, 1800-1914, trans. and ed, by Charles Issawi, (Chicago: University of Chicago Press, 1966), p. 122, n. 26.

^^dmer Celal Sarg, "Tanzimat ve Sanayimiz," Ibid, pp. 49-52. 15 three to five per cent; but as a concession to British political sup­ port, it abolished all prohibitions of trade as well as existing monop­ olies in industry and agriculture.^^ Imperial lands, leased for a more efficient collection of taxes, became transformed into freehold from which the new owners, not the state, reaped the benefits of an in- creased demand for raw materials by the West.17 Import duties were raised again from five to eight per cent 18 ad valorem by the commercial treaties of I86l and 1862. Revenue from this increase, however, was countervailed by the decrease in export duties from twelve to eight per cent, which were to be reduced further by one per cent each year for eight years. At the end of that time, the interior transit tax, now reduced from three to two per cent, was to consist also of one per cent ad valorem. These decreases, however indifferently executed, proved profitable to foreigners, owing to the lower export price of raw materials, and to the non-Muslim minorities, fast emerging as a native middle-class engaged in the financial and commercial representation of foreign interests 19 or in export enter­ prise for their own account. To maintain its income, the state was

Aristarchl, Legislation, IV, 109-15» The proclamation of free trade was a strike against Mahmud II's rival, Muhammad Âli, vice­ roy of Egypt. See Harold Temperley, England and the Near East; % e Crimea (London, New York, Toronto: Longmans, Green and Co., 1936), PP. 32-33» ^^Bernard Lewis, The Emergence of Modern Turkey (London; Oxford University Press, 19éï), pp. 442-44% Temperley, The Crimea, PP» 38-39» ^®Aristarchi, Legislation, IV, 115, 201. The l86l treaties with Rrance and Britain were the bases for those signed by all other trading nations the following year. ^^Lewis, Emergence, p. 448. 16

forced to retain an eight per cent duty on products shipped from one Ottoman port to another. This tax resulted In higher prices to Ottoman merchants than to traders abroad and was a subject of Increasing dis­

content. Two exterior loans, contracted with England and France for

purposes of the Czrlmean War, had added to the state's financial burdens at a time >dien the depreciation of an Issue of paper money, kalme, was

deranging the International trade of Istanbul, To afford facilities

for stable foreign remittances, an Ottoman Bank was chartered In Eng­

land In 1 8 5 6, To retire the kalme, however, a third loan, that of

1858, Initiated the fatal series of debentures secured by Imperial rev­

enues which was to climax In the suspension of debt service In October,

1 8 7 5# Meanvrtille, to restore fiscal order and improve credit abroad, the Ottoman Bank was transformed with the addition of French capital Into the Imperial Ottoman Bank, chartered in Istanbul by an Irade of 20 I8 6 3, Assuming the functions of a state bank, it opened a current account for the State Treasury (Hazine-1 Amire) and was given the ex­

clusive privilege of Issuing bank-notes while operating as a commercial bank as well. Exempt from all taxes and possessing a long-term conces­

sion, the Imperial Ottoman Bank became the dominant financial Institu­ tion In the Empire, participating in nearly every important economic decision and operation. As the Porte increasingly had recourse to domestic loans and advances from local bankers of Galata in addition to

Young, Corps de droit, V, 25-36; A, DuVelay, Essai sur l'histoire financière de la Turquie depuis le règne du Sultan Mah­ moud II jusqu'à nos joursTParls; Arthur Rousseau, 1903), pp, 189-96, The new principals included the Credit Mobilier and the Comptoir d'Escompte; the bank's top directors were M, H, Foster and Émile Deveaux, 17 those from abroad, 21 further penetration of European capital was facilitated by the establishment in Istanbul of numerous credit agen­ cies, all feeding upon state financial needs in a fever of speculation over mounting rates of interest. On April ?, 1873• the annual report of the Credit General Ottoman extolled the virtues of its industrial investments, lauded the happy state of the Ottoman economy, and an­ nounced a dividend of 26-3/4 per cent. Yet the profits had been realized not from industrial operations but on advances to and loans contracted by the Ottoman government.22 The recovery of wealth and power to withstand the Western threat was the fundamental principle, as it was for other traditional societies in the nineteenth century, which underlay state attempts toward economic development. Ideological conflicts against the use of

Western forms and concepts ensued, but tradition wzis relentlessly forced to retreat idien the question became not îdiether but how to use the methods of the West against itself. In an absolutist state, the initiative to reverse the decline of the Empire had to be taken at the center of power. This pivotal point was Istanbul, interlaced by mer­ cantile activity and foreign interests.

^^See below, p, 28, h, 29.

22 % DuVelay, L'histoire financière, pp, 304-05, CHAPTER II

INSTITUTIONAL ANTECEDENTS

Between 1862 and 1874, various attempts were made by the

Ottoman government to stimulate industry by the use of Western forms.

One of these ventures tried to unite tradesmen in privileged associa­ tions idiich were granted certain tax-exemptions, twelve-year conces­ sions, exemption from duties on.imported tools and materials, and a

"Buy Ottoman" preference by state purchases. The efforts were not suc­ cessful. A Commission for Industrial Reform, having had the short life of six years, stated upon its abolition in 18?4 that one reason for failure was the "lack of understanding of the advantages of col­ lective commercial practices, as opposed to individual endeavor."^ However, the advantages of a joint-stock company formed under the auspices of the Ministry of Commerce and the Lending Council could not have been obvious to tradesmen. It was only too well understood by

Ottoman subjects that any aissociation decreed or Inspired by the state would involve an unwelcome measure of official interference.

Halil Inalcik goes to the heart of the problem in observing that the state always sought to solve new problems within the old guild

^Osman Nuri, Kecelle-i Uraur-i Belediye (Istanbul, 1922), I, 718-52 nasslm, as cited by Sarç, "Tanzimat ve Sanayimiz," p. 53•

18 19 2 framework, A privileged association of tradesmen would simply re­

arrange the old guild pattern of occupational organization. It would

embody the same impediments to innovation as in preceding centuries by

being subjected to the same strict regulation by the state for pur­

poses of social and economic control. Within the traditional guild framework, all residents of the

capital had belonged to corporate occupational groups (esneuC, pi, of sinif, category), with the exception of the military, bureaucracy, palace officials, and foreigners,^ The system was maintained and con­ trolled by -Uie state for its own purpose, basically that of the or- derly administration of the capital's heterogeneous population, Thip control was exercised throu^ the guild head, the kethuda, later kahya, generally a master lAio, with guild consent, bought his position

txon. -Uie state-^ and thus became a state agent at the lowest rank. He represented the state authorities, the district judge (kadi) and the market superintendent (muhtesib or ihtlsab agasi)to guild members.

^Inalcik, "Capital Formation," p, 135. ^Mantran, Istanbul, p, 357: H, A, R, Gibb and Harold Bowen, Islamic Society and the West: a Study of the Impact of Western Civili­ zation on Moslem Culture in the Near East, Vol. Ij Islamic Society in the Eighteenth Century (London and New York: Oxford University Press, 1 9 5 0 )1 p. 277: Gabriel Baer, "The Administrative, Economic, and Social Functions of Turkish Guilds," International Journal of Middle East Studies, I (January, 1970), 31.

^Baer, "Administrative Functions," p, 49

^Ibid, p, 35: Mantran, Istanbul, pp, 373-75. ^The office of the muhtesib was in flux after 185^ tdien municipal government struggled to adapt to the French Prefecture de la Ville, A pehr-emini, prefect or city commissioner, assumed ihtlsab functions, assisted by an appointed council and also, after 10?8, by appointed directors of the ten newly formed municipal districts, Levis, Emergence, pp, 388-02, 20

•ad in turn m s spokesman for the guild vis-k-vis the state. Together with the yl^t ba^i, the guild's foremost master and actual chief, he m s responsible for the moral character and good conduct of guild mem­ bers.^ Since a sultan understandably would be reluctant to relinquish this orderly system, particularly in his capital, the guild structure was retained in Istanbul long after it began to adapt to new realities g in Izmir. Salonika, or Alexandria.

The organization of merchants idio participated in inter­ regional or international trade was of looser structure. Certain individuals, such as large landowners or Imperial officials investing ' 9 in large-scale commerce, were not obliged to belong to a guild.^ Those idio engaged in the Black Sea and Mediterranean trade, idiether as merchants, captains, sailors, or shipbuilders, had by the seventeenth century acquired a bazirganA bagi as warden of their guild. ' ' 1 Q As noted 11 above. little evidence is found with regard to moral injunctions for good conduct of the merchants. Since most maritime occupations were

^Baer, "Administrative Functions," p. 34; Mantran, Istanbul. p. 376. Q Mantran. Istanbul, pp. 378-79. For legislation lAlch con­ tinued to regulate the guilds in the latter half of the nineteenth cen­ tury in Istanbul, see Aristarchi, Legislation, III, 171-76 (Money Changers, 1861); III, 428-34 (Tobacco retailers, 1862); II, 338-43 (New law on gedlk-s, I86l); V. 289-91 (Boatmen, 1874); Young. Corps de droit. IV, 31-35 (Money changers, 1861); V, 288-91 (Regulation of Guilds, ca. 1862, and Bureau of Guilds, 1892). ^Mantran, Istanbul, p, 371. ^^Evliya Efendi, Narrative of Travels in Europe. Asia, and Africa in the Seventeenth Century, trans, by the Ritter Joseph von Ham- mer (2 vols, in 1; London» Oriental Translation Fund of Great Britain and Ireland, 1834-50). I. Part 2. 138-40.

^^Page 10. 21

held by Greeks, It Is possible that the moral regulation of these

infidels was left to their own religious community (millet). An offi­

cial who apparently supervised all merchants was the gahbender or |eh- bender. As described by Evllyâ Çelebl, he was a person of wealth and hlg^ status, taking cognizance of all letters of exchange and bills, having great authority as "provost” of merchants, 12 Mantran surmises that the sahbender was the equivalent of a muhteslb for great merchants,

both officials holding rank just below the kadi of Istanbul, He would, therefore, be an official strictly of and for the state rather than a guild chief. The development of the sahbender*s role appears iZj, to be one of "slow growth over centuries on native soil,"

12 Evllya, Narrative of Travels, I, l40,

^^Mantran, Istanbul, p, 147, The capital was divided into four mevllvlyet-s, juridical divisionst Istanbul proper (Stambul), Byyub, Galata, and Uskudar, Each had Its own kadi, but the guilds were regulated directly under the Istanbul kadi (p, 129), See also Glbb and Bowen, Islamic Society, I, 287, 14 David B, Welsberg, Guild Structure and Political Alle­ giance In E^ly Achaemenld Mesopotamia (New Haven: Yale University Press, 1 9 6 7), p. 1 0 5, a phrase referring to the development of guilds In the Near East but equally applicable to related officials. In ancient times. Near East merchants In Interregional activ­ ity were supervised abroad by an overseer representing the palace, since as foreigners they were accorded royal protection. In the Old Babylonian period occupational groups connected with palace or temple were supervised by an overseer, the Ü £ H 1 â (Sumerian) or aklu (Ak­ kadian.) Overland traders, whose overseer was also aklu, were allowed to settle with other foreigners in the harbor (karu) section outside the city, vdiere they enjoyed special administrative, political, and social status. Although foreign trade was necessary to supply scarce materials such as tin and to export palace production, the concept of hospitality was absent, similar to the economic amd social discrimina­ tion by the Greek polls against the alien. Intercity trade was managed from the harbor, outside the city proper. Inter- and Intraclty econom­ ics were thus kept apart, perhaps to maintain the equality of status of city dwellers vtio had yielded their clan relationships for urban loyal­ ties, A, Leo Oppenhelm, Ancient Mesopotamiai Portrait of a Dead Civil­ ization (Chicagoj University of Chicago Press, 1964), pp. 74-114, 22 The Neo-Babylonian overseer of merchants (akil tamkârë, wakil tamkarl; of, Arabic wakil. Ttirkish vekil) has been suggested as having been a mere tax-farmer. Weisberg, Guild Structure, pp. 88-89* With the rise of Arab maritime commercial activity, resident merchants at key ports were required as forwarding agents or consignees for goods to be stored, S, D, Goitein describes the Representative of Merchants ( wakil al-tu.jjix) in the tenth century as a novel venture in Jewish communal organization, then in transition from agricultural to commercial forms. In Cairo, Tyre, and Aden the Representative brought merchants’ complaints before the authorities, stored goods, cared for assets of clients deceased abroad, and handled all commercial func­ tions and "foreign relations," S, D, Goitein, Jews and Arabst Their Contacts through the Ages (New York: Schocken Books, Inc., 1955Ji pp, 118-20, Goitein further sees the wakil al-tujjar as a prototype for the consuls of Italian colonies in the Levant, although he finds no record of official recognition by governor or market superintendent. The wakil was not to be regarded as head of a merchants’ guild but as an agent. In the second half of the eleventh century, the Representa­ tive of Merchants in Aden for the Cairo-India trade (not necessarily limited to Jewish merchants) was the father of Madmûn ben Hasan ben Bundir, who was also head of the Jewish community in Aden, The same Madmûn, a shipowner, succeeded to his father’s office; upon his death in 1 1 5 1, the post fell to his eldest son. In 1220, one Madmûn ben David again became the Representative of Merchants in Aden, Although he WEIS of the ssune family as the previous Representatives, a genera­ tion had been skipped Eind his nsime did not beEir the suffix of ben Bun- dâr, S, D, Goitein, Studies in Islamic History and Institutions (Leiden; E, J, Brill, I9 6 6), pp, 3 3 6, 345-48, One can speculate that at this time the Sanskritic and Per- siEui term for harbor or port, bandar, had come into use in Aden, a port where Indo-Persian influencé was significant. As noted above, foreign merchants were relegated to the harbor outside the town in an­ cient times under an overseer, the aklu. Although Goitein uses the term wakil al-tujjar eis a Representative of Merchants abroad, the name of Madmûn ben Hasan ben Bundir strongly suggests that this man was the son of Hasan aind süLso son of the Bundir, head man of a port community who handled the affsdrs of international merchants. As such, this head would be known as the shayk al-bandar, or geyh ül-bender. Later, the Ottoman state utilized the gahbender or gehbender for its own pur­ pose, that of supervising great merchants who may or may not have been organized in guilds. As with the autonomous popular associations of the medieval period, his voluntary and independent role was then dis­ placed, See Claude Cahen, Pre-Ottoman Turkey; A General Survey of the Material and Spiritual Culture and History, 1071-1330, tians. by J, Jones-Williams (New York; Taplinger Publishing Co,, 1968), p, 3^1, The diplomatic use of the term gehbender as a consul in the nineteenth century is discussed by Carter V, Findley, "The Foundation of the Ottoman^Foreign Ministry: The Beginnings of Bureaucratic Re­ form under Selim III and Mahmud II," International Journal of Middle East Studies, III (Oct., 1972), p, 397, n, 1, 23 In concluding this brief description of the occupational struc­

ture of Istanbul, it should be mentioned that a firm line wais drawn be­

tween the esnaf artisan-retailer, e.g. a tanner trfio sold a finished hide for his own account, and the merchant, e.g. a middleman who dis­ tributed hides wholesale either to a shoemakers' guild in the capital or to buyers abroad. The line appeared to be determined not only by the possession of capital, the acquisition of which was restricted for the esnaf members by state-regulated practices^'^ but permitted to the •large merchants. It was also drawn by social needs since the attain­ ment of inordinate wealth would cause a guildsman to be expelled from the guild and thus lose his social milieu, that base of protection against exactions by agents of the state.The exclusivity of the esneif, which constituted the foundation of their solidarity, was deter­ mined by state decree of privileges to each guild. The end result was an extreme occupational specialization in the lower classes, the nature of which created a barrier to the development of a type of industrial organization which might be able to compete against the West. At the close of the eighteenth century, in an attempt to end the recourse to foreign protection by Ottoman subjects and to permit them to compete with foreign merchants, Selim III had issued his own berat-s of tax-exemption and juridical privileges. These were first

15E.g., monopolies, fixed prices, limited licenses (gedik) to exercise a craft or trade. Gabriel Baer, "Monopolies and Restrictive Practices of Turkish Guilds," Journal of the Economic and Social His­ tory of the Orient. XIII (April, 1970), pp. 146-59 passim.

^^Inalcik, "Capital Formation," p. 105; Mantram, Istanbul, P. 358. 24 sold to a Greek group17 which formed a guild of "European" merchants, the Avrupa Tuccari, and later to Muslim merchants for an analogous A 18 guild, the Hayriye Tuccari. Since Islamic law as applied by the Ser'l courts had little relevance to Western commercial necessities, the beratli tuccar-s were endowed with a chancellory which had juris­ diction over litigation between themselves and other Ottoman subjects. The Beratli Kançilaryasi was composed of three membersi a Muslim pres­ ident with the title of sahbender, having a monthly salary of Fs, 1,000; and two advisers, a Greek and an Armenian. Each was elected by the beratli-s of his own faith.^^ This chancellory may be seen as an adaptation of guild structure to changing times, somewhat similar to the assembly of guild-heads (l&hyalar meclis-i) found in Damascus and Seres. 20 That assembly exercised judicial functions over members of guilds represented therein, averting state interference by circumventing kadi verdicts. In retrospect, the issuance of berat-s by the state might be perceived as an attempt to register Ottoman mer-

17 'Stoianovich, "Conquering Merchant," p. 272, upon request by one Deroetrios Mouroutsls. ^®Lewis, "Beratli," SI^, I, 1171. For some specific rights accorded by these patents, which sold for Ps. 5*000» see A. Heidbom, Manuel de Droit Public et Administratif de l'Empire Ottoman (Vienna: C. W. Stem, 1908), I, 217-18, n. 20, who adds that these merchants were also known as defterli-s, the enregistered.

^^Heidbom, Manuel, I, 217-18; Young, Corps de droit, I, 224. Whether the Armenians joined the Greek guild or formed their own is not recorded, ^Cf. Baer, "Administrative Functions," p. 35» vhere the Hayriye Tuccari appears to have had its own sahbender who had the res­ ponsibility to assure that no berat-s were acquired by fraud. Baer cites Hurl, Macelle. I, 682, 685. ?0 Baer, "Administrative Functions," p. 43. 25 chants on official records, thereby extending state surveillance over

their activities. In 1840, a commercial court (ticaret meclis~i) vas created

in Istanbul under the presidency of the sahbender mentioned above,

meeting once a week at the Ministry of Commerce which had been formed

the previous year. 21 The court ruled on mixed commercial suits be­ tween foreign and Ottoman merchants, guided by Levantine commercial

practice. This tribunal was transformed in 1848 by virtue of an accord concluded between the Porte and the Powers, each of idiom named ten judges. 22 The Ottoman judges were selected from among the beratli.

merchants, whether Muslim or not, idiile the European judges were repre­ sentatives of the foreign merchants residing in Istanbul. After 1850

this new Ticaret Hahkemesi applied the new Code of Commerce, largely

an extract of the French Code, not only to mixed suits but to indigen­

ous merchants in general. Its president was no longer the sahbender.

but the Minister of Commerce himself. 23 Analogous tribunals which were

^eidborn, Manuel, I, 218. In 1837 a council for agricul­ ture, commerce, and public works (meclis-i umur-i nafia) was formed by Mahmud II, becoming a ministry two years later. Ibid, I, 151-52, n. 28. See also Lewis, Emergence, pp. 108, 366-67. ^^Heidbom, Manuel, I, 218; Young, Corps de droit. I, 248-50. Young gives the total number of judges as fourteen, from an English translation of an Arabic version of the regulation (nizamname) found in Beirut in 1853 (I, 249, n, 2). The personnel of provincial institu­ tions, however, was usually less in number than in the capital. 23''Temperley states that the infamous palace favorite, Riza, was the first president of the court. Since Riza felt the post was a demotion, he "showed his discontent by attending irregularly amd going to sleep on the bench." The court sat in a building near the old mad­ house, which excited crude Turkish wit. The Crimea, p. 233# 26 established in principal commercial cities convened under the presi­ dency of provincial governors with a similar selection of judges.

The secularization of commercial justice appears to have had an impact upon the functions of the beratli merchants' organization as recourse to the new commercial courts expanded. An increase in the number of transactions, titles, guaranties, and protests to be drafted, au-Uienticated, or recorded, not to mention the yearly examination of commercial account-books prescribed by the Code of Commerce, led to the replacement in 1858 of the documentary functions of the Beratli 24 Kançilaryasi by a Chancellory of Commerce in general. Within the registers of this Chancellory the names and addresses of all merchants, whether holding patents of privilege or not, were to be recorded as they had recourse to the commercial courts. The Chancellory also numbered and initialled their books upon yearly examination.

As a consequence of the judicial reform promised the West by the Hatt-i Hmayun, the i860 Appendix to the Code of Commerce again re­ organized the commercial courts for mixed litigation in the capital and provinces. The Ticaret Kahkemesi of Istanbul was divided into two sec­ tions for land and maritime cases, each with a president and twelve judges, four permanent and eight temporary, A Court of Appeal (Temyiz

Mahkemesi), sitting under the Minister of Commerce, was given three

24 Young, Corps de droit, I, 225. The text of a later regu­ lation on this Chancellory, given in Aristarchi, Legislation, II, 344-51, specifies that among the many writers to be employed for chan­ cellory duties, two were to be chosen from the guild for drafters of requests (arzuhalci), which illustrates the occupational specializa­ tion referred to above (p, 23). Apparently the Chancellory, located in the Valide Han, continued to be known in popular parlance as the "Beratli", JGCC, January 1, 1898, p, 1, 27 permanent and five temporary judges. Of Interest here were the pro­ visions for selecting the judges. In the capital the president, vice- presidents, and permanent judges, one of idiom was generally non-Muslim, were named by an Imperial ordinance upon a proposal by the Minister of

Commerce. However, the temporary judges were to be elected by an assembly of notable merchants of the land, principally the heads of the oldest firms and the most esteemed for their probity, orderly spirit, and thrift. A list of such notables, to be prepared each year by the directors of the Chancellory of Commerce from all the merchants under the court's jurisdiction, had to be approved by the court's president and by the Minister of Commerce. Although the functions of temporary judges were only honorific, with the duration of one year, their obligations and qualifications were strictly prescribed,

Of further Interest was the clarification In the Appendix of i860 as to idio was to be considered a merchant, and therefore com­ petent to litigate In the new courts, and who was not. Article 1 of the original Code of Commerce had stated that "Merchants are those who engage In acts of commerce and therein have their usual occupation."27

An official note appended to article 14? had stated that a decree would follow, later defining which of those persons belonging to

^The former sahbender's juridical role, assumed by the Minister of Commerce, appeared now to be delegated to the tribunal president, over idiom state authority was maintained through the Minis­ ter of Commerce. ^^Arlstarchl, Legislation, II, 354-56} Young, Corps de droit. I, 227-2 9I arts. 10, 13-21. The advisory capacity of these judges recalls the Ihtlyarlar or lonca. the council of masters of a guild.

^^Young, Corps de droit, VII, 55. 28 28 vaxlous guilds would be classed in the rank of merchants. In the Appendix* an official note added to section 1 of article 2?, which outlined the jurisdiction of the new courts* explained that while banking was to be considered an act of commerce* the transactions of

"those bankers (sarraf-s) appointed antique by the Ottoman Govern­ ment lAio are furnished with an imperial patent named *kuyruklu*

(brevet a queue)* being ruled by special regulation , . . *" would come under the jurisdiction of a special council at the Imperial

T r e a s u r y S i n c e the transactions of sarraf-s consisted chiefly of loans to the Treasury* the inference here might be that the state was not to be drawn into litigation in such matters. Also implied * how­ ever* was that sarraf-s were to be excluded from the higher commercial ranks. The principle of exclusivity was not easily abandoned* despite the assimilation of Western forms and legal concepts* and the question of whether or not an individual had the status of a merchant was to be raised again in the future.

^®Ibld, VII* 72. n. 9. 29 Ibid, I, 230, n. 10. A guild of local bankers and money­ changers (sarraf-s) had long existed at Istanbul, profiting by the state's alienation of anticipated revenues for ready cash toward cur­ rent expenses. Mainly Armenian, these sarraf-s negotiated havale-s at discount and dealt in the exchange of foreign currencies and local specie. Their transaictions at high rates of Interest and the opportun­ ities for arbitrsige due to the continuous debasement of Ottoman curren­ cy created a source of capital to which the state readily turned in order to cope with its exigencies. An ever-increasing floating or in­ terior debt was formed, the extent of which was never fully known. Heidborn states that sarraf-s settled their litigation at the Mint. Manuel, I, 218. The term kuyruklu, used to describe the beratli merchants, came from the rolled copy of the berat which they carried with them as witness to their privileges, written on a long and narrow band of paper (kuyruk). Ibid, n. 20. 29 By 1879» the capital's Tribunal of Commerce (Ticaret Kah­ kemesi ), which had been meeting in four divisions for the most expe­ ditious settlement of litigation, had been converted into three Cham­ bers,^® The first was reserved for mixed cases, not only commercial but those civil suits as well which involved a value of more than

Fs, 1,000; it was composed of a president, two Ottoman judges, and two advisers of the foreign litigamt's nationality. The second Chamber handled commercial questions between Ottoman subjects alone, including bankruptcies, with a president and two permanent Ottomeui judges, the employ of temporary judges having been eliminated. The third, the

Chamber of Maritime Commerce which succeeded an earlier Liman Odasi, dealt with all maritime questions, mixed as well as indigenous, and was composed of a president, two Ottomein judges, and two foreign advisers in mixed cases.

The functions of the Chancellory of Commerce idiich had replaced those of the Beratli Kançilaryasi in 1858 were gradually phased out. First, a system of notaries was created in 18?8 to pre­ pare li^al documents of all kinds, making copies, certifying dates, and communicating protests,^31 Next, the new Chamber of Commerce (Tic­ aret Odasi) was given by law the duties of preparing commercial docu­ ments for the courts, registering merchants, and furnishing certifi­ cates and professional permits as well as examining merchants' yearly 32 accounts,-^ The preparation of a list by the old Chancellory

^®Young, Corps de droit. I, 241-42. ^^Ibid. I, 193-97. ^^Ibid, IV, 8-9, 12-13, 30 of notable merchants from idiom temporary judges were to be chosen for the commercial courts, and the legalization of their election, had been taken over by the courts themselves,Falling Into disuse, the practice was abandoned until 1885, idien with much ado It was resur­ rected by the Chamber of Commerce of Istanbul. The functional differentiation which Is seen to emerge In the development of the commercial courts may be attributed to the

Influence of Western commercial practices and secular law. The structure of the Chamber of Commerce which replaced the two previous chancellories, however, retained the form and spirit of the guild system from early times.

^^Ibld. I, 228, n. 8. CHAPTER III

lEGISUTIVE ANTECEDENTS

As a "harbinger of a complete legal and social revolution"^ since it dealt with matters outside the scope of the Seriat, the Islamic religious law, the Ottoman Commercial Code of 1850 was sub­ mitted by the Grand Vezir, Mustafa Re^id Fai^a, for the approval of Abdulmecid with the following preface ;

His Imperial Majesty the Sultan, our Augusv Sovereign, having at heart to establish the reign of Justice and with it the infinite benefits of civilization, which doubtlessly will Increase the happiness and prosperity of the peoples under his paternal government, has rightly wished to take into His lofty and earnest consideration all the appropriate means for enabling trade to flourish in His states, that source of public wealth and prosperity . . . ,2

Similar sentiments were to be expressed over the next decades relative to the encouragement not only of trade but also of industry and agriculture. Laws which limited the personal factor in government were believed by early Ottoman reformers to be necessary for the security of individual enterprise. To meet commercial needs rt and create the conditions necessary to establish confidence in trade,^ the Code of Commerce was finally adopted after ten years of conserva-

^Lewis, Emergence. pp. 112-13. ^Aristarchi, Legislation. I, 275-76. 3 "^Majid Khadduri and Herbert J. Liebesny, eds.. Law in the Middle East, Vol. I; Origin and Development of Islamic Law (Washing- ton: Middle East Institute, 1955)i p. 289. 31 32 tlve disapproval of this Western addition to Islamic jurisprudence. However, prosperity could not be legislated. The legal protection of private enterprise by I860 had been of benefit chiefly to the non- 4 Muslim subjects of the Sultan. The cumulative exterior and Interior debts of the Treasury led tc a financial crisis enmeshed with political and natural events.

In the provinces poor harvests resulting from drou^t and floods brought a drop In tax receipts from 1873 to 1875« Economic misery caused by adverse weather conditions was Increased In 1874 by an ad­ ditional quarter-tlthe tax on agricultural production. This tax was

Intended to replace the revenues lost by the reduction of certain other duties, such as the export tax. With the threat of famine In the Interior, the state forbade exports of grain from these provinces, the scarcity of which on the Istanbul market raised prices. But provincial relief by the state, both In food supplies and In the ease­ ment of taxes, was Inadequate, creating rebellious discontent. In the

Balkans, revolt was to become an actuality as the vergl, tax on land, was Increased In the effort to meet demands of creditors In the capital.

To avert financial disaster, the Western-educated Saklsll

Ahmed Esad, Grand Vezlr from April to August, 1875» attempted measures

4 §erlf Mardln, The Genesis of Young Ottoman Thought; a Study In the Modernization of Turkish Political Ideas. Princeton Oriental Studies, No. 21 (Princeton: Princeton University Press, 1962), p. 190. ^Roderlc H. Davison, Reform In the Ottoman Empire. 1856- 1876 (Princeton: Princeton University Press, I963), pp. 30I-O3. 33 of economy by cutting salaries of high officials,* Additionally, the

time had come once more to call for improvements in the economic dev­

elopment of the Empire. A decree delineating the duties of a Council of Trade and Agriculture was issed June 13* This document outlined

ambitious reforms in three areas which would have required years of preparation and effort, as well as unlimited funds, to produce a beneficent effect upon the Empire's economy. Unfortunately, the need

was immediate. The decree's agricultural concerns included revision of the

provincial savings and loans banks to assure proper use of deposits;

establishment of agricultural and veterinary schools at Istanbul, model farms, a bureau of crop statistics, and an agricultural press; encouragement of improvements in crops and machinery through pecuniary rewards and honorific distinctions; and a study of the means to combat

the silkworm disease, epizooty, plagues, and swamp fevers. Moreover, an inquiry into the revision of tariffs blocking agricultural, commer­ cial, and industrial progress was requested, the results to be sent to the Minister of Finance. For industry, new schools were recommended for trades and

skills, and in the theory and practice of making cloth and machinery, A proposal to study appropriate means for encouraging industry was

*Ibid, p. 306,

^Aristarchi, Legislation, V, 266-70, This date is not verified. It is given as^l3 Juin 1292 with no correlating Gregorian or Julian date. The hicri year would be that of 1875; however, if the date refers to a mall or financial year, the months of which corres­ pond to those of the West, the year would be 1876, Nevertheless, the decree appears to antedate the decree of April 6, 1876, quoted on p, 37 below, .See n, I6, followed by suggestions for industrial expositions, savings banks and sanitary measures for workers, and privileges for those persons invent­ ing new machines or creating new industries. A proposed consultative corps composed of honorary members to be elected by those idio prac­ ticed an industrial occupation appeared to hint of the traditional social framework. Nevertheless, the final recommendation was "to mod­ ify the system of esnaf corporation in a manner advantageous to trade and industry." Here was a public acknowledgement of one of the prime difficulties of Ottoman industrialization. The solution, that of modifying the social structure from the top, was, however, an integral part of the problem. The duties of the Council relative to trade were to include the establishment of a school of commerce, an official commercial journal, and commodity and financial exchanges the brokers of which were to be regulated. The Council was also to prepare laws regulating banks, credit agencies, and the issuance of securities; extend commer­ cial courts into towns where needed; study commercial laws and the modifications required; assume surveillance of commodity exchanges, license taxes, insurance companies, and savings banks; request commer­ cial reports from consuls abroad; make a comparative study of foreign and Ottoman commercial relations and the means of their development; and adopt a statistical record of imports and exports. Of special interest was the proposal of this decree to form "as in other coun­ tries, chambers of commerce in the principal provincial cities, to be composed of the most notable merchants chosen by the trade and con­ firmed by the Imperial Minister of Commerce." 35 By the end of August, however, the unpopular Mahmud Nedim had replaced Esad Pai§a, who became Minister of Public Works, Under the pressure of protest from agriculturists, he retracted by irade of Octo­ ber 2 the extra quarter-tithe on production and renounced tax arrears g before the year 1872, In a parallel vein of financial retrenchment, on October 6, 1875» the Grand Vezir reduced Ottoman debt payments by one-half for five years, issuing new securities as compensation for the suspended portion of the debt. These securities were guaranteed by revenues already pledged to other loans, including customs, tobacco, salt, and the Egyptian tribute. The action brought vigorous protest from the Imperial Ottoman Bank, since it had not been informed of the g pending action. But Mahmud Nedim routinely charged the bank with the execution of the moratorium and requested creditors to designate con­ signees in Istanbul to receive the revenues affected,Patience was urged upon the creditors during the next five years while the budget was being badanced. Delivered from all financial preoccupation and discharged of the heavy burden imposed annually by the system of suc­ cessive loans, the government, Mahmud explained, "would be able to give all its attention and devote its entire energy to administrative

g Sir Edward Hertslet, The Map of Europe by Treaty; showing the various Political and Territorial Changes which have taken place since the General Peace of 1814, Vol, IV: 1875-1891 (London: Harrison and Sons, I891), 2407, No, ^54, 9 An irade of February 18, 1875,' confirming a reorganization of the Bank to include Austrian capital, had given to the Bank the title of Treasurer-General and the exclusive privilege of negotiating all public loans, DuVelay, L'histoire financière, pp, 195-96, 326-27; Young, Corps de droit, V , 37-^1.

^^DuVelay, L'histoire financière, pp, 329, 3^5. 36 reforas and to the development of the Empire's agriculture, commerce, and Industry, To placate rebellious Balkan subjects, a firman of Decem­ ber 12, 1875, promised reforms In taxes, land titles, religious equal­ ity, and justice. Commercial tribunals were to be transferred from the jurisdiction of the Ministry of Commerce to that of the Ministry of Justice, a move which would "permit the Ministry of Commerce to devote itself to the development of all that concerns trade, industry, and agriculture," 12 This Ministry was ordered to consult with capable and competent men on the means to Increase the economic development and wealth of the Empire and to submit their decisions for Imperial sanction. When -Uie Andrassy Note of December 30 suggested that the firman was only a statement of general principles and not likely to be applied locally, that religious equality was denied idien witness of Balkan Christians was not admitted In court as It was In Istanbul, and that the reaya-s felt they were overburdened financially for the 13 benefit not of their provinces but of the capital, Mahmud Nedim issued instructions on February 21, 1876, that the reforms should be

l^Ibld. p, 331. ^Aristarchi, Legislation, V, 26-33; Hertslet, Map of Europe, IV, 2409-17, No, 455. This Important juridical transfer is credited to Ahmed Cevdet, Minister of Justice from November, 1875, to March, 1876, H, Bowen, "Ahmad Djewdet Pa^a," EI^, I, 284-86,

^^Hertslet, Map of Europe. IV, 2418-29» No, 456. Britain's helpful comment on this Note was that it should te borne in mind that certain taxes were pledged as security for foreign loans; a with­ drawal of revenue from the Treasury would have a serious effect. Ibid, 2437, No, 457, 37 carried out at the provincial level hy the governors. Supervision

of reforms vas thus decentralized, at least in principle, the vali

being held responsible for the development of agriculture and public

vorks in his vilayet. Although the reduced payment on the Empire's debt had been

net in January, 18?6, by the first of April, payment was in total de­ fault. In his last attempt to increase internal wealth, on April 6 Mahmud Nedim issued the following vèzirial decree* Conforming to the arrangements of the organic law of the Council of Trade and Agriculture established by Imperial Irade, chambers of commerce and agriculture will be formed at Istanbul and In the provinces of the Empire. The chambers of commerce and agriculture established at Istanbul will each be composed of twenty-four honorary members. The chambers of Vilayet-s will have twelve members, those of the Sancak-s eight, and those of the Kaza-s four members. The members forming the chambers of agriculture should be taken from among the agricultural notables and those of the chambers of commerce from among the commercial notables of majority age. Their election will be made by the members and advisers of administrative councils and local courts of appeal (temyiz) by unanimous or majority vote; these chambers should convene, except in unusual cases, once a week; the cham­ bers of commerce and agriculture of the Kaza-s will communicate with those of the Sancak-s. the chambers of the Sancak-s with those of the Vllayet-s, and these last with the Ministry of Commerce. The chambers of agriculture should give, at the beginning of each season. Information to the Ministry of Commerce on cul­ tivation and crops, trees and other products of the land, on the

^^Aristarchl, Legislation. V, 50-59; Young, Corps de droit, I, 88-95; Hertslet, Map of Europe, IV, 2444-55, No. 459 (dated March, 1876.) ^^Although reversed by the decree on April 6, this decen- trailizaticn anticipated that of art. 110 of the short-lived constitu­ tion of December 23, 18?6, which attributed to the provincial general assemblies the duties of public works, agricultural banks, suid the improvement of agriculture, industry, and trade. Aristarchi, Legisla­ tion, V, 2-25. Of. Lewis, Emergence, p. 384.

^^Whether this refers to Esad Papa's irade of June 13 (1875) or some previous decree Is not clear. 38 state of farm animals, the number of sheep, cattle, and other beasts, and prepare a report indicating the appropriate means to develop agriculture, The chambers of commerce will transmit from time to time to the Ministry of Commerce reports on the means of dev­ eloping trade in the Empire. The powers and duties of these chambers will be decided shortly. The president of each of these chambers will be elected from among their respective members by unanimous or majority vote. This decision is sent for the information of all Vilayet-s and Mutasairiflik-s which are directly subordinate to the Sublime Forte. The principal purpose of the creation of these chambers being to augment the resources of the country and increase the wealth of the inhabitants by the development of commerce and agriculture, the zeal and the efforts which will be made to that effect by the members of these chambers is a service to the fatherland and to the nation,1? Government employees should, therefore, facilitate the task of these chambers by their cooperation,l8

The following month the Grand Vezir was demoted upon protest by those who opposed concessions to the Balkan revolutionaries and idio demanded that the government take a firmer stance against the danger of territorial loss than the mere issuance of decrees. The accession of Abd^bhamid H at the end of August weus accompanied by military vic­ tory in the Balkans, The result was war with Russia in April, 1877, and mother loan. Spumed by Europe, this loan was taken up by the

Imperial Ottoman Bank and other local sources at 52 per cent of par.

As the Empire's foreign creditors appeared to be threatened by the Treaty of San Stefano in March, 1878, with its removal of taxable ter­ ritory and large indemnity to Russia, they succeeded in adding to the official proceedings of the Treaty of Berlin a protocol providing for

17For nation, read millet, the religious community of any Ottoman subject, 18 Aristarchi, Legislation, V, 270-71, 39 an International commission at Istanbul to examine bondholder con- plaints and settle financial affairs in a satisfactory mannex. 19

By no means did Abdulhamid wish the tutelage of an interna­ tional financial commission at his capital. To forestall such for­ eign Intervention, by November he had appointed his own commission to propose methods of financial management which would reduce expenses, Increase the collection of revenue, and amortize both exterior and interior debts. This commission of local notables and GzuLata bankers lâio had provided financial support during the Russian war included

A Hayreddin Fa^a, ex-prime minister of Tunisia; Hassan Fehmi and Qhannes

AUahverdi, 20 former delegates from Istanbul to the defunct Chamber of

Deputies; M, H, Poster, director of the Imperial Ottoman Bank; and a

Mr, Mercet, director of the Crédit Lyonnais,

The selection of Hayreddin Tunuslu was probably made because of the political and economic views he had expressed in his treatise, The Surest Path, 22 then circulating in Istanbul, Hayred-

19protocol XVIII of July 11, 1878. Donald C. Blaisdell, European Financial Control in the Ottoman Empire: a Study of the Establishment, Activities, and Significance of the Administration of the Ottoman Public Debt (New York: Columbia University Press, 19297, p. 85. 20 Given as "Hoydavordijade" in Aristarchi, Législation, V, 3^9» and as "Handavendi" in Fesch, Constantinople, p, 3l6. Kassan Fehmî was president of the second session of the Ottoman parliament, December, 1877 - February, 1878, ^^uVelay, L'histoire financière, pp, 380-81, The frank report of this commission was published in the Levant Herald of June 11, 1879. 22 Aqwam al-Kasalik li Ma'rifat Ah wad al-Mamalik, First pub­ lished in 1867, the treatise appeared in a French version in 1868, It was re-issued in Arabic in I876, and translated into Turkish in 1878, 40

din's allegation concerning European Interference with Ottoman

reform^^ and his conservative opinions regarding representative gov- 24 emment had appealed to the Sultan, who not only detested foreign

meddling but also had prorogued the Ottoman parliament nine months

earlier, Hayreddin believed that economic prosperity, the source of

the state's strength, would ensue naturally if the state fulfilled its role of providing security, justice, and freedom to private initia­ tive,^^ Freedom's release of creative energies would result in the wealth essential for the restitution of state power. This view dif- 26 fered ftom that held by other Tanzimat reformers, tdio had stressed the need for security in order that the individual mi^t reap the fruits of his own dally labor. Another significant point in Hayred­ din *s favor was his explicit invitation to the 'ulama to educate them­ selves and to participate in the changes necessary to preserve the

^ , e , , by Europe's refusal to accept implementation of judicial reforms and its turning of Ottoman subjects against the Tan­ zimat, successful reform in the Empire had been thwarted. Leon Carl Brown, The Surest Path: The Political Treatise of a Nineteenth- century Muslim Statesman; a Translation of the Introduction to the Surest Path to Knowledge Concerning the Condition of Countries by Khayr al-Din al-Tunis!. Harvard Middle Eastern Monographs No. XVI (Cambridge: Harvard University Press, 196?), p. 122. 24I.e., that political equality and representation should be withheld from non-Muslim subjects who might not have at heart the highest interests of the state. Ibid. pp. 117-18.

^•^Ibld, pp. 53“56j 78-79. Although the state's role in economic activity should be limited, in order to overcome technolog­ ical stagnancy the arts and sciences should be encouraged through schools, societies, rewards suid honors for inventors, and expositions for products. Ibid, pp. 151-55; 163-65; 168-70, 26 Mardin, Genesis of Ottoman Thought, pp. 180-93 passim. 41

state,Of this Abdiilhamid would have approved, for he dreamed of the restoration of his Empire within the configuration of a world-wide

Caliphate,^® The appointment of Hayreddin, a Circassian mamluk, as Grand

Vezir on December 4, I8 7 8, appeared at first to be a brilliant move.

An outsider to the current clique of capital bureaucrats, he had accom"

plished tax and customs reforms as prime minister of Tunisia in 18?3-

1877. That autonomous portion of the Empire had been subjected to a

foreign debt commission in I869, of idiich Hayreddin had been the pre­

siding officer. Thus, both his experience and his political and econ­

omic program might be useful to the center of the Empire Wiich was

faced with similar problems. In addition, his emphasis on administra­ tive accountability for ending abuses and arbitrary actions accorded 29 with the Islamic concept of stewardship held by Abdulhamid, ' Only when the government was restored to “its sacred role of protector of

the people" would it regain the confidence of its subjects and the

^^Brown, Surest Path, pp, 72, 124-25. "Is it fitting that the physicians of the umma should be ignorant of its ailments?" 28 Albert Hourani, Arabic Thought In the Liberal Age; 1798- 1939 (London, Oxford, and New York: Oxford University Press, 1970), pp, 106-0 7, A current legend regarding Abdulhamid was that "When he was still a boy a fakir lAio could read the stars told him that the star under idilch he was b o m was that of the exalted Caliphate of Is­ lam, which he would some day restore to Its ancient splendour. Hence he has built himself a new palace tdilch he has called Yeldlz Kiosk, or the Hall of the Star , , ," Sir Valentine Chlrol, Fifty Ye^s in a Changing World (New York: Harcourt, Brace and Company, 1928), p. 87. 29I.e., the shepherd and his flock, upholding the principle of separation between the ruling and the ruled. Brown, Surest Path, P. 32. 42 authority necessary to lead the country to prosperity.30

If the date of the founding Irade of the Chamber of Commerce of Istanbul as given by Its Journal Is correct, Hayreddin was no doubt 31 instrumental In Its proclamation,'^ There had been In Tunis a large colony of European merchants, "an Indigestible element In the commun­ ity and a dangerous one because of the political use made of them by European governments,"^ Hayreddin had wished to bring them within the law to avoid European Interposition but failed during his prime ministership to develop a legal system to accommodate this element,

VIthin Istanbul and Its directly dependent provinces, the adoption of Western commercial law and a correlating court system, despite their

Imperfections, had already obliged the needs of both European and non-

Muslim merchants. The Institutional framework for the early beratli-s had successfully assimilated Its functions to these courts, to which.

Indeed, It had held an ancestral relationship. Now the chancellory framework Itself was In need of modification to adapt to the Increas­ ing commercial activity in Istanbul, Moreover, as the foregoing de­ crees witness. If the state were to escape bondage to European capital, It desperately needed the economic knowledge of those most competent to offer It advice.

30Ibid, p, 33# quoting from Hayreddin*s memoirs, "A Mes Enfants," in M, S, Mzali and J, Pignon, "Documents sur Khereddlne," Revue Tunisienne, No, 18 (1934), p, 193. ^^6 Safer 1296 / January 30, 1879; see above, p, 1, n, 1, The possible influence as well of Ahmed Cevdet, Minister of Commerce from December, 1878, to October, 1879» should not be overlooked,

^^Houranl, Arabic Thought, p, 93. 43 A confirmation of the desire of Abdulhamid to obtain the required economic knowledge from competent experts has been revealed in the reform program found in his recently catalogued private note­ book, Among the items of this program the following recommendation was listedI 8, Organization of chambers of trade and agriculture (ticaret ve zlraat odalari), in conformance with European prin­ ciples, composed of leading merchants and agricultural men, as at present, in order to advise the government on measures for the advancement of trade and agriculture In Istanbul and the provinces, and to carry out basic studies needed to secure the trade advantage of the Empire in regard to prices and the like;33 (Italics mine.) Shaw states that this program was written in Abdulhamid*s notebook at least prior to May 3» 1879, Young's information that the foreign embassies were informed of the founding irade on April 3, 1879I ^ correlates with the time period. If, as stated in the program, chambers of trade and agriculture already existed "as at present", the European principles endowed by the irade remained only to be executed.

The Chamber of Commerce was not formally organized, however, tdiile Hayreddin was Sadri A'zam, The report in June, 1879, of Abdul­ hamid *s domestic financial commission explicitly recommended measures tdiich aroused the resentment, if not fear, of powerful Interests,

These measures included the reduction of salaries for high officials and an increase of those for lower functionaries; the removal of

^^Hususi ve muhimm evrak ve saireye mahsus defterdir (Yildiz collection no. I5 0, Kisim 24, Zarf 152), pp, 9-10, trans, in Shaw, "A Promise of Reform," p, 362, ^Young, Corps de droit, IV, 3* See above, p, 1, n, 1, 44 parasitical sinecures and "useless” groups such ais the Council of

StateI the sale of Imperial domain and vakif (piously endowed) lands, which still comprised three-fourths of the Empire; a strict system of accounting to eliminate frauds in the Ministry of War and in the col­ lection of taxes and customs; and the entire reorganization of finan­ cial administration, irtiich should be put under European inspection and control. The report concluded in remarking that the sole manner in idiich it could justify the confidence placed in it by the Porte was to tell the truth insofar as it was known,Since35 these recommenda­ tions created hostility within all state and religious centers of influence, Hayreddin's letter of resignation was accepted on July 28.

By October, Hehmed (KÜ^ük) Said had begun his thirty-odd years of intermittent service as prime minister, grand vezir, or for­ eign minister. As Minister of Justice under Hayreddin, he had carried out the reorganization of the judicial system^ which completed the separation of powers of the judiciary from the executive initiated by

Ahmed Cevdet and the December 12, 1875» firman of Mahmud Nedia, If by giving added protection to non-Muslims in the courts these states­ men had expected the Powers to surrender their capitulatory privileges, they were disappointed. The transfer of the commercial courts from the jurisdiction of the Commerce Ministry to the newly-created Minis­ try of Justice, however, recovered the judicial function from the mer­ chants' guild-like group vdiich had seized an opportunity during the

^^DuVelay, L'histoire financière, pp, 391-95.

^^oung. Corps de droit. I, I6O-8O, organic regulation of 29 Cemaziyul * ewel 1296 /~May 20, 1879, creating a public Ministry of Justice, 45 evolution of the commercial court system to pass judgment upon them­ selves,^^ Hereafter, their possible influence upon the Justice Minis­ ter likely would be less than upon a susceptible Minister of Commerce.

To Said's honor may also be attributed the November 22, 1879» convention^^ which relieved the distress of Galata bankers over their short-term Defense Loan of 1877. Collection of taxes on spirits, silk, fish, documentary stamps, and the monopolies of salt and tobacco by the Administration of the Six Indirect Revenues (Riisum-i Sitte), managed as an Ottoman institution by Ottoman subjects, proved that the

Empire was capable of servicing debt interest without direct foreign intervention. Successful operation over a year's time raised the envy of foreign bondholders, idio protested to the Porte. As a result, by the transfer of the revenues of the Riisum-i Sitte to the Administra­ tion of the Public Debt, the resumption of exterior debt service was effected by the decree of 28 Muharrem 1299/December 20, 1881.^^

The legislative foundations of the Chamber of Commerce of Istanbul are thus seen to have been laid by several Ottoman statesmen.

These men had in view the object of obtaining expert advice regarding the path to prosperity for the state during a period of economic cri­ sis. Although Hayreddin did not trust the non-Muslims politically to act in the highest interest of the state, neither he nor his successors had much choice in requesting economic information from the commercial

^^See above, pp. 24-25,

^DuVelay, L'histoire financière, p. 398; Young, Corps de droit, V, 61-62.

^^Young, Corps de droit, V, 69-95. 46 and financial notables of the capital and provinces. These men, for the most part Armenians, Greeks, and Jews, had become experts by rea­ son of their past general exclusion from the higher ranks of official­ dom as well as by their proficiency in Western languages and proce­ dures, It is probable that among them there were those i.'ho had. con­ tributed to the Defense Loan of 1877 and vdio might therefore resent the cession of the Six Indirect Revenues to an administration which included foreign interests. How these notables responded to the duties ascribed to them by law will be perceived in later chapters. CHAPTER IV

THE FORMATION OF THE CHAMBER

An Ottoman guild, of tradesmen customarily had a council of elders (ihtiyaxlar) chosen from among the masters having prestige and authority. The role of this corps of experts included the division of merchandise among the masters of shops and the taking of sanctions against delinquent artisans.^ The chief officer, the Kahya, with state authorization represented the guild to the state and transmitted 2 the state's instructions to the guild. As has been noted above, an advanced variation of this organization was the assembly of guild chiefs (kahyalar meclisl) which exercised judicial functions of a moral nature over an entire commercial community, choosing from among themselves an executive authority (k^yalar ba^i). With regard to the great merchants, as long as the state was well served by these entre­ preneurs they had not been subject to the close supervision held over the lower orders, the role of the ^ahbender being of a more relaxed nature. However, when the state extended patents of privilege during the early nineteenth century, it also registered the holders of these

^Mantran, Istanbul, p, 377.

^Chapter III, p. 24,

47 48 patentst thus bringing them under Its surveillance. Since the law of the state had been Inadequate for their mercantile needs, an organiza­ tion was developed along traditional lines for judicial purposes em­ ploying Western law.

The adaptation of the traditional organization to Western principles brought considerable benefit to these merchants, for which, however, they paid a price. The synthesis brought with It a degree of control tighter than before, which was In time extended to all subject merchants, privileged or not. Likely this was Intentional, In order that the state might muster to Itself those resources which It so desperately needed, the economic knowledge, and control over the opera­ tions, of Its merchants of whatever nationality. The state's philos­ ophy, that Individual prosperity should contribute to the general wel­ fare of the state through the channels of the central government, may not have been accepted by these merchants. Nevertheless, they appeared to be willing to go along with the scheme, fully cognizant of the advantages they themselves might derive therefrom.

According to article 10 of the organic law of the Chamber of Commerce (Tlcaret Odasl) of Istanbul, upon Its formation the Chamber was to draw up Its own bylaws to be submitted for approval to the Minister of Commerce,^ An Interior regulation Is recorded under date of July 21, 1881, of which a translation was sent to the foreign em- hassles on July 22, 1882, This regulation was prepared by a Society

^Young, Corps de droit, IV, 3-5» "OL" hereafter. Translated In Appendix I. 4 Ibid, IV, 3-12, **IR" hereafter. Translated In Appendix II, 49 of Commerce appointed especially for this purpose in 1880 from among "the most competent minds in the commercial and agricultural spheres"^ and not by the Chamber, ^ich had yet to be formed. The constitution of the Society of Commerce cam only be surmised. It was undoubtedly composed of those large merchants, bankers, and landowners of the capital and its environs from whom the Sultan wished to draw advice.

The stzructural link between the ruling and the ruled which was neces­ sary for the state's purpose was manifested by the first article of the interior regulation: Hie Chaunber of Commerce of Istanbul is the source from which the Imperial Government derives, through the channel of the Ministry of Commerce, all information regarding commerce and merchants, and the special intermediary for any interchange which will take place between the Imperial Government and the latter, conforming to the arrangements of the present law,° This implication of occupational grouping under elders responsible to the state appears to exemplify the observation of Inalcik that the state always sought to solve new problems within the old guild frame- 7 work. With regard to the actual formation of the Chamber, article 3 of the organic law had stated that of the twenty electors who gathered to choose the members, half were to be named by the merchants regis­ tered with the Chamber and half by the state through its Minister of Commerce, This gives rise to a perplexing chicken-and-egg question, but apparently the above Society of Commerce formed the nucleus from

Burhaneddin Çeltik, "Dans sa quatre-vingts cinquième année La Chambre de Commerce d'Istanbul," Istanbul Ticaret Odasl Mecmuasi, Special Issue, 1966, p, 5. ^See Appendix II, p. 212, ^See above, pp, 18-19. 50 which the first merchant electors were chosen. It is evident that the state had the opportunity to pack its half of the electoral assembly with those lAom it considered to be loyal and dependable Ottoman sub­ jects, Regarded among the most faithful were the Catholic Armenians, g who had "almost Invariably been the richest portion of the community" in banking and other financial affairs. They "understood and sym­ pathized with Turkish methods of transacting business," being more in g touch with Turkish ideas and habits than were the subject Greeks.'

Accordingly, the president of the Chamber upon its inception and for fifteen years thereafter was Aristakes Azarian, a banker whose firm,

Azarian Fere et Fils, had connections with the London house of Roths­ child and who was also the brother of the current Patriarch of Catho­ lic Armenians, Etienne Azarian Pierre On January l6, 1882, the Istanbul Chamber of Commerce was officially founded, 250 merchants becoming enrolled under its auspices during the first year,^^

Of the first list of members published, 12 one-third of the

Q Richard Davey, The Sultan and His Subjects (London; Chatto and Hindus, 1907)» p, 384, ^Eliot, Turkey in Europe, pp. 396-97.

lOjCCC, May 22, 1897, p. l6l; January 14, 1899, p. 13. The Patriarch Azarian, »dio in 1888 reconciled the dissident factions of Catholic Armenians in Istanbul, was a shrewd, able man who protected his flock "by insisting on their maintaining as unostentatious an atti­ tude as was possible," Davey, Sultan, p. 385. The self-effacement of the banker Azarian is noticeable throughout the pages of the Chamber’s Journal, See also Eliot, Turkey in Europe, pp, 393-94; van den Steen de Jehay, De ^ situation legale, pp, 252, 263,

^^Çeltik, "Dans sa quatre-vingts cinquième année," p, 5.

^ J C C C , January 5, 1885, p. 2, 51 total, or eight of twenty-four, were Armenian, six or seven were Greek, and two were Jewish. Four bore Turkish names and one an Arab, making a total of five possible Muslims. Although European capital was represented by the Imperial Ottoman Bank, holding membership in its own name, the only individual British member was John R, Thomson.

The secretary-general, Spiraki Alexandridi, was an Ottoman Greek, while the first editor of the Chamber's Journal, Mihran Chirinian, was Armenian. Spiraki Alexandridi was a fortunate choice, for he had begun his career at the age of nineteen at the Chancellory (called

"Beratli") in 1868 and was thus competent to provide continuity in the 13 regulation of commercial registers. The complete list of officers and members of the Chamber in 1885 was as follows: President, Aristakes Azarian; Vice-President, Suleyman Subalzade; Councillors, Georges Casanova and Senekerim Man- oukian; Apik Oundjian, Abraham Benzonana, Mehmed Aghazade, Athanase Telloglou, Manouk Aslanian, Ferid Basmacizade, the Imperial Ottoman

Bank, Chérubin Cherbtdjian, Constantin Petridi, Çerif All, Dimitraki Yenidunia, Dimitraki Paspalli, Dikran Giumusschgherdan, Georges Sevais- topoulo, Jean (Yanco) Anastassiade, John Thomson, Mighirditch Essayan,

Mustafa Hakki, Serovpe Gulbenkian, and Zacharia Hazzopoulo.

In another era these men would be described sis titans of finsmce, moguls of commerce, or even robber barons. They represented the great names in the Istanbul money suid commodity markets, in the agencies for insurance smd shipping, smd in the handling of goods com­ ing from the interior and their re-sale, whether to the government, to

^^See Alexandridi•s obituary, JCCG. January 1, 1898, p. 1. 52 retailers, or abroad. Nevertheless, little is known about these men.

No memoirs or correspondence have come to light as yet and their bio­ graphic details have been obscured by the political events which swept many of them away within a short half century. How their fortunes were made, what their interests were, can be pieced together only by the glimpses which emerge from time to time in their Journal or in brief references, often derogatory, by European visitors of that period. Apik Oundjian was a large supplier to the Marine Ministry, as were Manouk Aslanian and Mighirditch Essayan, the latter a Russian tU, Armenian and a trader in iron. Apik was to pass through the crim­ inal court under indictment for conspiracy of state after provincial Armenian massacres in 1895, but he scraped through at a price and con­ tinued to divide with Hassan Fa^a, Minister of the Navy, the enormous advantages of that ministerial position.Aslanian's son, Kerovpe, was sent to France to learn the trade, obtaining his diploma at the school of commerce in Marseilles.Georges Sevastopoulo may have been a dealer in idieat, for he was named to an early committee which confronted the municipal authorities over the high price of bread

■\L Charles Hecquard, L*Empire ottomani la Turquie sous Abdul- Hamid II; Expose fidèle de la gérance d'un empire pendant un quart de Siècle, Août 1876 - 1er Septembre 1900 (Brussels: Henri Lamertin, 1901), p. 3S3T Essayan was associated with Essayan, Gulbenkian et Cie., which dissolved in April, 1892, JCCG, April 2 3, 1892, pp, 200-01, ^•^Hecquard, L*Empire ottoman, pp. 27^, 363,

^^JCCC. August 1 6 , 1886, p, 3. 53 compared to the low price quoted in the grain market. 17 John Thomson represented Marshall Sons and Company, importers of agricultural ma- 18 chinery. Tobacco may have been an interest of Zacharia Hazzopoulo, vdio was a member of a committee to investigate complaints of tobacco , 19 growers and dealers against the Regie des Tabacs, Senekerim Manouk- ian and Dimitraki Yenidunia were financiers; they were both elected to the board of directors of the Caisse d ’Epargne of Istanbul, Yenidunia was later a director of the Société Générale de l'Empire Ottoman.

DimitraJci (Demetrius) Paspalli was a board member of Crédit Général

Ottoman and, for a time, of the Société des Tramways as also were Jean

Anastassiade and Georges Casanova. 21 The name of Gulbenkian is well known, Serovpe's son, Gullabi, opened an agency in 1892 at 53 Cedar

Street in New York for the import of wools, skins, opium, grains, and rugs, 22 while a nephew, Calouste, held an important five per cent

ITjCCC, February 16, 1885, p, 3. 1R JCCC, July 12, 1886, p. 1. The name of Thomson weis wide­ spread in the Near East, Thomas Thomson, a British consul at Algiers, was a signer of the Algerian Treaty of October 29, 1716. Lewis Herts- let, A Complete Collection of the Treaties and Conventions at present subsisting between Great Britain and Foreign Powers, so far as they re­ late to Commerce and Navigation (2 vols.; London; T. Egerton, 1820), I, 77, Another Thomson, a British attaché in Tehran, accompanied the father of Henry Drummond-Wolff on a trip to Tabriz in 1845, Joseph Wolff, Narrative of a Mission to Bokhara in the Years 1843-1845, to Ascertain the Fate of Colonel Stoddart and Captain Conolly (New York: Harper and Brothers, 1845), pp, 308-18. ^^JCCC, February 7, 1887, p, 33» For the Regie, see below, p. 149, n. 58t and Chapter X.

ZOjCCC, February 7, 1887, p. 33; June 4, 1892, p. 26?.

ZljCCC, April 8, 1893, PP. 158-59; June 30, 1894, p. 304. pp JCCC, February 6, 1892, p. 67. The Journal alternated be­ tween "Serovpe" and "Sevrope" in spelling this name. 54 23 in the early Turkish Petroleum Company, Year after year these same merchants and bankers or their

relatives appeared as members of the Chamber of Commerce, Fourteen

families on the 1885 list were included in the membership of twenty-

four ten years later. Two or three new names might crop up each year,

but rarely did they survive on the perennial rolls. According to

article 7 of the organic law, the term of office was three years, to

be staggered so that one-third, or eight, of the members would be

elected each year. Although originally an out-going member could not

be re-elected until after the interval of one year, the clause was

modified January 13» 1890, to permit immediate re-election. In 1892,

for example, six members from I89I plus Joseph Levi, the Treasurer,

were re-elected, with the addition of two "new" members, John Kyriako 24 Hazzopoulo and Jacques Cherbetgian, "J. K," Hazzopoulo, however, 25 had been first elected to the Chamber in 188?» while Jacques Cher­ betgian was probably related to Chérubin Cherbtdjian of the I885

list. The Journal's spelling of names was haphazard.

In the early years the process of election was observed with strict formality according to articles 3» 4, smd 6 of the organic law.

Around the end of Jéinuary, a notice would appear in the Journal invit­

ing merchants and bankers registered with the Chamber to assist at the

DeNovo, American Interests, pp, 192, 197-200, After the deaths of Sevrope and his brother Sarkis, the Gulbenkian firm split, Badrig, Gullabi, and Haroutiun managed the interests of Gulbenkian Freres et Cie,, and Calouste and Karnig those of Sarkis Gulbenkian Fils. JCCC, March 11, 1893, P. 115: July 21, 1894, pp. 339-40.

Z^JCCC, March 5, 1892, p. II6 . ^^JCCC, March 5, 1887, p, 57. 55 general assembly about a week later at precisely five o'clock k 1æ A A Turque In the Chamber headquarters at Mehmed All Paga Han No. 11,

Galata26 to nominate the electors to elect replacements for the mem­ bers whose terms had expired. The notice was given in place of a let­ ter of invitation, stated the Journal, and only one vote per merchant house or société was to be permitted. A week or two later the names of ten electozrs were published, nearly all of them present members of the Chamber. 27 After a period of anyidiere from one to five weeks, the Minister of Commerce would submit the names of his ten electors, which included a number of financial institutions such as the Imperial. Otto­ man Bank and the Credit General Ottoman. They met with those of the commercial corps at the office of the Ministry of Commerce and Public Works to select the new members by secret ballot.

The annual choice of eight new members appeared to be divided equally between those who had been the electors of the Minister and those of the Chamber, although it is difficult to say who might be the Individual representatives of the ministerially-designated banks. The

Minister usually nominated Georges Sevastopoulo* Sylvain Mille, of Mille père et Fils; Halid Tantavizade; and always, of course, the Impe­ rial Ottoman Bank. In 1887. one ministerial elector was Ahmed Izzet

26 By 1892, the main office had moved to Rue Yoivoda, at No. 17 Lorando Han, in Galata. 27 In 1892, four of the Chamber's electors were outgoing mem­ bers who were subsequently re-elected at that year's electoral assem­ bly: Dimitraki Yenidunia, Mehmed Aboud, Zacharia Hazzopoulo, and the treasurer, Joseph Levi. JCCC, February 13, 1892, p. 80; March 5, 1 8 9 2 , p. 116. 56 28 Efendi, who succeeded in being elected for that year. As for the Chamber, its assembly continually named Azarian, Dimitraki Yenidunia, and Georges Casanova as electors during the period 1885-189^; when their terms as members expired, they were always re-elected, Ferid

Basmacizade never failed to appear on either list of electors, and it was he tdio ultimately succeeded Aristakes Azarian as president in 1898.29 Within two to four weeks after the election, an organiza­ tional meeting of the new Chamber's Bureau was held. Azarian would speak, welcoming the new members with nicely-turned phrases and depre­ cating his part in the Chamber's work over the past year. Yenidunia would thank him for his invaluable cooperation and then launch into a panegyric of the wise and enlightened administration of the Imperial government, vAiose benevolence had permitted the Chamber to acquit its multiple duties imposed by its triple powers. "Ardently wishing the preservation of precious days to the Sultan, under whose auspices trade, agriculture, and industry make unceasing progress," Yenidunia would then receive "enthusiéistic acclamation for his words," and pro­ ceed with the election of officers.Ferid Bey would assist President

pQ JCCC. February 19, 188?, p. 50; March 5, 188?, p. 57. Is it possible that he was the Syrian Arab Wio was second secretary and chamberlain in later years to Abdulhamid, and who was said to have in­ spired Armenian massacres? See Whitman, Turkish Memories, p. JO; Hec­ quard, L'Empire ottoman, pp. 102, 110; Fesch, Constantinople, p. 74.

29JCCC, April 9, 1898, p. 113. Azarian died suddenly aboard a Lloyd-Austrian ship between Alexandria and Brindisi on May 1?, 1897, just before the end of the Turco-Greek War. JCCC, May 22, 1897» p. l6l, ^°JCCC, March 26, 1892, p. 145; May 6, 1893, p. 205, for examples of this standard ritual. 57 Azaorian as vice-president; Georges Casanova and Senekerim Hanoukian were named first and second councillors respectively; and Joseph Levi was re-elected treasurer. The Chamber was thus organized for the year although the date might already be the month of June or even later as the years passed by. The officers remained unchanged, re­ placed only at their decease.

After 1895» the elections ceased to be held at all except on ministerial order. The elective process, if indeed there ever had been one, reverted to the traditional custom of ascribing authority to whoever held the reins of power. Within the Chamber, power belonged to those with the greatest wealth and influence in bureaucratic cir­ cles, To overturn power by a change of officers, a ministerial decree for new elections could be obtained, probably at a good price. The replacement in I9OO of Ferid Basmacizade by Bedros A, Azarian, son of

Aristakes, at an extraordinary assembly ordered by Zihni Pa^a, Minis- ter of Commerce, may have been an example of this type of influence,^31

By the beginning of 1885» seventy-eight Chambers of Commerce had been established in provincial centers of trade throughout the

Empire,In August of that year the creation of a Chamber in Izmir, known as "Gavur Izmir" because of its non-Muslim population, was greeted with warm welcome by the Istanbul Chamber. The great number of Greeks, both nationals and Ottoman subjects, in this city may have caused the delay in finding members Wiose fidelity to the state was

^ JCCC, September I5, 1900, p. 292. The Azarian family was eliminated from the Chamber following the I9O8 Revolution in a lengthy contest between August 29 and October 24, 19O8.

^^JCCC, January 5» 1885, p, 2, 58 unquestioned, or *Ao might wish to be drawn into a corporate group which included merchants of other faiths. Others may have been reluc­ tant to join an association patently under the control of the state.

Of the twelve members required for a provincial Chamber of Commerce,

Izmir's first list disclosed four Armenians, including the president,

Matheos Balyozian; five Turks and Arabs| and three who may have been of Greek origin but whose names had been Islamicized to the extent of containing the titles of Ha d and Holla. S o m e foreign merchants may have registered with this Chamber, for the Journal refers to their resignations owing to discouragement over the lack of support by local authorities in preventing frauds in such commodities as opium, cotton, % and valonia nuts.-^ All merchants, bankers, and manufacturers, tdiether Ottoman or foreign, were invited to be enrolled in the Istanbul Chamber's register. Four classes of membership were offered, depending on the type of economic occupation. Based upon these classes, graded annual dues were assessed, from five Turkish pounds for bankers and merchants to one pound for the lowest class.Chamber35 members, temporary judges of the commercial courts, arbiters named for lawsuits according to the

Ottoman procedure, appraisers and Inspectors of commercial books, had to belong to the first suid second classes.^36 In particular, brokers.

^^JCCC. September 28, 1885» p. 3* ^JCCC. July 19, 1886, p. 2.

^^IR, arts. 28,29. See Appendix II, ^^Young, Corps de droit, IV, 12-13. Additional Article of 8 Muharrem 1299 / December 1, 1881, "AA" hereafter. Translated in Appendix III. 59 those who were intermediary to any purchase or sale transaction, were obliged to be enrolled and to obtain from the Chamber a permit to prac­ tice their professlon.^^ The Journal for a time carried a notice In January Issues, stating the law and Inviting "Messieurs les courtiers'* 38 to regularise their situation as soon as possible at the Chamber."^ Theirs was the fourth and lowest class, idilch later was divided Into three sub-classes, the least of which paid dues of but one-quarter

Turkish pound a year,^^ The Chamber explained that idille brokers In

Europe were considered respectable, "ours are the disinherited of all 40 the professions, who have found a refuge" In that occupation,

Bach registrant was furnished with a numbered certificate bearing his class and type of trade, details of vrtiich were to be in­ cluded on any document addressed by him to the authorities or to the 41 Chamber, Evidently some foreigners, electing not to be enrolled with the Chamber, failed to include this information on documents pre­ sented at court. In a circular of November 4, 1882, the Porte called

^"^Ibid. p. 13. ^e,g,, JCCC, January 2, 1892, p, 9,

^^Art, 13, nizamname (regulation) on brokers of 1 Safer I306 / October 7, 1888, Young, Corps de droit, IV, 14-16, Young gives the Julian date here of September 2^7 This regulation referred to brokers of any merchandise, commodity, real estate, freight, or insurance, as well as stock brokers, idio were also covered by Bourse regulations (art, 1), It was extremely restrictive, prohibiting brokers from en­ gaging in transactions in their own name and for their own account (art, 19), To obtain a permit„ they had to provide the Chamber with a certificate signed by two notable merchants attesting to their good antecedents (art, 2), Books had to be kept which recorded every trans­ action without erasures, and which were to be preserved for ten years (art, 7),

^°JCCC. January 31, 1887, p, 26, ^^IR, art, 3 1 , 6 0 the attention of the embassies to the requirement, begging the ambas­ sadors to be kind enough to recommend to their nationals to conform thereto, A circular of the Ministry of Justice published in the jour­ nals of the city on June 4, 1887, eventually directed the courts to refuse to recognize any request or certificate which did not give this information. The embassies contested, however, that the Chamber had any right to refuse its legalization of documents on the grounds of non-registration, especially as enrollment with the Chamber originally had not been stipulated as being obligatory, 42 Nevei-theless, pressure was exerted in other ways upon the commercial community to enroll with the Chamber, Merchants and brokers who did not have enrollment cer­ tificates, for instance, were not to be admitted to compete at auc- tions conducted by the state,43 The enrollment certificate can be theorized as having the same function as the tezkere of the lower esnaf in the latter nine­ teenth century. This certificate of registration was required of all esnaf members as a proof of guild identity. Upon approval of the pro­ spective member by the kahya or kethuda, the tezkere was obtained from the ^ehr-emini (prefect) of the capital against payment of five to twenty piasters according to the remunerative possibilities and impor­ tance of the trade. The license had to be renewed annually as well as

4? IR, art, 3 1, n, 3 and art, 28, 43 AA, According to Ottoman fiscal procedure, in order to realize the cash value of the tithe when it was collected in kind, the produce was put up for auction (enchere) either at the locality of col­ lection or at the capital. A similar practice in reverse was the in­ vitation by government ministries for tenders to furnish certain sup­ plies, The lowest bid was at times published for the information of sellers who wished to underbid. 61

at any change In residence. That the Chamber naturally considered itself of higher

status than the esnaf is seen by an indignant article in the fourth

issue of its Journal. Certain zealous agents of the Prefecture of the city at times seek out the merchants registered at the Chamber of Commerce for the purpose of their obtaining tezkere-s which are issued to members of guilds (esnaf-s), and they have even succeeded in issuing some with the mention of esnaf of mer­ chants. That state of things giving rise to continual com­ plaints, the Chamber of Commerce, with a view to ending it, has already drawn this question to the attention of tdiomever it may concern; it is submitting a new report to the Sublime Forte by the channel of the Minister of Commerce.^5

Misunderstandings by the municipality concerning the nature

of the Chamber continued, nevertheless. Eight months later the Journal reported that merchants were annoyed by the Prefecture's agents at if6 the door, collecting guild taxes. Here insult was being compounded by injury. On the basis of the first article of the Code of Com- merce, the Journal attempted to differentiate between merchants vrtio

paid no monthly fee to the city and small esnaf retailers who did.

It had to concede that, strictly applied, the law would enable the

small retailer to escape his esnaf taxes since by definition he was

44 Young, Corps de droit, V, 289 and n, 1,

^^JCCC. February l6, 1885, P» 3» 46 » Collected by the kahya, monthly taxes paid to the city by guild members consisted of thirty paras to seven and a half piasters. Young, Corps de droit, V, 289, n. 1. 47 The reference here is to those who engage in "actes de commerce," defined as anyone signing contracts or obligations with trade as an end. See art. 28 of the Appendix to the Code of Commerce. Aristarchi, Legislation, II, 358; Young, Corps de droit. I, 23O-3I. 62

Indeed a merchant; but in order that the city not be deprived of

revenue indispensable to its maintenance, the old system should con­

tinue. To recognize the esnaf retailer as a reputable merchant simply

because he had in his warehouse a few detached portions of bales would

be ?far-fetched** (11 jr a bien loin), That was an anomaly »diich ought

to cease. The Chamber forthwith submitted the matter to the attention 48 of Hakki Pa^a, Minister of Commerce, for his consideration.

From these examples it can be seen that the Chamber, idiile attempting to extend its control over the indigenous commercial and financial interests of the capital, endeavored to maintain a measure of exclusivity against the lower classes of artisans and retailers. A 49 likely reason may have been the guarding of a tax-exempt status, but there were other considerations as well. The Chamber's functions, to be discussed below, brought it within the unofficial ranks of the Com­ merce Ministry's lower bureaucracy. If not actually part of the gov­ ernment, it was on fraternal though deferential terms with high offi­ cials, Far from being shunned for engaging in occupations beneath the dignity of the ruling class, the merchants had attained a position of influence tdiich they believed was commensurate with their wealth, While not always heeded, their opinion was sought on commercial and legal questions, eind vdiile the final decisions were not theirs to make.

na JCCC, October 26, 1885, P. 3. 49 "In Constantinople, the sole tax , , , was the esnaf- tezkeresi, or guild tax , , , Outside the guilds, merchants and other professions exercised in Constantinople, as well as their employees, paid no kind of temettu. Thus, the best of the taxpayers of Turkey, those who were most able to help with budgetary expenses, were exon­ erated of all direct taxes," DuVelay, L*histoire financière, pp, 6 6 2 -6 3 . 63 they were named to official commissions to study and recommend economic Improvements. Such a status was jealously guarded against the possible Intrusion of the petit bourgeoisie. The Chamber, therefore, emerged as a council of notables speaking for Ottoman commercial Interests but having officially pre­ scribed duties idilch would enable the state to obtain both surveil­ lance over commercial activities and assistance toward Its aspirations of economic development. There was no question of the Chamber's acquiring political power or representation; this was Impossible under a religious absolutism and, moreover, was not sought. National move­ ments found no response within Its merchant circles, for their know­ ledge of opportunities to be manipulated within the system and the privileges accorded to them satisfied their purely mercantile Inter­ ests. The merchants were Indeed loyal Ottoman subjects. The Ottoman

Empire had no more faithful adherents. CHAPTER V

THE CHAMBER'S JOURNAL

The Chamber had been In active function for three years before the first issue of its house organ* the Journal de la Chambre de Commerce de Constantinople (Istanbul Ticaret Odasi Mecmuasi), joined the ranks of the capital's press on January 5» 1882, In ful­ fillment of section 8 of article 25 of the bylaws, the original mast­ head of the Journal announced that it was "Founded to provide the Pub­ lic with commercial, financial, maritime, industrial, and other infor­ mation of general interest,” As a fortnightly issue available in either Turkish or French, the four-page paper was initially published every other Monday, with a special four-page section of current market statistics, the Weekly Commercial Bulletin, appearing each Wednesday,

The subscription rate for Istanbul and its environs was two Turkish pounds a year, or five piasters an issue. This rate compared with other periodicals of the time was high,^ although there is little doubt

\lntil 18?6, newspapers sold at one piaster a copy, »diich included a stamp duty; after 1878, financial distress may have raised prices, Ahmed Emin C Yalmari] , The Development of Modem Turkey as Meas­ ured by its Press (New York: Longmans, Green and Co, for Columbia University, 191^), pp, 4?, 59, While the price of all dailies in 190? was ten paras, or one quarter-piaster, the Journal at that time was still asking four piasters for an issue which combined Turkish and French text, three piasters for issues in separate languages, and twenty paras for market prices alone, Fesch, Constantinople, pp, 41, 43. 45,

64 65 that Its select subscribers could well afford the price. The follow­

ing year, the Journal began weekly publication. With the February 12,

1887, issue, the day of publication changed to Saturday in order to

give a more prompt service in reviewing the events of the week. The Journal was first printed on the press of the Levant

Herald, but by July 23, 188?, "in order to give the service expected, and considering the favor given to the Journal by the public," the

question of purchasing its own press was being debated. On August 20,

the installation of a printing and lithographic press at No, 20, Meh- A A mod All Fa^a Han, was announced, the transfer to occur in fifteen d^s «

Not until November 12, however, did the new type appear, larger and cleaner, followed by a rash of experimentation with various point sizes

and letter styles,^ By December 3» the paper had expanded into an is­ sue of twelve pages, a standard maintained until financial difficulties

in mid-1896 forced a reduction to eight pages. An outside cover was provided in color, which later carried advertisements as well as the

names and firms of the current members of the Chauaber of Commerce,

By I892, the masthead had dropped the word "maritime" and now offered " , , , information concerning commerce, industry, agriculture,

finance, public works, and others of general interest." This conformed if to a structural change in the Chamber, which became known as the

2 The Levant Herald and Eastern Express. founded in I856, was a leading daily, printed in French and English,

^JCCC. July 2 3, p. 177; August 20, p, 201; Noverber 12, p, 273; and November 19, 1887, p, 277. ^By decree of February 27, 1888, signed by the Minister of Commerce, Agriculture, and Public Works, (Jeltik, "Dans sa quatre- vingts cinquième année," pp, 5-6. 66

Chamber of Commerce, Agriculture, and Industry at the fashionable address of Rue Voivoda. The printing press meanwhile had moved to

Rue Haci All, Hedori Han. Announcements were accepted at ten piasters a line in either

French or Turkish, or fifteen piasters for both. In 1885, the firm of J, W, Whittall faithfully inserted a notice in each issue for its fire and marine insurance agency, and for the Moss Steamship Company the next year,^ Other advertisers at this time included a Danish brewery, the Chapellerie Parisienne in Galata, Cunard, the Hamburg and Antwerp Line, P. K, Courtgi's Steam Navigation Company (L'Egée), and various insurance agencies. Railroad timetables and shipping itineraries ap­ peared frequently in early years. Gradually these were displaced by notices of stockholders' meetings of the foreign and domestic financial institutions; changes in the constitution of iirms; and financial state­ ments and announcements of the Administration of the Public Debt. In ten years, such announcements, together with market prices and statis­ tics, occupied fully one-half of the Journal's pages and could be ob­ tained separately from its literary and reporting efforts.

Since Spiraki Alexandridi was secretary-general of the Cham­ ber until his death in December, 1897, he was also nominal director of the Journal by virtue of his supervisory powers under article 33 of

^Whittall himself was chosen as a Chamber elector in 188? and became one of the eight new members of the Chamber that year. JCCC, February 12, 1887, p. 38; March 5, 1887, p. 57. With the found­ ing of the British Chamber of Commerce in the same year, his membership was of short duration, for he transferred to the new group in which he held a leading role. In 1895, he was re-elected president of that Chamber. JCCC, February 23, 1895, p. 90, 67 the interior regulation. The actual editor, Mihran Chirinian, was an

accomplished journalist, as were many Armenians of the capital from

tiieir long association with literary publications and linguistic educa­

tion, His lively editorial style in the uninhibited early years of

the Journal equalled the enthusiasm of the Chamber as it embarked with

optimism upon the duties granted to it by the state. The appropriate mesisures, in the Chamber's opinion, to be taken for the economic prog­ ress of the Empire were confidently submitted to official eyes with the assurance that immediate action would result in prosperity for all. Over the months a more dignified style developed, observing the courtly manners lAich prevailed as a rule in respectable nineteenth century mercantile firms the world over. The honor of the house name was punctiliously upheld, as well as that of Chamber colleagues. If

the Journal felt a duty to bring to the attention of its readers some commercial scandal or questionable official conduct, it was done judi­ ciously, often with a presentation of extenuating circumstances. To illustrate, after a series of articles on fraudulent bankruptcies, the

Journal closed with the following paragraph : How many times in the last ten years has bankruptcy been penalized? In no case has justice been done . . , Unhappily we find ourselves obliged to establish that if failures are opened and shut /outside courj^ without the assistance of the judge, it is from the fear in our commercial corps of not finding jus­ tice. We beg our readers not to see the least allusion to the personality of the judges, tdio certainly merit all esteem and consideration and \ùïo have great experience. But, it is a question of principle, it is the system alone which we intend to strike. We draw this to the attention of His Excellency Server Pa§a, the new Minister of Justice,^

^JCCC, October 26, 1885, pp. 1-2. 68 At that time the talons of censorship had not yet been clenched and journals could still speak freely of official conditions which required correction. The Chamber was indeed striking at a re­ strictive law rather than at judicial personalities, but the chips were allowed to fall at will. Good editorial taste and the Sultan’s favor preserved for the Journal its immunity to express the opinions of the Chamber merchants. In his report covering the activities of the Chamber's sixth year, Spiraki Alexandridi extolled the Journal with his concluding words: I would be lacking in my duty, gentlemen, if I passed silently over the path cut by the Journal de la Chambre de Commerce during the past year. It gives me pleasure to state that this paper, which has entered into the third year of its publication, has realized all the hopes conceived at its foundation, for it holds today one of the first ranks in the local press, thanks to the constant efforts of its director, Mihran efendi Chirinian , , , °

The following week, while Alexandridi was promoted to the civilian rank of sanlye slnif-i sani (second class of the second rank of offi­ cials), Chirinian was raised to the grade of salise (third rank) and decorated three months later with the order of the Mecldiye, fourth 7 class. These honors conferred by the Sultan indicated the approval which the Journal had rapidly attained in official circles.

By the end of IBS?, the Journal had adopted the format of

^JCCG, March 26, 188?, p, TjCCC, April 2, 1887,^p, 81; July 2, 188?, p, 158. The high­ est civilian rank, that of bala, supreme, was attained by Dimitraki Yenidunia and Aristakes Azarian. JCCG, May 6, 1893» p. 212; July 28, 1894, p. 350, 69 other Turkish papers in which the main feature was the editorial arti­

cle on the first page, îhis concerned some current problem or issue,

with the Chamber's views and suggestions for amelioration tzwtfully

inserted in the middle of the article. Here journalistic skill was

at its finest in the art of soothing the barb with blandishment, so

well understood and practiced in the East,

Articles from commercial and financial periodicals of Paris, Cologne, Odessa, or Alexandria were occasionally reproduced, indicat­ ing a wide acquaintance by the Journal's staff with economic news and events abroad. The topics included recent enterprises undertaken by other chambers of commerce, tAether in Lyons or Blackburn; unusual commercial or judicial questions; the opening of new markets; and novel uses for agricultural and industrial products, Ihe proceedings of annual congresses of chambers of comierce in England, Germany, and

the United States, and the negotiations of French chambers with their government, were reported in detail, perhaps in the tacit hope that the Ottomsm government might be influenced to grant similar privileges of congregation to its own chambers in the capital and provinces.

Fledgling commercial periodicals in the capital were welcomed with hearty fraternity. The first issue of the monthly bulletin of the Hellenic Chamber of Commerce drew the comments "It is an excel­ lent publication, very well conceived toward the view of developing commercial relations between the Ottoman Empire and the Kingdom of 0 Greece, We wish full success to our new colleague," Later, best

GjCCC, May 2, I896, p, 212, 70 wishes were sent to the new weekly of H. von Koeller, the Konstantln- o opler Handelsblatt, and a similar greeting the following February to Dr, C, Melia's Rassegna Italiana, which had just appeared under its new name.10 Other capital publications, in particular ^ Turquie, drew a sharper tone. Remarking that ^ Turquie had made allusions to a pre­ vious article in a tone "less than confratemal, " the Journal sug­ gested that if it were of a different opinion, it should at least state its arguments, "I^ Turquie having taken for some time the habit of contradicting us on questions of which it knows little, we will not in the future take the trouble of replying to it,"^^ The Journal was to pay for this impertinence, for the instigator of 1a Turquie's crit­ icism was none other than Selim Melhame, later Minister of Agriculture and a Chamber antagonist par excellence. With the facilities of his new printing press, Chirinian promptly began the attempt to clarify for his readers in the commercial community and officialdom as well the basics of nineteenth century economic thought. From extracts of studies explaining "fundamental truths , , , avoiding as much as possible the vague and abstract theo­ ries which ordinarily trouble more than they enlighten," Chirinian pre­ sented to the reader "ideas susceptible of comparison with his own" from Bourdonné*sf Simple Notions of Social Economy, 12 The stages of

9jCCC, June 13, 1896, p, 281,

^°JCCC, February 6, 1897, p, 46. ^^JCCC, July 26, 1886, p. 1, 12 JCCC, November 26, 188?, p. 293« 71 society; labor as the source of wealth; the right to work; rights of property; and principles of capital, interest, usury, and salary were expounded in succeeding issues. The print, however, became increas­ ingly smaller until it was nearly illegible, Whether this was the result of censorial demands or of the economy of space can only be conjectured. Nevertheless, the ambivalent philosophical views of the mer­ chant class emerged through the Journal's stand on the numerous issues which confronted the Chamber, Articles on monopolies, the preserva­ tion of free trade, and inveighments agednst protectionism were di­ rected not only against nations abroad but also toward elements within the Empire, Monopolies were an abomination. The Sultan was reported to believe that any monopoly not justified for reasons of public order 1*5 was an evil thing, ^ All monopolies, in fact, were barriers to the free exercise of trade. The agriculturist should have the right to sell the product of his labor at a price resulting from his free con­ sent, Those Ottoman capitalists vdio had arisen from their usual torpor and sought monopolies on agricultural products contributed nothing to 14 the development of Turkey, Without comment, the Journal later waus compelled to report that Chamber members Jacques Cherbetjian and Dimi- traki Yenidunia had solicited the state for monopolies on opium and licorice respectively,^^ Industry in Turkey should be encouraged,

l^jccc, November12, 1892, p, 541,

^^JCCC, November26, 1892, pp. 565-66, ^^JCCC, December10, 1892, p, 596; December 2, 1893. P. 571. 72 stated the Journal, "but not by monopoly, which is fruitful for produc­ ers but prejudicial to the majority of consumers and cannot exercise a healthy influence upon the economic destinies of nations,The sup­ pression of the eight per cent duty on internal movement of goods and the reduction of hobbling imposts would be sufficient protection to enable native products to compete with foreign imports.

Reporting a message to Congress by Grover Cleveland, which stated that American surplus revenue exceeding $700 million constituted a danger for the country, the Journal remarked that; We would like to be in an analogous situation . , , He has announced that he will maintain the tax on wines, tobacco, and spirits, considered in America as superfluous , , . /because of/ American puritanism. Everyone in the United States is more or less, in appearance, the member of a temperance society,17 Despite the general lowering of tariffs- the Chamber was annoyed by the duties on the specific products mentioned since these were articles of prime interest to its members. While it later agreed with European acclamation that Cleveland's second election was a "victory for hones- 1 ft ty," the protectionist policies of Meline, the French Minister of

Agriculture, and later of McKinley were castigated since they gave "an arbitrary direction and falsified the natural law of exchange," Otto­ mans would remain faithful to their good economic traditions of low 19 tariffs and an avoidance of "artificial protection,"

^^JCCC. June 22, 1895, p. 289. ^^JCCC. December 31, 188?, p. 3^8.

JCCC, November 19, 1892, p. 559.

19jccc, March 27, 1897, p, 97. 73 Along with other publications in Istanbul at that time, espe­ cially if they expressed their devotion to the Sultan, the Journal was probably subsidized by Abdulhamid, Western observers have endlessly ridiculed the pompous eulogies to the Sultan emitted by these journals, from the belief that the apparent submission displayed was the price for survival which no self-respecting press should have to pay. The practice of eulogy, however, did not begin in the era of Abdulhamid; it was the natural style >Aiich had been observed for centuries in the

Orient, deriving from the obligation to attribute all virtues to the sovereign. 21 Literary skill had no relation to factual presentation, but wais instead devoted to the art of pleasing an audience, embellish­ ing that which was desired to be heard. Thus, in matters regarding the Sultan and his personal administration, a writer adhered to tradi­ tional forms and phrases appropriate to the occasion. Each journal had on its staff an old, experienced writer vrtio produced according to for- mula the correct praises for each situation, 22 whether it was the anni­ versary of the Sultan's birth or that of his advent to the throne.

Accordingly, the lead article of the issue nearest to Au­ gust 31 was always devoted to the celebration of the happy accession to the Osmanli throne of His Imperial Majesty, the Sultan Abdulhamid

Khan II.

?0 Sir Edwin Pears, Life of Abdul Hamid (London; Constable and Company, Ltd., 1917), p. 198, stating that all local papers received subsidies from Yildiz.

^^See Eliot, Turkey in Europe, pp. 13O-3I. 22^alman/t Development of Modern Turkey, p. 81. 74 . . . The country’s commerce and industry, objects of the wholly special solicitude of His Majesty, by the medium of their humble organ have come to place their ardent best wishes at the feet of the august throne of the Sovereign, who has been acquitted of new deeds to the gratitude of his people in assuring the maintenance of peace , . . 23 From the bottom of its heart, the humble organ always hastened to add

its voice to that of its compatriots of the Empire Wio wished the preservation of long days of happiness to the Glorious Sovereign in the "sincere and repeated cry of Padigahim qok yaqa." The adulation

might then be followed by a market report which complained of sluggish

activity and a lack of confident buyers, or perhaps by an expose of

some condition— the crippling duties on viniculture, the lack of in­

terior transportation, the non-adherence to legaO. formalities— vdiich stood in urgent need of correction.

Observance of censorship laws did not appear to be difficult,

since the Journal was concerned primarily with the effect of political

events on commercial interests rather than with politics itself. As the general tone of the paper was one of helpful service to the state’s cause of economic development, denunciations of conditions which pre­ vented progress of that cause were made with righteous indignation;

these the censors passed. However, long two- and three-part series of articles on commerce and the state, ending with a suivre, became fewer in the late ’90’s as censorial standards broadened. 24 Personalities continued to be mentioned until the turn of the century, but reference

^^JCCC, September 6, 1886, p. 1,

24For the nine prohibitions for journalism to be observed by censors, apocryphal or not, see Fesch, Constantinople, pp, 52-54-. 75 was made rather to the office of an official than to his name, and the light banter of earlier years was lacking. Allusion to affairs of state occurred with discretion, hinted through the announcements of arrivals and departures of important persons having economic connec­ tions, the naming of delegates to treaty commissions, or the regula­ tions on wartime navigation and provisioning. When a notice appeared that the Porte had forbidden the export of cereals, it was understood that some province was experiencing famine, Ottoman diplomatic offi­ cials abroad were usually mentioned by name when they sent to the Cham­ ber copies of new commercial regulations and publications from their posts in Europe; this appeared to be a form of communicating the where­ abouts of persons temporarily displaced from the capital.

Contrary to the statement that news from Egypt after 1879 was prohibited, articles with a commercial slant and listing Egyptian export-import statistics were quite acceptable. The Khédivial decree admitting non-Turkish tobaccos in Egypt was decried as a blow to Turk­ ish trade in favor of Greece,Customs relations with Egypt became a source of discontent, as heretofore the exchange of Ottoman merchandise had paid duty only upon leaving ports of embarkment. When rumors sounded that Egypt had imposed a new entry tax, Hakki Pa§a, the current Minister of Commerce, professed no knowledge of such information. The

Journal, however, pursued the matter for three months until it was finally able to print the complete text of Egyptian customs regulations

^^Pears, Abdul Hamid, p. 197,

JCCC. February 2, I885, p, 3. 76 27 signed by N. Nubar the previous year. The Egyptian budget for 1892

was reported with the comment that the Daira for the first time had no 28 insufficiency and that there was even a disposable excess, A Khédi­

vial decree signed by Abbas Hilmy was printed in full when Egypt for­

mally abandoned the corvee and commercial tax and made a fifty per

cent reduction in the salt tax. 29 A description of the amazing trans­

formation of the city of Suez, owed to the "French company which cut the canal," was quoted from the Egyptian Gazette. A n d when Abbas

Hilmy remitted one-fifth of the land tax in lower Egypt because of an

agricultural crisis "with which a government has the duty to be occu­

pied," the Journal with a further turn of the screw observed the great

satisfaction expressed by Egyptian public opinion over this good deed.^^ In view of conditions at the Empire's center, these items may

have been poorly received by the Sultan, but they were not censored.

From September 28 to November 23, 1885, first page reviews of the week had commented on the "grave coup to trade" given by the rup­

ture of communications with Eastern Rumelia. The only serious buyer

on the market was the Seraskerat (War Ministry). A future crop defi­

cit was predicted, and lamented, because 1,200,000 redif-s (reserves) had been called from their fields. The crisis was said to be the con­ sequence of the madness of a small number of adventurers, from whom

ZTjCCC, July 26, 1886, p. 1; October 11, 1886, p. 3.

ZGjccc, January l6, 1892, p. 30.

29jCCC, Februar}' 13, 1892, p. 78. 3°JCCC, September 15, 1894, p. 435.

^IjCCC. January 12, 1895, p. 19. 77 reparation for damages to Turkish trade, numbered in the millions,

should be exacted. As was the traditional custom of guilds in Istan-

bul in time of war,*^32 the Chamber, "considering that the commercial corps cannot remain indifferent to the patriotic movement of peoples

of all classes of the Empire," formed a committee to collect donations

for the Imperial army. An appeal was made to the capital's merchants,

inviting offers in kind or nature, to be sent to the Chamber's address in Galata or to the Stambul office of Suleyman Subaizade.^^ By the

time of the Greek War in 1897, however, no attempt appears to have been

made toward a similar action. The state of war received no mention in

the Journal's columns other than official notices regarding the depeir- ture of alien Greeks, navigation restrictions, and the possibilities

of provisioning Cretan ports through friendly flags,^ In the first

week of June, the Governor of Larissa sent an urgent plea to the mer­ chants of Salonika to expedite supplies of coffee, sugar, and petrol because of the absence of these necessities in his district of eastern

Thessaly.The commercial community was thus officially informed that

32Although the capital's inhabitants had been granted exemp­ tion from military duty after its conquest by Mehraed II, civilian ser­ vices and auxiliaries were recruited in time of war. Special surtaxes in kind were levied on certain guilds not furnishing an auxiliary con­ tingent of craftsmen to the army. Mantran, Istanbul, pp. 386, 391-93? Baer, "Administrative Functions," pp. 40-41.

^^JCCC, November 23, 1885, p. 2; Weekly Commercial Bulletin. November 20, 1885, p. 4. Members of this committee were Aristakes Azarian, Suleyman Subaîzade, Dimitraki Yenidunia, Apik Oundjian, Dikran Giumusschgherdan, and Zacharia Hazzopoulo.

^JCCC, April 3 through May 22, 1897.

35jccc, June 5, 1897, p. 180. 78 the war had. ended, a fact of which Greek traders would have long since been aware.

In an early end-of-year issue, Mihran Chirinian, the merchant

journalist with a touch of the poet, had written* Today the year 188? renders its soul to the Eternal of Centuries and the year 1888 displays itself to us with all the attraction and disquieting charm of the Unknown, Let us therefore yield to the rapture of vision, being on guard against all feeling of anxiety for the future,3° The Journal had continued to flourish with a vast outpouring of information in sections devoted to trade, agriculture, industry, finance, public works, and jurisprudence, all of vrtiich were felt to come within the Chamber's purview. Many columns were given over to the printing of legal regulations, which was the method employed by various ministries for communicating these laws to the public, Recom­ mendations for commercial improvements were repeatedly made, in ac­ cordance with article 9 of the Chamber's organic law.

Yet, for reasons not entirely clear but which will be consid­ ered later, the Journal suffered a crisis midway through 1896, On

June 27 of that year its advertisement for printing services in Turk­ ish, French, Greek, and Armenian appeared for the last time. There­ after the paper was reduced to eight pages. On August 22, the editor­ ial article was signed with the initials "E, G.", No issue appeared on August 29, which fell three days after the date of the twelve-hour

JCCC., December 31, 1887» p, 346, Chirinian's business ad­ dress was V/hittall Han, Eakçe-Kapu, Stambul* his trade-line is not known. See JCCC, July 21, 1894, p. 3^+0, and two subsequent issues which advertised Chirinian's loss of a seal to be affixed to "checks to be cashed and other documents such as requests, etc., to be pre­ sented to government departments," 79 seizure of the Imperial Ottoman Bank by Armenian Dashnak revolution- aries,"^37 Although the subsequent massacre of Armenians in the capital was reported to involve only the lower-class Gregorians, the wealthy

Armenian Catholics being unsympathetic to revolutionary ideas, even OQ the banker Azarian fled to the island of Prinkipo.

The issue of September 5 commemorated the twenty-first anni­

versary of the Sultan's advent to the throne with a short single column dutifully stating that the relatively enormous progress of the past

twenty years was entirely due to the constant solicitude of His Impe­ rial Majesty for the welfare of all His subjects without distinction

of race or religion, "In the presence of that situation which is— we repeat— the work of the Great Sovereign , . , we are moved at this time

to utter from the bottom of our heart , » , " etc, "E, G," signed an editorial article on Turkish wines, and a notice appeared that since the commercial transactions on the Istanbul market during the last

eight days had been insignificant, the Journal would not contain its

usual bulletin of current prices. 39 On November 28, another announce­ ment, repeated in the succeeding two issues, stated that for several

weeks the management of the Journal had deployed its best efforts to

^ For accounts of this seizure and consequent massacre, see Louise Kalbandian, The Armenian Revolutionary Movement; the Develop­ ment of Armenian Political Parties through the Nineteenth Century (Berkeley: University of California Press, 1963), pp. 3^-35; Pears, Abdul Hamid, pp, 255, 258-61; George Washburn, Fifty Years in Constan­ tinople and Recollections of Robert College (Boston: Houghton Mifflin Company, 1909), pp, 245-4?, Whitman, Turkish Memories, pp, 20-21. Azarian reportedly had foreknowledge of the plot,

^^JCCC, September 5, I896, pp. 377-78, 382, 80 improve services in order to make the paper more interesting. It hoped that appreciative readers would create an active propaganda in its favor. New subscribers would receive free all issues to the end ^0 of the year, payments to be due only after the first of January,

That the Sultan had withdrawn his subsidy, at least temporar­ ily, can be surmised. The first issues of 1897 were printed on thin paper of poor quality. Several writers had tried their hand at pro­ ducing articles: "G, B,", "J.", and "P, E,", the latter undoubtedly being Pavlaki Economides, an employee at the Chamber's Bureau,

Then the initial of "Z," signed a provocative editorial on

Turkish forests on February 6,^^ This article suggested that the forests of the state could become a new source of revenue, not only by their products but also when pledged as security for advances, with no need for outside intervention in arranging loans. The Journal was back in business! Successive **Z, Y," signatures to trenchant editorials offering ingenious solutions to the issues closest to the heart of the

Chamber while at the same time reconciling the interests of the state obtained for Zareh Youssufian the position of editor. At least up un­ til the issue of the Journal on February 28, 1921, Youssufian remained as spokesman for the Ottoman merchant community of Istanbul. As for Mihran Chirinian, a cryptic note had appeared in Janu­ ary in the Journal's jurisprudence column. This item, buried within an article outlining the commercial competence of courts, stated that

40 JCCC, November 28, 1896, pp, 477-78.

^^JCCC; February 6, 1897» p. ^3» 81 since a journal director was a merchant, he was therefore considered 42 to be justiciable by commercial courts.

^Zjccc. January 9, 1897, P. 14. CHAPTER VI

ADMINISTRATIVE FUNCTIONS

The extensive powers generalized in articles 9 and 11 of the organic law of the Chamber of Commerce of Istanbul were specified in the interior regulation by articles 25 through 2?,^ The scope of these functions appears to verify the thesis that the young Chamber was an institution which assimilated the venerable tradition of cor­ porate administrative concern with the desire of Abdulhamid that his government be advised of measures required for Ottoman economic ad­ vancement, The latter motive, the antecedents of which have been traced in Chapter Three, was the principal factor in the organic law; the interior regulation superimposed the technical elements which provided for institutional continuity. Each occupational group in the past had defended with vigor the exclusivity of its rights and privileges. These rights had issued from ancient firman-s and old administrative decisions "by which a variety of monopolies and restrictive practices was established,"2 Once obtained, the privileges were guarded against the intrusion of

^See Appendices I and II, 2 Baer, "Monopolies and Restrictive Practices," p, 145,

82 83 outsiders challenging a monopoly. This characteristic applied to the

Chamber no less than to other professional groups. Subsequent to the enregistration of merchants, the Chamber was authorized to record their movements when leaving and returning to

the capital, their declarations of failure and their restoration to

credit, and any crimes or misdemeanors of which they might be accused.

Aside from the aspect of surveillance, perhaps never rigidly observed,

this type of information would provide a useful addition to the records held by the Chamber toward the establishment of a member's credit rat­

ing, not unlike the function of a modern chamber of commerce. More­

over, since the stability of merchant houses was of keen material in­

terest to the entire commercial community, rumors or actual declara­

tions of failures of both members and non-members, current or impending, were reported in the Journal whenever possible, with all available details.

The Code of Commerce had stated that any and all failures

were to be declared within three days of the cessation of payments in

the midst of a commercial deputation at the residence of the unfortun- 3 ate merchant,-^ Through the collaboration of the investigating syndics, fraudulent declarations were numerous and of great concern to the Cham-

ber, occasioning the harangue with Server Pasa in 1885, When Ahmed

Cevdet returned to the Justice Ministry the following year, announcing

that he would enact great reforms in view of the state in which he

^Young, Corps de droit, VII, 73, art, 148.

^JCCC, October 12, 1885, p. 2; October 26, 1885, pp. 1-2; see above, p, 6?. 84

found that department, the Chamber explicitly reserved expression of its opinion. Stating only tnat Cevdet Paça's reputation had already

long been made, it firmly hoped that "he will not be slow in carrying

out remedies to the illnesses of which our commercial corps complains and of which our Journal does not fail to echo faithfully."^ One of

these echoes had been sounded to the request of the Chamber of Commerce

in Izmir that it be permitted to designate at least one member of a

syndic to investigate failures,Twenty years were to paiss before 7 this satisfaction was legally accorded to the Istanbul Chamber, How­ ever, a decision by the Council of State (§urayi Devlet) in March,

1890, did order that all failures should be registered at the Chamber

of Commerce and any court rulings relative to these failures must be 0 transmitted to it. Both the organic law (article 11) and the interior regulation

(article 25» section 4) specified the keeping of a record of all data relative to commercial transactions such as current prices, merchandise, currency, and public titles or securities. This would appear at first

sight to be a prodigious task. How thorough a record was maintained is not known. It is likely that the register which was kept of the above information consisted of an on-going collection of data from com­

mercial, financial, and administrative sources. From this the Journal

^JCCC, June 21, 1886, p, 2. ^JCCG, November 9, 1885, p. 3. O Not until August, I906, was a clause added to art, 170 of the Code of Commerce providing for the designation of syndics from among those merchants registered at the bureau of the Chamber of Com­ merce. Young, Corps de droit, VII, 7 6, n, 14(a).

®Ibid, p. 73, n, 10. 85 printed its weekly bulletin of statistics. Of prime importance were its quotations on the grain market, for in the absence of a commodities exchange, the Journal's wheat quotations were taken as the official 9 basis for fixing the price of bread by the municipal authority. Also listed were the weekly exports and imports of merchandise and commodi­ ties of the capital's international trade, the number of sales and current stocks, and the port traffics of ships, steam and sail, under whatever flag. Each year a compendium of export-import movements was published, extending over several issues of the Journal as necessary.

Carried regularly were such financial quotations from the Galata Bourse as the rates of discount, interest, and foreign exchange, and the current market of state securities, now regularized by the Public Debt Administration, Quotations were given for the shares of local banks and firms, among »diich were the Imperial Ottoman Bank,

Société Generale Ottoman, Credit General Ottoman, Banque de Constantin­ ople, Société des Tramways, and the Société Ottoman de Change et Val­ eurs, Notices of drawing for lottery bonds were posted, as well as the winning numbers of these promesses, the control of which wets shared by the Chamber, the Imperial Ottoman Bank, and the Galata

Bourse,The Galata exchange rate for foreign and local currencies against the gold Turkish pound of 100 piasters was listed weekly for

See JCCC, April 23» 1898, p, 129, which cites Mahmud Celal- eddin's tezkere to Ferid Bazmacizade "to continue as in the past the quotation on cereals,"

^^For the regulation on promesses, prepared by a Chamber commission and promulgated by Zihni paga, the current Minister of Com­ merce, see JCCC, November 12, 1887, P. 273; Young, Corps de droit, IV, 35-36. 8 6

the pound sterling, gold Napoleon (later the twenty-franc piece),

ducat, Russian Imperial, paper ruble, Ottoman mecidlye, and such small

coins as the altilik, be^lik, and metelik. The exchange rate of the

Turkish pound in London and Paris was given aus well. From time to

time notice was made of the authorization by the Imperial Ottoman Bank to mint small coinage, one and two piaster pieces, according to

specie needs. In appearance, the Chamber seemed to fulfill admirably the function of official registrar for commercial and financial statis­

tics, that fundamental requirement for developing a modern economy.

The accuracy of its figures might be challenged, however, by those

persons intimately involved in specific transactions such as the

bakers of the capital. Doubtless the Chamber was startled to leam

after a few years that the Imperial Ottoman Bank planned to establish under the direction of Fritz Neef its own statistical bureau for all matters in thich the Bank was concerned,even though the Bank was always represented in the Chamber's membership. Another administrative function, that of the gratis authen­ tication by the Chamber of the solvency of guarantors signing certifi­ cates of guaranty and other documents required in commercial matters, incited once again the Chamber's jurisdictional jealousy of other

groups in the capital. The practice of requiring a material deposit

as guaranty to assure the proper performance of an office had long

^^JCCC, April 25, 1896, p, 199; May 16, 1896, p, 2>, For protests by the bakers against the Chamber's grain quotations, see below, Chapter IX, 87 been established in the Empire, 12 In essence, the time-honored custom of the sale of office can be rationalized by the need to guarantee proper performance of that office in the absence of a merit system.13

In modern practice, this is related to the bonding of employees re­ quired in certain occupations. The function of the Chamber, however, was that of certifying at no charge the credit-rating necessary to 14 guarantee a guarantor. Since this certification was not purchased, the implication might be that it was a true and honest statement of a merchant's financial reliability. However, the non-exaction of cer-

12Tax-farmers, especially, had to give such guaranty, often borrowing from the Armenian sarraf-s the necessary deposit. An excel­ lent account of this procedure and its results is given by David Urqu- hart, ^ Turquie; ses ressources, son organization municipale, son commerce, suivis de considerations sur I'etat du commerce anglais dans le Levant, trans, from the English by Xav, Raymond vois,; Paris; Arthus Bertrand, I836) II, Part III, 203-13* ^^It will be remembered that the decline of the merit-based devsirme administration in the latter sixteenth and early seventeenth centuries was accompanied by an increase in the sale of office, the justification for which has commonly been attributed to the need for increased revenue, 14Baer refers to the guaranties issued by the gehbender and muhtar-s of the Hayriye Tüccarî for the honesty and good character of all the merchants of that guild. No mention is made of any payment of surety fees. ("Administrative Functions," p, 35.) The guaranty of moral character and behavior of esnaf members was backed by a fee which the kahya collected from every new member before he furnished the ilmuhaber necessary to obtain a tezkere of registration with the municipality. In turn, the kahya himself had to furnish a cash guar­ anty to the state for proper performance of his duty of supervising his guild. Although the procedure was modernized by the establishment of a Bureau of Guilds (esnaf) in January, 1892, the guaranty was still required, not only of the kahya but of the director of the Bureau as well. See Young, Corps de droit, V, 289-91» arts, 6 and 7, The absence of a cash payment by the large merchants for their guaranty of conduct thus stands in contrast to the fee required of tradesmen. 88 tlflcatlon costs, always welcome to the mercantile mind of the certi­ fied, would appear to be counter-balanced by the investigation into his accounts, an opportunity vrfiich compensated the Chamber for any dearth of fees for services rendered,This function had been chal­ lenged by notaries and guild chiefs who continued to certify the sol­ vency of "merchants” for a fee. The Chamber felt that the notaries had acted irresponsibly in this matter and quoted a statement from the

Minister of the Interior to the effect that notaries would be held accountable for the truth of any document vdiich they verified with re­ gard to persons attesting their degree of solvency on certificates of guaranty, Resolution of the problem was made by the Council of State in

October, 1890, which decided that since it was the Chamber of Commerce vdiich had the right to certify the degree of solvency of merchants who signed documents as guarantors, notaries were to limit themselves to authenticating only the certificates of guaranty. The municipal authority was charged with transmitting the order to the guild heads to interfere no more in confirming the solvency of merchants.17

^Carried over from the previous Chancellory of Commerce had been the duty of initialling and numbering the books of merchants as required yearly by the Code of Commerce, For this a cnarge of twenty- five piasters was made for the first 200 pages and five paras for each additional page. See Appendix III, For Chamber fees, see Young, Corps de droit, IV, 13. To authenticate an annual balance sheet, the fee was also twenty-five piasters. Certain charges were incurred, therefore, before the guarantor received the gratis certification of the solvency of his signature,

^^JCCC. June 4, 1887, p. 134.

17See Appendix II, n, 2, 89 Six years later the Journal felt compelled to publish again the Council's decision when it was established that notaries had con­ tinued to trespass on the Chamber's prerogative. An order from the

Minister of Justice had been given to the effect that not only must the degree of solvency of a merchant first be certified by the Chamber of Commerce, but that the solvency of a guild member must be attested by his respective guild council, the solvency of an official by his chief in the bureaucratic hierarchy, and that of the rentier (emlak sahibi) by the competent department vhich should ascertain the value of the property inscribed in his name and the mortgage of the land for the entire duration of the guaranty. It appeared that notaries were not following these prescriptions but authenticated all certificates of guaranty presented to them without distinction. It was not rare, the Journal reported, that some individuals attributed to themselves a credit rating higher than their financial capacity by signing their own documents in the name of the Chamber of Commerce or of the esnaf bagi of whatever guild they chose according to their caprice. The

Chamber believed its duty wais "to draw this problem— delicate between 18 all— to the benevolent attention of the Minister of Commerce," Challenges came from above as well, A new law on the farming of the tithe (agar) based guaranties on the value of the land held by the tax-farmers or their guarantors; thus, in some provinces the local Chamber's attestation was not being accepted. This, the Journal

18 JCCC, August 1, 1896, pp. 3^5-46, The wording of the decision here published differs slightly from Young's translation; e.g. the notary is to authenticate only the signature on the certifi­ cate of guaranty, (italics mine.) 90 stated, was a "false appreciation of things." Property was often over-valuedj if it had to be sold, it might bring only thirty per cent of its stated value. Very rare would be the honorable men who, "in order to render altruistic service," would consent to their lands being held liable to seizure. Others might use this means to unload their property, the sale of which in other conditions would involve considerable expense to themselves. Much better was it to have the knowledge which had been ascertained by a minute inquest of the guar­ antor's accounts for the past year, A Chamber's attestation was not valid only for the day given, as some had. objected, but was based on a merchant's credit, developed and maintained over time by regular payments and faithful execution of his engagements. The safest method of assuring the government its receipts would be to require the depo­ sit of collected taxes beginning one month after the harvest and com­ pleted within six months, "We hope the Minister of Finance recognizes the justice of these considerations,"19 The function of recording agreements of partnership and other deeds drawn outside the Chamber appears to have been submerged if not scuttled by the growth of limited liability enterprise. For instance, the Ottoman holder of a concession for any type of venture generally formed, or tremsferred the concession to, a corporation for its ex­ ploitation of which the major part was subscribed by foreign capital,

Since the 1882 regulation on Ottoman incorporated firms 20 was

^^JCCC, June 18, 188?, p, Ik^; June 25, 188?, p. 153. PO Young, Corps de droit, IV, 55-81, 91 extremely prescriptive in its statutory conditions, a company which was domiciled abroad could escape these restraints, claiming at the same time the liberties accorded by the Capitulations. The invasion of the Empire through branches and agencies of firms incorporated abroad presented to the Ottoman Ministries and to the Chamber an increasingly onerous problem of regulatory supervision.

Early in 1885, the Minister of Justice had remarked on the

"inconvenience of the annoying lack of control of certain foreign sociétés anonymes." This comment was directed especially toward fire insurance companies established abroad but operating in the Empire through agencies aind branches. The Minister of Commerce, added the

Journal, had submitted to the Porte a project regulating foreign societies. Repeated at the end of the following year was the same announcement.21 In the meantime, a campaign was conducted by the Chamber against foreign fire insurance companies. In a city where the majority of buildings were of wood construction, fires occurred frequently with losses of great importance. Various parts of Istanbul had been con­ sumed by fire countless times since its foundation, Fire-fighters running toward the flames with cries of "Yangin varl" were often use­ less against a large conflagration because their ancient guild priv­ ileges permitted neither competition nor change in procedures. Al­ though Greek and Armenian merchants were said to have a penchant

^^JCCC, February 2, 1885, p. 3; December 13, 1886, p, 1, 92 toward arson, 22 the mercantile adage, “As prices decline, the inci­ dence of fire rises,” was well known throughout the East vdierever fire insurance was available. The insurance agent, noted the Journal, would pay nothing until he had consulted his firm in Britain, Germany, or wherever, and these firms always alleged a fault in the contract. The Chamber had demanded a copy of the insurance companies' statutes 23 from their agents, but not one had replied to its appeal, A similar lack of response was experienced at the Ministry of Commerce, which had ordered all Ottoman sociétés anonymes to submit to the Ministry the names and any changes in their boards of directors, copies of their Einnual reports, and minutes of the general assemblies of their shareholders,24 Bie new law regulating foreign sociétés anonymes in Turkey 25 was proclaimed on December 8, 1887. This law was based on studies made by Horn Efendi, the German mustesar (undersecretary of state) to the Minister of Commerce,Among its provisions was the submission of a copy of the statutes of any new firm to the Commerce Ministry

22 Whitman, Turkish Memories, p. 243, For descriptions of Istanbul fires and firemen, see Davey, Sultan and Subjects, pp, 236-37, and Hecquard, L*Empire ottoman, p, 66,

^^JCGC, August 2, 1886, p, 2, ^^JCCC, July l6, 1887, p, 170.

^^JCCC, December 24, 1887, p. 333; Young, Corps de droit. IV, 53-55. 26European assistants were hired for several of the Minis­ tries during this period to aid in the introduction of administrative reforms. Horn had replaced Baron den Nordenflicht in I885 on a ten- year contract. He returned to Germany early in 1895. JCCC, Janu­ ary 5» 1895, p. 7. 93 prior to authorization by that Ministry to operate on Turkish soil. These statutes would be examined for contents contrary to the laws and the interests of the Empire and of public morality. Societies already established in Turkey had to obtain special authorization and be inscribed in the Ministry's register. Upon the communication of this law to the foreign embassies on March 13, 1888, objections were raised by them to the required authorization of new societies as being contradictory to the freedom of trade guarantied by the Capitulations,

The controversy continued, and in January, 1892, the embassies pro­ posed that while the regulation might be useful, certain modifications should be made to safeguard•the principle of commercial liberties.27 The Chamber now directed its campaign toward the creation of an indigenous fire insurance company which would serve as a model to others in observing all statutory conditions in the law for Ottoman societies of limited liability. The prospects for fire insurance were bright, since in the past year four hundred properties, including ninety-two shops, had fallen prey to flames, Perhaps insurance could be made obligatory, at least for inhabited houses; this might be im­ posed, as a start, upon the 10,000 employees of the government in Is- tanbul; and possibly the government itself would pay their premiums.28

By August of that year, considering the unsuccessful efforts of the government to regulate incorporated enterprise, the Journal pro­ posed as a solution to "fly-by-night” and bogus societies that, in

27 Young, Corps de droit, IV, 53# ", 1. ^^JCCC, January l6, 1892, pp. 25-26, 94 line with its functions, "the Chamber of Commerce strictly supervise the method of establishing firms in collective name," All groups wish­ ing to form a société should inform the Chamber of their names and ad­ dresses and all matters relative to the new firm. Only after this en­ registration should they be allowed to operate. Any société already formed must register with the Chamber within two weeks. The Chamber should be informed of any change in statutes or directors, or of an anticipated dissolution, so that it could advise the commercial commun- 29 ity of this news via the Journal, As for the unreliability of for­ eign insurance companies, only those whose honor was beyond question would be permitted to operate in the Empire; those agents who were registered at the Chamber would, of course, be quite trustworthy,^*^ Announcement was made the following week that the Council of State had approved a thirty-year concession for the formation of a

Compagnie d'Assurance Ottoman by Terneau Bey, Dimitraki Yenidunia, René Baudouy, and Alexander Ralli, to be capitalized at tT 110,000,^^

By December the Minister of Commerce had sent Terneau Bey the firman 32 for the concession and the company's statutes had been approved,"'^

The following year, this firm was praised for paying out fifty per

^^JCCC, August 27, 1892, pp, 409-10, 3°JCCC, September 24, 1892, pp, 457-58.

^^JCCC, October 1, 1892, p. 474, Baudouy, a French subject, was banker to the French Embassy at Istanbul, DuVelay, L'histoire financière, pp, 555-56, Ralli, of a Greek house with branches extend­ ing fromTabriz to Manchester, was a director of the Société Générale de l'Empire Ottoman, See Wolff, Narrative, pp, 325-26.

^^JCCC, December 3, 1892, p. 583. 95 cent of its receipts for fire damages, in comparison to the forty-five per cent paid by foreign companies. Of the remainder, thirty per cent had been required for expenses, leaving twenty per cent for profits. However, recommendation was made that the company study measures to ■ reduce the risks of fire,"^^ The subsequent history of this Ottoman venture is irrelevant at this point except in connection with the continuing efforts of the

Ottoman government to regulate firms of limited liability. In 1895» the company, now the Société Générale d'Assurance Ottoman, was still the only insurance firm whose statutes had been approved at the Com­ merce Ministry, the other forty-nine agencies in Istanbul not having submitted to that formality,^ The Chamber of Commerce stoutly upheld the law of December 8, 188?: We are astonished that a coalition of serious companies has not already been formed to oppose the invasion of bogus societies, that they may profit from the law to defend the pub­ lic against the deception of Société Anonyme interlopers. It seems that respectable societies are far from appreciating the advantages of the law. Nothing is easier than to obtain these advantages; one has only to be enrolled very simply in the register at the Ministry where statutes of the society can be examined to es­ tablish if it is formed on a solid base or whether it repre­ sents only a gang of big business men. We see no reason to justify the conduct of honest societies in this matter. There would be no coercive prohibition, one would only publish the names of the societies which were not in line with the law.35 The following year, Aristakes Azarian prepared a report for

Mahmud Celaleddin, then Minister of Commerce, regarding measures

33jCCC. August 19, 1693, p. 385.

^JCCC. August 3, 1895, p. 366,

^^JCCC. August 10, 1895, P. 373. 96 necessary for economic progress. One of the eleven points suggested was the enregistration at the Chamber of all sociétés anonymes in

Istanbul, This provision, together with the obligation of the soci­ eties to keep the Chamber informed of any modification in their pro­ cedure, should be added as a special clause to the Code of Commerce, according to Azarian, Of all this, nothing transpired. The embassies never accepted the law of 1887, and a counter-plan prepared by their drago- man-s was not acceptable to the state,^37 The Chamber's role of super-, intendence of the capital's commercial community was stopped short at the line of foreign enterprise. Considering itself as an adjunct to the Ministry of Commerce, it had endeavored to assist in the Minis­ try's regulatory efforts. It had, for example, been ordered by the

Ministry to prepare a list indicating the nationality of all societies and companies in Turkey as well as the number and names of their dir- og ectors,*^ Since these did not come forward to give the necessary information, the Chamber was unable to respond to the Ministry, Where the state itself had failed, the lower hierarchy was unable to succeed.

According to article 26 of the interior regulation, the Cham­ ber was expected to give its opinion on any necessary modifications of the Commercial Code and laws concerning the Tribunal of Commerce

(Ticaret). No hesitation was apparent on the part of the Chamber,

^^JCCC, May l6, 1896, p. 229. ^^Young, Corps de droit, IV, 53i n, 1,

3Gjccc , April 14, 1894, p, 173; December 14, 1895, p. 593. 97 Returning again to the subject of false bankruptcies, the Journal observed on behalf of honest business failures that commission-agents often scandalously overextended credit to inexperienced manufacturers, with a result which astonished no one. The Journal remarked that the commercial courts were not the same as the Court of Appeals (Temyiz

Mahkemesi), which dealt with legal questions pure and simple, but instead were a kind of government agent in eau:h commercial district to watch over the moral conditions necessary to the country's profitable trade. Enjoying certain latitudes that other courts do not have, they have a mission to prevent all ob­ stacles to the rise of commerce and to give relief on diffi­ cult or threatening occasions by coming to the aid of honest but unfortunate merchants prevented from honoring their signatures by fortuitous accidents.39

The Journal noted that the commercial courts were empowered to accord a delay for the payment of certain debts, similar to the privilege of

French courts, which exercised the beneficent mission of safeguarding trade and industry. It expressed a wish that this spirit would in­ spire Ottoman commercial judges, although their inclinations might be restricted by the Code of Commerce. This Code, although almost iden­ tical with the French Code, had been promulgated before the existence of commercial courts in the Empire, Its provisions, therefore, deliv­ ered the declaration of bankruptcy into the hands of syndics and the Minister of Commerce. Unless the case was brought to court by the syndics, who were often hand in glove with dishonest creditors, the new commercial courts could not rule on the fraudulency of a failure.

^^JCCC, October 12, 1885, p. 2. 98 Thus, the judges were almost powerless to exercise the latitude of

French courts when an honest merchant had been led to his ruin, Re- 40 form of the law on this point was considered indispensable, Meanirtiile, in order to assure justice in their own interests,

the merchants of the Chamber sustained a drive to regain their former

judicial functions. As described above, 4l by the time the judiciary

had been reorganized in 18?9 under the new Ministry of Justice, the selection of temporary judges as stipulated by the i860 Appendix to

the Code of Commerce had fallen into disuse. Little was left of the old Beratli judicial privileges except the Appendix provisions which

continued to remain on the books. The 1879 regulation which estab­

lished the nizamiye court system made mandatory the presence of tem­ porary judges when provincial commercial cases were tried in kaza-s where no commercial court existed. 42 These judges were to be elected from among the notable merchants of the community, who presumably would be knowledgeable of local commercial practice and could advise the permanent, titular judges accordingly. The lack of employ of these advisers in Istanbul may have resulted from the assumption that the permanent judges of the Tribunal of Commerce, appointed by the Ministry of Justice, had become sufficiently learned in commercial practice as to obviate the use of merchant advisers.

^^JCCC, October 12, 1885, p, 2; October 26, 1885, p. 1; see also Young, Corps de droit, VII, 98-99, especially arts, 288, 291» and 292, 41 Chapter II, p, 29. 42 Young, Corps ^ droit. I, 168, art, 10, 99

Nevertheless, in April, I8 8 5, the Chamber announced that at

its request the Minister of Justice had decided to revive the abandoned

practice of the naming of temporary commercial judges. At its previous

session, therefore, the Chamber had elected thirteen such judges, four

to the Second Chamber of the Tribunal, which handled cases for Ottoman subjects alone; four to the Maritime Chamber; and five to the commer­

cial. section of the Court of Appeal, Their names would be withheld

until their election had been validated by Imperial sanction, In

June came the announcement that twenty-two temporary judges had been

named instead of thirteen, to enable these merchants to sit in court

only two days a week in order not to lose too much time from their 44 business affairs. Five months later, a notice regretted that the election of the temporary judges, "far from being submitted to Imperial 4< sanction, had not yet left the dossiers of the Justice Department,"

By August, 1886, the Chamber was thumping the table, demand­

ing the reorganization of justice which Ahmed Cevdet had previously endorsed. Reform of the courts was an urgent necessity, stated the Journal. The people must be assured of a protective justice for which

influence carried no price and which limited the rich and powerful as 46 it did the poor and feeble. With further indignation, the Chamber declared that Safvet Bey, the presiding magistrate of the Izmir commer­ cial court, had elected temporary judges for his court by himself.

JjCCC, April 2 7, 1885, p. 2. JCCÜ, June 8, I885, p. 2.

^^JCCC, November 23, I885, p. 2. ^^JCCC, August 2, 1886, p. 1, 100 over the protests of the Izmir Chamber of Commerce, These merchants naturally refused to sit as judges, the election not being validly made. The Journal quoted article 13 of the Appendix to the Commercial Code to prove the illegality of judicial interference in these elec­ tions,^^ Thanks to Cevdet Paga's intercession with the Sublime Porte, by the end of the month an irade had been issued sanctioning the en­ forcement of the legal provisions for temporary judges. The installa­ tion of the judges elected the previous year by the Chamber took place immediately, "with all the solemnity required by the circumstances," The Sultan, credited with the deed, was reported to say that he hoped

"the presence of the new judges would carry their enlightenment in com- mercial matters to aid the acceleration of the march of justice,"

The names of those merchants elected were now released: for the Court of Appeal, commercial section, were named Aristakes Azarian, Dimitraki

Yenidunia, Georges Casanova, Suleiman SubaSzade, Senekerim Hanoukian, Manouk Aslanoglu, Dikran Giumusschgherdan, and Constantin Petridi; for the Maritime Court, Apik Oundjian, §erif Ali, and Houssep Cavafian; and for the Second Chamber, Joseph A, Azarian, Anastas Iliadi, Ferid Basmacizade, Semoullah Vayizade, Andon Hadjian, Kyriako Hazzopoulo, K, Karageuzian, with the name of Artln Kenadian added the following

, 49 week.

^^Ibid. p, 2, 48 JCCC, August 3 0 11886, p, 2, ^^Ibid; JCCC, September 6, 1886, p, 2, 101 A formal notice from the Ministry of Justice appeared nearly three months later outlining the procedure to be followed in the

Ticaret; The public is informed that as of November 13# 1886, the Second Chamber of the Tribunal of Commerce will be opened from six to eleven o'clock à la Turque. All those who have petitions to present or communications to make should address themselves to the Tribunal from six to seven a la Turque. After this time, the judges will enter the audience room to examine and rule on the affairs. They will proceed without delay, conforming to the law with re­ gard to the parties who do not appear at the time fixed in their citations. Persons interested in matters of failure on days other than those designated should address the President or titular judges each Tuesday from six to nine à la Turque and on the other days during the hours given above for petitions and citations,-50

As for the situation in Izmir, a circular from the Justice Ministry warned Safvet Bey that while temporary judges had previously been elected by an assembly of notables, since the establishment of the Chambers of Commerce, the latter were the true representatives of the commercial community. It was to them that fell the duty of making the elections,Cevdet Péiça was reported to have cancelled the uni­ lateral election by Safvet Bey and to have ordered that new judges be elected by the Izmir Chamber itself, "as practiced in Constantin- ople," ‘52 Perhaps assuming that the previous practice of court selec­ tion of temporary judges still held,^^ Safvet demurred, upholding his

^^JCCC, Weekly Commercial Bulletin, November 15# 1886, p. 4.

^^JCCC, November 1, 1886, p, 1,

^^JCCC, November 29, 1886# p. 1, ^See above# p, 30» Young# Corps de droit, I# 228# n, 8, 102 own choice of judges until the expiration of their term of one year. Thereupon, the president of the Izmir Chamber, Matheos Balyozian, re-

signed.The momentary suspension of the Izmir Chamber's operations,

reported the Journal, resulted in more frauds than ever before in the

preparation of valonia nuts for export,The governor of Izmir re­

fused to accept Balyozian's resignation, and the Chamber returned to

its work.^^ A lengthy report of the woeful decline of trade, however,

was submitted to Zihni Pa|a, Minister of Commerce, by the Izmir Cham- *57 ber.^' At last the term of Safvet's judges expired, and the Izmir

Chamber wais able to proceed with its own election, "Thus,” concluded

the Journal with an air of righteous satisfaction, "the incident, well- known to official circles, has closed. During this time, the Chamber in Istanbul considered suggest­ ing to the government the necessity of naming temporary judges to the

First Chamber (Mixed) of the Tribunal.Here it treaded upon uncer­ tain ground, for the temporary judges of the mixed court were to be of the same nationality as the non-Ottoman litigants. Moreover, a note of disenchantment began to be heard. Resignations from the temporary judgeships for the Second and Maritime Chambers created vacancies for

^ JCCC, February ?, 188?, p. 33.

^^JCCC. April 16, 1887, p. 93.

^^JCCC. April 23, 1887, p. 98.

^fjCCC. July 2, 1887, pp. 157-58.

^®JÇÇÇ, July 9, 1887, p. 165.

^*9JCCC, February 7, 1887, p. 33. 103 which the Chamber of Commerce had to hold new elections,In May,

1887, Izzet Bey moved from the presidency of the Court of Appeal's correctional section to the presidency of the First Chamber,The question arises again as to whether this was not the same Ahmed Izzet

>dio was elected to the Chamber of Commerce that year in March and who resigned shortly thereafter in June,62 In view of the large number of cases which had accumulated at the Second Chamber, the Maritime Chamber was charged with the expedi­ tion of failure and insursuice lawsuits that September,Although these legal categories were of top interest to merchants, a confusion, perhaps purposeful, occurred regarding the designated days on which such cases would be examined. To ascertain the exact days "lAen tem­ porary judges should sit beside the magistrates of the Maritime Court," 64 President Azarian met with Cevdet Pa§a in December, Perhaps in an effort to influence the situation, the Journal devoted an article to the creation of commercial courts in England, It reported that several British Chambers of Commerce had memorialized the Lord Chancellor to the effect that decisions of regular judges on commercial matters were

JCCC, April 2, 1887» p. 81, J, M, Levi was elected to the Second Chamber, while Parsekli Halagian and Panayotti Courtgi were named to the Maritime, ^^JCCC. May 21, 1887, p, 122,

^^JCCC, July 2, 1887, p, 138.For the opinion, both European and Turkish, of the character of Ahmed Izzet, president of the Ticaret and later second secretary to the Sultan, see Hecquard, L'Empire otto­ man, pp, 220-2 5, 261,

^^JCCC. September 10, 1887, p, 218, 64 JCCC. December 10, 1887, p. 313. 104 often faulty, "being contrary to commercial usage,As the question of judicial competency over commercial failures continued to raise apprehension, the Justice Ministry was rumored to have the laudable intention of creating a special juridical section consisting of a president and two judges to be chosen from among the notables of the commercial community. These offices were to be not honorary but remunerated,^^ Apparently this plan did not materialize.

Eventually, by irade of April 17, 1893» article 8 of the Appendix to the Commercial Code was modified to reduce the number of temporary judges from four to two for each commercial court, each judge to have deliberative voice,By this time the Journal had no comment to offer. The concern of the Chamber of Commerce over its representation in the commercial courts had evidently been diverted to more pressing matters. Perhaps the reputation for venality which the courts had acquired deterred some merchants from seeking a place on the judiciary, "not wishing to attend a constant debate between their 68 conscience and their interest," Possibly a reluctance to be absent regulaurly from their business affairs restrained others from accepting the honor. Henceforth, the election of temporary judges was no longer a burning issue, and the Journal took up other, more profitable, causes.

^^Ibid. p, 314. ^^JCCC, December 17, 1887, p. 324.

^^JCCC, May 6, 1893* P. 212; Young, Corps de droit. I, 227, 240, 68Hecquard, L*Empire ottoman, p. 259. For typical European polemics on the commercial courts and the venality of judges, see pp, 260-63. 105 Nevertheless, the interest in retaining a judicial role did not fade. In 1892, the Journal commented on a recent procedure in England whereby the "Corporation of industrials and merchants" and the Chamber of Commerce of London had established a Chamber of Arbi­ tration to rule the differences between merchemts who solicited its

Intervention. Arbiters were to be named by the Chamber each year. In the Journal's opinion this was not only a swift method of resolving 69 conflicts, it was inexpensive as well. Three years later, editor­ ializing on the annoyances of customs duties paid in kind, the Journal suggested that the Chamber arbitrate conflicts between importers and the Administration of Indirect Taxes (Rusumat Nezareti), or Customs

Bureau, 70 By 1898, in an apparent effort to regain an earlier bloom and restore the Chamber's status in Istanbul, the Journal published the following editorial which reveals a changing social scene. Far from us is the desire to see revived the old guilds with their sad procession of unjust laws which the masters of the good old days sought to use and abuse in scorn of commer­ cial emd industrial freedoms in the Ottoman Empire, But, while disapproving that which the old guilds or trade groups had of the unjust and barbarous in their organ­ ization and laws, we cannot help admiring the expeditious manner in which certain differences which arose between the members of a guild were often solved by the professional syndicates in conformity to the principles of justice and equality and to the satisfaction of the parties. It is true that ordinary courts, composed of judges knowing the least subtleties of written and customary law, apply justice with a sure hand, but that official intervention, always costly for the State and individuals, ought to be re­ duced to reasonable proportions. Thus, in speaking of that class of merchants who have not the means to sustain a lawsuit, would it not be charitable

^^JGCC, October 1, 1892, p, 474, 70 JCCC, July 6, 1895. p. 3 1 3 . 1 0 6 to create for them a Council of Arbitration to which they could have recourse whenever they were placed in the cruel alternative either of not recovering their just rights or of being ruined in negotiating a judicial action long and costly? By the distinction and integrity of the members who compose it, the Chamber would be able to serve as a re­ spectable arbitrator, honored by merchants sufficiently convinced of the truth of the old adage; "A bad arrange­ ment is better than a good lawsuit,” That ruin, those material and moral miseries, those hatreds, viewing even simple litigation as atrocious crime, often due to a little misunderstanding— are they not pro­ voked among merchants, and may they not easily disappear as by enchantment under the magic wand of an honest and en­ lightened arbitration?

But it would not be difficult, we believe, for the little merchants and shopkeepers above all, to bring their quarrels before the Chamber before deciding to have recourse to the courts , , , We are firmly convinced that the Cham­ ber would render important services to the little merchant if not to the big , , , The aid of the Chamber would be free. But, according to the importance of the case, the Chamber could exact a preliminary deposit from each party to cover eventual expenses. The creation of a body of arbitrators at the Chamber would establish, moreover, a new bond to attract merchants to this institution, uniquely created to defend the interests of Ottoman trade. And who knows if this frequent contact of merchants with their legal deputies would not permit the rise of the public renown and moral prestige of this assembly, and thus, in this increase of influence of their representatives^ diffuse to all the elements necessary to the progress of each?71

February 19, 1898, p. 57. CHAPTER VII

RECOMMENDATIONS

Anticipated ais the source from which expert advice would issue on economic matters, the Chamber of Commerce was originally formed under the Ministry of Commerce and Agriculture (Ticaret ve

Ziraat Nezareti). The Ministry, to which all aspects of economic activity were attributed, was composed of three main divisions in the

1880*s under a single Minister; the Department of Commerce, to which trade, industry, local banking and the Bourse, statistics, and pat­ ents of invention were assigned, and which was directed for a time by the able Refik Bey; the Department of Agriculture, under the less able management of Amassian Efendi; and a High Commission of Public Works, dealing with railroads, bridges, roads, and similar projects. To exercise parallel functions to the Chamber of Commerce, a

Chamber of Agriculture (Ziraat Odasi) was formed in Istanbul under the presidency of Necib Melhame, a Syrian Arab, and having corresponding Chambers in the provinces. Many of the latter groups fell apart through lack of organization and landowners' cooperation and were con­ stantly having to be reconstituted,^ A Chamber of Industry also was

JCCC, November 1, 1886, p, 2, as illustrated in the report of Agathon Efendi, agricultural inspector for the province of Kaxesi (Dardanelles).

107 108 2 reportedly founded in the capital but does not appear to have been activated. Because of the lack of funds to cover their expenses and in the absence of an animated leadership, the Agriculture and Industry

Chambers were eventually discontinued. In February, 1888, the Chamber of Commerce acquired the obligation of speaking for the three areas of commerce, industry, and agriculture. The latter two were officially 3 added to its name, although the Journal retained its original title,^

The Ministry itself published the Umuri Kafia ve Ziraat Kecmuasi (jour­ nal of Affairs of Public Works and Agriculture) as an official weekly 4 organ. To the Ottoman view, commerce signified trade, more specific­ ally that international exchange of money and goods which was believed to be the source of wealth necessary to recover the Empire's power. This appeared to be related less to a mercantilist theory than to the fact that customs duties had traditionally furnished a large source of revenue for the state. It was not extraordinary, therefore, that the organic law burdened the Chamber of Commerce with the multiple duties in article 9 of recommending appropriate measures to be taken in all areas related to trade. The consolidation of these aspects by arti­ cle 3 of the interior regulation as "all necessary measures for the

^JCCC, July 10, 1897, pp. 221-22, from report of Mahmud Celaleddin, 3 See above, p. 6 5, n, 4. Kot until September, 1910, was "Agriculture" dropped from the Chamber's name, despite the formation of a separate Ministry of Agriculture in 1893. At that time it became the Chamber of Commerce and Industry, JCCC, September 10, 1910, p. 291.

^JCCC. November 19, 1892, p, 553. 109 development of commercial and industrial interests" may have been directed toward the purpose of promoting the Empire's trade advantage, in line with Abdulhamid's views. To improve emd facilitate their own export-import capacities, however, was perhaps closer to the Chamber merchants' intentions. The opening sentence of the first issue of the Journal defined the position from which the Chamber would thereafter make its recommendations, It is an indisputable principle, rig .y acknowledged in our time, that the true strength and civilizing influence of nations rests on Trade much more than on military power and the spirit of conquest,5 The Journal proceeded to state that from the example of those countries which had extended their commercial relations abroad, trade was seen to be the "fruitful source of prosperity and public progress, to be exercised peacefully, having always in view a respect for the rights and duties of reciprocity," principles of modern economy must be adopted if any nation was to attain the national power which assured security vdthin and respect from without. Eulogizing the Sultan's solicitude, the Journal listed sixteen measures which His Imperial

Majesty had decreed for study and enactment. These, emphasized the Journal, were of urgent necessity if the Empire's economy was to arrive at the level of the most advanced nations. Every one of these meas­ ures was related to benefits which would accrue to trade.

Creation of a Chamber of Commerce in the capital and in all the commercial centers of the Empire,

^JCCC, January 5» 1885, p. 1, 110 standardization of the rate of charges on vessels under the Ottoman flag.

Establishment and development of commercial and maritime schools throughout the Empire, by means of active performance. Gradual suppression of interior duties on the transport of native products from one locality of the country to another.

Revision of the method of collecting the tithe on various prescribed products, which demands an expedient reform.

Adoption of the English system of tonnage already in force.

Reform of transit duties and creation of storage centers, of which one is already established at Trebizond for the Persian trade. Dredging of ports. Regulation of commercial exchanges. Regulation of commercial brokers and those of the Bourse.

Establishment of a Bureau of Inspection.

Revision of the Treaties' of Commerce and tariffs by means of international study. Registration of stock corporations.

Extension of the period for warehousing or storage at Customs. Regulation of maritime and fire insurance agencies.

All these measures were already being carried out or studied by the departments concerned, reported the Journal, which hoped to see them in full administrative activity within a brief period. By state action, the items referring to Chambers, tithe collection, broker regu­

lation, and inspection (presumably at Customs) had been accomplished

to some degree within four years. Other items were still being studied

fifteen years later or had. proved impossible of execution. Prom time

^Ibid. Ill to time the Journal reported the results of Chamber studies relating

to these measures. Submitted to the Minister of Commerce for his

approval, they were then directed toward the Grand Vezir or the Coun­

cil of State and often were not heaurd of again. If the government was slow to act, however, it must be admitted that the Chamber also dragged its feet on the establishment of a commercial or commodities

exchange, the control of which the Chamber wished to acquire. An initial flurry of interest was declared in the Imperial

School of Commerce, the Hamidiye, Established in 1882, the four-year institution was intended to train young Ottomans who had completed

secondary school to be skillful traders and industrialists capable of utilizing the natural riches of the Turkish soil. The obligatory cur­ riculum included Turkish and French (other languages were optional); calligraphy ; commercial composition and correspondence; commercial mathematics ; economic geography and statistics; world, Ottoman, and commercial history; natural science "according to commercial needs"; commercial and maritime law; tonnage calculations and maritime sup­ plies; and marketing, accounting, cuid arbitrage. Practical experience in various types of firms was to be acquired in the last year. It can quickly be detected that this type of preparation was geared to the commercial rather than the industrial fields.

Somewhat similar to the passage of an apprentice (çirak) to journeyman (kalfa), examinations were passed before a committee named from members of the Chamber of Commerce, over which presided a delegate

^JCCC, January 19, 1885, p, 3. 112 from the Commerce Ministry. "A great concourse of parents, friends, and students” attended the examinations, and a "remarkable progress of

students in the French and Turkish languages" was reported by the o Journal, The first degrees of Master of Commercial Science were pre­ sented September 3* 1883, by the Minister of Commerce himself, then Su%i Pa§a, Student elocutions in French, English, Italian, and Greek wished happiness and prosperity to the Sultan, promoter amd protector of the school. Again the Journal observed that the progress in 9 languages was most remarkable. The Hamidiye fee of fifty gold piasters a month payable each trimester in advance, plus an initial registration fee of fifty gold piasters, would appear to exclude lower-class youth for whom the school could be of greatest benefit. Even kalem bureaucratic employees might be hard-pressed for payment on their monthly salaries of Ps, hOO to 500, vrtien pald,^^ Wealthy Armenian and Greek merchants preferred to send their sons abroad for European commercial training and to acquire facility in Western languages. Above all, the tradition of ascriptic occupation, despite the Islamic avowal of social equality, probably played a major role in causing the school to close the following year.

To recruit students had become difficult, for higher-class parents wished their sons to follow after them in the state bureaucracy or in

®JÇÇÇ, May 25, 1885, p. 3. ^JCCC, September l4, 1885, p. 2.

^^Hecquard, L*Empire ottoman, p, 246, 113 the great financial institutions.^^ If a transfer of occupation wsis to be made, preference was given to public administration even by many non-Muslims, a choice deplored by the Chamber. Among our young scholars a regrettable tendency is manifest . . « It is the unlimited love for public office which seems to possess their hearts from the most tender age without distinction of social conditions. It is cer­ tainly very laudable to wish to serve the State, but one will agree that, in order to fulfill public office, it is necessary to set certain social conditions, lacking which at the home of the postulant renders him inept to carry out the high mission to which he aspires. There are other ways in which he can be useful to his government. For us, the highest patriotism does not consist of entering, upon leaving school, some bureau of the public administration at the risk of applying oneself for years with no use either to oneself or to the State. . . . The first duty is to be in whatever manner useful to the collectivity, in whatever branch of human activity . . . Our preference is for the commercial career . . . where private initiative may be exercised with profit . . . but the great majority persist in enjoying careers where the lack of initiative imposes on them a passive role, little favorable to the economic progress of the country . . . 12

For political reasons, by 1892 a critical situation had devel­ oped for Ottoman subjects idio wished to travel outside the Empire. Although they were at liberty to send merchandise for display, mer­ chants were cautioned against attending in person the many fairs auid expositions abroad which had proliferated with expanding industrialism. The Journal stoutly upheld the presence of merchants at these exposi­ tions in order that they might answer questions concerning conditions of trade and take orders. It especially touted the fair at Nizhni

^^JCCC. October 27, 1894, p. 501.

^^JCCC, January 6 , 1894, p. 1. 114 Novgorod, "the most important in all Europe," which many Armenians previously had the custom of attending.13

The restrictions undoubtedly affected the merchants' dispatch of their sons for commercial education in Europe, Since students in other fields were sent abroad by the government, not commercial students, asked the Journal. A campaign was launched, therefore, to form a society for the encouragement of trade, as in France, Holland,

Germany, and Belgium, Its main purpose would be to send young men to

Europe for commercial and industrial experience, above all in lan­ guages. This would be a patriotic opportunity for the young to help develop Turkey's commerce and industry, stated the Journal, which in addition pointed out that the president of the Paris Chamber of Com- 14 merce was by right the president of just such a society.

Commercial knowledge of the world is necessary for new markets, to keep au courant of passing events, to fore­ see the future and take measures accordingly , , , One will object that our exporting merchants have representatives in all countries with which the Ottoman Empire has commercial relations. But to replace them in the future we insist young men must be trained , , , Those >rfio choose trade as a vocation should be able to have proper information, which has not been the case up to now , , ,15

The campaign for such a society, however, was unsuccessful. Late the following year it was announced that the old Hamidiye would be re-opened under a new three-year curriculum prepared by Zuhdi

l^JCCC, July 30, 1892, pp. 361-62, l^JCCC, September 10, 1892, pp. 433-34.

^^JCCC. March 4, 1893. PP. 97-98. 115 Paça, Minister of Public Instruction,^^ At first report it was to admit forty students; three weeks later a notice was published that twenty students would be admitted from among the graduates of the Galataseray Lycée and other i*dadl schools of the capital and provin- 17 ces, ' The Journal expressed doubt that the school would flourish unless the spirit of order and economy, the "heritage of merchants' 18 sons," was inculcated in the general population. The Chamber appeared to be uneasy over the loss of its control of the curriculum and the admission of students from non-commercial families. However, in January, 1895t the new Hamidiye was convoked by Zuhdi Fasa, tdio spoke on the duties incumbent upon the students and the services which 19 they were called to render to the country, A graduate of this school was condescendingly employed three years later at the Chamber, which believed that it had the duty to patronize the Hamidiye*s students.

Provincial Chambers were invited to imitate this example. But, warned the Journal, students should still be sent abroad to complete their education like those in medicine, mineralogy, or agricultural pur- suits,20

^^JCCC, November 3, 1894, p. 519,

^^JCCC, November 24, 1894, p, 355, The deadline for appli­ cation was given as November 17. Although this was actually three days later by the Julian calendar, occasionally used to confusing ends, the impression left was that the deadline had already passed at the time of the notice in the Journal.

^^JCCC, October 27, 1894, p. 501.

^^JCCC, January 19, 1895, p. 31. 20 JCCC, March 12, I898, p. 81. 116 When it was realized that Hamidiye graduates were turning toward other fields, making no use of their commercial education, the

Council of State decided that parents would be required to pay an In- demnlty If the graduates embraced any other than a commercial career.21

The Chamber admitted a dearth of available openings In the merchant houses but suggested that a higher Institute could train Hamidiye graduates as consuls for the Empire, Increasing by this means their opportunities for advancement, their patriotic sentiments, and their zeal as students. No longer would the Empire be forced to recruit con- suis of foreign nationalities as In the past. 22 Thus, purportedly to overcome the social stigma of a purely commercial profession, the opportunity for public office was ultimately recommended by the Cham­ ber despite Its previous declarations to the contrary. Should the sug­ gestion have been approved for execution, there Is little doubt that the multi-lingual sons of merchants would have pre-empted Ottoman con­ sular positions abroad, A striking omission In Abdulhamid's projected reforms listed in the first Issue of the Journal was that of railroads to provide for the rapid transport of produce from the Anatolian Interior to port cen­ ters for export and/or consumption. This was of great concern to deal­ ers In native commodities. It appeared to the Chamber that the govern­ ment was more Interested in completing the network which would link

Istanbul by rail to Austria and Germany than In facilitating communica­

ZljCCC, April 23, 1898, p. 130.

22jccc. June 4, 1898, pp. 177-78. 117 tions with the heartland. The effect on the capital’s trade and indus­ try of unwelcome merchandise from the north was dolefully predicted, and throughout 1885 the Chamber hammered on this problem. In the central provinces, winter has paralyzed com­ mercial movement, notably at Koniah where a large quantity of cereals rests in storage, perhaps beginning to rot be­ cause of the lack of transportation. We may be permitted to remark that a railroad between Koniah and Mudania would be, in our opinion, infinitely much more advantageous for the country than any other combination of railways of which the utility is doubtful,23 , , , We do not doubt that after what the Imperial Government has done recently for a line whose utility to the country is secondary in the view of national trade, it will not be slow in encircling our Asiatic provinces with a ring of iron routes connecting various rural centers and permitting the fruitful render of the immense natural riches of the national s o i l , 24 , . , The solution of the problem of the junction which will tie us closely with Europe obliges us to take prompt measures if we do not wish complete annihilation of our trade and industry,25 Addressing the Minister of Commerce, the Chamber once more drew attention to the situation which would occur after joining the

European and Asian lines. The flow of foreign products into Turkey would be greatly increased, giving a fatal coup to native industry if no remedy were taken, A special committee should study this grave 26 problem.

^^JCCC, February l6, 1885, p, 1, 24 JCCC, March 2, 1885, P. 1. The government was contracting with the Imperial Ottoman Bank and others to complete the fragmented network which was later to become the Oriental Railways Company of Baron de Hirsch, See Young, Corps de droit, IV, 73.

^^JCCC,.April 13, 1885, p. 1, This warning was repeated in JCCC, August 3» 1885, p, 1,

^^JCCC. August 3 1 , 1885, p. 2, 118 Of chief anxiety to Armenian merchants in cloth, as well as to the guild of tailors'in Istanbul, wais the import of ready-made clothing from Austria, against which, the Journal protested, not even 27 a fifteen per cent duty would protect local industry. Thereupon,

La Turquie was "inspired to give a false interpretation of the Cham- ber’s views," Condemning the concept of a protective tariff, La

Turquie proclaimed principles of free trade, principles, argued the Journal, which had no raison d'etre in Turkey where excellent wool fabrics were beginning to be produced at Konya and Van, Although the military used the fabrics in great quantity, interior duties had pre­ vented them from appearing on the Istanbul market, Austrian clothes were lower in price, 1a Turquie had stated, but in fact, their quality was poor, containing something other than wool ïdiich was not durable, 29 Finally acquiescing to the European junction, the Chamber proceeded to outline its proposals to solve the problem of Anatolian transportation. There were two points for attention with regard to railroads, stated the Journal, strategic and economic. In Turkey a commercial line was nearly always able to become a strategic one; therefore, economics should be stressed primarily. In place of one interconnected network in Anatolia, three separate rail-heads were sug­ gested: Istanbul, Trabzon, and Izmir, The Istanbul line should be extended to Ankara and Diyarbakir to draw raw materials destined, for

~TjCCC, August 3, 1885, p, 3. ZGjccc, September 28, 1885, p, 1, Z^Ibld. 119 Europe, 30 Then, since ports were cul-de-sacs unless connected with the interior, a line was recommended from Trabzon to Erzurum which would then fork into two linec, one through Bayazid, the other through

Van, up to the Persian frontiers. This system should concentrate at

Trabzon the Persian transit trade now blocked by Russia in the Cauca­ sus,which could easily leave behind to Turkey's benefit some

IT 300 million in interior duties. Moreover, the Empire would gain in influence upon the people of Central Asia with moral and material ad- vantages, and strategic as well for the defense of Asian frontiers,^32

As for Izmir, the line to Aydin should be projected to Konya, then southward. Extending Izmir's lines toward the north would kill the trade of Istanbul by drawing this trade southward, to the detriment as well of Izmir's port. By means of this proposed scheme, the provinces would be divided into three great distinct railway systems, each hav­ ing separate clients for the best development of the port cities of each. Later, when each system became strong and prosperous, they could be united into a single network,Such33 a division of Turkey, however, apparently held little attraction for the Sultan, By the middle of 1886, the Journal showed impatience over the

3°JCCC, October 12, 1885, p, 1, ^^For the heavy duties and caution money required by Russia of the Georgian transit trade, see Charles Issawi, "The Tabriz-Trabzon Trade, 1830-1900; Rise and Decline of a Route," International Journal of Middle East Studies, I (January, 1970), pp, 23-24,

32jccc, November 9, 1885, p. 2,

^^JCCC, November 23, 1885, pp. 1-2. 120 lack of state action on proposals which had been made by both the Sul­ tan and the Chamber, In a series of four editorials on "Commerce and the State," it compared trade to the "blood which circulates in the veins of the body politic, giving it vitality,"

, , , For reasons useless to develop, the commercial system in Turkey does not function in a satisfactory maui- ner for the simple reason that it is not equipped to func­ tion otherwise. All other countries have a most perfected mechanism to maintain commercial circulation with no inter­ ruption; here that circulation is left to the grace of cir­ cumstance to maintain itself by its own mesins, to traverse innumerable difficulties. As a result, that circulation loses everyday its energy, and if one does not find means to facilitate its course, it will undergo grave perturba­ tions , , , ^uch means/ are: construction of ways of com­ munication , railroads, regularization of the postal services, abolition of the interior duties euid other similar taxes, creation of docks and warehouses, a native merchant marine, etc. The question is whether these are within the ability of Turkey, where individual initiative is generally lacking and where all progress must receive its stimulus from the State,3^

Four years later after the Anatolian Railway had been con­ structed as far as Ankara, linking the interior with Istanbul, the

Journal had further recommendations to offer. Railroads were the reviv­ ing arteries for the development of trade, industry, auid agriculture, it said, but to obtain the maximum advantage from this means of circu­ lation, rates should be reduced. Not only rates but the transport from fields to the stations as well were high enough to render the existence of the railroads profitless to the people, A committee was ordered, therefore, to examine railway rates, among whose members were

Constantine Caratheodory, Gabriel Nouradounghian, and Aristakes

^JGCC, June 21, 1886, p, 1. 1 21 Azaxian,^^ After the passage of a year's time, it was announced that the Anatolian Railway had reduced the freight rate for cereals ty thirty-five per cent and the cost as well of third-class travel from

Haydar-Pa%a to Ankara, Envisioning future benefits to all, the Journal described this reduction as a "new confirmation of the noble and con­ soling theory of the solidarity of social interests, and of the pre­ cept that a good deed is never lost to its author,

The Chamber had continued to grumble over the import of raanu- factured coats and suits from Austria,"^37 It recommended that these articles should be hit with a seventy-five per cent duty without wait­ ing for current treaty negotiations to be completed. As the import of clothing increased, the import of cloth decreasedj and by means of tortured calculations, the Chamber proved a corresponding loss of cus­ toms duties based on the weight lost through the cutting of the cloth 38 used to make the clothes in Austria instead of in TurkeyIThe mer­ chants' anxieties were thus unmasked, seen to derive not from possible damage to the Empire's nascent woolen goods industry but from their own dwindling imports of cloth. Nevertheless, the merchants adjusted to the changed situation. Possibly some became agents of Austrian clothing firms. Six years later in another of its ambivalent state­ ments the Journal was proclaiming:

55jccc, October 15, 1892, p. 493,

^JCCC. September 9, 1893, P. 421,

^^JCCC, November 8, 1886, p. 2, ^JCCC, November 22, 1886, p, 1, 122

We have always welcomed any irade founding any rail­ way whatever on Ottoman territory. Certain souls period­ ically prescribe the erection of customs barriers against products of foreign soil and industry at their entry. Knowing the inanity of these protectionist or prohibitive theories which, under the pretext of favoring some rare producers, sacrifice the great meiss of consumers, we have always sustained the thesis that it will be more rational to favor our trade, industry, and agriculture by abolishing all interior or exterior obstacles opposing the free and easy circulation of exchangeable products in the Ottoman Empire,39

Being men of affairs, the Chamber merchants well knew the difficulties of obtaining agreement by all the Powers for revision of the treaties of commerce. As importers, the eight per cent duty on foreign merchandise was quite satisfactory since they could easily undersell locally-produced articles. But as dealers in native prod­ ucts, the pinch of competition could hurt. It was then that the cry was heard for protection by special consumption taxes on foreign prod­ ucts, or for a drawback of interior taxes on products to be locally consumed. Treaty negotiations, constantly on-going with one or more

Powers, were avidly followed, especially with the nearby states of Bulgaria, Rumania, and Serbia, Most-favored-nation status, while ac­ corded by the Empire to the Powers, was not reciprocal except for Hol­ land and Austria, with certain exceptions. Such a clause in a new 40 treaty with Rumania was auinounced with joy which was short-lived when the merchants discovered that the clause of "nation limitrophe"

(special treatment of Rumania's neighboring states of Austria, Serbia,

^^JCCC, October 15, 1892, p, 493.

^°JCCC. January 16, 1897, p, 22, 123 and Bulgaria) would frustrate Turkey of most-favored-nation benefits.

Then again came the call for a return to the "natural law of free exchange. In an editorial containing comprehensive recommendations for the development of industry, 42 the Journal attributed the causes of the decadence of Ottoman industry first to political difficulties and conditions which could not be pursued by the government; and second, to a complete lank of initiative on the part of the Empire's capital­ ists, Profits had been easier and more lucrative in the import trade and public office. Industrialists had retained their antique systems without equipment or, overwhelmed by European industrial progress, had closed up shop and left the field. Certain economists believed that to have raw materials was not enough, continued the Journal, the popula­ tion must have special aptitudes; that industry belonged to a distinct class of humanity and could not be acclimatized to Turkey, This false principle, said the Journal, nevertheless pleaded in Turkey's favor, for its people, naturally industrious, had finally shaken off their torpor and had begun to devote themselves anew to in­ dustry, Spinning mills and factories for hemp weaving had been opened at Kastamonu and pottery works at Kutahya, Cotton and wool textile trades multiplied daily in Asia Minor, as well as those of cotton and silk in Syria and Cilicia, The mining industry had already given a sign of life, while around the capital could be seen tanneries, pottery

^^JCCC. May 29, 1897, p. 169, 4? JCCC. July 19, 1886, pp, 1-2, 124 43 works» and glass factories. ^ It was true these were but modest begin­

nings, yet they asked only to be encouraged in order to succeed, open­

ing a new era of prosperity for Turkey, It was just the time idien the initiative of the state ought to come forth. With characteristic ambivalence, the Journal was certain that

"the Imperial Government is ready to impose upon itself sacrifices in

inaugurating a system of protection for the profit of native industry," Among the measures which could afford this protection were* the modi­

fication of laws regulating commercial societies; the suppression of

formalities to which industrial enterprise was submitted; modification

of the difficult conditions exacted by the High Commission of Public

Works for requests to establish machine and textile factories ; reduc­

tion of imposts and taxes which hobbled the industrial development of raw materials; freedom of circulation of native merchandise from one end of the Empire to the other by suppression of the eight per cent interior duties; exemption from import duty for all machines and tools as well as coal for industry; reduction of import taxes on gold and silver wire and on all materials raw or finished needed by industry; conclusion within short of the treaties of commerce, taking the needs of native industry as a basic principle; opening of practical schools

of industry and establishment of model farms and distilleries in pro­ duction centers; and finally, as always, the construction of railways.

Kouchon (Hoshe?) Levy had acquired a ten-year concession to establish a glass factory on free mlrl land on the Bosporus, prod­ ucts of vdiich were to be duty-free throughout the Empire, a "proof of the Sultan's intentions to encourage industry," JCCC, August 3» 1885, p, 3» 125 “Industry is capricious," concluded the Journal; "it prefers the arid rocks where it is free to the rich and fertile plains trfiere it is hin­ dered." The Swiss had no raw materials; they imported everything but enjoyed full prosperity, "Why do we not profit by this example?" asked the merchant importers.

Free entry of machinery and tooling equipment for new factory installations had previously been ordained for a ten-year period by a law of 23 Receb 1290^^/September I6, 18?3# This irade having expired, the exemptions were included thereafter in the privileges conferred by individual concessions granted to Ottoman subjects only, in an apparent effort to control the founding of factories by foreigners, Concession- seekers in the 1880's were often close to the throne and therefore well-placed to receive favors, e,g, Selira A|a, chief of the Palace

Guards, 46 and Osman Bey, first chamberlain to the Sultan, 47 The en­ deavor to prevent foreign penetration, however, met with little success. As an example of the pattern which evolved, the ice-factory case serves admirably,

Selim Aga had obtained a concession by irade in I885 for. making artificial ice for Istanbul and the territory up to the Dardan­ elles, With a fifteen-year monopoly, neither the manufacturing nor

^JCCC. July 19, 1886, p, 2,

46This date may not be accurate as the Journal had encoun­ tered some confusion on the history of this irade. See JCCC, Decem­ ber 2 5, 1897, p. 413, ^^JCCC. June 21, 1886, p, 2,

^^JCCC, October 4, 1886, p. 1, 126 the sale of ice were to be subject to taxes, interior or export. Free

entry was to be accorded the necessary machinery and equipment, Selim formed a stock corporation the following year to exploit this conces­

sion, the Société Anonyme Ottoman de Glace, The company duly held its

first assembly of stockholders at Glavany Han in Galata in 188?,

chaired by Hassan Fehmî, president of the board of directors, who was

assisted by a delegate of the Ministry of Commerce, Refik Bey, Director

of Commerce, The manager for the coming year. A, Scaife, presented a

summary of the past year's operations and announced that construction of the ice factory had been farmed to an English firm in order to be

provided with the most modern improvements. Ice-making would begin in

one month at the latest, many orders having already been received.

Included among the directors were the names of Vincent Caillard auid a 48 Mr, Smythe, In effect, the British had acquired the ice concession.

The general exemption from import duty of machinery and tool­ ing equipment was revived by irade of 2 Receb 1306/March 4, I889, per­ haps as a result of the Chamber's importunate demands on behalf of industrialist friends who had continuing vexations with Customs, It was renewed for another ten years on 23 Receb 1313/December 18, 1897, when the Council of State decided that native industry still needed protection and encouragement.49

Of the other industrial recommendations in the Journal's 1886 editorial, many would benefit commercial and agricultural enterprise

JCCC, June 21, 1886, p. 2; August 3 0, 1886, p. 3» May 28, 1887, p. 132} June 18, I887, p. 147, 4Q ^JCCC. December 25, 1897, p, 413, 127 as much as industrial. In the parlance of nineteenth century political economy, the Journal distinguished between three types of industry: agricultural, commercial, and manufacturing, all related and equally in need of development, in its opinion,Strong support was extended as much to the Borax Company, Ltd., which would "serve as an example for those who hesitate to throw themselves into that unexplored path of drawing industrially from Turkish soil the immense accumulated wealth,as to the local soap and candle factory financed by the

Banque de Constantinople, "With a little goodwill and a certain spirit of initiative in the governmental sphere as well as in the world of business, it will be easy to place Turkey at a level with all countries of Europe , . , Contrary to its opinion of foreign insurance companies, the Chamber was not averse to the use of foreign capital for develop­ mental purposes. When Reçad, the municipal comptroller, reported to a financial commission sitting under Kahmud Celaleddin that Turkey should finance public works not by recourse to foreign capital but by raising the tithe to twenty-five per cent, the Journal took emphatic objection. We do not believe the people of the Empire will support such an increase; that would lead to nothing less than the ruin of agriculture . , . We are in perfect accord with the author of the report as to the unhappy results of the interference of foreigners chez nous; but once we take care to safeguard the interests of the country in our con­ ventions and relations with foreigners, enforcing respect

^°JCCC. December 31, 188?, pp. 3^6-4?.

^^Ibid, p. 347 ^^Ibid. p. 346. 128

for our laws and not permitting them to be blasphemed (as unfortunately is always the case), what can they do? , , , We believe that the means which the country has are not sufficient to construct our great public works. It is thus necessary to have help from others on condi­ tion that in all our conventions we keep in mind only the interest and respect for the law of the Empire, We have, moreover, in Zihni Paça, Minister of /Commerce a n ^ Public Works, a minister for whom the safeguarding of these interests constitutes the sole care,53 Five years later the Chamber was to eulogize the "capitalists who risk their money in far-off lands, acquiring large fortunes while contributing to the progress of humanity in general." They were con­ trasted to native capitalists, ïdio had "no initiative" and practiced usury or arbitrage ab antique while maligning foreign capitalists as sq. crooks and swindlers,^ Given Abdiilhamid's antipathy to foreign controlling interests within the Empire, the views auid recommendations of the Chamber of Com­ merce could not have been received without misgivings. An undercurrent of uneasiness may have arisen in the Sultan's mind concerning the im­ partiality of Chamber recommendations; possibly it invaded the minds of his advisers and leading officials with regard to their own spheres of influence. This uneasiness was manifest partly in the disinclina­ tion of the state to adopt precipitantly the recommendations of the

Chamber experts, and in part by the bureaucratic impediments placed upon the attempts of the Chamber merchants to further their economic interests. The Chamber itself displayed a reluctance to encourage any enterprise in which its members did not hold a participating share, or

^^JCCC, November 19» 188?, pp, 278-79.

^JCCG, November 26, 1892, p, 5^5• 129 which might develop a monopolistic disposition. When consulted by the Ministry of Commerce regarding projects proposed by other Ottoman subjects, its opinion was frequently negative. In short, the Sultan, the bureaucracy, and the Chamber each guarded its prerogatives with exceptional skill, vrtiile the management of the Empire's economy passed into foreign hands. CHAPTER VIII

RELATIONS WITH THE TRADESIŒN

The activities of the Chamber with regard to the artisanal sector of Istanbul should be examined in the light of a recent article asserting that the Chamber of Commerce was established "as a modern institution to help Ottoman tradesmen adjust to western business prac­ tices,"^ This function was not explicit in the legislation pertaining to the founding of the Chamber, Yet the concept of the responsibility of the Chamber to aid tradesmen does appear to have existed in the minds of some officials during the period under study.

In a report to the Sultan in 1897» Mahmud Celaleddin, Minis­ ter of Commerce and Public Works, stressed that the Chamber of Commerce had not fulfilled effectively the purpose envisaged, that of taking the "necessary measures for the progress of skills and trades: reforms and amelioration of industry, encouragement of workshops, organization of industrial expositions with prizes for artisans , , , " Mahmud at the same time acknowledged that the Chamber members were not indus­ trialists and did not possess the knowledge required for these duties

^Ercümend Kuran, "Küçük Said Paga (1840-1914) as a Turkish Modernist," International Journal of Middle East Studies, I (April, 1970), 129.

1 3 0 . 131 2 which had originally been given to a Chamber of Industry, A similar concept had appeared in the decree earlier outlin- ing the duties of a Council of Commerce and Agriculture.^ This irade recognized that in order to achieve economic reforms, the professional organization of urban areas, the esnaf groups, had to be modified "in a manner advantageous to trade and industry." In other words, an alteration of the socio-economic structure was perceived to be neces­ sary, the moving force to come from above. The obligation to stimulate this change was to fall to whatever Council or Chamber was created in response to the irade. Possibly the modification of the esnaf was intended to be achieved through education, a training for new skills and vocations to comply with the needs of an anticipated industrial growth. A School for Skills and Trades (Mekteb-i Semayl) had existed in the capital for at least ten years. According to the Journal, by 1886 it was "in full disarray." Numerous debts had accumulated while teaching was neg­ lected, and the nutrition and clothing of the boarders were in a de­ plorable state. For 230 students, the school maintained a personnel of ninety-three whose positions had become complete sinecures, Ismail

Hakki, Commerce Minister, was placing Colonel Yusuf Bey, a member of the Council of Mines and Forests, in charge of the school with full 4 powers to institute whatever reforms he judged necessary. To this

^JCCC, July 10, 1897, pp. 221-22.

^See above, pp. 33“3^« irade of "13 juin 1292," Aristarchi, Legislation, V, 266-70. ^JCCC, September 20, 1886, p. 2. 132 school, however, the Chamber of Commerce paid scant attention. The

Chamber merchants, having no gainful employ for artisanal skills in their professions, were not inclined to be concerned with the develop­ ment of such skills,^ In 1893• the School, then under the direction of Ebuzzia Tevfik Bey, was removed from the Ministry of Commerce to the Ministry of Agriculture by irade upon the Porte's proposal,^ Nevertheless, in certain areas requests were made by the

Chamber for official acts or favors on behalf of the development of corporative groups. These were the trades closely related to the eth­ nic minorities represented by the Chamber merchants, such as the Ar­ menian and Jewish goldsmiths and jewelers, the Greek winemakers and 7 millers, auid the Jewish tailors, although by no means was the Chamber partial to all esnaf in which the minorities participated. Such groups as the bakers, butchers, tanners, and porters often received hostile treatment. The caise of the bimke?hane (literally, a shop mak­ ing gold or silver wire) illustrates the type of effort made by the Chamber to help a favored group, the jewelers and goldsmiths.

The term for artisan (san'atkar) signified artist as well, one who was accomplished in manual skills. The organic law of Octo­ ber 14, 1885, in Young, Corps de droit, IV, 2, for a Chamber of Skills and Trades concerned "belles-lettres'* and "beaux-arts" rather than trades relating to industry. Also noted is a Finance Ministry circular ordering actors and actresses to pay a special tax "like other artistes who live by their industry," JCCC, December 17, 188?, p, 324,

^JCCC, August 19, 1893, Pt 390, The Minister of Agriculture may have pressured the Porte for this transfer in order to enlarge his sphere of control over that of the Commerce Ministry, 7 For the ethnic division of labor, see Sussnitski, "Zur Gliederung wirtschaftslicher," pp, 118-20, 133 g As explained by the Journal, the Simkeshane was established in Istanbul by Ahmed I (I603-I617), who brought from Bursa several members of a guild of embroiderers which dated to the reign of Crhan

Ghazi, Receiving Ps, 500,000 from Ahmed as capital, the Slmke?hane furnished the embroidery for palace and tomb decorations. Although its gold and silver threads were said to be superior to those of for­ eign make, a price differential in the nineteenth century had permit­ ted foreign threads to prevail at the capital, "causing a precarious situation," The official functions of -Uie Simkeghane had become lost, said the Journal, and it "served only the private interests of certain Q men," The government of Abdulhamid placed it under the care of the

Commerce Ministry, where, after an inquest of its accounts, Refik Bey was ordered to study the proper means of reorganizing "this important branch of indigenous industry," To enable goIdworkers to compete with foreign imports, Edib Efendi of the Customs Administration submitted a request to the Porte to lower the rate of the export duty on goldwork to other parts of the Empire, notably Egypt, by about fifteen per cent,^® Eighteen months later another request was submitted asking for reduction of the damga resmi (stamping tax) for precious articles of a lower quality and grade. This report was accompanied by the news that the tariff on imported goldwork would be reduced by the treaties under negotiation from eight to four per cent to prevent smuggling.

®JCCC, October 20, 1894, pp. 495-96,

^JCCC, March 2, I885, p, 2,

^^JCCC, November 9, 1885, p, 2. 134

The Chamber protested that with the damga reduction, "our industrials, unheedful of the general interest, would naturally prefer to work in metals of a low grade or even sell it as metal of a higher quality," Since this would destroy confidence in the tu&ra (imperial monogram, thus a hallmark) of Ottoman metalwork, a special mark should be adopted for precious metals of lower grade. As for the reduction of tariff, it "will certainly reduce contraband, but will it protect native

Industry?

By 1893» a committee, of which Ferid Basmacizade was a mem­ ber, was formed at the Ministry of Commerce to find means of stiraulat- ing the industry producing gold thread. 12 Two months later the Jour­ nal reported that according to the new tariff rates the import duty on jewels and other precious objects, among vrfiich presumably gold thread could be included, would be reduced considerably. Although the new rates were not yet in force, the treaties not having been signed, the Director of Indirect Taxes (Customs) was already applying the clauses relative to precious articles to prevent smuggling, A second committee was established to study the question, 13 Another year passed. The Journal again referred to the project for the activation of the Sim- ke^hane to compete with foreign imports of silver and gold thread. The Chamber recommended an immediate payment of LT 9,000 by various departments of the state to the Slmke^hane to purchase machinery

^^JCCC. April 23, 1887, p. 97.

^^JCCC, July 22, 1893, P. 343. ^^JCCC, September 9, 1893, P. 426. 135 required, for new manufacturing methods. In May, 1898, thirteen years after the project originated, it was announced that the Council of

State had sent to the Grand Vezir a modified regulation for the Slmke$- hane,^^ This long affair illustrates not only the inordinate delay incurred for a projected reform and the impediments, perhaps deliber­ ate, placed upon the industrial development of a trade practiced by certain ethnic groups. It also makes clear that however much the Cham­ ber stated its concern for the goldsmiths, its efforts on their behalf were confined to recommendations only. No entrepreneurial investment of iT 9»000 for the necessary machinery came forth as private aid to its own minority group. As with those other Ottoman subjects whose initiative it decried,the Chamber looked to the state for internal financial stimulus of industrialization. In the Austrian ready-made clothing crisis of 1886, the tai­ lors* guild presented to the Porte a petition bearing 2,000 signatures which prayed for consideration of the competition which had reduced 17 them to misery. The Vezir referred the petition to the Minister of

Commerce, who passed it to the Chamber, The latter advised that the petition was well-founded and expressed confidence that Kamil Paja would not be slow in taking the necessary measures. Later, the

^^JCCC. October 20, 1894, pp, 495-96,

^■^JCCC, Kay 21, 1898, p. l64. The outcome of the project, not having been resolved during the period under study, is not known,

^^JCCC. June 21, 1886, p, 1,

^^JCCC, November 8, 1886, p, 2, 136 Journal estimated that in Istanbul and its suburbs there were 9,800 tailors and tailoring-merchants, eaw:h of whom whould be paying Ps, 20 a year for his tezkere and a monthly tax, rusumiye, of Ps, 3î of these only 260 tailors had paid anything, the individual amounts coming to

Ps, 28 for tezkere and Ps, 7 per month tax. Furthermore, of 37,400 workers and their chiefs who should be peeing r'ùsumlye of Ps, 5 per month, only 13,000 workers were paying a tax of Ps, 6, Thus, the total revenue from the tailoring industry, which ought to have amounted to

Ps, 2,792,800 per year, had been reduced to Ps, 965,120, The reduction of tauc-paying tailors was ample reason to strike the import of clothing with a seventy-five per cent duty. 18 The Journal's further calcula­ tions on revenue lost through decreased cloth imports, however, seemed to disclose the merchants' real interests. Since no treaty providing for a genuinely protective tariff would be approved by the Powers, Jewish tailors abandoned custom tailoring to deal as haberdashers in ready-made clothing. 1 9 Eight years later, upon complaints of small tradesmen against competition from the larger haberdashery houses, the Chamber came up with a solution which it was to recommend to all groups which felt threatened by powerful economic forces. This was the cooperative move­ ment, the results of which in Europe had aroused the admiration of the

Chamber in Istanbul, To eliminate the pressure of high prices upon consumers or that of competition created for small retailers by large

18 JCCC, November 22, 1886, p, 1, See above, p. 121, ^^Sussnitski, "Zur Gliederung wirtschaftslicher," pp, 118, 120, 137 firms, the spirit of aussociation through forming cooperative societies was advised hy the Chamber as the best solution to the difficulties experienced by the small and weak. Even the large firms were now issu­ ing shaures, said the Journal, pointing to the example of Orosdi Back et Cie., a type of department store which wais then incorporating it­ self, Small retailers should follow the way of the future auid associ­ ate in groups of four, six, or ten for the purchase auid sade of their merchandise.20 Association had first been recommended to consumers of bread to improve their lot by forming a cooperative bakery against the rapa- cious bakers of the capital. 21 Through wholesale buying, cooperative consumer societies could eliminate the vexations not only of bakers but of butchers, grocers, and other retailers as well. These cooper­ atives would fall under the eye of the municipal authority, "who even now intervenes to restrain the love of lucre," 22 Apparently the >rfhole- sale merchants intended to sell directly to consumers, perhaps to ob­ tain part of the middlemen profits as well. Later, the Chamber sug­ gested the issuance by cooperative societies of shares of one or two

Turkish pounds, to be placed in the care of a syndicate. This syndl-

JCCC, December 22, 1894, p, 597,

JCCC, December 23» 1893, P# 601, The complex relations of the Chamber with the bakers' guild are consigned to the following chapter, 22 JCCC, January 26, 1895» p. 37. Bernard Lewis cites Orban Tuna on consumer's cooperatives from 1909 to 1918, v^ich disappeared "perhaps because of the political direction and exploitation to which they had been subjected." Emergence, p, 453 and n, 37. 138 cate would fall under the Ministry of Commerce for supervision of its regularity of operations. To establish a cooperative butchery, the 23 Chamber estimated a capital of tT 500 would be sufficient. The lack of an associative spirit for industrial enterprise by native capitadists, the Journal had stated earlier, was caused by the desire for individually-acquired profits, "Each wants to count only on his own forces without wishing to take associates so as not to have to divide the profits, without considering that where profits are 24 divided, it is also necessary to divide losses," This was also given as the chief reason for the lack of successful mineral exploitation in the Empire at the time. Praise wzis later accorded to the example set by a syndicate of small producers of oil "to offset the great," which 25 had taken the name of Standard of Baku, None of these recommendations apparently had any effect upon artisanal organization. While the Chamber deplored ancient guild prac­ tices,^^ it welcomed the new Bureau of Guilds as a regulating instru­ ment for retail and industrial (esnaf) sellers which would increase municipal revenues and "put an end to the abuses committed by some of the guild chiefs (k'àhya-s) A project of one G, Exaporiton and one

^^JCCC, February 8, I896, p, 6I; April 18, I896, pp. 181-82,

^^JCCC, June 8, 1885, p, 1,

Z^JCCC. April 1 6, 1892, p, 188,

^^As, for instance, in the excerpt from Bourdonne on the right to work, which was hastily disengaged from the concept of the obligation to furnish work, JCCC, December 10, 1887, p, 317«

27jCCC, January 23, 1892, p. 42, 139 N. Efcarpldi for combining all industrial guilds to strengthen certain resources of the state was rejected by the Chamber as being impractical

since it would "throw great confusion into the functioning of the var- 28 ious guilds with no profit to the State and to industrialists." The

general opinion seemed to be, moreover, that some of the esnaf were already too strongly associated when it came to defending their privi­

leges, such as the mahonaci-s, who monopolized the water transport of

cargo to and from ships, and the hamal-s, tdio insisted that all por- 29 terage be carried on their backs. However, an advisory role was enjoyed by the Chamber of Com­ merce vis-à-vis the workers of Istanbul as various esnaf brought to it

their complaints and grievances. The shoemakers (kunduraci) who pro­ tested as injurious to the reputation of their craft the use of card­

board and oilcloth by some individuals in the making of soles were ad- vised to use a trademark for their own make,^30 Since the registration

fee of iT 5 plus further fees for deposits of trademark samples at the

Ministries of Commerce and Justice 31 may well have been beyond the means of ordinary shoemakers, a second complaint was reported the

pO JCCC. September 30, 1893» P. ^57» from the annual report to the Chamber for 1892, presented by SpiraM. Alexandridi,

^^JCCC, March 23, 1895» PP. 133“3^» excerpt from the Revue Commerciale du Levant, monthly bulletin of the French Chamber of Com­ merce in Istanbul, See also the Ottoman Chamber's complaints over the insufficient number of hamal-s and their lack of discipline after the massacre of I896, JCCC, February 27, 1897» pp. 65-6 6,

^^JCCG, August 6, 1892, p, 374, from the annual report for 1891 by Spiraki Alexandridi,

^^Young, Corps de droit, IV, 3 8» art, 5 of Regulation on Trademarks of 29 ^aban 1305/May 11, 1888, and n, 4, 140 following year. Considering the shoemakers' proposals as excessive, the Chamber submitted to the Council of State a report that up to now the measures taken had given very good results. The Council agreed with its conclusions and the shoemakers were dismissed,^32 The farriers also petitioned the Chamber to intercede with whatever authority to forbid the exercise of their trade to those whose scant knowledge of the art of shoeing horses discredited the guild. To these the Chamber recommended that a strict selection of apprentices should be made through registration and examination by experts before a permit to practice the trade was granted,33

A request to the Minister of Commerce for a concession to build a fireproof warehouse for lumber, supported by several members of the guild of timber dealers (keresteci), was transmitted to the

Chamber for its examination and advice. On the grounds that the ware­ house would create a type of monopoly of the lumber trade as well as contribute, because of the high storage charges, to a rise in the price of lumber, "an object of prime necessity in our city where most of the houses are wood," the Chamber rejected the concession as inopportune, indicating that other measures should be taken to protect lumber from fire,^3^ presumably insurance, A request by the tanners' guild to the

Council of Ministers to abolish the eight per cent interior duty on valonia and pine bark was, however, heartily seconded by the Chamber,

^^JCCC. September 30, 1893. p. ^57. 33jCCC, November 18, 1893. p, 346, ^ JCCC. December 11, 1897, p, 393. 141

Such abolition, stated the Journal, would merit the gratitude of the commercial world in general,35

Another request submitted by the Commerce Minister to the

Chamber for its opinion was that of the rugmakers of U|ak, It seemed that wholesale buyers had been measuring the rugs to be purchased with defective instruments, at a loss to the rugmakers. These asked that the official measurement of their rugs be delegated to the head of their guild, idio would be authorized to collect ten paras per foot on all pieces measured under his official supervision. The Chamber, among whose members were dealers in rugs, opined that the proposed method of measurement would be a disguised kind of tax tdiich was unjust and useless for the progress of Turkish rug manufacture. The rugmakers were at liberty to submit to their municipal authority the verification of any measurements used in Turkey, As for preventing fraudulent pur­ chases, the Chamber suggested that the rugmakers use wool thread of an irreproachable quality ; vegetable dyes such as valonia, which did not lose their color with time as imported chemical dyes did; and official measuring instruments. Moreover, it advised that the sellers accept the mecidiye at a rate of twenty piasters,

Three months later a commission had been formed which was com­ posed of Mehmed Hilussi Bey, Director of Industry at the Ministry of

^^JCCC, February 26, 1898, p, 74, ^^JCGC, April 2, 1898, pp, 105-06, The mecidiye was quoted that day in the financial section of the Journal at 108,05 piasters per Turkish pound of 100 piasters, thus giving it a value of about 18,5 piasters. It fluctuated during 1898 between 107,20 and 108,10, 1 4 2 Commerce; Ferid Basmacizade, President of the Chamber;^"^ Hassan §erif

Er-Alizade and Badrig Gulbenkian, Chamber members; and Zarmair Cigmar- dahos, rug merchant. This commission acquired the right to inspect the manufacture of rugs to prevent fraud, attaching a lead seal to

each rug after it had passed their inspection. The expenses of the

commission were to be defrayed by a, "modest fee collected from the mer-

chEuit buyers."^® Thus were the merchants ensured of the quality on

their own terms of Turkish rugs, export of which to the United States

was to increase four-fold in the period 1892-1902,^^ For the rug­ makers, more stringent standards of craftsmanship were expected to bring a smaller rate of return. Matters of fraud were frequently brought to the Chamber's portal by the Ministry of Commerce, the Prefecture, and the Customs Administration. The above examples of the concern of the shoemakers and farriers for the exercise of their craft indicates that a respon­ sibility for quality control lingered among some guilds. With the breakdown of traditional market supervision, however, a supervision which had become impossible to execute over the foreign element in mar­ ket affairs, the municipal authority contented itself as a rule only with the sanitary aspects of manufacturing or with products injurious

^ After the death of Aristakes Azarian on May 17, 1898, the post of president had remained vacant until March 24, 1898, when it was officially filled by Ferid Basmacizade, former vice-president, JCCC, April 9, 1898, p. 113,

^ JCCC, July 23» 1893, pp. 233-3^. Cigmardahos became a member of the Chamber in 1903. JCCC, April 4, 1903, p. 105,

^^Gordon, American Relations with Turkey, p. 65. IkJ

to the public health. The Customs Director was concerned with im­

ported merchandise unfit, mislabeled, or switched in transit, while

the Commerce Minister relayed complaints from other departments of the government and the provinces. Although the Chamber itself had no

power to prevent fraudulent practices, its advice and recommendations

were sought by the authorities who did.

When parcels of Khokard silk arriving by way of the Russian Navigation Company of Odessa were found to contain dried grass satur­

ated with water, the Chamber accused steamship companies in general 40 with a lack of vigilance. For the entry of adulterated foreign

olive oil, a grief to traders in that article as well as to native pro­ ducers, insufficient or faulty inspection by Customs was held respon-

sible, 41 A report on the prevention of fraudulent imports was sent to

the Bureau of Legal Counsellors at the Porte for study "in view of the

existing treaties with Foreign Powers," From there it went to the 42 Council of State, where it became more or less buried. Adulteration of opium, while disturbing to exporters, annoyed

even more the Finance Ministry when it occurred in tithe payments. As

a matter of interest, the Chamber described two methods used by peas­

ants, to whom the adulteration was attributed. One consisted of a recipe of apricot juice, scrambled egg yoke, c o m flour, and the juice

of the "opium plant" boiled to a high temperature; the other was the

^°JCCC, April 13, 1885, p, 2,

^^JCCC, March 26, 188?, p, ?4. ^Zjccc, August 31, 1885, p. 3; March 26, 1887, p. 7^. 1 #

Insertion of heavy articles such as lead, iron, or rock into opium loaves. The Chamber again recommended draconian measures of inspec­ tion, similar to those of Persia whose opium was "pure of all foreign matter," and to which London buyers were turning after experiencing

Turkish fraud, ^

Fraudulent manufacture in Damascus was publicized twice in one month shortly after the Syrian Izzet Bey became president of the

First Chamber of the Tribunal of Commerce. The reputation of a soap factory in that city for too much lime in its product was said to have discredited the soap industry of Syria. Next, a Damascene manufac­ turer of cloth was reported to have decreased his yardage dimension.

Zihni Pa§a, the merchants' highly-favored Minister of Commerce, re- bh, quested the Chamber to study appropriate measures to be taken. The case of soap in Üsküdar, found to contain potash and lime, was handled by the Minister of the Interior, vho warned provincial authorities to be vigilant since the renown of soaps of Ottoman manufacture could be compromised.^^ However, the question of the soaps of Mytilene (Lesbos) and islands of the Archipelago containing matters which "one pretended to be contrary to the public health" was inconsequentially dismissed.1*6

^^JCCC, April 27, 1885, p. 1. ^JCCC. July 9, 1887, p. l65; July 16, 1887, P, 169. ^^JGGC, May 28, 1892, p. 259.

JCCC, September 30, 1893, P. ^57. Among Chamber members from Mytilene were the Courtgis of the Aegean Line. Dimitraki Yeni- dunia was a director of the Courtgis' Bank of Mytilene, which was com­ mended as an outstanding example of the employ of capital in Turkey with its ownership not only of L'Egée but of coal mines at Heraclea (Eregli) as well. JCCC. May 27, 1893, PP. 241-42. xh5 The Chamber had important members and friends from Mytilene,

While the available evidence is not conclusive, the Chamber appeared little concerned over frauds committed by tradesmen themselves unless, as with the rugmakers, it had a direct interest in the arti­ sans' product. Despite its pronouncements, the Chamber seemed less interested in the protection of the public than in safeguarding its own local industries such as raisin wine smd olive oil from the competition of harmful alcohols and cottonseed oil mixtures from abroad. Accusa­ tion of fraud or its connivance might be used politically to discredit an enemy, or equally denied to protect a friend. Fraud, in itself, was of relative unimportance to merchants who for centuries had exer­ cised their wits in gainful occupation. What the Chamber did consider as important was the admonition of Ottoman exporters \rtio, careless of their own interests, adulterated opium, altered the quality of figs, or encouraged fraudulent rugmaking. Their imprescience and love of lucre, warned the Journal, could kill the proverbial goose instead of assuring the progress of the export trade of the Empire,

A conflict between the Chamber and the municipal authority over esnaf status has already been described, 48 A further clarifica­ tion was announced by the Journal the following year.

Since the creation of the Prefecture at Constantinople, the merchants established in a particular guild according to the nature of their trade have been compelled to pay a pre­ scribed tax collected by the Prefect of the city as a license to exercise their trade in the capital. Following the founding of the Chamber of Commerce, and by virtue of its laws, merchants had been ordered to be in­

^^JCCC, November 12, I8 9 8 , 353"5^. ^ S e e above, pp. 61-62, 146

scribed on the books of the Chamber and to obtain a declar­ ation indicating the type of trade exercised according to the formalities required by commercial law. Certain mer­ chants of the capital have believed themselves, in being enrolled at the Chamber of Commerce, to be free of the Pre­ fecture's tax which they had paid up to then, a pretention which cannot be allowed in any manner.49

The Journal explained that the Council of State had decreed that merchants and traders \dio had paid esnaf taxes before the found­ ing of the Chamber would have to continue to pay those taxes to the municipality until the new profits-tax was established in Turkey,

Until then, merchants who sold either wholesale or retail, if belong­ ing to a guild recognized by the city, would be held as previously to obtain a tezkere from the Prefect and to pay the monthly tax even if they were simultaneously inscribed in the Chamber's register. While the Chamber had wished to extend its authority over as wide a section of the commercial community as possible, it was evident that the institution did not intend to become an avenue of upward so­ cial mobility. Such a course might bring with it the disadvantage attendant upon the lower classes, that of paying professional taxes for the maintenance of the municipality. For the petit bourgeoisie, the implication of becoming bound to an occupational status might have created alarm had there not existed the expectation that a change in the method of taxation could result in a change of social structure. A law of 3 Recep 1296/jvme 23, 1879 levying a tax (temettü) on the presumed annual profits of all merchants and industrialists outside Istanbul had proved unenforceable owing to the protests of the

^9jccc, November 29, 1886, p. 4. ^^Ibid. 14? foreign embassies. Article 8, section 4, of the Kuharrem Decree of

December 20, 1881, had stipulated that the excess of revenues result­ ing from the general application of a llcense-tax over the current receipts of the temettü would be applied to service the Public Debt,^^

The Powers were therefore Interested In negotiating a new law of gen­ eral application of a tax on all merchants and Industrialists operat­ ing In the Empire regardless of location or nationality. However, the reservations expressed by the embassies' dragoman-s at a meeting In

May, 1883, on such matters as the method of collecting the tax and consular jurisdiction proved to be Insurmountable. The most Interest­ ing reservation was that made by Russia, which desired the total aboil- 52 tlon of the esnaf before submitting her nationals to such a tax. While Abdulhamld*s government was not Interested In Increas­ ing revenues for the express purpose of servicing the Public Debt, the opportunity to extend taxation to foreigners within the Empire could not be passed over, A new law was decreed July 24, 1886,^^ of which the first article opened to all residents the exercise of any Industry whatsoever. Including the guild trades which heretofore had been pro- hlblted to those who were not Ottoman subjects. 54 This provision may have been a concession to the Russian reservation. Nevertheless, It also marked an Important departure from paist policy of the Ottoman

^^Young, Corps de droit, V, 75. ^^Ibld, p. 28?. ^^DuVelay, L'hlstoire financière, p, 66l, It was the profits- tax levied by this law to which the Journal had referred on November 29, 1886, See above, p, 146, 54 Young, Corps de droit, V, 286, 148 Empire which had jealously guarded the guild occupations for the benefit of its own subjects.Since55 the law was not accepted by' tthe

Powers, however, it was modified by a regulation of August 5» 1889, 56 enforcing the temettü only upon Ottoman subjects in the provinces while the esnaf tezkeresi system was retained in Istanbul, A social reform "as dangerous as it was desirable" 57 could therefore be said to have been prevented ly the refusal of the Powers to submit to Ottoman taxation the profits of their merchants and indus­ trialists in the Empire, As it stood, the upward mobility of a devel-

55"By virtue of the freedom of trade consecrated by the treaties, Sicilian merchants , , , may sell freely in all Turkey , , , However, it is forbidden to them to engage in small trade the same as the esnaf or guilds of Ottoman subjects with or without gedik. The exercise of crafts in the Ottoman States being reserved to subjects of the Sublime Porte, the subjects of the Two Sicilies may not have shops for this exercise," Art, 7» Turco-Sicilian treaty of March 5» 1851. Aristarchi, Legislation, IV, 275. "Greek subjects, no more than those of other Powers friendly to the Sublime Porte, may not participate in guilds regularly estab­ lished in Turkey, nor exercise the industries especially reserved to these guilds. But if Greek subjects, following former practice, are found taking part in these guilds, they will preserve their national­ ity but they will be held to fulfill the conditions to which the sub­ jects of the Sublime Porte participating in the same guilds are sub­ mitted, to pay the taxes required of them and to contribute to the charges which are especially allotted therein; they will be judged and punished without the intermediary of diplomatic and consular agents of their nation in case of contravention of obligations especially im­ posed upon the exercise of their industry in these guilds , , , None of these Greek subjects may exercise the functions of head of one of these guilds," Art, 17, Treaty of Kanlica, May 27, 1855. Aristarchi, Legislation. IV, pp, 227-28,

^^Although the tauc was to vary according to budgetary needs, it became fixed at five per cent of the estimated annual profits of the taxpayer, DuVelay, L'histoire financière, p, 662, DuVelay further remarks upon the injustice which obliged the natives to pay the temettü while the foreigners went free, "contrary to the most elemen­ tary rules of equity,"

^"^Young, Corps de droit, V, 207. 149 oping middle class in the capital, despite enrollment at the Chamber, was blocked by the financial needs of the municipality, sustained by taxation of the guild members. To these needs the Chamber was deter­ mined to make no contribution through a professional tax.

The endeavor to keep its distance from temettu-paying status was maintained by the Journal's protest over news that the provincial cp employees of the Regie des Tabacs would be submitted to that tax. If such a precedent were established, the same tax might be extended to employees of the Chamber. To avert this fate, support was expressed for the Régie employees, generally disliked throughout the Empire. We believe that . . . the temettü is a kind of license collected from those trtio are part of a guild or who practice industry, and one cannot logically admit that such is the case for employees of the Regie or any other commercial soci­ ety or House of commerce whatever. Moreover, the Regie being co-interested with the Imperial Government, its employees may even be classed among employees of the State, if we recall the ministerial circular which compared them to the latter for the abuses committed in their operations; and we are firmly convinced that the Porte will not permit a measure which would be able to serve as a precedent to the prejudice of a certain class of men who have only their wages for sustenance.-59

The journal threatened that if forced to pay the esnaf tax for which the municipal agents continued to hound Chamber employees, commerce would soon become a "luxury too costly, and one will see a decrease

^ The Société de la Regie cointérressée des tabacs de l'empire ottoman was a trust formed January 10, 1883, by the Credit Anstalt, S. Bleichroeder, and the Imperial Ottoman Bank to exploit the tobacco monopoly for the Public Debt Administration. See DuVelay, L'histoire financière, pp. 502-15. For the May 28, 1883, firman authorizing the concession for thirty years, see Young, Corps de droit. V, 191.

^^JCCC, December 13, 1886, p. 1. 150 in the number of our merchants already limited,"^ Complaints continued, to appear throughout the years regarding

the tezkere-imposing agents. In 1898 an editorial lectured on the

"delicate question of the tax-basis," which must not compromise the harmony which should reign within the exercise of the various branches of human activity. The grievous spectacle of a certain guild chief who imposed the esnaf-tezkeresi and a title and quality which they did not have upon honorable merchants subordinate to the direct juris­ diction of the Chamber of Commerce was deplored. This might result in a regrettable confusion of titles and qualities, warned the Journal, "The Municipality tries to impose the tax on the Chamber's badliffs.

There is no similarity between a Bank or firm and an official institu­ tion created to issue opinions and advice on questions submitted ty the Imperial Government,(italics mine,) In this manner the Journal asserted its link with the ruling bureaucracy. The superiority of the employees of the Chamber of Com­ merce was upheld over those wholesale amd retail tradesmen who had acquired sufficient prosperity on their own initiative to rise into the world of commercial notables. The tradesmen were forced to remain categorized within the community from idiich they had originated ; the

Chamber employees shared the benefits of officialdom.

JCCC, December 20, 1886, p, 2, Both Young and DuVelay state that the extension of the temettü to employees, banks, administrations such as the Régie, and those other than merchants, industrialists, and tradesmen was Illegal according to the terms of the 1886 law. Corps de droit, V, 285; L'histoire financière, p, 662, *^JCCC, July 16, 1893, pp, 225-26, CHAPTER IX

THE CHAMBER AND THE BAKERS

With no other guild were the Chamber’s relations more complex than with that of the bakers of bread in Istanbul, These relations were intertwined with important interests of the Chamber such as the grain and flour trade, with bureaucratic politics, and with reform efforts of the government. The firinci-s were more independent than other tradesmen because of the importance of their occupation to the daily needs of the capital's population. With them the Chamber mer­ chants engaged in a battle of wits, which was turned for a time to the bakers' advantage by foreign diplomatic intervention.

From the earliest days of the conquest of Constantinople, the provisioning of grain for the capital had held prime consideration in market affairs. In the sixteenth and seventeenth centuries, the grain merchants, to vdjom fell the obligation of transporting cereals to the capital, were under the orders of the arpa emini, This "comptrol­ ler of barley supplies" was responsible for the estimation of crops and the quantities to be delivered by the provinces, the collection of cereal duties, the storage of grain in state warehouses, and the fixing of the price for grain distribution to the various bakers' guilds.^

^Mantran, Istanbul, pp, 169-70,

151 152 As wheat arrived from Egypt, Thrace, and the Black Sea provinces by ship, the opportunities for smuggling or speculation on the peurt of the owners or captains of the vessels, generally Greek subjects, were considerable, A fixed price (narh) was enforced on bread, a commodity of dally necessity, for the benefit of the population of Istanbul, This price was negotiated between state officials, the kadi and ihtisab agasi, in consultation with guild heads, the kâhya and yigit basi. The fixed price allowed the bakers a profit of ten per cent and was valid until a change in money values or economic conditions such as 2 the price of grain dictated a new narh. Selling below the narh was not countenanced by the guilds. By the latter part of the nineteenth century, despite the changed patterns of trade and the differentiation of official functions, a fixed price for bread was still maintained in

Istanbul, The principals to vdiom the commercial duties of the kadi and the ihtisab agasi had devolved, the Ministry of Commerce and its adjunct, the Chamber of Commerce, and the city's prefect (?ehr-emini), negotiated this price in conjunction with representatives of the mil­ lers and, at times, the bakers. Gradually the bakers appeared to have less voice in the matter as officialdom grew stronger. Because of the increased importance of the grain merchants in the marketing of cereals to and from the Vest, as well as their amassed wealth and influence, they acquired a substantial augmentation of power

2 Ibid, pp, 297, 326-2 7. Not only bread but all market prices were fixed by the same procedure, A ten per cent profit was standard, although up to twenty per cent was granted depending upon the diffi­ culty of production. 153 in comparison to the dealers of earlier times. This power was wielded through the Chamber of Commerce vdiich, indeed, repeatedly referred to itself as the "organ of commercial and agricultural interests." Thus,

Refik Bey, Director of Commerce, and Georges Sevastopoulos, Chamber member, were named to a committee to examine with the prefect the jus­ tification for a high fixed bread price when the current price of

ïdïeat was low,^ soon after the inception of the Chamber, In the same year, the millers addressed the Chamber for assistance when they be­ came disturbed by the competition of foreign flours. At that time, the Chamber could achieve only an assurance from the Director of Indir­ ect Taxes that the import duty on flour would be increased when the current negotiations for tariff revisions were completed. Also ob­ tained was a tezkere from the Porte by which the eight per cent duty on cereals and flour from one Ottoman port to another would be sup­ pressed when the government felt financially secure enough to abolish I4. all interior duties.

The importance of the Chamber's function in fixing the price for grain was demonstrated during a reform of the method of selling produce collected by the tithe. If it was not to be forwarded to the capital, this produce had previously been sold by provincial Councils of Administration (meclis-i idare-s) at prices often in complicity with colleagues to the detriment of the Treasury, After I885, local

^JCCC, February I6, I885, p, 3* h JCCC, August 3f 1885, p, 3. The tariffs were not revised until 1907f when in return for extensive concessions they were raised from eight to eleven per cent ad valorem. 154 committees were ordered to sell tithed grains at the weekly base price

furnished by the Journal, with the latitude to auction or not accord­ ing to circumstances,^ Dependence upon the Journal's quotations sig­

naled the advisability of a commercial Bourse, or commodities exchange, which had been specified in the Sultan's recommendations for commercial reforms,^ The duty of organizing this exchange was given to Refik Bey,

who was Imperial Commissioner to the financial Bourse in Galata in ad- 7 dition to his directorate at the Commerce Ministry. He found himself

frequently in consultation with the Chamber over the next year con­ cerning proper measures for creating the exchange, but a definitive g decision continued to be delayed.

With increased flour imports in 1892, perhaps due to the 1888 opening of through rail service from Hungary, the price of grain de­ creased, occasioning the fixed price of regular bread to be reduced 9 from 55 to 50 paras per okka. The simit, a small ring-shaped loaf.

^JCCC, August 31» 1885, p. 2. ^See above, pp, 109-10,

^JCCC, July 1 9, 1886, p, 3.

GjCCC, Kay 7, 188?, p. 111; July 3 0, 188?, p, 182; Novem­ ber 12, 1887, p, 273.

^JCCC, April 2, I8 92, p, l64. Hard wheat from Rumelia and Edime had declined from 52 - 53 paras per okka in January, 1892, to 38 - 39 by April; that of Rodosto auid Samsun, from 28 - 28-^ to 21-| - 22, Soft wheat from Philippopoli fell from 32 - 33 piasters per kile to 24 - 24^ in the same period; that of Varna, from 30 - 31 to 19i - 20, The okka at that time was the equivalent of 2,83 pounds or 1,28 kilograms ; in Turkish weights this equaled 400 dirhem-s. Twenty okka-s equaled one kile, or about 3^i kilograms. Forty paras equaled one piaster. The above 5-para reduction in the price of bread was less than hcilf of the reduced price of hard irtieat from Rumelia, Who was pocketing the difference? 155 was about 10 paras cheaper than the regular loaf which weighed one okka. The municipal authority had complained of imported flour which contained matters "injurious to health" and seized this damaged idieat vrfien it was discovered.^® Its concern for sanitation extended to the kneading of bread dough by the bakers, In ridicule of the city's appointment of a surveillance committee, the Journal published an editorial in punning jest regarding "panique sur la panification," a panic over breadmaking. How was the committee to discover vdiether kneading was done by hands or feet? It would simply have to hide be­ hind an okka of bread! The prefect intended to tax unsanitary kneading by one para per okka, which would take all profit from the bakers, said the Journal. It suggested that both the kneading and the tax be prohibited, and that the bakers should acquire machines to knead for them as in civilized countries.As for flour "injurious to health," the Chamber was to return to this problem at a later date.

In July, 1893, R&if Pasa, a former Minister of Commerce

(I89O-I89I), succeeded as Director of Indirect Taxes Hassan Fehmi, who was sent to Aydin as governor-general. The following month an irade

JCCC, April 9» 1892, p. 175, In his summary of the Cham­ ber's activities for I89I, Spiraki Alexandridi reported that the First Chamber of the Tribunal of Commerce had inquired as to the disposition of damaged wheat seized by the prefect. A Chamber committee had stud­ ied the question, but its report was unfortunately not included in this account, JCCC, August 6, 1892, p. 373»

^^JCCC, November 5, 1892, p. 529. Bakers made feT 15 per month, baking 2,000 okka-s daily, A tax of one para per okka, or 2,000 paras, would amount to a daily tax of one-half a Turkish pound, or &T 15 a- month. 156 was obtained exempting domestic wheat and flour from the eight per cent interior duty from one Ottoman port to another, Raif Paga re­ quested extension of this franchise to certain other cereals as well.

After study, however, the Council of State rejected the latter proposal, announcing that bran and semolina would have to pay the same interior duty as always. 12 Nevertheless, with the wheat franchise combined with the Anatolian Railway's thirty-five per cent reduction of the cereals transport rate in September, thanks to the Chamber's efforts, 13^ the price of native flour was sufficiently lowered to fix "Wie price of regular bread at 40 paras,

The bakers, however, did not "accept with angelic resignation the decisions of the authorities ending their rapacity," In submit­ ting to the official rate, they conveyed "their ill humor in a thou­ sand ways to the unhappy consumers , , , by using low-grade flour, sprinkling the dough with water more or less pure to arrive at the regulated weights, etc."^^ Their discontent over the low bread price was matched by that of the millers, who complained to the new Minister of Agriculture, Selim Melhame, regarding competition by foreign flours.

^^JCCC. July 8, 1893. p. 320; August 12, 1893. p. 379; Au- gust 26, 1893, p. 403. ^^See13 above, pp. 120-21,

^^JCCC, December l6, 1893. P« 593. On December 9. Ankara hard wheat was quoted for the first time at 30 paras per okka to Rum- elia's 31 - 32, Ankara soft, quoted since April at 20 - 20% piasters per kile. by December 30, 1893. was l6^ to Varna's 15j - l6%,

^^JCCC, January 20, 1894, p. 31. 157 These had been subject to low tariffs, said the Journal, "over the

last nine years in the interest of consumers,Another seasonal

reduction the following year by the Anatolian Railway Company in the 17 grain freight rate was insufficient to placate the millers, vdio

were publicly supported by the Minister of Agriculture in their desire 18 for a twenty-five per cent duty on imported flour. Bread was then

selling at 35 paras per kilogram, an early adoption of the metric sys­

tem which was a lighter weight than the okka. However, with the off­ season rise in the price of flour the following spring, the bakers were authorized to raise the bread price back to 40 paras.Here it was maintained despite the arrival of new crop wheat.

To raise the tariff against foreign flour was impossible be­

fore a revision of the 1862 commercial treaties with the Powers, To prevent the use of imported flour, therefore, a scheme was hatched between the millers, the grain merchants, and various state officials in collusion. For the announced purpose of lowering the bread price, a committee of three millowners, six bakers (no doubt well-chosen), and Aristakes Azarian, President of the Chamber, experimented with making bread from various mixtures of flour, imported and domestic. The revelation was made that foreign flour rejects had found their way

^^JCCC. March 10, 1894, pp, 109-110, ^^JCCC. July 28, 1894, p, 351; August 11, 1894, p, 3?4, This twenty-five per cent reduction was valid until the end of October, 1894, 1A JCCC, October 6, 1894, p, 4?1, Quotations on Ankara and Rodosto wheats were very rarely made for the year 1894,

19jCCC, May 4, 1895, p. 210, 158 to the bakers, who discovered therewith the "adulteration of dough the easiest operation," The committee decided that a great contribution to national progress would result by limiting the bakers to the use of

native flour only. 20 The proposal was then adopted by the Prefect and

four months later sanctioned by the Council of State, which also ap­

proved the minting of 2-1/2 para coins to facilitate the raising or

lowering of the bread price with the fluctuations of the market.

Thirty paras per okka was suggested as the narti for bread baked of domestic flour, 21 a price low enough to appeal to the humanitarian

instincts of everyone except the bakers. The news of this proposal was accompanied by another Journal pronouncement upon the desirability of cooperative societies. These societies would end the complaints of "pretended damages" by those who did not appreciate the state’s efforts to achieve "a just and equal balance between the interests of consumers and producers," Taking aim at the bakers, the Chamber fired an argument which it had often used for its own purposes ; , , , Every time the State wishes to regulate an industry to a useful end, the producers nearly always try to thwart that regulation— destined to prevent the realization of illicit pro­ fits— by entrenching themselves behind the economic principle of "laissez faire, laissez passer" which they wish to see ap­ plied in all ways, chiefly evil,22

^^JGCC, October 5i 1895, p, 469; see also March 7, 1896, p. 109.

^^JCCC, February 8, 1896, p, 65. Note the return to tradi­ tional weight, 22 Ibid, p, 61. 159 Although the Chamber's campaign against the bakers had been supported by the millers, the Journal expressed the shock of a "rough jolt" the following month. It seemed that, knowing the bakers would be restricted to the use of native flour, the millowners of the Golden

Horn had raised in unanimity their price for grinding idjeat from 1-1/2 to 3-1/2 piasters per kile overnight. This grave mistake, stated the Journal indignantly, allowed the shadow of doubt to enter the public mind. Moreover, it could easily be exploited by the millers* competi­ tors abroad, giving them a weapon for their success which they did not need. The Anatolian Railway Company was announcing another important reduction in the transport rate for hard and soft tdieat. The recip­ rocal interests of all required that measures should be adopted for the safeguard of these interests,23 The following week, with apologetic relief the Journal an­ nounced that the previous news had been in error. The rumor had orig­ inated with various organs of the local press >rtjo were engaged In polemics over whether or not the local millers required protection. The millers' rates had undergone no modification for the past two years, stated the Journal; in fact, they did not charge enough, and the industry was in its death-throes, "To wish to favor a dozen mil­ lers to the detriment of around one million consumers of bread in Con­ stantinople" would be an economic error the most unpardonable. Yet, to leave a native industry at the mercy of a favored foreign competi­ tion was strange solicitude indeed. In Rumania the import duty was

^^JCCC. March ?, 1896, pp, 109-10, 160 twelve francs per 100 kilograms of flour, A means less radical than this had been adopted by the bread comission, concluded the Journal. 2^ one which would also favor Ottoman cultivators.

In an apparent switch from the Chamber's previous policy against industrial protectionism, two weeks later the Journal wrote*

As we have said several times, we do not partake of the social and economic view by which one believes he can artifi­ cially invert the order of periods in the evolution of various phases of economic progress. One can abbreviate these periods, at the very most, from pastoral to industrial life , , ,25

Large, or capital. Industry could not be implanted in Turkey, contin­ ued the Journal, but the state must hasten to create those industries which could be viable, among which was the milling of flour. The mil­ lers' "solidarity of interests with farmers and consumers" permitted them the consideration of some protection. Receiving authorization by both Councils of State and of Min­ isters, Bidvan Pasa, Prefect of Istanbul, ordered exclusive use thence­ forth of domestic grains by millers and bakers,Those merchants who were dealers in cereals from the interior had the situation firmly in hand, while agents of foreign flours were probably driven to the

JCCC, March 14, 1896, pp, 121-22, During the fiscal (mall) year of 13II (March 15» 1895 - Mairch 14, I896), 106,711,276 kilograms of foreign flour with a value of Ps. 89,984,513 had been imported, com­ pared to the export of 318,665 kilograms of domestic at a value of Ps, 375»336. For the same period, however, Ps, 36,896,764 of domestic wheats had been exported, compared to Ps, 46,6l6,433 of imported wheats, JCCC. July 1, 1899, p. 206* July I5, 1899, p. 222,

25jccc. March 28, I896, pp. 14-5-46,

^^JCCC, April 2 5 , 1896, p. 199; May 30, I8 9 6 , p. 259. I 6 l vail. The house of Sevastopoulos In London had. already suspended its 27 payments five months earlier.

In the meantime, Hassan Fehmi had returned to grace and to pQ the office of Director of Indirect Taxes, The project of a commodi­ ties exchange was renewed. The Journal reproduced an article about the evolution of the exchange broker in the past thirty years from a mere executor of orders into a powerful, irresponsible manager of for­ tunes, With the explosion of industry in Europe and the United States, the Bourse had become democratized. Regulation was mandatory, or con­ tinued speculation would create increasingly frequent economic and fin- smcial crises, "With the advent of oligarchy, the Bourse proceeds to 29 anarchy," This frightening prospect could be prevented by Chamber administration of the proposed commodities exchange in Istanbul, The proposal was mentioned in Azarian's report to Mahmud Celaleddin the following May regarding measures to promote the Empire's economic progress,-'30 Since the prospect did not appear to be bright for govern­ mental approval of a Chamber-dominated exchange, another approach was undertaken. From the Minister of Commerce, Mahmud Celaleddin, was

^^JCCC, December 21, 1895, p. 606, pQ JCCC, January 11, IB9 6, p, I6.

^^JCCC, January 25, 1896, pp, 37-38, quoting from Moniteur des Intérêts Matériels,

3 0*JÇÇÇ, May I 6 , I 896, p , 229, 162

”j1 solicited by Leonidas Zarifi, President of the Bank of Mytilene, the / 4 authorization for a société anonyme, capitalized at LT 110,000 in shares of LT 5 each, to establish a commercial Bourse in Istanbul,12

% e Journal published a reassuring comment in a separate article that the Chamber of Commerce at Izmir prohibited merchants from paying higher than one per cent brokerage on purchases of opium, valonia, and grapes. This prohibition had been motivated by the fact that since merchants raised their selling prices thereafter, export was made more 31 difficult, causing a loss to the country,Zarifi's request was re- ferred by Mahmud CelaleddinA to the Minister of Finance,"^ l U where it evidently suffered oblivion.

The disturbance in August of economic life in Istanbul re­ sulted in a higher price for flour in October, causing the bread price to rise to 45 paras per okka,^^ Although the metric system had offi­ cially gone into effect in March of that year, the population was ex­ periencing difficulty in adjusting to the new figures in relation to commodities of daily necessity, Bidvan Pa^a had publicly posted the comparative weights and measures,*^ but bread returned to the old.

^ Zarifi was also former president of the Banque de Constan­ tinople, which had dissolved and amalgamated with the Société Ottomane de Change et Valeurs in April, 1895# Of the latter, Zarifi and the Imperial Ottoman Bank were the largest stockholders by I896, JCCC, May 2, 1896, p, 209. Zarifi became a member of the Chamber in I903. 32jCCC. July 18, 1896, p, 332, ^^Ibid.

^ JCCC. July 2 5, 1896, p. 340,

35jCCC. October 24, I896, p, 437; October 3 1, I8 96, p. 445.

^JCCC, September 26, I8 9 6 , p, 404. 163 familiar weight. By November a scarcity of wheat was felt in the capital. The Journal stated there was an abundance of the grain in Anatolia but that it lacked transport. Queries were sent to Salonika by the Minis­ ter of Commerce regarding the status of supplies in that province, the quantity required for local consumption and that which could be ex­ ported from the province,This opened the opportunity for Allatini

Rceres et Gie,, millers of Salonika, to renew their request which had been refused three years earlier for exemption from interior duties on domestic bran and semolina as had just been conceded for standard wheat. The Porte granted the request, Allatini Freres were also authorized to convert their large mill into a société anonyme, a move which the Journal applauded as an encouragement to others to follow in 38 their footsteps,^

Mahmud Celaleddin ordered the Chamber to submit the interior regulation for a new Bourse of cereals, Spiraki Alexandridi, charged with its preparation, announced the regulation was completed and that the Chamber would be occupied with discussing the articles in several days, A month later the study was underway, with the report that the regulation would soon be forwarded to the Minister of Commerce and thence to the Council of State after approval by the Council of Minis- ters, following which it would be sanctioned by irade,According39 to

^^JCCC, November 14, 1896, p, 46l,

^ JCCC, December 5, I8 9 6 , p, 485} March 27, 1897, p, 101,

^^JCCC, December 5, I8 9 6 , p, 485; January 2, 1897, p, 6 , 164 this report, the Bourse was a fait accompli, A new bread-price commission was formed under Mahmud Celaled­ din, which included his muavln, or assistant, Cemal Bey; Mehmed Efen- di, the chief city engineer; Aram Efendi, Director of the Technical Council at the Ministry of Agriculture; Ferid Basmacizade and Halid

Tantavizade, Chamber members; and Dominique Corpi, a flour merchant.

The commission decided that in view of the price of flour, there was no reason to raise the price of bread and informed the Prefect of this 40 decision.

Tales of famine were now appearing in the London Times, com­ mented the Journal, which astonished the world since that newspaper was not given to sensationalism. The Times had stated that 500 people had died of starvation in Diyarbakir, Yet the cultivators in Aslan Turkey had provisions in good supply; moreover, they had profited by the rise of cereal prices in the export of wheat, A great movement of activity in the ports c>f the Ottoman littoral was reportedly in prog- 41 ress, A concerted, determined effort appears to have been made to coerce the bakers into accepting the will of the grain and flour mer­ chants, Upon request by the bakers' guild for a price increase, the new bread commission decided that a reduction of price should be or­ dered instead. The price was decreased from 45 to 40 paras; four months later during the Turco-Greek War, it was further reduced to

^^JCCG, December 5« 1896, p, 485; December 12, 1896, p, 493. ^^JCCC, December 12, 1896, p, 493. Whether this export was made to Istanbul or to a foreign country is not clear. 165 Lo 35 paras. The Council of State had continued to discuss the minting of 43 2-1/2 para pieces to pay the bread price vAen it was in fractions.

^y August, however, the bread commission had concluded that a strong upward movement in the price of bread was due. The Journal again sug­ gested that if the public wished cheaper bread, it should form coopera­ tive bakeries as in Europe, This would stimulate competition among 44 the bakers of the capital. The rise was explained as being caused by a lack of transport for vdieat from Ankara, The price of bread 45 advanced to 5 0 1to 55* and back to 50 paras per kilogram. With the official end of the Greek War on September 18, it was announced that Greek ships now might pass freely and dock at all 45 Ottoman ports. The question of grain for the capital then became critical. Another commission under the presidency of Hussein Tevfik, a former Minister of Commerce and now President of the Bureau of Ac­ counts CDivan-i M'ùhasebat), and of which Ferid Basmacizade was a mem­ ber, was formed to study the causes of the tdieat shortage. Among these causes those of chief interest concerned the transport of wheat

^^JCCC, December 19, 1896, pp. 501-02; April 17, 1897, p. 125. A war-time prohibition on export to Greece probably caused a surplus of grain and flour in the capital. However, the possibility of a sub­ sidy from the Sultan at this time should not be overlooked,

^^JCCC. July 3, 1897, p. 212, 4a JCCC. August 7, 1897, pp. 249, 253. ^^JCCC. August 14, 1897, p. 257, 26l; August 21, 1897, p. 268, The metric weight had returned, 45 JCCC. September 25, 1897, p. 309. 166 from the interior and its expoirt abroad. The Journal insisted that in the provinces a surplus of fourteen million hectolitres existed, which could easily be exported. But the Anatolian Railway Company was re­ quested by Mahmud Celaleddin to increase its rolling stock in order to transport to Istanbul the grain waiting at the railway stations in

Anatolia,^^ The Chamber countered with accusations against all idio could be held responsible for the sorry state of things. An editorial on the need for a commercial Bourse admitted the danger of speculation, since

"the same lot changes hands a thousand times before the real buyer takes delivery of the merchandise," However, that could not be prevent­ ed; in fact, it had a certain utility. It was much the best to have a central place for registering publicly the daily fluctuations and transactions in commodities. In addition, a swipe at the millers was taken with the comment that the dally consumption of wheat in the cap­ ital was ten to twelve thousand kile-s, and that the price for grind- 48 ing was now three piasters per kile, a rate far too high. Next, attention was drawn to the unscrupulous retailers and ambulatory ped­ dlers whose substitution of the kilogram for the okka resulted in a twenty-two per cent loss for the public, since they now sold at the same price a weight of 312-1 /2 dirhem-s instead of the former 400,

The Sultan had ordered an end to the victimizing of the population by these merchants, reported the Journal, and the question was under

^^JCCC, October 2, 1897, p. 31&. Had large dealers pre-empted the available wagons in order to drive down the price of wheat?

^®JCCC, October 23, 1897, pp. 337-38. 167 A 49 study by Memduh Paga, Minister of the Interior, Later, the Prefect ordered a return to the okka during Ramazan (January 24 to February 22 that year) so that the women could gain full benefit of their pur­ chases. The difficult decision to adopt one or the other system of weight would be taken after Balram, and until then merchants were for­ bidden to use the new metric weight, Meanwhile, in December, 1897, the Director of Indirect Taxes, now Nazif Paça, ordered an inquest into the matter of duties on cer­ eals, The state had hoped for a large revenue from these during the year, which had not been forthcoming. The solution appeared to be to lift the prohibition on the export of cereals to Greece, This was en­ acted immediately,^^ By May, a rise in grain prices was attributed to the outbreak of the Spanish-American War, which had caused cereals to rise everywhere, said the Journal, The prediction was made for a twenty-five per cent rise in grain and ten paras per okka for bread.

However, there was no need for zQarm; good rains and abundant crops C2 Insured that the rise would be ephemeral,'^ An ad hoc committee under the presidency of Ahmed Refik, m'ùs- te^ar for Memduh Paça in the Interior Ministry, and which included

Ferid Basmacizade, met to discuss means of checking the rise in bread

^^JCCC, November 20, 1897, p. 372. ^°JCCC, January 29, 1898, pp, 37-38, ^^JCCC, December 4, 1897, p. 388; December 18, 1897, p. 404, Whether this move was made to increase collection of export duties by the elimination of smuggling, the Journal did not say,

^^JCCC. May 7, 1898, p, 145, 168 price. The question of prohibiting wheat exports again was on the car­ pet, but the Sultan was reported to have ordered that the interests of Ottoman trade and agriculture were not to be uselessly compromised un­ der the pretext of favoring the consumers of bread. The Journal ap­ plauded his faithfulness to the principles of freedom which would as­ sure progress in trade and agriculture, stating that there was no need for recourse to the extreme measure of export prohibition. To reduce domestic grain prices, it would be enough to decrease various interior taxes such as the kantar parasi, a municipal weighing fee collected each time a parcel changed hands, 53 On May 21, a front-page editorial stated that the fantastic highs on the New York and Chicago markets could not be attributed en­ tirely to the Spanish-American War, The Chamber recalled a telegram to the New York Post around the first of March from one of the largest eh Minnesota millers who predicted a price rise before the next crop. This insinuation of mischief was trailed by a report from the Council of Hygiene at the School of Medicine on the qualities of a nutritious flour. The inferiority or lack of gluten made the use of certain flour rejects improper for bakeries, over which a very strict control should be exercised, A detailed report of the Council's information on gluten had been sent to the Prefect and various Ministries, At the annual assembly of the Credit General Ottoman in June, Dominique Corpi, flour miller, and Badrig Gulbenkian were elected to

^^JCCC. May 14, 1898, pp. 153-54,

^ JCCC. May 21, 1898, p. l6l. ^^JCCC, May 28, 1898, p. I6 9 . 169 replace the deceased Bernard Tubinl and Demetrius Faspalli on the

Board of Directors,The miller as well as the rug-dealer had joined the banking interests. In July, the export of wheat from the region •57 of Diyarbakir was prohibited. Meanwhile, the bakers had grown restless. The Journal re­ ported that the lack of an official Bourse quotation on wheats and flours enabled the bakers to cry orfraie (bird of prey) whenever the Chamber gave the municipal authority information to justify a reduc­ tion in the price of bread. The Chamber had suggested, continued the

Journal, that to obtain indisputable quotations required a cereals Bourse and the end of its own intervention in municipal policy, Never- less, Mahmud Celaleddin had sent a tezkere to Ferid Basmacizade con­ taining an irade from the Sultan which expressed appreciation for the services of the Chamber and stated that grain quotations fell within the Chamber's domain. The Chamber was to continue its quotations as in the past, since the project of the creation of a Bourse for cereals CÛ had been overruled,^ The Chamber had voiced the opinion that the simultaneous use of two systems of weights and measures might be very advantageous, the decimal for state departments and those who were intelligent enough to understand it, and the old Turkish one for retail sales of grocers,

^^JCCC, June 18, 1898, pp. 19^-95. Their tenure was short; the credit agency was dissolved as of January 7, 1899.

^fjCCC, July 2, 1898, p, 212.

58,JCCC, April 23, 1898, p. 129. 170

CO butchers, and others,However, an official order for the return to the metric system for all elicited a protest from the guild of bakers, whereupon the Chamber sided with the state. The bakers' guild re­ quested the Grand Vezlr to allow its members to make bread following the old weights, "pretending that the sale of bread according to the new weight would be prejudicial to them," scoffed the Journal, In reality, the larger volume offered by a loaf of bread weighing only one kilogram afforded a facility to the bakers to "leave in the inter­ ior of the bread that excess of moisture which replaces flour to their advantage, The daily Sabah, whose director was one Mihran Efendi,^^ com­ mented that although the price of regular bread was fixed at ^5 paras, several bakers were selling better bread at 40, 35» or even 30 parais per kilogram,It might be assumed that the latter had ignored the prescription against foreign flour, a shipment of >diich may have ar­ rived directly from New York with a considerable reduction in freight rates,In one of its inimitable literaury efforts, the Journal

^^JCCC, June 25, 1898, p, 202, The advamtages which such a solution could hold for skillful merchants can be imagined,

^°JÇÇÇ, August 20, 1898, p, 268,

^^JCCC, March 26, I898, p, 99. Could this be Mihran Chirin- ian, first editor of the Journal?

^^JCCC. September 10, I898, p. 289, ^^Formal service on direct shipment between New York and Turk­ ish ports began in February, 1899, by the Barber Steamship Compamy, A "rate waur" was precipitated by British lines until 1902, when Barber waus eliminated. See Gordon, American Relations, pp. 120-21, 171 replied that it was not the least imagining that these bakers would be disciples of the "famous character of Ottoman legend, Nasseredin hodja, of pleasant memory— viho practiced trade in reverse by selling at five paras a pair of eggs which had cost him ten paras each-- , , . " The decline in the current price of flour should authorize the Prefect to 6 lf impose on the bakers' guild a lower fixed price for bread. In October the Council of State invalidated the principle of selling bread below the fixed price. This was merely a re-affirmation of the practice traditionally upheld by the esnaf. The bakers' guild caused to be thrown into prison and penalized one Nicoli, who had com­ mitted the crime of selling bread at a price twenty-five per cent be­ low the narh. The Journal remarked that prices should be fixed by the state in the interest of consumers, not the producers, and that the state should encourage those bakers who produced at a better market instead of chastising them with a "painal" tax,^^

This pun was not appreciated by the firlnci-s. Another daily,

Ikdam, had commented on "the pretention of the bakers who wish to oc­ cupy a seat at the Chamber of Commerce under the pretext that the price of wheat and flour furnished by the Chamber is not exact,

With fervent rectitude the Journal declared that the Chamber did not

^ JCCC, September 10, 1898, p. 289. ^^JCCC, October 8, 1898, p. 313. Not until 1906 were the Prefect and the bakers' guild ordered by irade not to molest those bakers who could deliver bread at a price lower than the narh. JCCC, March 17, I906, p. 121,

^^JCCC. March 4, 1899, PP. 6 5 -6 6 , 172 quote a price unless it was sure that the quantities of wheat and flour necessary for the subsistence of the population could be fur­ nished at the official price for a fifteen-day period. The Chamber was recruited among merchants whose honor was above contest, Firinci complaints were irrational; they swore that the lack of capital ob­ liged them nearly always to pass between the pincers (fourches caud- ines) of the holders of wheat and flour who made them nay too dearly at terms of long and risky payment. The Journal added that a commit­ tee under the Minister of Commerce had decided it would be unjust to burden bread consumers with the faults of certain firinci-s who exer­ cised their trade without having the means. One member of the commit­ tee, Halid Tantavizade, had even offered to supply all the bakeries of the capital at the price indicated by the Chamber, The declarations of the bakers, however, clearly indicated which side was at fault: the Chamber, which only established the normal quotations, or the fir­ inci, who was reduced to the expedient of raising unduly the price of bread in order to avoid an insufficiency of capital vdiich he was always willing to obtain at usurous rates. In the good old days when the bakers did not enjoy the unlimited freedom now accorded to them, they never lacked capital or raw material, and some even possessed wind­ mills with which they ground flour at any time of day from the con­ siderable stocks of wheat never lacking in their granaries,

If the prescription against foreign flour proved difficult to enforce, the millers were protected for a time by a decision of the

^?Ibid, 173 Council of State that all flour from abroad must be submitted to an analysis. Those recognized as "adulterated" would be rejected.

Whether, as stated elsewhere, 69 the Greek millers bribed customs offi­ cials to refuse admittance to American flour on the basis of insuffi­ cient gluten and elasticity was not, of course, revealed in the pages of the Journal. The subsequent efforts of the American minister to obtain proper analysis of American flour resulted in a bread price reduced by one-third when American flour was permitted to pass cus- toms. 70 The narh for bread was based on the price of imported flours thereafter until February, 1902. At that time, following the Chamber's representations and views issued toward the end of 1901, the price was fixed again on the basis of domestic flours.71

The relations of the Chamber with the bakers of Istanbul illustrate the difficulty of Ibe rapid fulfillment of Abdulhamid's expectations. The Chamber's assistance to these tradesmen to "adjust to western business practices" 72 was limited to the recommendations to use kneading machines, to sell at competitive prices, and to obtain primary products on credit. How many machines were installed, if any,

^ JCCC. December 24, 1898, p. 404. 69 Oscar S. Straus, Under Four Administrationst from Cleve­ land to Taft (Boston and New York; Houghton Mifflin Company, 1922), pp. 147-48; Gordon, American Relations, p. 175, citing Foreign Rela­ tions, 1899* p. XXXI and Straus. ?°Ibid.

^^JCCC, March 17, 1906, p. 121. This coincided with the year of the elimination of Barber Steamship and direct shipment from the United States,

^^See above, p. 1 3 0 , 1?4 Is not recorded by the Journal, Competitive prices were hindered not only by state decree and guild practice in the ancient concern for the stability of production; they were also restricted by the high cost to bakers of domestic flour, especially on ciedit.

Overriding the question of assistance to tradesmen was the zeal for profits of the grain merchants and flour millers. They en­ deavored to retain their home markets through ingenious schemes which would nullify the disabilities of the unchangeable low uniform tariff. They manipulated committees responsible for the traditional duty of insuring bread at a reasonable rate for the capital's population.

When prices were lowered, the bakers took the loss. Grain was exported abroad during times of scarcity and famine. These activities were possibly little different from procedures followed in past centuries.

But that these merchants were more predatory than those in other lands in the struggle against competition from abroad is not sufficiently established. In part, the opprobrium which was accorded to them^^ originated in their contemporaneity with economic imperialism and may be in need of modification. The contention of the Chamber against low- cost flour imports preserved for the Empire one of its most valuable industries. Nevertheless, a distrust of free enterprise as exercised by these merchants has possibly lelt its influence on Turkish economic thought.

E,g,, Straus, Under Four Administrations, pp, 14?-48, who stated that he "sent an open telegram to our State Department that the flour was being refused admission in distinct violation of our treaty rights , , , The result of this negotiation was , , , significant es­ pecially for the poorer people, who were grateful to the American lega­ tion and the American people for further reducing the price of their bread," CHAPTER X

BUREAUCRATIC CONFLICTS

To pass over the many activities which engrossed the Chamber merchants during the period under study is difficult. Their efforts to develop an indigenous merchant marine; to establish a commercial musée for display of sample domestic products; and to extend their markets abroad at a time when the East Asian horizon beckoned all traders offer fascinating glimpses into the economic life of Istanbul at the clop.e of the nineteenth century. The factors determining the range of these interests, limiting or promoting their success, can be viewed as underlying forces which permeated the fabric of Ottoman society. One factor was the immunity to economic restraints of for­ eigners under the Capitulations. Upon examination, however, it may be seen that this factor was overshadowed in importance by the inter­ ference of the state at will in all aspects of society. The reaction of Ottoman merchants to the invasion of the

Public Debt Administration (PDA) from Europe beginning in 1881 would appear at first to hold significance for future developments in the Ottoman economy. Would the native merchants, already westernized in commercial thought and procedure, receive the European bankers and of­ ficials as allies? Or would they resent the encroachment of these foreigners upon their home territory and create an indigenous

175 • 176 opposition? The answer appears to be that the reaction contained mixed qualities. The Public Debt Administration was used by the mer­ chants to their own purposes when it was expedient, criticized when it was not, and extolled as much for political motives as for the stabi­ lity which was brought to the financial market for Ottoman bonds.

While reports of the increased revenues collected by the PDA were registered with approval by the Journal, opposition to the Regie des Tabacs was voiced for meuiy years,^ That any institution should be granted a monopoly over the purchase, manufacture, and sale of Turkish tobacc;,, a product unique in itself, was a bitter pill for the Ottoman merchants to swallow. The surveillance of the Regie officials over tobacco planters in the environs of Istanbul was attended less by tact­ ful manners than by bureaucratic officiousness, and the complaints of cultivators found a solicitous hearing with the Chamber, When in May, 1885, Sir Hamilton Lang resigned as Director-

General of the Regie, the Journal admitted he lacked neither energy nor tact, but stated that he had no knowledge of the complexion of the growers or the land. Unhappy correspondence from the provinces proved that the situation would be ameliorated not by a new director but by a radical change in the system of control. Of Lang's successor, Frank

Auboyneau, former Director of the Conceded Revenues for the PDA, the

Journal reported that he had adopted a rude and severe conduct toward native traders in tobacco, an attitude which would not increase sym­

^For the Regie, see above, p, 149, n, 58, 177 pathy for the Regie.^ Delays in the restitution of the mUruriye, the state tobacco tax ceded to the Regie's collection vrtiich was to be re­ turned to traders upon export of their tobaccos, added to the mer­ chants' discontent. The situation was called to the attention of

Kamil Paça, Grand Vezir, with the comment that tobacco "had become very difficult since the establishment of the Régie, Another of the revenues ceded to the service of the Public

Debt, the salt monopoly, also occasioned a show of annoyance. The

Journal had protested against an expedition costing hT 3,000 sent by the PDA to investigate for possible operations the Brega salt mines in li­ the Gulf of Sirte on the "African coast," The new Director of Con­ ceded Revenues, Selim Melhame, took objection to this protest in a letter to the Chamber, The latter refuted him with the information that the locale was exposed to nomadic tribal attacks, that it lacked a port, and that the existence of salt mines worthy of the naune was uncertain,^ Further sums would be needed, said the Journal, "if the

Council of the Administration is guided by no more substantial facts furnished to it on a matter already condemned by competent persons near the head of that Administration," To Turquie's protest the following week on behalf of Selim Melhame, the Journal added that a dossier at the Directorate, prepared by persons vho were able to judge their value, treated the salt mines as chimerical,^ When the inspect-

ZjCCC. May 11, 1885, p, 1; August 31, 1885, p. 1,

^JCCC, November 23, 1885, p, 2, ^JCCC, July 5, 1886, p. 2..

^JCCC, July 19, 1886, p. 2, ^JCCC, July 26, 1886, p. 1. 178 ing engineers, Couteaux and Crespin, returned from Brega three months n later, the Journal suavely noted that the project had been abandoned. The Chamber's intimation of chicanery on the part of Selim Melhame did not hinder it from recommending that he as well as the Council inquire into an irregular situation in Edirne and Salonika g regarding the stamp tax on army purchases. The documentary stamp impost (varakai sahiha), applied proportionately to contracts, the formation of societies, and commercial transactions, was another un­ popular revenue ceded to the PDA which encountered innumerable diffi­ culties in its collection. Written contracts had existed mainly be­ tween non-Muslim merchants, the contractual obligations of Muslims tending to be verbal. Commercial or industrial societies had only to request exemption, and the government obliged them. Countless infrac­ tions were made in the case of commercial transactions, foreigners, of course, being free of the duty by virtue of the Capitulations, In 1880, the Galata bankers had agreed to observe the formalities since the stamp revenue had been ceded to their own Administration of the 9 Six Indirect Taxes, but foreign merchants were to escape payment of the tax until March 20, 1894,^^ The Chamber had been irritated over the application of the stamp to multiple endorsers of bills of exchange, since, it explained,

TjCCC, October 18, 1886, p, 1, O JCCC, September 13, 1886, p, 2,

^DuVelay, L'histoire financière, pp, 484-86,

^°Ibld, p. 485; JCCC, January 27, 1894, p. 42, 179 bills were accepted on the strength of confidence in the last endor­ ser's name. To require stamps for endorsements of documents "left an

open field to schemers and the dishonest," In Istanbul not five out

of one hundred observed the tax,^^ Growing In strength, the Irrita­

tion was turned the following year toward foreigners.

We believe we speak for the commercial community In general In demanding a new law , , , to be enforced on all residents of the Empire without exception, for the exemp­ tions enjoyed by a certain category of men creates to their profit an exceptional situation which has the most evil effect upon transactions In general,12

Zlhnl Pa§a, the current Minister of Finance, did what he could to ease the matter of "double taxation" on governmental checks

and receipts, and limited the endorser's stamp fee to a fixed ten 13 paras, However, the PDA agents began to collect penalties from

those merchants who failed to obliterate with their signatures of guaranty or endorsement the ten-para stamp and even struck with a

triple penalty the Chamber, which had legalized the papers In ques­ tion,

The Chamber's wrath spilled over upon the Régie and its prob­ lems of controlling both the planting of tobacco and the smuggling of that product out of the Empire,

^^JCCC. February 2, 1885, p, 1, ^^JGCG, October 11, 1886, p, 1, ^^Ibid, pp, 2-3.

^^JCCC, November 8, 1886, p, 1, According to art, l6 of the Huharrem decree, secret inspectors were to receive, "like those of the Government, the usual portion of fines and double duties to be paid by the delinquents," Young, Corps de droit, V, 92, 180 When one furnishes the public with tobacco to its taste and at a good price, when good conditions are made to the grower, when one avoids making difficulties for the grower in trying to buy it cheaper, then smuggling will end. The Regie should stop creating daily embarrassments which wrong both itself and the country, 1-5

The Regie must attempt to persuade the grower to consider it as a friend, continued the Journal, which hoped that M, Auboyneau would not be slow in taking the only way to lead the Regie to certain success.

Secret stamp agents of the PDA then begem to stop in the streets the runners of commercial houses to search them for non­ stamped bills of exchange. The Chamber prayed Hakki Paga, Minister of Commerce, to remedy that state of things which occasioned the greatest wrong to trade, but to no avail,With great joy the Cham­ ber welcomed the transfer at the end of the year of Zihni Paça from the Finance Ministry to that of Commerce and Agriculture, A deputa­ tion was dispatched to render to him the congratulations of the Cham- her, 17 Zihni took the Chamber's prayer to the Council of State, which ordered an end to the search by secret agents. 18 However, in the re-shuffling of ministerial posts, Agop Pa^a, lately of the Civil List, was named as the new Finance Minister, The thrifty Agop had

^^JGCC, November 8, 1886, p, 1, ^^JCCC, December 6, 1886, p, 3,

^^JCCC, December 27, 1886, p, 1, Good relations ensued with this minister. Even idien sent to Salonika asgovernor in I89O,Zihni continued to support the merchants by creating provincial Chambers of Commerce in kaza-s where they had not existed before, JCCC, July 30, 1892, p, 368,

^®JCCC, April 9, 1887, p, 85; May 7, 1887, p, 109, 181 great projects for the financial reorganization of the Empire, result­ ing in his quick succession within six months by Zuhdi Pa^, restored to the capital after a period as governor at Bursa, Unfortunately for the Cheimber, one of Agop's first circulars instructed that there was no difference between a signature of guaranty and that of an endorse- ment; both were required to pay the stamp impost, 19 and the matter was concluded,

Meanwhile, merchants exporting tobacco from the provinces to

Istanbul or abroad were bedeviled by the Regie’s certification formal­ ities, Notwithstanding a lengthy exposition of their complaints, the Chamber expressed its desire to conciliate the- „. o parties to end the continuing fracas, "One of our confreres persists that the Regie is not a humanitarian institution , , , we are of the opinion that the

Regie/ has need of sympathy to prosper,"20

The subtle switch to the Regie's side illustrates the polit­ ical use made by the Chamber of the European financiers. The confrere mentioned was the Chamber of Agriculture, which had received protests from planters concerning the prohibition of tobacco culture without a permit in the region around Istanbul, That Chamber was under the presidency of Necib Melhame, a "twisted Syrian," 21 brother of Selim, Kecib had submitted a proposal for the construction of railroads in Anatolia to be financed by a tax on all heads of families, a scheme of

^^JCCC, January 31, 1887, p, 27. ^^JCGC, December 20, 1886, pp. 1-2,

21Hecquard, L*Empire ottoman, p. 227. 182 which the Chamber heartily disapproved. 22 Together with Amassian Efendi, Director of Agriculture at the Ministry of Commerce, Necib had also experimented with steam threshing machines for the Imperial farm at Yegilkoy (San Stefano), making the final selection not from John Thomson, whose machines were highly endorsed by the Chamber, but from a competitor, 23 The rivalry between the Chamber and the Melhame brothers may have had both religious and regional motivations. The Melhames were Syrian Catholics, probably Maronite, whose affinity for

Prance exceeded that of the Armenian Catholics, not to mention the Greeks, Strongly supported at Yildiz by Haci Ali Bey, the Sultan's 24 first chamberlain, Selim obtained the Beirut docks concession for his colleague, Yusuf Moutran, vho contracted with French interests for 2< their construction, The group, which included the Comptoir d'Es­ compte, may have been compatible with the interests of the Imperial

Ottoman Bank and the PDA, but the Chamber began to have second thoughts about further foreign investments which could assume monopolistic proportions. To investigate the complaints against the Regie, a committee was formed under Refik Bey which included Amassian Efendi and two

22jccc, August 16, 1886, p, 2; April 30, 188?, p, 105, 23jCCC, July 12, 1886, p, 1; July 19, 1886, p, 3; August 2, 1886, p, 4, 24 Hecquard, L*Empire ottoman, p, 398, In this account Selim is described as an "intelligent man" vAio initiated European procedures and improvements during his lengthy term as Minister of Agriculture,

^^JCCC. March 19, 188?, p, 69; July 2, 1887, p. 158; Septem­ ber 24, 1887, p, 230; October 1, 1887, p. 238, 183 pZ Chamber of Commerce members, Andon Hadjian and Zacharia Hazzopoulo,

By July, 1887, tobacco merchants were threatening to take the "Dette" to court. 27 However, the destruction of tobacco planted without the

Regie's authorization was upheld by the Minister of Finance, Zuhdi

Paça, as a measure to prevent smuggling. 28 When other journals called for the downfall of the Regie, the Chamber refused to act in concert, although it admitted that Regie employees "behave like a conquering 29 country in certain localities," Four years later, vdien Selim Melhame was replaced by J, Nob- let as Director of the Conceded Revenues, the Chamber's attitude to­ ward the PDA had mellowed. Possibly this was the result of the ef­ forts of the PDA to help the Ministry of Commerce to eradicate the phylloxera disease which had ravaged vineyards since June, 1885,^^ and to aid in the restoration of the silk industry through the Seri­ culture Institute founded in 1888 at Bursa, The Regie moved into a new building on Rue Voivoda next to the Imperial Ottoman Bank and near the Chamber's own front office at Lorando Han.^31 The proximity of these institutions may have accelerated their cooperation on projects of mutual interest; and the Chamber apparently felt a heightened sense

^^JCCC. February 7, 1887, p. 33. 2?JCCC, July 2, 1887, p. 158. pO JCCC, September 24, 1887, p. 230, Zuhdi Pa§a was replaced by Mahmud Celâleddin as Minister of Finance on December 26, 1887. 29jCCC, October 8, 1887, p. 241.

3°JCCC, April 9. 1892, p. 175.

31jCCC, July 23, 1892, p. 3^9. 184 of prestige. By this time a new interest had been acquired by the Cham­ ber, that of the administration of the Banque Agricole, Founded in

1888, this bank replaced the provincial banks of public utility under local control which had been formed twenty years earlier along plans devised by Midhat Paga to rescue the Danubien rural population from usurers. A state bank, the Agricole was centralized by law under the

Ministry of Commerce and Public Works, which supervised agricultural interests at the time the bank was founded. Managing the bank's af­ fairs were a director-general, his assistant, and a boaurd to which the Chamber of Commerce was entitled to send two delegates and the Chamber 82 of Agriculture but one,^

In 1892 the director-general was Cemal Bey, formerly of the Administration of Mines and Forests and a great friend to the Chamber, Dimitraki Yenidunia and Georges Casanova were members of the bank's board of directors. The Chamber was extremely gratified by the suc­ cessful operations of the Banque Agricole, which by the end of 1892

32For a summary of the operations of the provincial banks and the Banque Agricole, see DuVelay, L'histoire financière, pp, 205- 210, For the organic regulation of the Banque Agricole of 19 Zilhicce 1305/August 28, 1888, see Young, Corps de droit, V, 342-50; for addi­ tional articles of 30 Muharrem 13O8/September 23, I890, Ibid, pp, 350- 354, Branches established in the provinces followed lines of organiza­ tion similar to the head office in Istanbul; their accounts were exam­ ined by inspectors periodically. Loans were extended to agricultur­ ists only, at six per cent for a maximum of ten years. Of the profits, one-third was added to the bank's capital, which was formed by a one per cent surcharge on the tithe plus whatever income and capital had remained to the previous provincial banks of public utility; one-third was applied to schools and model farms for agricultural development in the provinces where loans were made; and one-third was acquired by the Ministry of Commerce for improvements in seeds and farm animals. 185

had ELcqulred a capital of fcT 3 million, "not to be disdained for the

provinces where a usurer with LT 100 had been considered as a savior

by unhappy planters,For33 a complete annihilation of usury, however,

the Journal recommended various improvements in the conditions of

loans; the mortgaging of crops, tools, and animals; and a general 34 cadastre for the just assessment of property values,^

A reorganization of the Directorate of Agriculture was an­ nounced at the close of the year; in February, 1893# came the news that the Directorate had been transferred from the Commerce Ministry

to the Administration of Mines and Forests, The new Ministry of Agri­ culture, Mines and Forests was thus formed, headed by none other than

Selim Melhame, "ex-Director of the Ottoman Public Debt,"^^ With appar­ ent relief, the Journal also announced that the Banque Agricole would continue to operate under the care of the Minister of Commerce,^ Other projects with which the Chamber had been occupied were a distillery for maJcing brandy to save the grape crop from the effects of the prohibitive French tariff of January, 1892, and a permanent Ex­ position at Istanbul for Ottoman industrial and agricultural products. To the Chamber's disappointment, Selim Melhame was named president of the Exposition committee, whose membership at first failed to include

33jCCC, December 10, 1892, pp, 589-90,

^ JCCC, November 19, 1892, pp, 555-5^; December 17, 1892, pp, 601-02; December 24, 1892, p, 613.

^^JCCC, December 24, 1892, p, 619; January 28, 1893, p, 38; February 18, 1893, p, 78,

3^JCCC. March 4, 1893, p. 99. 186 a single delegate from the Chamber of Commerce,''^37 After substantial

cash contributions by various unnamed railway and steamship companies

and societies, Yenidunia auid Suleiman Subaizade were named to this

committee,^ As for viniculture, the Journal reported that the wounds

of French protectionism would cause vineyard products at Çegme to be

used simply as forage for farm animals.^39

To add to the merchants' vexations, the Minister of Agricul­

ture was allotted tT 3,000 to enlarge the Agricultural School at Bursa to provide for sixty students. The School of Forestry was transferred

to the Halkali Veterinary School, for which Selim was authorized to engage two European professors vdio were also to pay frequent visits to the Imperial stables. The School of Trades and Skills was removed

from Commerce to the Agriculture Ministry, And young men were being

sent to Europe to study mineralogy and similar subjects, to the

exclusion of students of commerce.

Further rivalry was disclosed in a terse note by the Journal

that the Council of State was examining specifications sulmitted by the Minister of Agriculture and J, de Catelin for a concession to ex­ ploit a mine at Argana, although "a house in relations with the House of Rothschild has already presented to the Grand Vezir the request for

37jCCC, April 29, 1893, p. 200,

^JCCC, May 27, 1893, P. 248; July 22, 1893, P. 3^3.

39jCCC. July 15, 1893, p. 325.

^°JCCC, May 27, 1893, p. 248; August 19, 1893, p. 390; Au­ gust 26, 1893, p. 403, 187 41 a copy of the specifications in order to make a counter-proposal." > 42 This house could only be Azarian Pere et Fils,

When Vincent Gaillard, President of the Council of the PDA, proposed modification of the duty on domestically-manufactured wines and spirits, the Journal expressed its gratitude, "We already have several examples of the happy influence exercised by the Administration of the Public Debt on the various revenues confided to it, e.g, seri­ culture, Thanks to the perseverance given by the Council to the pur- 43 suit of affairs, the modification will be a fait accompli." The

A A Chamber asked reduction by one-half of the fifteen per cent resmi-miri

(manufacturing tax) on wine which was ceded by the Muharrem Decree to the PDA, Unfortunately, that Administration decided that it could 44 abandon the tax only if an equivalent revenue was received, and the fait accompli proved to be a mirage, Selim Melhame as a gesture also submitted a proposal to the Sultan for taxing foreign alcohols upon 4< both their consumption and their use in Turkish distilleries, How-

^IjCCC, September 9, 1893. p. 426,

In May, 1894, Azaurian Père et Fils, acting for N, M, Roths­ child of London and Rothschild Frères at Paris, and Louis La Fuente and Gustave Wulfing, acting for the Imperial Ottoman Bank, loaned to Nazif Pa^a, Minister of Finance, tT 9.033.574 partly to consolidate the 1854 and 18?1 loans secured by the Egyptian tribute. The terms of this loan, issued at 91 with 3"l/2 per cent interest, were among the most favorable to the Treasury up to 1913» JCCC, April 28, 1894, p, 200; May 19, 1894, p, 234; Issawi, Economic History, p, 104,

^^JCCC, September 2, 1893. p. 409, ^ JCCC, September 30. 1893. P. 458; DuVelay, L'histoire financière, p, 490,

^^JCCC, September 3 0 , 1893. P. 458; June I6 , 1894, pp, 277-78, 188 ever, Abdülhamid, Defender of the Faith, was more interested in encour­ aging the manufacture of attar of roses than he was in preserving the 46 non-Islamic wine industry.

To meet the expenses of the phylloxera commission, of which

Selim was president, a tax of twenty paras per kantar (120 pounds) had been imposed upon grapes at Izmir, By the end of 1894, from this tax

Ps, 451,000 had been deposited at the Banque Agricole, Reasoning that it was no longer necessary to apply the measures which had been decreed to combat phylloxera since the stagnation of the grape and raisin trade had obliged growers to destroy their vines, Selim proposed to use this money for other projects of public utility. The Council of Ministers firmly rejected this proposal, 47 Selim had also requested and re­ ceived from Abdülhamid a sum of Ps, 100,000 for schools of sericulture in Salonika, Antakya, and Malatya similar to the one in Bursa, The

Minister of Finance, Nazif Pa|a, vetoed the expenditure, deciding that such institutes should be created instead at the expense of the PDA,

Of this the Journal approved, commenting that the administration of 48 these schools would thus be controlled by the PDA, which the Chamber appeared to trust more than it did the Minister of Agriculture, Pos­ sibly the foregoing actions reflected official partiality to Chamber

^^JCCC. March 3I, 1894, p, 149; July I3, 1895, p, 326; Novem­ ber 9, 1895, p. 534, See also Louis Rousseau, L*effort ottoman. (Paris; F, R, de Rudeval, I907), p. 219. 47 JCCC, December 8, 1894, p. 580. Such measures had in­ cluded the free distribution of American grafts, immune to the vine­ yard disease, 1%Q JCCC, August 2 5 , 1 8 9 4 , p, 399; February 9, 1895, P. 64. 189 interests in the wake of Azarian's loan negotiations with the Minister of Finance, However, Selim still held high cards. He displayed a growing impatience with the Journal by announcing that the Ministry of Agricul­ ture intended to publish a periodical in a style better suited to the intellectual level of the farmers in the provinces. This paper would be designed to expose the farmers to the use of machines and modern agricultural tools. It irould also make them understand, reported the

Journal, that not only wheat and grapes could be grown with profit but other products as well, such as hops which breweries in Turkey had be- gun to use in quantity. Much of the information vAiich appeared in the Journal's weekly agricultural columns, such as the culture of mush­ rooms, snails, bees, artificial eggs, and insect destruction by elec­ tricity, was admittedly exotic, useless to the average farmer even if he could read. To publicize Selim's criticism of itself was coura­ geous of the Journal, Thanks to the prescriptions of the Qur'an, how­ ever, the reference to hops could be as damaging to the Agriculture Minister as the problems of wine and spirits were to the Chamber, A concession for a boracite mine in Karesi sancak in the vilayet of Hudavendighiar was next requested of the Minister of Agri­ culture by Repid Bey, ex-mustegar of the Interior Ministry, J, Whit- tall, and H, Chirinian, Selim sent the request to the current Grand

Vezir, KÜçük Said Paga, who referred it to the Council of State,

JCCC, September 7, 1895, p. 421, The periodical of the Agriculture Ministry was the 2ira'at Gazetasl, to which Fesch refers in Constantinople, p, 64, 190

Three weeks later the Journal announced that the Minister of Agricul­

ture intended to auction publicly a sixty-year concession for a bora­

cite mine in Karesi, In the interim, xûçük Said had been dismissed

temporarily, and Kamil Pa^a was named to the Vezirate, The Journal mentioned discreetly that Çevket Bey, assistant to Cemal Bey, Director of the Banque Agricole, was Kamil Papa's son, Selim changed his mind and "decided to give in concession" the mine in question,

Another minister, however, wsis soon to replace Selim as the

Chamber's bête noire, Several Chamber merchants had important inter­ ests in Hudavendighiar, a large province which extended across north­ west Anatolia, A second Cemal Bey, who had been active as an agricul­ tural inspector at Eski^ehir in that province, radsed difficulties for the merchants in 1893. At that time the Chamber had mentioned the need for an increased budget for the Banque Agricole because of the additional expenses it had encountered, such as salaries for the many inspectors employed,The replacement of three provincial bank dir­ ectors guilty of irregularities was later reported on the very day that Mahmud Celâleddin wais announced as the new Minister of Commerce and Public Works, 52 As his assistant he named the agricultural in- spector from Eski^ehir, Cemal Bey,^53

JCCC, September 21, 1895i p. ^51» October 12, 1895» pp. 486, 487; October 26, 1895, P. 510, This location would be within the pre­ sent province of Balikesir,

^^JCCG. September l6, 1893, pp. 433, 439.

^^JCCC. November l6, 1895, PP. 542, 546,

^^JCCC, November 30, 1895, p. 5&9. 191 This was the beginning of new trials encountered by the Cham­ ber in its contentions with bureaucratic authorities. The frictions engendered by Selim Melhame now receded into the background as a strong-willed Minister of Commerce replaced the affable Hussein Tevfik,

Mahmud Celâleddin had entered the official scene in 1881 as one of the magistrates idio condemned to Taif those men who had dethroned Abdiil- az i z , ^ He had replaced Zuhdi Paça as Minister of Finance in 1887 and had also served as head of the Budget Committee after a short term as governor of Crete, One of Mahmud's first acts was to order that all offices of the Ministry must be open on Sundays as on other days, since among the official state holidays Sunday did not appeaar. Moreover, the

Council of State met on Sunday, and if important trade or public works matters were to be discussed, the ministerial bureaus should be ready to furnish information or relative papers upon demand,Next, he attempted to form a list of all sociétés anonymes in the Empire which was to include their statutes, amount of capital, names and national-

6^Hecquard, L'Empire ottoman, pp, 37-38, This diatribe gives the information that Mahmud had several çatal-s, agents behind scenes to receive bribes, "With his extreme voracity, this Minister doubt­ less feared something might escape him," Ibid. p, 376, Mahmud's son was Munir Pa^a, ambassador to France during the latter I890's, idio reportedly informed the Sultan of the activities of the Young Turks in Paris, See Fesch, Constantinople, p, 84, n, 1, Mahmud should not be confused with the two Damad-s of the same naune, one of whom had perished with Midhat Paga in 1883 smd the other who was to flee to Paris at the end of 1899.

^^JCCC, December 31» 1887, p. 3^9; June 30, 1894, p, 308; September 1, 1894, p, 411,

^^JCCC, November l6, 1895» P. 546, 192 Itles of directors, and location of annual assemblies. 57 A capable man despite his reputation among Europeans, Mahmud, tAio retained his presidency of the Budget Committee, intended to encourage industry and turn his Ministry into an institution profitable to the state.

The Chamber was ordered to prepare a study of current trade conditions in the Empire, the measures necessary for their full devel­ opment, and the "causes preventing various Chambers of Commerce in Tur­ key from rendering all the useful services vdiich the country has a right to expect from these institutions," The study was also to indi­ cate inter alia whether the causes of the Chambers' inadequacy should be attributed to their current organization and method of electing mem­ bers or to their system of finance, and the best remedies for each,^^ Provincial authorities and the Chambers of Bursa, Ankara, Beirut,

Aleppo, and Ismit were all invited to memorialize on the commercial and industrial situation in the provinces ; particularly desired were the names of factory-owners, overseers, and artisans employed and the annual quantity of production,-^59 Five months later Aristakes Azarian submitted the Chamber's report to Mahmud listing the following recommendations for trade; Suppress interior duties collected on Ottoman goods upon their arrival at any ^ttoman/ port.

Increase tariffs on foreign manufactured products similar to those produced in Turkey; or, if this raises difficulties, tax them with certain interior duties.

5?JCCC, December l4 , 1895, p. 593.

^ JCCC, December 21, 1895, p. 605,

^^JCCC, January 4 , I896, p. 5. 193 Maintain bridges and roads; construct ports and railway stations; drain swamps.

Establish commercial bourses and fairs to be administered by the Chambers of Commerce,

Abolish taxes on Ottoman navigation; simplify ship visita­ tions; establish marine and shipbuilding schools.

Encourage industry by the octroi of privileges; forbid industrial monopolies other than those having great public utility. Modify customs regulations to facilitate trade.

Modify the tithe regulation to safeguard farmers' interests; improve the method of estimating the value of the products of the soil.

Reform the mining regulation, using as a basis the most liberal law in other countries. Register at the Chamber of Commerce all regulations, specif­ ications, contracts, etc, of sociétés anonymes, limited joint- stock companies, and societies in collective name at Constan­ tinople, Oblige these to keep the Chamber informed of any changes in the society and add a special clause to that effect to the Code of Commerce, Establish a Bureau of Statistics of Trade and Agriculture, Permit an increase in the number of Chambers of Commerce in Turkey and their regular operations, &0

Meanvdiile, Haladjian et Cie,, unable to compete with coal imported from Britain, had been forced to suspend its coal mine opera­ tions at Heraclea (Eregli), Its request to the Minister of Agricul­ ture for a reduction of duties and expenses was given the usual run­ around by being sent to the Council of State, to the Grand Vezir, and to the Council of Ministers,The Société Générale d'Assurances

^°JÇÇG, May l6, 1896, p, 229 ^^JCGC, January 11, 1896, p. 16, The following year, a request for exploitation of the Empire's mines by a syndicate of eight financiers, all directors of the Imperial Ottoman Bank, the PDA, and 194 Ottomane, now headed by Edgar Vincent of the Imperial Ottoman Bank and other European financiers but still managed by the original director, 62 Th, J, Maltass, noted a loss of tT 19,600 for the year 1895. The

Société Ottomane de Change et Valeurs re-elected all its directors

(one in London for his health, another in Athens) and announced a

27-1/2 per cent dividend. Mahmud Celâleddin reported to the Sultan that progress had been made in trade and industry. Studies were ready to be decreed, he said, but certain information was still awaited from the Chamber of 64 Commerce. Four months later a seventy-article document was sent to the Porte by Mahmud containing measures to stimulate industry which centered on the sixth item of Azarian's recommendations, the octroi of privileges.

Since relations with the current Ministers of Commerce ar.d of

Agriculture were less than friendly, the Chamber turned to other offi­ cials to champion its interests. Among these were Memduh Paga, Minis­ ter of the Interior, who seconded the Chamber's proposal that the tithe be collected in the form of a fixed land tax and whose assist- the Regie, received a favorable opinion from Selim Melhame. JCCC, October 9, 1897, p. 324. 62 JCCC, May 23, I896, p. 247. Maltass et Cie. also repre­ sented the London Assurance Company until August, 1897, when it was replaced by John R, Thomson and Sons. JCCC, August 14, 1897# p. 262. Azaricin Pere et Fils were agents for Lord Rothschild's Alliance Assur­ ance Company, insuring against fire with "full powers" for execution,

^^JCCC. May 2, I896, pp. 208-09. ^ JCCC. June 27, 1896, pp. 301-02.

• ^^JCCC. October3 I , I 896, p. 444. 66 ance in matters of greiin and. flour was to prove valuable. The Direc­

tor of the Commercial Bureau at the Ministry of Foreign Affairs,

Nicolaki Sgourides, was also helpful in securing new markets for Otto-

raaui trade by stimulating consular assistance abroad as well as by

negotiating a commercial convention with Rumania "alone , , , the

other Ottoman delegates being indisposed. The loss of Ottoman territory in the Balkans is generally

believed to have made Abdulhamid apprehensive that Anatolian provinces bordering Russia might also be lost to the Empire through the aspira­ tions of the more radical Armenian revolutionaries. The Chamber's continued importuning of consumers for cooperative and collective

societies may have raised new anxieties in the Sultein's mind regarding a possible connection between these societies and Armenian revolution- 68 ary activities and concepts. Any form of local, popular control could be suspect. With the deaths of Dimitraki Yenidunia in 1894 and Georges Casanova the following year, the Chamber lost two conservative

financiers, and a new note began to sound in the Journal's recommenda­ tions for improving the transactions of the Banque Agricole, Partly

3Æ a result of the feud with Selim Melhane, increased services by the bank to peasants were suggested, such as the renting of farm machines

^^JCCC, January 9» 1897, p. 12; see above, p. l6?,

^fjCCC. April 4, I896, p. 162; October 10, I896, p. 421; January I6, 1897, p. 22. 68The program of the non-Marxist Dashnaktsuthiun party included assistance to popular industrial progress by modern produc­ tion methods based on communal enterprise, Nalbandian, Armenian Rev­ olutionary Movement, p, I67. 196 69 to those who could not afford to buy them. Especially stressed was ■Wie making of loans only to those farmers vdio used the money for pro­ ductive purposes in order to increase crop yields, not for the purchase of land, food, or elegant clothing. Although the bank directors were unable to determine whether or not a loan was used productively, a collectivity or council of cultivators would have "exceptional means of being well-informed" on the matter, since in the villages everyone 70 and his activities were known. While directed toward the lower classes rather than the wealthy merchants, the Armenian massacre of August 26, I896, in Istan­ bul appears to have created a precarious climate of suspicion toward the indigenous commercial community. The Chamber's despondency was indicated by a feeling of uselessness, as for example in an editorial regarding certificates of origin, Zareh Youssufian wrote that such certificates, being required for fruits and vegetables exported from districts infested by phylloxera, could easily be provided by the pro­ vincial Chambers of Commerce, This function could contribute to the strengthening of the Chambers* "comforting conviction that they render a real service to the residents of their respective districts, and to the country in general," The Istanbul Chamber was "admirably placed to exercise surveillance and control" over the provincial Chambers in 71 this matter.

^^JCCC, January 18, I896, p, 25,

T^JCCC, July 11, 1896, p. 321; August 8, I896, pp, 353-54, 1 fljccc. April 1 7 , 1897, p. 121, 197 Nevertheless, Mahmud Celaleddin continued to stress indus­ trial development, indicating that the Chamber had never been effec- tive in this area, 72 A tezkere was sent to Ferid Basmacizade which stated: It is beyond doubt that industrial progress is one of the principal means of contributing to the economic progress of the country. It is true that various industries respond­ ing to the needs of the past existed in Turkey, but several of these have little by little disappeared and the others have not been able to make appreciable progress. This is due to the fact that the people of the Empire have become tributary to foreign industries for the satisfaction of their needs , , , /3

In order to be able to advise the right measures to favor Ottoman industrial progress, Mahmud again addressed questionnaires to provin­ cial authorities asking the causes which prevented this progress. The

Chamber was requested to obtain information and production figures for

"factories having a moving force of steam, water, wind, or simply human arms currently existing in Constantinople, the factories making cloth, spirits, soap, glass, wool, leather, or milling flour," and to forward its opinions to the Ministry, Although the Chamber was of the opinion that the best method of insuring prosperity was eigricultural development, it was delighted to perform once again in an official capacity. It is an excellent occasion for each trade guild, syn­ dicate, or industrial head to give the Chamber its desiderata on the prosperity of the branch of activity which it occupies. The comparative study will permit the Chamber to exclude those whose realization does not conform to the general interest , , , 7^

?2jCCC, July 10, 1897, pp. 221-22, See above, p, 1]0,

?3jccc, September 11, 1897, p. 289, "^^Ibid, 198 Â committee was appointed to collect this information and prepare a report for Mahmud Celaleddin.

A month later the Journal announced that a Société Agricole

Ottomane had been created by the cultivators of Bdremid district of

Karesi kaza in Hudavendighiar, A cooperative in form, it was to func­ tion as a r’lrrl bank,^^ In an unexpected move, Mahmud Celaleddin as­ sumed direct management of the Banque Agricole. The reason given for this action was that "it was judged opportune to render surveillance more immediate." To economize on expenses, the bank's services were to be simplified, and Nurian Efendi, State Councillor, would henceforth 77 preside over the board of directors. Evocative of traditional state seizures of overgrown private fortunes, this coup by a suspicious minister may have been intended to avert possible diversion of state funds by the small coterie which had controlled the bank's operations.

Eulogizing the sagacity of the Minister of Commerce and Pub­ lic Works, the Chamber stonily accepted the loss of its authority and carried on. In reply to the Minister's request for industrial recom­ mendations, it submitted the following with the prayer that Mahmud would fill the indicated lacunae with new laws auid regulations:

The principal reason why native industry cannot compete with foreign even in its own markets lies in the non-application of the protective system practiced abroad.

'^^JCCC. September 25, 1897, p. 309.

^^JCCC, October l6, 1897, p. 330.

^^JCCC, November 13, 1897, pp. 3^1, 3^6. 199 The system in other countries whereby tariffs are not to be collected on raw materials necessary to industry does not exist in Turkey,

Industry is deprived of banks which will advance money for industrial needs. The best means of arousing industrialists from that secular torpor which prevents them from deviating from the routine in industrial procedures would be to send intelligent youth to study such procedures in Europe, The intervention of municipal authorities in industrial activity for hygienic reasons and other obstacles of that kind kills the spirit of enterprise and private initiative,

"Die octroi to all existing industries or those to be created of the privileges accorded to sericulture will contribute to their progress, 79

Shortly afterwards, the information was published that the

Société Agricole in Hudavendighiar had been formed on the initiative of the president of the Istanbul Chamber of Commerce with a capital of LT 1,000, 79 This was followed by the recommendation that the Banque

Agricole advance money on mutual guaranty as well as on movable ef­ fects, which had been restricted by the bank's regulations. Auctions of forfeited lands would thereby be reduced, as well as other embar­ rassments encountered by "an administration organized to achieve a 80 wholly different mission," Two months later Ferid Basmacizade and

Joseph Levi were named to the Banque Agricole's board. The bank was praised for its inestimable service to agriculture and congratulated

^®JCCG, January 1, 1898, p, 2,

^^JCCC, January 29» I898, p, 38, Why the term "president of the Chamber" was used is problematical, Azarian had died in May, 1897, and the office remained vacant until April, 1893, fin JCCC, February 5» 1898, p, 41. 200 for adopting the new system of advancing money on mutual guaranty.

With the further addition of agricultural insurance, said the Journal, 8l it could have a really solid base. Subsequently, this tangential line of action was pursued by the Société d'Assurances Ottomane, Mahmud Celaleddin was reported a few months later to be pre­ paring new regulations in accordance with the Chamber's recommendations for industry. The Journal commented that it was "time to initiate foreign capitalists to the legal clauses which would be applied to industry in general, and especially to prepare native capitalists and Ottoman industrialists for the loyal competition which they ought to exercise on Ottoman territory to foreign industry and capital , , , "

Once a permit had been given, the municipality would no longer be al­ lowed to prevent construction of factories for reasons of the public health. And for workers, a bank of general assistance was to be founded.83

Unfortunately, Mahmud Celaleddin died in Jsinuaxy, 1899. At the re-appointment of Zihni Pa^a as Minister of Commerce and Public Works, the Chamber was "filled with joy" since it again had a "bon ON père for our institution," Moreover, in Zihni were now combined the functions of Director of the Banque Agricole as well as head of the

GljCCC, April 23, 1898, pp, 129-30. Op JCCC, June 18, 1898, pp, 193-9^, Mahmud refused his permis­ sion to the Société to underwrite this type of insurance since he "wished to see the development of habits of foresight" among the popu­ lation,

®^JCCC, October 22, I898, p, 329.

®^JCCC, January 28, I8 9 9 , pp, 25-26, 201 Commission of Financial Control (Budget Committee) under the direct presidency of the Sultan, The Council of the Public Debt was now com­ plimented for its activity and spirit, of which the clearest results were the prosperity of the revenues tdiich it managed and especially the rise of the credit of Ottoman bonds.Finally, after the Minis­ try of Agriculture had received official censure for a decline in its receipts, the offensive was renewed against the Syrian Arab, Selim

Melhame,^^ Riding the crest of a new wave of authority, the Chamber inveighed against the request of the meclis-i idare of the vilayet of Syria for a Chamber of Agriculture, Reminiscing upon the early years of the Chambers of Commerce, of Agriculture, and of Industry and the consequences which had ensued, the Journal mused; Among the three institutions, it was the Chambers of Commerce which had proved to be of incontestable vitality, enabling them to serve as the root for the grafting of the two other branches which were able only to vegetate during their first years of existence and presented symptoms of exhaustion at early maturity , , , /Wost agriculturists did not fulfill the conditions required to establish Chambers^j/ , , , As for industrial life which is still in an embryonic state chez nous, naturally a long life could not be assured to the Chambers of Industry, of which the members were re­ cruited with difficulty among a few scarce heads of work­ shops destitute of the qualities necessary to discourse properly on general questions of a higher order. The Chambers of Commerce are likely to be composed of the elite of the population. Commercial, agricultural, and

G^jccc, February 25, 1899, pp. 57-59. GGjCCC, May 27, 1899, pp. l6l-62; July 8, 1899, pp. 209-10. The Journal criticized Selim’s method of awarding mining concessions to foreign capitalists and questioned whether his agricultural schools and model farms were filling the real needs of peasants. 202 Industrial matters have such a correlation that it is difficult tj separate completely one from another. Following these considerations, the Imperial govern­ ment had added to the powers of the Chamber of Commerce those of Agriculture and Industry which existed only in name after several years of an artificial existence. Trades are not diversified until after a long period. Whoever knows the true state of things in the Ottoman Empire remembers the strange sight of three separate Chambers composed of the same persons, having as their only distinction the hours and sometimes the places of their meetings,87

®^JCCG, September l6, 1899# PP. 289-90, CHAPTER XI

CONCLUSION

In the Ottoman Empire during the nineteenth century a class

of wealthy merchants, landowners, and nascent industrialists had been

formed as the result of political and social changes wrought by the Tanzimat. This class was dominated by those non-Muslims vdio had long

been familiar with Western procedures in trade and whose knowledge of Western languages enabled them to become a buffer between the ruling

Turks and the influx of foreigners into the Empire which took place after the Crimean War, Although pledges had been made by the state since 1839 to respect the life, honor, and property of Ottoman subjects, pledges

which were renewed in I856, the wealthy middle class was pervaded by

a sense of insecurity. In the traditional view of the Near East, all sources of wealth belonged to the state in order to preserve and pro­ mote the ruler's power,^ In order to avoid arbitrary confiscation of property, many merchants had purchased foreign protection, acquiring

Western nationality thereby. Others preferred to retain the privilege of owning land as Ottoman subjects. These bought protection from the state by means of berat-s which assured certain judicial safeguards as

well as the preservation of inherited property. Avoiding a show of

^Inalcik, "Capital Formation," p. 97. 203 204 affluence, the members of this group maintained a low profile in order not to arouse the envy of their political superiors. Perhaps for this reason little is known regarding the names and activities of individual members of the economic elite, who operated in the shadows of obscurity,

"One knows of them that which they did in passing on the scene, a pro- 2 found mystery envelops the remainder of their existence," As the ingress of foreigners intensified during the unhappy years of an accumulating state debt, the native merchants likely became apprehensive toward the inroads made upon their home markets. Although tradesmen may have failed to appreciate "the advantages of collective 3 commercial practices, as opposed to individual endeavor," such advan­ tages were quickly understood by westernized merchants viho faced increas­ ing competition from abroad. In times past the great merchants of the

Empire had been organized loosely, if at all; however, changing circum­ stances demanded collective action. The judicial functions of the Av- rupa and Hayriye Tuccarî guilds had merged into the Beratli Kan^ilar- yasl, which in turn was supplanted by new courts and chancellories pro­ viding legal services for westernized commerce. While not wholly satis­ factory, judicial protection was thus acquired by the merchants; yet the defense of indigenous enterprise required further measures. For protection against commercial rivalry from abroad, a guild-like struc­ ture was conceived by the Istanbul notables of trade, agriculture, and

P, Challemel-Lacour, "Les Hommes d'etat de la Turquie," Revue des Deux Mondes, LXXIII, 2nd per, (15 February 1868), 899. The observation concerned Grand Vezirs but was equally applicable to other Ottomans. 3 ^See above, p. 18, 205 industry, Whatever its origins, a Cheunber of Commerce was created by

Imperial irade, that decree of permission without which no activity could occur in the capital. In return for the state's permission to establish their col­ lective association, the founders of the Chamber may have agreed to aid governmental efforts to promote the Empire's wealth and power by recommending appropriate measures to be taken to that end. The seeking of this advice by the Sultan was in the Islamic tradition of consulta­ tion by the ruler with those subjects who possessed the necessary ex­ pertise, However, although the advice was often based upon sound con­ cepts such as the development of agriculture, the reduction of crip­ pling imposts, and the protection of small, viable industries, few of these recommendations were adopted. In addition to the state's press­ ing fiscal needs and various bureaucratic jealousies, a rising suspi­ cion of the merchants' self-interested motives prevented the wholesale implementation of their suggestions, It became evident that enriching •the merchants did not automatically result in an enrichment of the state, and that to regain the Empire's trade advantage an industrial development was required to combat the foreign articles which flooded the markets. To aid in this development, the merchants were ill- prepared. In the same spirit as the lower esnaf, the Chamber of Com­ merce had sought a monopoly for its function, -that of regulating the capital's commerce. In order to control all possible enterprise

4 See below, Appendix IV, 206 including that of foreigners, the Chamber demanded inscription upon its rolls of all members of the higher ranks of the commercial commun­ ity, Through strict supervision and limitation of commercial competi­ tion by means of an imposed classification as well as statutory prohi­ bitions, the notables endeavored to retain their dominance of the capital's trade. Nevertheless, foreigners managed to elude their con­ trol, In the years following the creation of the Ottoman Chamber in

Istanbul, the subjects of other nations formed their own Chambers of

Commerce for the purpose of improving trade conditions in their res­ pective interests. Averse to the modification of the traditional occupational grouping of Istanbul, a social structure which had contributed to the maintenance of the economic advantage of large merchants, the Chamber gave little encouragement to the artisan and trade guilds to adapt to the requirements of modem industrial organization. An attempt was made instead to prevent the rise of important segments of domestic enterprise such as the bakers and the timber retailers unless a parti­ cipating share in such enterprise could be acquired, Even enrollment with the Chamber did not offer an avenue of social mobility to those vdio had previously paid the municipal guild taxes, and entrepreneurial tradesmen were forced to remain categorized within their occupational groups. The large merchants' tax-exempt status in the capital as well as the exclusivity of their privileges were guarded with vigilance against the intrusion by others. At the same time, the Chamber attempted to extend its privi­ leged sphere by assuming the authority of lower bureaucratic officials. 207 As the structural link between the government and the capital's commer­

cial population, it functioned as an adjunct to the Ministry of Com­

merce. Its close relations and influence with sections of this Minis­

try led it into conflict with other officials. Hostilities arose over

bureaucratic usurpation of privileges which the Chamber considered as

its own, such as commercial education and agricultural loans. A basis for later political patterns of the Turkish Republic may have been laid

during these years of conflict between the bureaucracy zind the merchants over economic policies.

With the rise of anti-foreign and anti-Christian sentiment, encouraged by the monopoly over the economic sector by non-Muslims, both native and Western, and epitomized in the Armenian massacre of

1896, the Chamber's prestige began to dwindle. Its stature was reduced

by the deaths of a number of its leading notables, Azarian, Yenidunia,

Casanova, and the capable Secretary-General, Spiraki Alexandridi, A

number of the Chamber's activities were curtailed by the obdurate Mah­

mud Celaleddin, who endeavored to break its commercial monopoly. The imports of foreign manufactures by the large merchants, believed the Minister, continued to restrict the development of indigenous industry. Moreover, the Chamber had begun to favor Western industrial enterprise

within the Empire, possibly as the result of a generational transition

from the original motives of the Chamber's founders. At the return of its bon pere, Zihni Paga, the Chamber tried

to regain the ground lost to the former Minister of Commerce, However, a close association vrtiich had developed with the European advisers of the 208

"Dette Publique" after an initial stand-off may have cast further sus­ picion upon the merchants, now increasingly identified with the West­ ern element. No longer were the Chamber's opinions and advice sought by government circles. Journal editorials became fewer in number and market news returned to the first page. Gradually its columns were taken over by reports from the Public Debt Administration and the pro­ ceedings of various European stockholders* assemblies. The Chamber appeared to exist in a world of its own, its roots pruned from the soil which had nourished it. A Belgian resident of Istanbul wrote in 1901 that the three great administrations, the Regie, the Public Debt, and the Imperial

Ottoman Bank, had devoured all enterprise within their compass. "All around these establishments trade languished, the small industries were extinguished one after the other, the Bazaar wept for its pros­ perity of yore , . , The interlocking directorates of these three institutions did indeed extend over nearly every financial and indus­ trial enterprise in the Ottoman Empire. Only occasionally could be discovered on their boards the name of an Ottoman subject. Buffeted between the forces of regional and religious hostil­ ities on the one side and Western capitalist competition on the other, the Chamber merchants were nevertheless enabled to survive at this time through their commercial acumen and dexterous manipulation of random sources of support. Relegated almost exclusively to the busi­ ness of exportation, the merchants were apparently unconcerned with

^Hecquard, L*Empire ottoman, pp. 79-80. 209 political ferment. When the Revolution of I9O8 took place, it meant for them only the end of state intervention in commercial affairs,^

For a short time after July 24, a happy regime was enjoyed under

Gabriel Nouradoun^ian, then Minister of Commerce and a savant vdio was able to distinguish between the needs of merchants for free trade and

■7 the requirements of industrialists for protectionism.

However, the expectations of the merchants were not fulfilled.

Old patterns of impediments to trade continued to be traced. As late as February, 1921, the Chamber was still battling with the guild of mahonaci-s which had requested the intervention of the Chamber with the authorities against the prohibition to deploy their sails in the waters of the Golden Horn. Because the privileges upheld by mahonaci kahya-s in the transport of cargo had exasperated port merchants,

"condemned to pass under the fourches caudines of Messieurs les Mono- g poleurs." the request was indignantly rejected.

^JCCC. September 19, 1908, p. 293.

fjCCC. October 24, I908, p. 334. O 8jJCCC, February 28, 1921, pp. 215-16, editorial by Zareh Youssufian.I . APPENDIX I

THE CHAMBER OF COMMERCE OF ISTANBUL

Organic regulation^ 6 Safer 1296/january 30, 1879

(Translation communicated to the Missions by circular of April 3» 1879)

Organization of the Chamber.

Art, 1, The Chamber of Commerce of Istanbul will be composed of twenty-four members. Art, 2. The members of the Chamber of Commerça are elected from among the merchants possessing a good reputation, honesty and solvency, at least thirty years of age, having engaged in commerce for five consecu­ tive years, and having undergone no condemnation for crime or misde­ meanor, Merchants declared to be in a state of bankruptcy will not be elected until they have been rehabilitated. Their election will be made by secret ballot and by majority vote; in case of equal votes the preference will be given to the eld­ est, Two members of the same firm may not be elected at the same time.

Art, 3« The election of members of the Chamber is made by twenty electors, of which half will be named by the Ministry of Commerce and Agriculture and the other half by the merchants.

Art, 4. The electoral assembly will meet under the presidency of the Minister of Commerce,

Art, 5. In case there are persons among the elected members who will not accept their commission, it will proceed to replace them following the method of election mentioned above. Art, 6, The members of the Chamber will elect, by absolute majority of vote, a president and a vice-president from among themselves and will submit their election to the approval of the Ministry of Commerce,

Art, 7, The term of the commission of the members of the Chamber is three years, but as each year one-third will be changed, the first and

Young, Corps de droit, IV, 3-5, Young gives the date as 6 Safer 1297/January 19, 1880, The name "Constantinople" has been replaced throughout these translations by "Istanbul,"

210 211 second year this third will leave by drawing of lots and the following years by order of seniority; the members leaving will be replaced suc­ cessively by the new members elected following the arrangement of art, 5. A member whose commission has expired may not be re-elected until after the interval of one year, (Amended January 13, 1890, to read: The member >diose commission has expired will be able to be re-elected.)

Art, 8, In case of the death, resignation, bankruptcy, or condemna­ tion for any crime or misdemeanor whatsoever of one of the members during the period of his office, he will be replaced at the meeting nearest the Electoral Assembly by a person who will remain in office until the expiration of the commission given to his predecessor. Any member who, with no legal reason, has not been present at meetings for six consecutive months, will be considered as resigned. Duties of the Chamber

Art, 9» The Chamber of Commerce, whether on its own initiative or according to the demand made of it, will propose in writing to the Ministry of Commerce and Agriculture appropriate measures to lead to the progress and development of skills and industry, modifications and reforms to be introduced into commercial laws and customs duties, projects concerning the execution of public works such as the con­ struction of ports, river navigation, the extension of postal, tele­ graphic and railway lines, the opening and repair of bridges and high­ ways, the establishment of exchanges, the publication of commercial journals, in short, all that cam contribute to the progress of com­ merce. Art, 10, As soon as it is formed, the Chamber of Commerce will pro­ ceed to draw up its interior regulation and submit it to the approval of the Ministry of Commerce, Art, 11, The Chamber of Commerce will keep an examt record of mer­ chandise, currency, and public titles of all kinds, as well as any other object relative to commercial transactions, and, upon demand by the Ministry of Commerce, will send to it am extract of this record invested with its special seal. APPENDIX II

THE CHAMBER OF COMMERCE OF ISTANBUL

Interior regulation^ 24 ^aban 1298/July 22, 1881

(Translation communicated to the Missions by circular of July 22, 1882)

Chapter I

Purpose of the Chamber of Commerce and Method of Its Formation,

Art, 1, The Chamber of Commerce of Istanbul is the source from which the Imperial Government derives, through the channel of the Ministry of Commerce, all information regarding commerce and merchants, and the special intermediary for any interchange which will take place between the Imperial Government and the latter, conforming to the arrangements of the present law. Art, 2, The number of members of the Chamber, the qualifications re­ quired for participation, the method of election of the president and vice-president, and finally the duration of their commission are indicated in the organic law of the Chamber,

Art, 3» The fundamental duties of the Chamber of Commerce consist of gradually investigating the means and taking all necessary measures for the development of commercial and industrial interests; to communicate, after previous examination, to the Imperial Government the information assembled to that effect, and to indicate to it the causes which arrest the progress of commerce and the appropriate means to increase develop­ ment and prosperity.

Art, 4, The members of the Chamber of Commerce must belong to the first and second class of merchants enrolled in the registers of the Chamber, Art, 5. The Chamber will meet once a week; it may, however, in case of need, be convoked in extraordinary session upon the invitation of the president or upon written demand by six of its members. The persons elected in conformity to the regulation of the Chamber, and who have

\oung. Corps de droit, IV, 3-12, -mg's date is July 21,

212 213 already accepted the commission of membership, must assist personally at the ordinary and extraordinary sessions of the Chamber on days and hours fixed.

Art, 6, After the nomination of the president and vice-president, following the dispositions of the organic law of the Chamber, it will proceed each year to the election of a first aind a second councillor from among the members of the Chamber by majority vote.

Art, 7. The first secretary and the personnel of the secretariat are elected aind named by the Chamber, Art, 8, The first and second secretaries of the Chamber who will be named after the dispositions of art, 7 must know Turkish amd other languages. Art, 9. The presence of all the members at sessions is obligatory. For each session the members will be invited by meains of special cards with which will be enclosed the agenda. The Chamber may take no deci­ sion unless two-thirds of its members are present. In caise the re­ quired number is not present, the deliberations will be adjourned to the session of the following week.

Duties of the President

Art, 10, The President convokes the members of the Chamber; submits to the deliberation of the members, after examination, all the reports amd other documents which will have been referred to the Chamber; opens, when a majority of members is present, amd closes the sessions; systematically gathers the opinions resulting from discussions; super­ vises the required formalities; and submits, if necessaury, upon demand of the majority of members present, the fully-discussed questions to secret ballot. Art, 11, No member may take the floor without having obtained it from the president. In the case where several members demand the floor simultameously, the president will rule the order according to which it will be given to each of them. Art, 12, The debated questions are resolved by majority vote. In case of a tie, the vote of the president is deciding.

Art, 13. During the discussion of a question, any time that a member may wish to maike a proposal on amother matter his proposal will not be taken into consideration until the end of the discussion. If then the discussion of that proposal is admitted, it will be carried to the agenda of the following session.

Art, 14, The opinions, for and against, given by the members present will be recorded in the minutes \diich will be signed by the president and the abovementioned members. The president, before the closure of 214 the session, will rule the agenda of questions to be discussed at the following session.

Art. 1 5. At the opening of the session, the minutes of the previous session will be read. These minutes approved, they will pass to the agenda. Among the questions thereon, priority will be given, on de­ mand of the majority of members present, to that which is the most urgent.

Art, 16, In the case of the president's absence, the vice-president, and lacking him, the first, and in his absence, the second councillor, will preside. Still lacking these latter, it is the eldest among the present members who will be elected to preside provisionally.

Art, 1 7, During the deliberations the members present may not express by proxy opinions in the name of members absent. Art, 18, Matters concerning the Chamber of Commerce must be discussed and decided on the premises; any deliberation or decision held outside is considered as null and void.

Art, 19, All verbal or written communications of merchants, members of the Chamber or not, concerning commercial interests and other af­ fairs, must be addressed to the president. He will forward those fdiich are admissable to a committee composed of three members, elected from among those of the Chamber, to be discussed therein. Art, 20, Letters addressed to the Chamber of Commerce will be opened by the president; in his absence, by the vice-president; and, lacking these, by one of the councillors or by the secretary-general,

Art, 21, Any certificate or other.document prepared by the Chcimber following a previous decision must be signed by the president and, in his absence, by the vice-president, and invested with the seal of the Chamber, Any certificate carrying the seal alone without signature will not be valid. Art, 22, Each year there will be elected among the members of the Chamber a general treasurer; if necessary, he may be named from out­ side the members of the Chamber, recompensed and under guaranty.

Art, 2 3, The office of the Chamber will be in a location of the capi­ tal which will afford the greatest facility to the meetings of the merchants, Art, 24, Neither the president nor members may be permitted to sign petitions and other documents relative to commercial matters prepared outside the Chamber and destined to be submitted to its deliberations. 215 Chapter II

Functions of the Chamber

Art, 2 5, The Chamber of Commerce, beyond the duties indicated in its organic law, is also authorized to conduct the following transactions1 1, To have prepared by the secretariat the books necessary for the registration of the facts described in art, 11 of the abovemen­ tioned law, 2, To invite, by the channel of local journals or by circulars, merchants, bankers, and manufacturers to be enrolled within a fixed period in the special registers of the Chamber, 3, To record in a special register the departure, the return, the declaration of bankruptcy, the rehabilitation of merchants appear­ ing in the registers of the Chamber, as well as any accusation for a misdemeanor or crime which will be borne against them, 4, To record in a special book the current prices, merchandise, currency, and other public titles and any object relative to commerce and to deliver, as needed, to the claimants all kinds of certificates. 5, To confirm and authenticate gratis the degree of solvency of guarantors in the documents and. certificates of guaranty relative to commercial matters,2

^Decision of the Council of State published in the journals on October 28, I89O (of, vezirial order of January 24, I88I); "Whereas the law on the certificates of guaranty prescribes formally that it is to the Chambers of Commerce that the duty falls of certifying the degree of solvency of merchants signatory to certificates of guaranty, and that the notaries have the right to certify the solvency only of those persons who are not engaged in any act of commerce; idiereas counter to these prescriptions it has been established that notaries and heads of guilds continue to certify the degree of solvency of merchants; whereas that state of things constitutes a violation of rights and duties clearly fixed by law; it has been decided that notaries must limit them­ selves in the future to authenticating only the certificates of guaranty, "As for the distinction to be made between merchants and per­ sons belonging to a common guild (esnaf), one ought to respect the prescriptions of the Code of Commerce vhich stipulate that, out­ side of individuals living by the product of their manual labor, all persons who sell merchandise, products, or commodities by wholesale or retail, as well as those who are occupied with com­ mercial operations listed in art, 28 of the Appendix to the Code of Commerce and, in general, any person who can be declared to be in a state of failure, must be deemed merchants. Since the Cham­ ber of Commerce must certify the degree of solvency of persons of this category, the Prefecture of the city has been charged with transmitting the order to the heads of guilds henceforth to inter­ fere no more in these kinds of certificates. 216 6, To have entered and recorded by the intermediary of the Minis­ try of Commerce protests for non-payment of goods, promissory notes, and bills of exchange, signed by merchants, bankers, and manufacturers, 7, To record verbatim on demand of the contracting parties the agreements of partnership and other deeds drawn up outside the Chamber relative to commercial, financial, maritime, and industrial affairs and to public works. 8, To publish commercial journals, to indicate the need of creat­ ing commodity exchanges in localities where the need has been felt, and to communicate to the Ministry of Commerce its information amd know­ ledge with regard to merchants and trade. Art, 26, The Chamber of Commerce may give its opinion (amended to read: will give its opinion) on the modification and amendment of the Commercial Code amd laws concerning the Tribunals of Commerce j on the formation and creation in the provinces of Chambers of Commerce and Exchanges; on the naming of exchange-brokers amd agents; on the regu­ lations of brokerage; on the table of rates and other operations con­ cerning trade and subject to rates; as well as on the formalities to be fulfilled with regard to locad banks and works of public utility from the commerciail point of view.

Art, 27, If there is a real, necessity to examine and study certain questions, the Chamber has the power to name commissions formed outside its members. These commissions, named for the purpose of obtaining for the Chamber in summary the result of their investigations on the issue in question, will have no more than six members, One member of the Chamber will be a delegate attached to the commission to draw up the report relative thereto. Chapter III Duties of Merchamts and Persons Engaged in Commerce

Art, 28, All merchants, bainkers, and manufacturers, Ottoman subjects or foreigners, having offices at Istanbul, have the right to be en­ rolled in the special register of the Chamber, It is necessary for them to make this demand in writing, three months at the latest after the publication of the present regula-

"Finally, the Ministry of Justice has received transmission of that decision and has been invited to give orders to vhoever is concerned that they respect the law ad hoc, in acting in con­ formity to the decision taken, "On the other hand, as to that which concerns the protests of bills of exchange, since that question touches commercial matters, the notaries have received the formal order to transmit, in a maximum period of twenty-four hours, to the Chamber of Com­ merce of their constituency, any protest of bill of exchange." Young, Corps de droit, IV, 8-9, n, 1, 217

tlon, or right after the transmission of the circulars announcing the formation of thj Chamber, Art, 29. To provide for the expenses of the Chamber, all merchants are divided into four classes. Obliged to pay a subscription rate of iT 5* merchants, bank­ ers, and manufacturers appear in the first class; fcT 3# those in the second; LT 2, those in the third; and tT 1, those in the fourth. After their enrollment in the special books of the Chamber, they will be classed according to the decision of members of theCham­ ber and will pay each year in advance their annual subscriptions. Partners and brothers who have but one and the same signature are considered as a single person.

Art, 30. Merchants idio, not being enrolled at the Chamber of Commerce within the fixed period, request to be so after the expiration of this period, will have to pay a subscription increased by fifty per cent for the time trtiich will have elapsed since the expiration of the period until the date of the request.

Art, 31. All deeds and documents vriiich will be addressed by the mer­ chants to the authorities or to the Chamber of Commerce must mention at the bottom the name and surname, the domicile, the type of trade, and the class of signatory as well as the number of the certificate delivered by the Chamber indicating that class,3 Chapter IV Duties of the First Secretary and other Paid Officials

Art, 32, The first secretary and other officials of the Chamber of Commerce are recompensed and must furnish guaranty. Their salaries are paid from the receipts of the Chamber and appear in the annual budget.

^By circular of November 4, 1882, the Porte called the atten­ tion of the Missions to this article, as follows: "The performance of this formality so advantageous in it­ self, offering no difficulty for merchsuits, the Ministry of For­ eign Affairs begs the Ambassador , , , to be willing to recom­ mend to his nationals to conform thereto," A circular of the Ministry of Justice published in the jour­ nals June 4, 1887, directed the courts to refuse formally any request or certificate which did not fulfill the conditions of art, 31. But it has been contested on the part of the Embassies as to whether the Chamber had any right to refuse its authentication because of non- enrollment of the merchant at the Chamber, especially as at the found­ ing of this Chamber it was stipulated that this enrollment would not be rendered obligatory. Ibid. p, 10, n, 3* 218

Art, 33» The first secretary has the duty to supervise the editing of the minutes of the sessions of the Chamber and to sign, conjointly with the president, these minutes as well as all reports and documents pre­ pared according to the decision of the Chamber; to submit to the Cham­ ber a summary of all the documents, memoranda, and petitions which will be sent to him by it; to supervise the good keeping of records of the Chamber, mentioned in art, 25 of Chapter II; to prescribe and have fulfilled the duties of the secretaries and other employees placed under his orders. Art, 3^, A receipt book with stubs will be prepared for the collec­ tion of subscription fees of the merchants. The receipts, detached in their respective order, will be signed by the president, the treasurer, and the secretary, and invested with the official seal of the Chamber, The secretary-general will prepare each month a sheet indicating the daily receipts and expenses which he will send to the treasurer to be submitted to the Chamber, Any other income will equally be collected against numbered receipt and detached from a receipt book with stubs. This receipt, signed by the president, will be returned to the con­ cerned.

Art, 35t For any expense over the sum of Ps, 100, the secretary- general will inform the Chamber of it in writing and obtain authoriza­ tion for it.

Art, 3 6. Each member of the Chamber of Commerce has the right to examine and verify, whenever he wishes, the records and the bookkeep­ ing of the bureau of the Chamber.

Art, 3 7« In case of the absence of the first secretary for plausible reasons, his functions will be provisionally fulfilled by the second secretary or by one of the members of the Chamber.

Art, 38. During the summer the officials of the Chamber must be found at their posts in the morning from nine o'clock to noon, and in the afternoon from one until five o'clock. The hours of service dur­ ing winter will be fixed. During the sessions of the Chamber no offi­ cial may be away from his post without special permission of the first secretary, If an official for plausible reasons must be absent from his post for several days, he must obtain a leave permit from the president of the Chamber,

Art, 39. If the first secretary or one of the officials of the Cham­ ber is absent without legal reason, or if he conducts himself in a manner to attaint the dignity of his post, he will be relieved of his duties upon the decision of the Chamber, 219

Chapter V

Receipts of the Chamber of Commerce Art, 40. The receipts of the Chamber are comprised of the annual dues paid by way of subscription by the merchants enrolled, as it is stated in art, 29» and of charges levied according to the special table of rates for the transactions and affairs indicated in art, 25, Art, 41, After deduction of all expenses, the surplus of receipts will be used, upon decision of the Chamber and with the authorization amd approval of the Imperial Government, for the establishment of com­ mercial schools and for the creation amd publication of journals of commerce. However, a reserve fund which must not fadl below fcT 200 will be retained in cash in order to meet extraordinaury expenses of the Chamber, Art, 42, At the end of each yeaur a budget of the Chamber indicating the receipts and expenses will be prepared,

Cha ter VI

Seal of the Chamber and Various Dispositions

Art, 4 3, The Chamber sets forth amd submits to the Imperial Govern­ ment the rewards to be accorded to authors of industrial inventions of public utility.

Art, 44, The special seal of the Chamber will carry on the upper part a cross with star, the words "Chamber of Commerce of Istanbul" in Turkish in the middle, and all around in French, All papers and documents emanating from the Chamber will be invested with this seal. APPENDIX III

THE CHAMBER OF COMMERCE OF ISTANBUL

Additional Article^ 8 Muharrem 1299/November 30, 1881 (itanslatlon transmitted to the Missions by circular of July 22, 1882)

The members of the Chamber of Commerce, the temporary judges idio will be named to the commercial courts conforming to the disposi­ tions of the Appendix to the Commercial Code, the arbiters named for litigation according to Ottoman procedure, as well as the appraisers and inspectors of commercial books, must belong to the first and second classes of merchants enrolled in the registers of the Chamber,

The presence of all members at the sessions is necessary. The Chamber can take no action if the number of members present is below twelve. In Ccise no quorum is present, the deliberations are adjourned until the following session to which the members are spe­ cially invited. Mention will be made, at the bottom of the invitation cards, of opinions expressed by the members present at the preceding session. Members invited a second time will be obliged to make known in writing to the Chamber to which of these opinions they agree. If they hold opinions contrary to those indicated in the invitations, they are obliged to be present personally at the session to support them. Otherwise, they are considered to have formed no opinion and the members present, even if below twelve, will have deliberative voice.

The Chamber will prepare and deliver certificates relative to all types of guaranties of merchants destined to be exhibited before the civil and commercial authorities and courts. The Chamber will send a special employee to represent it during the execution by judicial order of a confiscation, sale at public auction, or estimation of merchandise by appraisers.

^Young, Corps de droit, IV, 12-13. Young's date is Decem­ ber 1, 1881,

220 221 The Chamber Initials and numbers the books of merchants and authenticates, in case of demand, their annual balance-sheets,2

Merchants and brokers not furnished with a certificate attesting to their enrollment at the Chamber of Commerce will not be admitted to compete at auctions operated by the Government,

All brokers will be enrolled at the Chamber of Commerce and are obliged to obtain from the Chamber a permit of profession.

^This paragraph was repealed 3 Rebiyulahir 1304/December 31, 1886, Young gives the date as 1887, APPENDIX IV

AN UNRESOLVED PROBLEM

One of the many problems remaining unsolved, in this disser­ tation is the origin of the legislation pertaining to the Chamber of Commerce of Istanbul, A number of firman-s and irade-s were involved, principally those of June 13* "1292"; December 12, 18?5; February 21,

1876; April 6, 1876; January 30* 1879; and July 22, 1881, Whether the archives of the Ottoman Ministry of Commerce and Public Works, when catalogued, will reveal the sources of these decrees is problematical.

The definitive resolution of the problem may have to await the dis­ closure of information other than bureaucratic, if indeed such infor­ mation was recorded and preserved.

Who or what elements were responsible for the concept of a structured council of economic notables to advise the government in an effort to improve trade conditions in the Empire? Had a European dip­ lomat or ministerial adviser implanted the idea as a useful Western reform? Or did the Russian ambassador, Ignatyev, influence Mahmud

Nedim along these lines as a check to British and French economic pen­ etration? How far did Ahmed Cevdet's opposition to foreign interests extend beyond the transfer of the commercial courts to his Ministry of

Justice?

222 223 Mahmud Nedim was known for his partiality to Armenians. Was he pressured by an Ottomem merchant and landowning class into recom­ mending the establishment of collective groups for its notables? Had

Hayreddin Psu^a, an outsider to the capital's bureaucratic circles, been raised by Abdulhamid to the Grand Vezirate in order to control and direct these non-Muslim pressures; and did the lack of Hayreddin's success encourage the later centralization of power into the hands of the Sultan and the rise of an Arab camarilla close to the throne? A Society of Commerce for the purpose of drawing up the

Chamber's interior regulation was reported to have been created in

1880 after a preparatory period of four years. This period included the disasters of war with Russia, famine and disease, and a treaty which disappointed Armenian hopes for security of life and property.

One of the members of this Society was Aristakes Azarian. To what ex­ tent were other local financiers involved? Was there any relation between the Society and the concession of the Rusum-i Sitte to those who had financed the war? These questions among others concerning Ottoman socio­ economic history in the last quarter of the nineteenth century open further areas for investigation. What has here been uncovered is but the tip of an iceberg. SELECTED BIBLIOGRAPHY

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