The Role of Foreign Trade in the Economic Development of Syria, 1831-1914
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69 - 18,805 KALLA, Mohammad Sa'id, 1924- THE ROLE OF FOREIGN TRADE IN THE ECONOMIC DEVELOPMENT OF SYRIA, 1831-1914. The A m erican University, Ph.D., 1969 Economics, history Unl/ersity Microfilms, Inc., Ann Arbor, Michigan (cT)Copyright by Mohammad Sa'id Kalla 1969 THE ROLE OF FOREIGN TRADE IN THE ECONOMIC DEVELOPMENT OF SYRIA, 1831 - 1914 by Mohammad Sa'id Kalla Submitted to the Faculty of the College of Arts and Sciences of The American University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in Economics Signature of Commit^tLtee: Chairman: f t 1 ( ' U , /f '? ~J ^ ctr-j ' ,__________ ^ r rr . ....L - — -- — ----------- 'T" V " 'if— f * -r ^ \ the College of Arts . ^ --- ~ / I CZ6(f' ) and Sciences 0 1 1.. _br\. 0 I Date: 1969 The American University AMERICAN uh(\Zh.Rc?> Washington, D.C. LIBRARY M A Y 2 ? 1969 WASHINGTON. D. C 3170 ii TABLE OF CONTENTS PAGE INTRODUCTION vii CHAPTER I. THE FOREIGN TRADE OF S Y R I A ................................ 1 The Role of Foreign Trade in Theory and Practice .... 2 The Scope of Syrian Foreign Trade ..................... 10 The Growth of Foreign T r a d e ........................... H Direction of T r a d e ...................................... 22 The Balance of T r a d e .............. 30 Composition of Foreign Trade ........................... 40 Conclusion.............................................. 46 II. THE TERMS OF TRADE ........................................ 58 I Definition and Limitation of the Concept.......... 59 The Terms of Trade of Aleppo ..... ................. 65 Long-Run Price Trend ................................... 73 Conclusion.............................................. 84 III. COMMERCIAL P O L I C Y ........................................ 91 Ottoman Commercial Policy ............................. 91 Free Trade vs. P r o t e c t i o n ............ 102 Appraisal of Ottoman Commercial Policy ................. 107 IV, THE ORGANIZATION OF FOREIGN T R A D E ..........................117 The Organization of the Export T r a d e ..................... 119 The Organization of the Import Trade ................... 124 Financing Foreign Trade ........ ...... 127 iii CHAPTER PAGE Transportation .......................................... 133 Conclusion ................................. 140 V. THE IMPACT OF EXPORTS ON AGRICULTURE........................152 The Impact on P a s t u r e ....................................156 The Impact on Agricultural Husbandry ................. 158 The Impact on the Land System ....................... 171 The Rural Level of L i v i n g ................................177 Conclusion................................................ 180 VI. THE IMPACT OF IMPORTS ON I N D U S T R Y .......................... 190 The Decline of Handicraft Industries ................... 195 The Expansion of Processing Industries ................. 207 The Urban Level of L i v i n g .................... v~v . 217 Conclusion................................................ 221 VII. THE ROLE OF SYRIAN FOREIGN T R A D E ............................ 234 APPENDIXES.................................. 250 Foreign Trade Statistics of Syria ..................... 251 Population Statistics of Syria, 1784 - 1915 276 BIBLIOGRAPHY.......................................................290 iv LIST OF TABLES " TABLE PAGE I. Growth in the Current Value of Foreign Trade and in the Population of Syria, 1780's - 1 9 1 3 .......... 13 II. Growth in the Current Value of Foreign Trade of the World and of Selected Countries, 1780 - 1913 . 20 III. Britain's and France's Shares in Syrian sea borne Trade in 1835-37 and 1 8 4 4-46................ 24 IV. Geographical Distribution of Beirut's Trade in 1844-46 and 1855 ................................... 25 V. Geographical Distribution of the Trade of Main Syrian Ports, 1 9 1 0 ............................... 27 VI. The Balance of Trade of Syria, 1825/27 - 1913 ...... 32 VII. Per Capita Exports and Imports of Syria and Selected Countries, 1913 . ......................... 34 VIII. Percentage Shares of Export Classes, 1835-37 - 1913 .. 41 IX. Percentage Shares of Import Classes»-1836-37 - 1913 .. 44 X. Export and Import Unit-Value Indexes and Terms of Trade oi Aleppo, 1891 - 1 9 1 3 .......... 68 XI. Average Unit-Values of Selected Syrian Exports and Annual Values of Selected European Imports, 1872 - 1913 ............................................ 75 XII. Average Values of Selected Syrian Imports, 1872 - 1913 ............................................ 79 XIII. Annual Unit-Values of Selected Exports of Industrial Europe, 1872, 1900, and 1913 ............... 80 XIV. Customs Revenue of the Vilayet of Suriya, 1869 - 1871 ............................................ 99 XV. Ruppin's Estimate of Syrian Agricultural Production in a Normal Season ......................... 162 XVI. Average Size of Syrian Farm« Prior to World War I . 178 V APPENDIX/TABLE PAGE I / I. Exports and Imports of Syria, 1776-87 - 1913 .... 254 II. Composition of Principal Exports, 1835-37 - 1 9 1 3 ...............................................260 III. Quantity and Average Value of Selected Exports, 1874 - 1913 264 IV. Composition of Principal Imports, 1836-37 - 1 9 1 3 ...............................................266 V. Quantity and Average Value of Selected Imports, 1866 - .1913 273 II / I. Sedentary Population of Syria, 1784 - 1915 ......... 277 II. Distribution of Population by P.eligious Creed, 1833 - 1915 279 III. Compound Average Annual Rate of Population Growth, 1833 - 1915 280 IV. Population/Land Ratio, 1909/10 ..................... 281 V. Estimates of Non-Sedentary Population of Syria, 1784 - 1915 282 VI. Syrian Cities with Population of 5,000 and Over, 1833 - 1915 284 VII. Degree of Urbanization, 1833 - 1915 ........ 288 VIII. Occupational Distribution of Population, 1833 - 1915 289 VI LIST OF FIGURES FIGURE PAGE 1. The Terms of Trade of Aleppo, 1891 - 1 9 1 3 ................. 69 2. The Frontier of Settlement in S y r i a ......................... 160 \ \ \ \ \ INTRODUCTION Syria (and the term is used here In the broad, historical sense) is an ancient mercantile nation. Its geographical location at the crossroads of three continents has long been one of its main assets. Lying on the major trade route between Asia and Europe, easily accessible to Europe by sea, it became for centuries a thorough fare for exchange of merchandise and ideas between East and West. The rise of industry in Europe in the latter part of the Middle Ages, followed by the discovery of a new sea route to India and the discovery of the New World, led to the decline of the Mediterranean basin. Trade between Syria and Europe did not cease, however. Turk ish concessions opened Turkish ports to European traders and enabled them to engage in commercial activities. Competition with the sea traders was keen, but Portuguese insistence on high, almost monopolis tic prices gave these traders in Syria their chance. Of all trade relations, however, French trade with Syria remained for a long time an economic reality of first importance.^ Limited as this trade might have been, it was, as long as it 2 lasted, very lucrative for the European merchant-houses and their 3 agents in the Levant. No enduring benefits accrued to Syria from 4 this trade, mainly because it was in European hands. It tended how ever, to increase the prosperity and strengthen the position of cer tain local communities that were touched by it. Many Aleppine Chris tians amassed great fortunes. Later, a number of them went to Italy vlli and established themselves in Leghorn, which was becoming the chief 5 center of the trade between Europe and the Levant. Europeans also supplied a good part of the coins in circulation, some of which con- tinued to circulate up to World War I. The international transit trade was hindered during the eight eenth century, not only by internal political unrest and pressure of nomadic tribes,^ but also by the Turkish-Persian wars in the Near East g region. A comparable deterioration took place in the Mediterranean region, where the long series of wars among the European powers as 9 well as the OttomanrRussian wars frequently interrupted trade. The end of the eighteenth and the beginning of the nineteenth centuries marked a low point in the-history of Syria. The Egyptian occupation from 1831 to 1840 temporarily arrested this decline, and in some cases reversed the trend.^ A good measure of order and security was established. Religious minorities were guaranteed pro tection and equality. Agricultural investment and production were encouraged. Nomadic tribes were forced to give up their predatory raids and pursuaded to settle on hitherto deserted arable land on the desert fringe. More significantly, during this short period, Syria was "opened" to a relatively large-scale penetration by foreign 11 traders, travelers and missionaries. Once more, the people of the eastern Mediterranean became oriented westward as in Phoencian, Roman, Byzantine and Crusade days. The entire area was exposed to new forces springing from the industrialization of Western Europe. This x<ras a period of great European, particularly of English, commerce, under the ix pressure of search for external outlets. The Egyptian rule lasted nine years. At first hailed as deliverers from Turkish yoke, the Egyptians soon made themselves gen erally unpopular to the vested interests by their reforms and to the 12 public by the establishment of military conscription. Anglo- Austrian military intervention,