The Dominion THURSDAY. JANUARY 2, 1018. TURKEY'S FINANCES.

Dominion, Volume 6, Issue 1637, 2 January 1913, Page 4

The Dominion THURSDAY. JANUARY 2, 1018. TURKEY'S FINANCES.

_The oxpuhwfi of the Turk from Jiuropo b&g and baggage" hag for many years been a favourite theme with many who considered only what Beetled to them, the inherent evils of J, arkish rule.x overlooking the financial rights in the Ottoman Empire ox many other nations. Were it not for Turkey's indebtedness, more particularly to France, Germany, and Great Britain,, her expulsion from Europe would be much less difficult of accomplishment, But if the Porte leaves Constantinople what is to be j come of Turkoy's creditors? That is one of the matters which must affect the work of the peace delegates now in London. Turkey's financial problem, will bo difficult to solve. rfle countries named* and others, are Turkey's creditors, and, apart from such questions as the balance of (power in Europe, and Great Britain s position as- a Mohammedan 1 ower, the respective Governments perforce must guard the interests of their .nationals who, for a lengthy period, have assisted to finance the liuridsh Government. ! Turkev's fi. usnc'es aro in a bad way at the prctant time, and, to all appearance, oa [y. advice and material aid from outside will prevent disaster/ Turkey has already been bankrupt, ing in 1876 suspended payment '■ of interest on one-half of her outside debt, which then had reachod a total of about' £200,000,000. But the only satisfaction her creditors received was in the'form of certificates acknowledging tho amounts duo.' In 1877 interest on the remaining portion of:the debt was stopped, and tho prospects; of the creditors were far from bright.: Tho first stoppage of interest was. attributed by;, the forte to revolts in several of her .provinces; but no specific cause soems to have been: forthcoming for the. non-payment on, tho remainder/ or:tho debt. War with Russia ensued in consequence of which the outlook for the. creditors became dark indeed. .'The oreditors, however, decided upon action, and tho result was that tho Porte handed over .to of bankers in yonstantinople •' thd ', administration 1 and. . collection of, various taxes which .'wero,to be applied cxclusivei' ly to the service of the debt.' ' • Sib Vincent Oaiixabd, who,•; for raany years, was President of tho Council of the Ottoman Public, Debt,-has recently'given a •particu*larly, lucid account of the financial position in Turkey at the time when what, i a known as the; Boubke-Vai,-Erey scheme waß agreed to by Turkey and the' Powers.' In 1881:' tho Porte invited delegates from: tho bondholders in the different countries, to, assemble in Constantinople and'discuss the resumption' of payment of interest. Russia declined to take part in the discussion, but all the other Powers financially interested were represented.. Lobd. OonNEMAitA (then the Biqht Hon. K; Boubkb) and : M. Vawrey were chiefly responsible for /arranging' the final compromise which soon after-wards-found formal expression.; in the Irado of Muharren, on December 20, 1881. It was then found that tho public,debts upon which interest was due Amounted, with arrears of interest, to the sum of £252,000,000, including', tho certificates already mentioned., This vast sura was written down to £106,000,000, and, under the Bourke-Valfrey scheme, it was agreed that on this. amount interest should bo paid at the rate, of not less than one per cent.; interest to be increased gradually, as.': the revenues appropriated for ;the' purpose expanded. An International Council was created to administer the debt' charges,, to collect the revenue^'and, generally,' to safeguard the interests alike or tho Porte and of-tHe''creditors. This Council was, within ihe limits of the law, absolutely independent' of Ottoman control.: The scheme appears to have worked well from the first. .> The "indirect contributions," which was the name given to: tho revenues set aside for tho servico of the debt, included duties on tobacco, salt, commercial, stamps, spirits, certain. fisheries, and silk. These produced in 1910 atotalrevonuo of £2,873,000. In addition, funds were appropriated in respect of a' tobacco tithe, tho Eastern fyumelia . annuity, certain surplus revenues from Cyprus, and from a few other sources. Under, the Treaty of Berlin, Bulgaria, Servia, Montenegro, and Greece:should have, annually, paid proportional shares of the Ottoman .debt, but nothing has been paid by these States. Until Italy's descent upon Tripoli, nnd. the outbreak of war With the Balkan States, the Bourke-Valerey schemo had been, says Sin Vino&nt Oaillard, "a notablo success;" The seded rovenues expanded to a remarkable degree, and tho. International' Council energetically dcvelop--3d th 6 revenue sources from a commercial point of view." The debt now controlled by tho Council represents a of £91,31)0,328, the innual charges being £3,606,620. To date, the capital redeemed is over E3,000,000. But meantime Turkey las not forsaken the money market. [n tho last three years, for example, mo has floated loans, chiefly in Germany and France, to the extent of fully £19,000,000. These aro mostly, it would appear, secured by the issignment of specific revenues, on tho samo principle as tho "indirect jontributions" controlled by tho International Council. Many sources )f revenue will, necessarily, be affected by tho war, and, more so, by the alienation of portion •of Turkey's European possessions. The Douncil will bo faced with a considerable diminution in its revenues, ind it is, at present, difficult to Foresee how Turkey can make good ;ho. shortfall. One proposition will ioubtless be that tho Balkan States should guarantee such portion of ;ho annual debt charges as would ;iavo been rocotvod from the torrijories to bo ceded by Turkey, A

prcccdont for this is found in Italy's undertaking to provide an indemnity to tho Porte for the Grown lands.in Tripoli, tho amount to bo applied to tho service of Tripoli's share of Turkey's public debt. But tho Balkan States would havo several very strong reasons to advance why they should not bo burdened with the debts of Turkey. One of these would be that Baid public debt Lad been largely incurred in oppressing the inhabitants of Macedonia. Still, thero remain sources of. income untapped in Turkey, Every subject of tho Sultan—to mention one source—who works for his living has to pay a tax, whilo subjects of other countries are immune taxation. The financial position of Turkey naturally is a not unimportant factor in tho situation arising out of the war, and in the possibilities associated with peace negotiations.