MODERNIZATION AND COMMERCIALIZATION
IN THE TANZIMAT PERIOD: 1838-1875
Zafer Toprak*
‘The aim of the present study is to reconsider and reconstruct the eco-
nomic history of the “decaying” Ottoman Empire during the Tanzimat
period. Scores of scholars have already interpreted the decay in terms
of imperial expansion. The decay paradigm is part of empire histories.
Therefore, itis strongly imprinted with political discourse,
Below, I will argue that the Ottoman case would be better un-
derstood if viewed within the context of a more dynamic process of
change versus inertia rather than decay, and that such an approach
to Ottoman economic and social history would be less tainted with
political concerns.
‘The ultra-nationalist approach to Ottoman economic history, has
always blamed the 1838 Anglo-Ottoman Commercial Treaty for the
“under-development” or “dependency” of the Iate Ottoman Empire
‘This scenario with a xenophobic hint and backed by Marxist as well
‘as nationalist historiographies, finds the main scapegoat of modern
Ottoman-Turkish economic history in the 1838 Treaty.
Most students of Ottoman economic history, influenced by this
mentality, saw the Tanzimat era as an economic process which forced
the Ottoman Empire to fall under foreign domination and to lose its
political and economic independence. According to this view, the new
‘era was characterized by the free-trade policy inaugurated in 1838, and
foreign debts borrowed from 1854 onwards were instrumental in the
creation of this dependency or foreign domination.
For these students, the tenets of the Treaty created the legal and
mental milieu for a laisser faire, laisser passer framework, which led to
the destruction of Ottoman local economic potential, mainly the tra-
ditional guild system, Ottoman foreign debts, on the other hand, pre-
pared the milieu for foreign political and economic supremacy. ‘Thus,
agricultural as well as non-agricultural pursuits became more and more
dependent on foreign markets, relegating the Ottoman Empire to colo-
nial or semi-colonial status.
However, historians with a non-conflictual and consensual model
of development in mind could construct a different scenario and offer an
alternative problematic by framing their models in a complementary,
* Roephora University, ntanbul, Department of History
New Perspectives on Turkey, Spring 1992, 7, pp. 57-70.58 ZAFER TOPRAK
rather than a mercantilist and antagonistic context. A much more
optimistic acenario conld be adopted and the Tanzimat era could be
considered as the turning point in the making of a modern nation-state
with a capitalistic opening. In fact, most Ottoman-Turkish historians
are uneasy in their treatment of late Ottoman-Thirkish history, namely
the rise of a nation-state framework leading to Republican Turkey and
the fall of the Ottoman Empire. When they embark upon global anal:
ysis, they hesitate between analyses based on economic imperialism on
the one hand, and socio-political evolutionism on the other. Despite
their misgivings on economic policy, the Tanzimat, for most Republic
can historians, is the starting point of modernization, or the making of
the so-called nation-state.
‘The economics of the Tanzimat, despite its ups and downs, can,
however, be integrated into this modernization paradigm summarized
in terms of urbanization, secularization, and structural differentiation,
In other words, the economic liberalism of the Tanzimat may well have
been the prerequisite for a new structure, escaping inertia and low social
mobility. So the Tanzimat era could be interpreted in terms of a gradual
yet irreversible trend towards more rational, complex, and impersonal
forms of social organization within the framework of capitalism and
moder bureaucracy. In fact, I want to argue that the Tanzimat period
should be seen as a phase which proved to be indispensable for the
transition of the Ottoman economic structure from its pre-capitalist
stagnation to a dynamic growth. Or in sociological terms, a transition
from traditional society to modern society based on achievement and
high mobility. One can argue that foreign trade had the “mission” to
destroy the traditional social framework and make change possible, as
Marx put it for the British in India.
‘The Ottoman ancien régime had to be disbanded and refortns had
to be carried out, despite the economic and financial problems inherited
from the classical economic model. And, this could only be pursued in
a liberal capitalistic framework, ie., with capitalistic procedures and
stitutions emulated from the Western world. ‘The Anglo-Ottoman
Commercial Treaty of 1838 and the ensuing treaties were parts of this
spurt. Rather than the antagonistic mercantilist assumption of dif-
ference of interest, a much more liberal approach was tested in the
‘economic and financial activities of the ‘Tanzimat.
NEW PERSPECTIVES ON TURKEY 50
Restructuring of the Empire
‘The reports sent to the British Board of Trade in the 1830s, before the
signing of the ‘Treaty, illustrate amply the irregularities of the market
mechanism in the pre“Tanzimat era. David Urquhart, renowned for his
book The Resources of Turkey, compiled prices at different stages of
rmarketization with the help of an Armenian commercial house. Accord-
ing to his report to the British Board of Trade, the price of commodities
increased more than ten times through their journey to the export port
For example, a quintal of valonia bought at seven karsg from the peas-
ant leaped to seventy kurus in Izmir. In a mediocre year it could be
as high as ninety kurug. Other export goods such as wool. sesame,
nuts, raisins, and olive oil shared the same fate. Monopolies, internal
customs and permis, plus money paid to the local governors, restricted
the market. The practice of monopoly at the mercy of local governors
discouraged many commercial houses from earrying out business in the
Ottoman territories. As for the producers, they had no choice but to
deliver their products to the monopolizers or accapareurs.
‘We cannot deny, however, that the policy adopted by 1838 Treaty,
as in all iberal economic trends, engendered a duality in the Ottoman
‘economy. Most students of Ottoman economic history argue that im-
ported goods, mainly cotton goods, dismantled the old household cot~
ton industry, This has been shown by many local as well as foreign
chronicles. But one has to be cautious in generalizing such a decay.
‘The dismantlements cannot be denied for several Ottoman urban
centers vulnerable to foreign trade. But the process was much more
complicated. First ofall the picture of total collapse is unrealistic and
challengeable. In most cases the dismantling of a traditional structure
went hand in hand with a transformation in non-agricultural sectors
Several factors affected the process. Inland areas were always protected
from the challenge of foreign trade. In addition, consumption patterns
in a traditional society are not always rational and are therefore vulner-
able to foreign invasion. Thus the duality of demand in several parts
of the Ottoman territory continued to survive for a long time.
In fact, in several parts of Anatolia, the number of looms increased
rather than decreased up to World War I. In Antep, for instance, be-
tween four and five thousand looms were active on the eve of World
War I (Tevfik Nevzat, 19260, 1926b). ‘The main blow came with World
War I and the ensuing economic dislocation, rather than economic lib-
eralism of the nineteenth century. Despite the World War and the War
Foran intereating local account, ace Ahmned Mubtar (1326)60 ZAFER TOPRAK
of Independence, Republican Turkey inherited 4,500 looms in Kasta-
‘mon alone? According to an industrial census sponsored in 1921 by
the Ministry of Economy during the turmoil of the war, in the non:
occupied territory of Anatolia the number of shops with hand-looms
engaged in textile manufacture reached 20,057. In fact, the duality in
the consumption patterns always provided a certain market for tradi-
tional “home-made” textiles.
In several cases, such as leather, the liberal atmosphere encouraged
the transition to “manufacture.” In Istanbul, Yedikule, and Kazligegme
leather manufactures developed in the last quarter of the nineteenth
century (M. Ziti, 1340/1924, pp. 50-100). In Adana, several factories
wwere established for the production of cotton goods.
‘Commerce was not the only channel of economic integration dur-
ing the nineteenth century. The 1838 Treaty was part of a whole set
cof measures serving British economic interests in Ottoman territories.
‘The expansion of foreign trade requited more than commercial treaties
Liberal trade had to be supported by an efficient credit apparatus. This
engendered the need for financial and banking institutions. The con-
cept of the modern banking institution had been introduced into the
Ottoman Empire by British diplomats and men of commerce in the
same year as the signing of the Treaty. But banking institutions and
credit facilities provided by these banks have always been seen as patt
of the dependency scenario. Studies have usually focused on the sup-
ply of capital rather than demand for capital. They have seen foreign
banks, debts with the ensuing Public Debts Association, and the cre-
ation of concessionary enterprises owned by foreign shareholders, as a
loss of national sovereignty and first step to colonial subjugation
This negative evaluation is largely due to preconceived notions
minimizing the importance of financial input in developing economies
in favor of productive capacities, infrastructure, or managerial experi-
cence, Furthermore, analyses always concentrated on external relations
rather than the internal economy. In line with this approach, the im-
portance of finance in the Ottoman Empire is limited to forcign debts,
debt payments, and the effec of exchange rates on external trade, Such
a view overlooks the added importance monetary factors assume
lethargic economy. In short, in Ottoman economic history, monetariza-
tion is always taken for granted
3 Turhiyetde 1597 Senesi Sanayi Faaliyet* Istanbul Ticarst ve Sanayi Odass Mec
suas, 39/2, January 1390/1923, pp 66-87
NEW PERSPECTIVES ON TURKEY 61
Quantitative Data or Serial History
What were the basic concerns of the Tanzimat men when they adopted
‘a new financial framework? What did Ottoman integration to Europe
mean to the Ottoman bureaucracy? How did the emerging middling,
strata perceive European civilization in the light of capitalism? Polit-
ical and diplomatic history fail to give us convincing answers as they
reflect the daily concerns of governing bodies. The complex mental val-
ues of the Ottoman civil servants do not reveal the conceptual frame-
work of the emerging social structure. The answer had to be sought in
a socio-economic paradigm of development. And this requires first of
all quantitative data or serial history.
Cliometric data for Ottoman history have recently gained impor-
tance thanks to the work of economists interested in history. Vedat.
Eldem in his famous book on late Ottoman history compiled statistical
data for the last 40 years of the empire (Eldem, 1970). Sevket Pamuk,
relying on European foreign statistics, provided us with series on for
cign trade from 1820 onwards (Pamuk, 1987). ‘The quantitative data
of these two pioneer works defy the classical “sick man” appronches to.
modern Ottoman history.
However, one must admit that quantitative studies have a long way
to go in Ottoman historiography. The compilation of such a serial his-
tory requires methodological expertise as well as historical insight. not
to mention some knowledge of economics. Wages, prices, budgets, and
a host of numerical data await discovery by historians, Such sources,
including monetary history and metrology, are vital for drawing the
outlines of Ottoman social history in its widest context.
While waiting for the quanto-historical findings, social historians
could partly overcome the lack of serial data through “by-products”
of social history. In some cases, broad inter-disciplinary perspectives
could substitute for the gaps in cliometric historiography. The nomen-
clature of import commodities, for instance, could well be a source of
information for consumption patterns. Advertisements in journals, pe-
riodicals, or yearbooks could lead the researcher in studies of income
distribution (Toprak, 1988, pp. 22-29); o a telephone directory could
be the main source for real-estate values. In fact, consumption ori-
ented perspectives could direct researchers in their search for rough
‘quanto-historical trends,
Historians badly lack statistics prepared by the government for the
Tanzimat era, the only exception being budgets é Veuropéen from the
late 1850s onwards. But in the absence of reliable figures. the perfor-
‘mance of the Tanzimat could well be evaluated through the interrelated62 ZAFER TOPRAK
processes of monetization and commercialization.
‘To begin with, there were a multitude of basic handicaps in the
classical provisionist model of Ottoman economy. Arbitrary attitudes
in commercial transactions, governmental restrictions, monopolies, inc
of rationality, fiscalism, and a number of similar malaises characteristic
of the pre-mercantile era dominated the classical Ottoman structure.
‘An economy suffering from an in-built inertia could hardly harmonize
itself with industrializing Europe.
Europe, and particularly the pioneer country England, with its
commercial expansion did in fact kill the autarkic internal inertin of
the Ottoman Empire and provided the spurt for its speedy commer-
cialization and monetization.
Compared to the pre-Tanzimat period, the economic history of
the Tanaimat ia characterized by the rise of modern economic and fi
nancial institutions, both public and private. The first paper money,
the transition to a unitary monetary structure, state and private bank-
ing institutions, European-style budgets, the stock exchange, foreign
debts, foreign chambers of commerce, in short a host of new economic
land financial devices unknown to the previous era proliferated from
1838 onwards. The commercial treaties of 1838-52 and the succeeding
‘ones in 1861-62 are part of this renovation of the economic structure.*
‘The 1838 Treaty, in its liberal context, dislocated the self-sufficient,
internal, local economy with a limited market, and integrated part of
the hinterland to the world economy. ‘The abolition of monopolistic
practices, despite its capitulatory nature in its bilateral legal aspect,
liberated the producers from the commands of the fiscalist, provision-
ist Ottoman classical mind (Toprak, 1988). The profit motive became
increasingly the main concern of the peasantry. ‘The lot of the ru-
ral population improved. Mass consumption started. The quality of
consumer goods increased. Prices of staples decreased. Urbanization
started. Public amenities in urban centers improved
‘The above scenario presumes that the 1838 Treaty opened new
vistas to commercial milieus. Price mechanism replaced arbitrary de-
cisions. Port cities, such as Istanbul, Tamir, and Saloniea prospered.
Local men of commerce became the nucleus for the ensuing middling
strata or Ottoman bourgeoisic.
+ For the legislation concerning the emerging Ottoman economic and financial struc
‘une, ace Ahmed Rait (1311),
NEW PERSPECTIVES ON TURKEY 63
Urban Life and Middling Strata
In order to judge the real impact of “liberalization,” one has to recon-
struct the economic life of these port cities in the late nineteenth and
carly twentieth centuries. The urban and bourgeois life of these cities
and the wealth they acquired owes much of its success to the libertarian
atmosphere dominant in commercial activities
With the impact of burgeoning market relations in terms of mon-
tization and commercialization, the population of Istanbul tripled
within thirty years. At the turn of the century, Istanbul and its sur-
rounding banlieues accounted for around one million people.
A capital in inertia for more than two centuries transformed itself
as the Ottoman Empire became part of the European world and as
its market articulated with the European economy. The population
growth in Istanbul, the geographical extension of the market area con-
trolled by mercantile interests in Istanbul, the removal of obstacles to
the free movement of goods thanks to commercial treaties enacted with
European powers and to legislation borrowed from Napoleonic codes,
technical developments in terms of the transport of goods and the cir-
culation of information about market opportunities—all helped widen
the market in the Ottoman capital.
‘The old bazaar-type local markets lost ground and territorial
markets, including national and international ones, began to replace
them. Annals or yearbooks, such as L'indicateur constantinopolitain
Guide commercial or Annuaire oriental du commerce containing ad-
dresses and advertisements of commercial firms were published reg-
ularly in Istanbul from 1868 onwards. Exhibitions such as Sergi
Umumi-i Osmani of 1863, emulating the Great Exh
the Crystal Palace in Hyde Park, London, were held in
of the Ottoman Empire. Money and commodities exchanges were es-
tablished in the 1860s. Wholesale commodities prices were advertised
in the dailies. Commercial news was disseminated from Istanbul thanks
to the separate Turkish and French editions of the Chamber of Com-
merce's newspapers. Fairs in Anatolia and in Rumelia, continuing to
play important roles as marts for particular products, became sensitive
to the price variations in Istanbul
‘The Tanzimat era brought in its train the concept of urban de-
velopment, mainly in port cities. In fact, Istanbul, the capital of the
Empire, witnessed a process of urbanization from the middle of the
nineteenth century. Public transport, street lights, piped water and
refuse disposal became basic concerns of the newly established munie-
ipal authorities.64 ZAFER TOPRAK
‘The transformation of the economic structure, as a result of the
new economic vistas pursued by liberal policies of the Tanzimat men
created a duality in the urban shaping of Istanbul. Galata and Pera,
the districts inhabited mostly by non-Muslims, adapted to the require
‘ments of modern living. The influx of foreigners who settled in Istanbul
exacerbated this duality as they created new consumption patterns.
Istanbul, in the last quarter of the nineteenth century, with its depart
ment stores, music halls and beer houses catered to an emerging bour-
{geoisie. As for the traditional neighborhoods of Istanbul, the southern
part of the Golden Horn, Uskiidar, Eyiip, and to some extent. Kadikdy,
income structure of the populace dictated their way of life. The old
guild system dominated the bazaars in the traditional quarters. Dis-
trict retailing was conducted through itinerant traders wandering in
the streets and weekly bazaars where street traders plied their trades
from fixed stalls. Direct exchange between producers and retailers still
prevailed. Changes in retailing were slow and patchy.
In fact, this duality of market relations dominated the capital for
at least half a century and was a function of its ethnic structure, Then
came the take-off of the traditional districts inhabited by the Muslims.
‘This was partly due to the disintegration of the classical guild system
challenged by imported goods. Retail shops catering to the rising mid:
dling strata and the well-to-do became firmly established in the second
half of the nineteenth century.
‘The growth of population in Istanbul during the nineteenth cen-
tury had widespread implications for patterns of demand. Specializa-
tion became important. Per capita incomes rase. ‘The structure of
expenditures changed. A vastly increased market for food and other
agricultural products emerged. Activities such as food processing and
tailoring, which had previously been carried out on a customary basis
within the family, were now shifted to the market. ‘The use of money
became widespread.
Consumption Patterns
‘The increasing purchasing power of the populace affected patterns
of consumption. Even patterns of food consumption, generally slow
to change, became a function of income level. Ottoman cookbooks
published in the second half of the nineteenth century reflected this
‘transformation. Western styles brought in their train Western tastes,
‘The purchase of luxury items and furniture gathered momentum as
the emerging uropeanized strata in the capital emulated Paris and
London. Department stores, such as the Bon Marché, the Louvre, and
NEW PERSPECTIVES ON TURKEY 65
the Lion were set up in the 1860's and 1870's and increased the effi-
ciency of marketing.
Besides population growth, changing attitudes of mind also had
important. consequences for consumption patterns. In traditional
Istanbul, Islamic precepts had dictated the limits of material aspira-
tions. Ottomans, Muslim or non-Muslim, were expected to live unos-
tentatiously and dress soberly. With liberal economic policies, the old
concepts of modest living lost their appeal. Westernization led liter-
ate people to emulate Western styles. The reforming bureaucracy and
foreigners settled in Istanbul expounded a hedonistic calculus rather
than asceticism. The attitude of acquisitiveness gained ground as the
individual and his or her interests articulated in the nebulous Ottoman
society.
In fact, the Ottoman Empire in its late decades inherited a mone-
tized, commercialized economic structure from the nineteenth century.
“Consent” rather than “command” dominated rural life. Monopoli
tic practices almost disappeared. Money in hard currency became the
main solvent in the economy. Rationality replaced customary habits.
Mercantile concerns dominated fisealist ones.
Ottoman finances and the economy in the Young Turk era (1908.
1918) were “modern” in every sense. Efficient devices were imple-
mented to secure a decent revenue to the state. Economic concerns
replaced budgetary ones in the promulgation of legislation,
Budgets drawn and published every year became reliable sources
for Ottoman state expenditures and income. The ministry of finance
reshaped itself in line with the requirements of a modern-nation state.®
Local as well as foreign chambers of commerce,* trade unions, money
and commodity exchanges, paper money, international and local credit
institutions, joint stock companies,’ and cooperatives were the compo-
nents of a capitalistic economic model. In fact, dissolution of the former
inertia through a “liberal” shock was the spurt required. From the sec-
cond quarter of the nineteenth century onwards, the outside world was
better known thanks to commercial transactions and improved trans-
port and communication. This process, of course, took place over more
‘than one generation
‘The Ottoman economy did develop in the nineteenth century. Ac-
For a modern Ottoman financial institution, see Maliye Netaret (1327)
For foreign chambers of commerce, see Topeak (1890/2, pp. 78-81)
7
For a compile let of joint-stock
piled lat of joint-stock companies ertablished in the Ottoman Empire
from 1849 101918, se Topeat (1982, pp. 369-83),66 ZAFER TOPRAK
cording to the GDP figures provided by Vedat Eldem, despite the 1873
1896 Great Depression, the gross domestic product showed a yearly
increase in real terms of approximately two percent between 1889 and
1911. This growth rate, compared to Western countries, remained be-
low that of Germany (3.1 percent between 1875 and 1913) and that of
the USA (3.5 percent between 1884 and 1913). But, apart from the
pioneering late-comers, the Ottoman growth rate fared quite well.
In eastern Europe, Hungary, with the advantages of being on the
outskirts of a developed Europe, had a similar growth rate with the
Ottoman Empire between 1907 and 1911, namely 2.5 percent.
[As for the Tanzimat era, it will be difficult for the years to come to
calculate the GDP figures of the empire as a whole. It is, on the other
hand, useless to look for hard data for all the regions of the empire,
‘Such a dispersed empire, with different economic and social structures
within its realm, eannot provide a coherent model for meaningful ex-
planations if the stage in question is pre-capitalistic. Even the most
abstract conceptual frameworks, such as “modes of production,” would
not be helpful in covering such a geography.
But Anatolia and Rumelia, with all their dualities, could well be a
meaningful “unit” of consideration. Despite the decentralized economic
aspect of the so-called core area, rough estimates could he deduced
from indirect input to economic and social history. Monetization and
commercialization, twa basic concerns in our development. paradigm,
are well documented in foreign and Ottoman sources. It would not
be difficult. to write a monetary history of Turkey or to account for
commercial developments for the last 150 years.
‘Trade and Money
Sevket Pamuk, in his recent book, provides us with data on long-term
fluctuations in Ottoman foreign trade. Pamuk estimates that during
the three-quarters of a century following the Free Trade Treaties, to-
tal Ottoman exports measured in current prices increased more than
five times, from 4.7 million to 28.4 million, while imports measured in
current prices expanded six and a half times, from 5.2 million to 39.4
million, despite the loss of territories. Since the prices of the commodi-
ties involved in Ottoman foreign trade were considerably lower on the
eve of World War I than in 1840, the increases in trade volumes were
even greater. Pamuk measures them in constant 1880 prices: Ottoman
‘exports and imports increased respectively, approximately nine and ten
times during the period 1840 to 1913.
‘The expansion in foreign trace was more rapid in the Tanzimat
NEW PERSPECTIVES ON TURKEY 67
era than the following Hamidian period which experienced the Great
Depression. The compound annual rates of growth of Ottoman trade,
in constant 1880 prices for exports and imports are respectively 5.3 and
64 during the early Tanzimat, (from 1839-41 to 1852-54), and 6.2 and
5.2 during the late Tanzimat (from 1857-59 to 1871- -73).
In view of these figures, one could assume that the Ottoman eco-
nomic structure did in fact commercialize speedily in the years of the
‘Tanzimat. ‘The growth in foreign trade would in any case have its im-
pact on internal trade. The injection of money through foreign trade
would dismantle the self-sufficient, closed economic circuits in many
districts and create in many cases dual economic structures with disin-
tegrated, money-oriented market economy and resistant, selfintegrated
“domestic” economy. Following the item-by-item analysis of imported
commodities as well as marketed commodities in urban milieus, one
can restructure the consumption patterns and assume that the inter
nal trade carried out in hard currency doubled or even tripled in the
span of three decades. Such a growth could hardly take place in the
pre-Tanzimat era in one, or even, two centuries,
In like manner, the volume of circulating media (i.e. Ottoman
hard currency, the old one and the new one after the Monetary Re-
form of 1844, foreign currencies in circulation in the Ottoman territo-
ries, paper money issued by the Treasury, and finally the banknotes
of the Ottoman Bank), creating a well-developed exchange mech:
(Toprak, 1990/1, pp. 67-71), increased, roughly speaking, four times
before the bankruptey in 1875.
The 1844 Monetary Reform was an important step in the pro-
cess of the unification of Ottoman currency.® In the turmoil of war
and rebellion in the early nineteenth century, Ottoman currency was
debased several times. During the reign of Mahmud II, for example,
the form and name of Ottoman coinage was changed 35 times for gold
and 37 times for silver issues and the rate of the Ottoman kurus or its,
equivalent to the pound sterling fell from 23 in 1814 to 104 in 1839.
The aim of the 1844 reform was to stabilize Ottoman currency and
establish a uniform monetary unit valid in all parts of the Ottoman
territories. The old, debased silver currency had to be withdrawn and
the circulation of foreign pieces to be prohibited.
With the 1844 Reform, new gold, silver, and copper coinages were
issued. But as commercial transactions increased, the volume of new68 ZAFER TOPRAK
currency fell short of the need. Money supply had to be supplemented
with the old debased coinage and unpopular paper money. Foreign
currency also remained in circulation mainly in the distant provinces
of the empire. The variety of circulation media created an internal
exchange mechanism which lasted until World War I, In 1916 a radical
‘attempt was made to unify the currency. The Law for Unification was
enacted and the gold standard was adopted instead of the bimetallic
1844 system.
In the years of the Tanzimat, expanding internal and foreign trade
and state expenditures required a larger volume of circulating media.
Before the Tanzimat, governments relied on debasement of the cur-
rency when they were in a revenue crisis. As long as the prices of
staples were fixed through governmental or municipal decters, the low-
of intrinsic value provided the governing bodies a certain surplus.
But as the Ottoman economy integrated into the European economy
and free market dictated the purchasing power of Ottoman «
any debasement was reflected in the prices of commodities, mainly the
imported ones. And this, in chain effect, increased the general price
level. The debasement of hard currency was no longer an appropriate
‘way to meet the expenditure needs of the government,
‘Tanzimat men had to find new ways of increasing the amount of
culating media. Borrowing from abroad was the last resort. As the
amount of bullion could not be increased quickly, the issue of paper
money seemed appropriate for the government to mect hoth the state
expenditure and the need of further money for the market. at large.
‘According to available records of the mint, between 1840 and 1863
the amount of hard currency in circulation did not exceed 2,000,000
Ottoman liras in gold and 2,000,000 Ottoman tiras in other coins, It is
true that in some parts of the country and even in Istanbul foreign gold
and silver coins circulated, but the highest estimate for such coins docs
not exceed 1,500,000 in Ottoman liras. The paper money in circulation
in 1863 was about 11,000,000 million lias
In fact, despite all its inconveniences, the unredeemable paper
money was an important step in the monetization of the Ottoman econ-
omy. But as it jeopardized the whole monetary system, the Tanzimat,
government replaced the unpopular paper money with hard currency
imported from Europe, ic., debts. This heralded a new era in Ottoman
‘economic history. The foreign debts from 1854 onwards, the founding
of the Imperial Ottoman Bank, the bankruptcy of 1875, the estab-
lishment of the Ottoman Public Debt. Administration, all these stages
are part of the monetization and commercialization process. A stable
reniey,
NEW PERSPECTIVES ON TURKEY 69
and sound currency with fixed exchange rates was indispensable for a
flourishing economic system.
How did this process of capitalistic development occur in terms of
institutions and mentalities? What were the basic inputs and open-
ings in the making of Ottoman capitalism? How did the Western style
of life affect Ottoman strata? These questions remain to be answered
in much detail, But students of Ottoman history have to admit that
‘Ottoman society did in fact gather momentum in the making of a con-
sent economy with a price mechanism and did go through a radical
social transformation following its encounter with European finance
and economy.
‘The development of a unitary monetary system and sound finan-
cial institutions and techniques greatly helped the rise of a financial
‘and mercantile milieu in the Ottoman Empire. By the end of the nine-
teenth century, the Ottoman Empire had a sound currency system, an
ordered currency exchange, a full-fledged Ministry of Finance with an
efficient bureaucratized system of tax collection, a detailed economic
and financial legislation, an annual budget, an ordered capital market
in bonds and equities, and modern banking institutions including a
‘quasi-central bank.
In conclusion, we may argue that. the 1838 Anglo-Ottoman Com-
mercial Treaty dislocated the self-sufficient, provisionist and fisealist
Ottoman economy with a local market, Integration of urban centers
and part of the hinterland to the world economy dismantled the autar-
kkie internal inertia and paved the way for a structural change through
speedy commercialization and monetization. The basic changes in ma-
terial civilization went hand in hand with changes in habits of mind.
‘The classical Ottoman mentality withered away and an enlightened bu-
reaucracy functioning under rational and impersonal rules took over.
Achievement and mobility became the main concerns of the Tanzimat
men. Without a liberal capitalistic framework borrowed from the West
cern experience, this transformation could not have taken place70 ZAFER TOPRAK
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Odast Gazetesi Matbaasi
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Umu-
OPEN-DOOR TREATIES:
CHINA AND THE OTTOMAN EMPIRE COMPARED
Regat Kasaba*
‘The Balta Liman ‘Treaty of 1838, the Nanjing Treaty of 1842, and
the events that led to them have epochal significance in the history of
Britain's involvement in the Ottoman Empire and China. In addition to
stipulating the principles according to which commercial relations were
to take place between England and the Ottoman Empire and China,
these treaties became the first in a series of international and domestic
measures that marked a turn toward free trade and informal empire as
distinct from the widespread use of formal methods of control that had
characterized British policies in previous periods. As such, the treaties
are also regarded as having a global significance. Furthermore, unlike
previous unilateral grants by the Ottoman and Chinese governments
that restricted the commerce and the residence of foreigners, the Balta
Limam and Nanjing documents were drawn up as bilateral agreements
that greatly expanded the foreigners’ ability to trade and reside in the
Ottoman Empire and China,
Both of these treaties were negotiated and signed during what,
could be described as difficult times for the Ottoman and the Chinese
Empires. In the late 18305, the Ottomans were trying to suppress a
revolt by the Governor of Egypt. The Chinese, for their part, had just
fought a very costly three-year war with Britain! Reflecting the fact,
that it came after such a confrontation, the Nanjing Treaty contained
a number of punitive clauses.? For example, the Chinese government
agreed to pay 21 million dollars’ indemnity, ceded the territory of Hong
Kong to the English, granted amnesty to Chinese subjects who had
been imprisoned for their dealings with the British, and allowed for
the presence of the British fleet in Nanjing to enforce compliance with
the treaty. Outside of these provisions, the bulk of the Nanjing Treaty
and all of the Balta Limant ‘Treaty dealt with commercial matters.
Both were “free-trade treaties” in the sense that they sought to provide
* University of Washington, Jacaon School of International Studies,
4 rhe literature on the Opiuin war in extensive In addition to the classic Foiebank
(1959), ae Waly (1968), Chang (1968), Fay (873).
2 Por the text ofthe treaty, se Mayers (1806, pp. 1-4).
3 For he tet ofthe Datta Limans Teeny, ave len (1866, pp. 99-40), Kiko
(41974, pp 100-13)
‘New Perspectives on Turkey, Spring 1992, 7, pp. 71-89.