The Sun.
London, England, 1860-12-12 00:00:00

111.

FINANCIAL ORGANISATION OF THE OTTOMAN EMPIRE.
If the political and administrative system of the Ottoman
Empire offers a curious physiognomy, its aspect becomes
still more surprising when the conditionuf this vast em-
pire is examined from a financial point of view, particularly
with respect to taxation. A
It may be said, on thilkead, that far from being an ex.
hausted country, the Ottoman Empire is the least bur-
dened of all states.

In fact the taxation varies from 5 to 2f per cent., and, in
fine, its importance is but from 275,000,000 to 300,000,000
for a population of 30,000,000, or 10 fr. per head. Now, the
taxation in England is 55 fr. per head ; and in Austria,
30 fr., &c.
Moreover, the Ottoman Empire is exempt from those
enormous debts which encumber other states.
Without wishing to enter here into the detail of the dif-
ferent taxes, it will be sufficient to make known with what
equity and moderation they are imposed. The principal of
these taxes, the verghi, or direct land tax, which forms,
after the tithes and the customs, the most important part of
the public revenue, is apportioned by the principal inhabi-
tants of the localities without then intervention of the go-
vernment, and according to the position, the means, and
the fortune of each, as well as according t. the revenue
from the property.
Agriculturists have the right of discharging the imposts
either in money or kind. They may pay the impost on
cereals according to the number of sheaves, or by weight,
as they prefer.
The tax-payers in this strange country thus possess faci-
lities and immunities for the acquittal of the imposts that
no European government either could or dared grant.
In order to simplify the administration and reduce the
charges of the state, the greater part of the revenues are
farmed to some of the inhabitants of each district. This
farming privilege is publiely awarded at the Ministry of
Finance on the lst (13th) of March in each year. Every
farmer is bound to have securities at Constantinople of un-
doubted solvency, and who are responsible for punctuality
of payment.
This payment is thus effected. The farmers regulate
their accounts during their year of office by means of
monthly bills, delivered and signed by their securities at
Constantinople. No instance has ever occurred of one of
these bills having been dishonoured.

FINANCIAL CONDITION OF THE OTTOMAN EMPIRE.
The financial condition of the Ottoman Empire exhibits
the peculiarity of having during a period of four centuries,
that is to say, from 1453 to 1853, presented the phenomenon
of a state which discharged its total expenses with the ordi-
nary receipts without any increase of taxation. And let it
not be imagined that the yield of taxation was irregular.
On the contrary, the law is explicit on this point. It inter-
dicts any augmentation, and grants to all the members of
the Ottoman nationality the right of controlling and super.
vising all the expenditure.
It is only from the date of 1854 that the balance between
the receipts and the expenses was disturbed by the extraor-
dinary expenses of the war in the East, and that, as a con-
sequence, the Ottoman Empire was obliged to have recourse
to the system of loans. And yet the sum total of all these
loans is only 325,000,000 f., an amount which indicates
neither prodigality nor disorder on the part of the Turkish
Empire.
Of all the states of Europe the Ottoman Empire is there-
fore the only one that is not loaded with a heavy public debt.
If its credit is not developed, it is because its loans are of
recent date; because there has been no opportunity of
clearly exhibiting its financial situation; and finally, because
the banking-houses to whom the negotiation of the Rentes
(titres de rente) of this empire was entrusted have not paid
sufficient attention to the reorganisation of its finalises.
This reorganisation, now in preparation, is really very easy
for a state which possesses such great resources, and which,
so to speak, has no debts, since altogether they are limited
to a total of, 774,000,000 f.
The debt of the Turkish Empire, like that of most other
states, is divided into the exterior and interior debts, into
consolidated and floating debt.
The following is an exact statement of these debts as
obtained from sources which may be termed official :
THE EXTERIOR DEBT.

The exterior debt, contracted since 1854, to
meet the expenses of the war in the Crimea,
represents, after deducting the redemption Francs.
already effected, a capital of

VI.
After having exposed, as exactly as possible, the financial
situation of the Ottoman Empire, and before indicating the.
guarantees furnished by the Government of his Imperial
Majesty, it remains to point out the character and the ob-
ject of this loan.
An example borrowed from the financial history of Eu-
rope in these recent years will clearly elucidate the idea that
has influenced the contractors.
Four years ago the Queen of Spain had just dissolved the
Cortes and summoned Marshal Narvaez to the Presidency
of
It was
t
that
tf
one Alinoifstthe ersc.onAtrtacttoharts, m
ver.ymmiroems,ewnast a bad
harvest
I
ncectrihleals was producing an uneasiness that further
aggravated the general and political state of the country.
sum-
moned to Madrid by the intermediation of an influential
personage, and was put in communication with Marshal
Narvaez for the negotiation of a loan. He found at Madrid
something analogous to what was met with at Constan.
tinople—that is a commercial situation little developed,.
which gave but few outlets to capital, and left the bankers
scarcely any other custom than that of the government.
It will be understood, in short, that when .commercial
and industrial affairs do not offer sufficient aliment to capi-
talists, they turn away from their natural mission to pursue
the path which offers them greater and more immediate ad-
vantage.
The Spanish government was desirous of making a loan
at that period, not only to
pay for the grain it was buying in
different ports of the Mediterranean, but also to pay the in-
terest of the public debt. The Madrid bankers were aware
of these embarrassments and .re. 7,:.• not: willing to facilitate
, •
the loan further than within the urgent &L.,. • ti......reasury.
that damaged its credit and obliged it to PLY a Ten' high
There resulted to the government a precarious situation,
interest (10 and 12 per cent.) for the smallest sums fur-
nished by the bankers. This situation is exactly. that oi the
Ottoman government. •
M. Mires was struck with the danger that such a state of
things plisented to the prosperity of Spain, and in confer-
ence with Marshal Narvagz and M. Barmanallana. then Mi.e•
ulster of Finances, he offered to remedy it, by taking the
entire balance of the loan of two millions of reels authorised
by the Cortes. This balance consisted of 800 millions of reale.
This was the basis of the loan of which he obtained the con-
cession, and the realisation of whisk may be said to have
been the point of departure for the ascending period into
which Spain has entered. The large resources placed by
that loan at the disposal of the Spanish government gave a.
spring to its credit, and the Spanish Three per Cents., which
were at 36f. in 1866, are now at 51f.
Such is the object that was attained in Spain, such is
that pursued at Constantinople. The contractors could
make a loan for a more restricted figure than that at
which they have stopped, but then the Ottoman Em-
pire would not be with sufficient resources to withdraw
from circulation the paper money which clogs commercial
enterprise, nor to extinguish the greatest part of its floating
debt, nor lastly to escape from the exigencies of A few

bankers.
The contractors have done still more. By an agreement
concluded with the directors of the Bank of Turkey, they'
have insured to that institution great advantages, by facili-
etaretrt. forT hiteysoarmee
eimreapothigrtanat
ilhaoperanctiialonseeuislieptalany for public
Ottoman
works and the construction of railways. AireadY the con-
cession of the railway from Constantiiople to Adrianople is
demanded by a powerful company of capitalists and bankers.
In fine, everything leads to the presumption that the reali-
sation of this loan will be the dayspring of a new era for the
Ottoman Empire, just as the Spanish loan has been one of
the causes of the development of prosperity in the Iberian.
peninsula.

VII.
THE GUARA.NTEES FOR THE LOAN.
Although the rank of the Ottoman Empire in Europe's its
immense resources, and tho relatively small amount of ital
debt, offer to capitalists absolute security and great advan-e
tapes, the contractors, however, felt it incumbent on them,
though it appeared unnecessary, to demand specialguaran-
tees beyond the general assignment of all the revenues of
the empire. These guarantees have been accorded with the
greatest sincerity and the most perfect good faith ; they do
not depend upon contingent revenues, susceptible of reduc-
tion, but on the surest and most important returns, for they
are all farmed, and easy of realisation. Their anaount greatly
exceeds the sum necessary for the payment of the interest
and for the redemption of the loan in a period of 36
Vars.
Whatever might be the conviction of the contractors unon
the really favourable financial condition of Turkey, they felt
compelled to take into consideration the errors propagated
against the Ottoman Empire, and it is with the object of
combating and destroying these errors that, independently
of the guarantees accorded, they have demanded and ob-
tained the formation of an international commission com-
posed of distinguished men.
This commission of 12 members, resident at Constanti-
nople, Paris, and London, is deputed to supervise the re-
turn of the revenues assigned in guarantee, and the regular
payment in Paris and London of the interest and redemp-
tion of the loan.
It is on those members of this commission resident at
Constantinople that will naturally fall the most useful task,.
viz., that of superintending the returns of the revenues
given as guarantee.
It will, therefore, be of service to announce their personal
situation, because it is precisely this which has determined
the choice of which they have been the object.
The members resident at Constantinople are
The Marquis de Plceuc, inspector of the Finances of
France, sent on a mission to Constantinople, at the request
of the Ottoman government, to co-operate in the financial
reorganization, and in this capacity member of the Superior
Council of the Finances of the Ottoman Empire.
M. David Glavani, banker at Constantinople, and the
highest and most honourable of the financial notabilities of
the empire.
Mr. Ch. S Hanson, banker, one of the censors of the
Ottoman Bank at Constantinople, and brother of one of
the directors of the Bank of England.
Mr. Ch. Arland, one of the principals of the house of
Arland, G. Court and Co., and a partner of the special
commissioner of tho Ottoman government for the loan.
Members residing in London :
The direction of the Bank of Turkey, composed of—
Russell Ellice, Esq., of the firm of Roberts, Lubbock,
and Co.
William Gladstone, Esq., of the firm of Thomson, Boner,
and Co.
H. G. Gordon, Esq., of the Oriental Bank.
M. E.:Rodoeanachi, Esq., of tke firm of Rodocanachi
Sons, and Co.
Members residing in Paris :
Count Simeon, senator.
M. Donon, banker, consul-general of Turkey.
M. Lichtlin, director of the Societe Generale de Credit
Commercial et Industiiel.
M. 'seders Fould.

After having summarily exhibited the general situation
of the Ottoman Empire, and the financial considerations
which have determined the contractors to undertake this oan,
they have the right to add that, whilst seeking advantages
for tho interests they represent, they further believe they
will be useful to the
great Europe:az family by contributing
to the prosperity
of an empire so necessary to the equili-
brium of all States, and the integnty of which has been
assured by the concurrence of the Gre
Great Western Powers
when they admitted the Ottoman. Empire into the European
compact.—Reeeife, &c.
For the Contractors of the Ottoman Loan,
J. MIRES.

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Who
on imagined that it would have found a
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happy it
appears again to behold its countryme
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