The citizen. (Honesdale, Pa.) 1908-1914, 1912-12-06
FINANCE PUZZLE
. IN TURK DEFEAT
What VIII Happen TO Holders
Of Its Debt?
triple MONEY ALLIANCE. "

Poured Millions Into Turkish Loans,
Can Be Relied Upon to Insist Upon
Guarantees of Their Citizens Invest
ments-Position of Ottoman Bank.
In the event of the defeat of Turkey
the financial consideration will be OF
great Importance Writing of the frs.
steps toward peace negotiations NJ.
Leroy-Beaulieu, a political and fnan-
cial authority of high repute, puts the
situation thus: Turkeys appeal will
hardly be considered unless It's gov
ernment accepts as terms of peace its
complete abandonment Of its European
possessions including Constantinople,
and the hour seems near at hand when
it must resign itself to that conces-
sion"
Whether this prediction is right or
wrong in regard to the fate of Con
stantinople, it is admittedly correct as
regards at least a partial dismember-
ment of the empire. But that involves
international considerations of another
sort These other difficulties concern
the Turkish national debt, with its lien
on the taxes in the European domin-
ions; the loans guaranteed by other
European revenues in virtue Of the de
cree of Mouharrem; and, finally, the
future status of the Turkish Imperial
bank, known as the Banque Ottomane.
Turkeys Loan Security.
The revenues pledged against Tur-
keys various foreign loans consist tc
some extent of proceeds of taxes of
provinces outside of Europe, such as
the Egyptian tribute and the grain
tithes of various districts Of Asia Mi
nor. But revenues from European Tur-
key are also largely involved.
Italy has set a precedent in assuming
Ia proportional part of the similar debJ
when taking possession of Tripoli An
agreement somewhat similar has been
made by Spain in Morocco.
But events have crowded so closely
Eand have already come so near to the
complete dissolution of the old order
kfor Turkey in Europe that awkward
questions will shortly have to be faced.
pt is beginning to be recognized that
much will depend on the good will of
the Balkan allies, especially If their
victory is complete and final.
Who Holds the Deht7
The present situation is plain enough.
France, England and Germany, the
f'Triple Money Alliance" have for
years opened their money markets
wide to Turkish loans, and 1t is highly
Improbable they will not unite to in
6ist on preserving the guarantees of
fLheir citizens investments. France
|has the heaviest interests at stake. A
moderate estimate assigns to French
holdings 20 per cent of the total Tur-
#ish obligations. The Unified 4 per
fent loan-the most important-can
present no immediate difficulty. Its
annual service demands f2157,375 !
pounds Turkish, equal about $40 |
fach in American money!, and the an
flual receipts applied to 1t are f4OOO,-
poo, so that there is a reserve Of nearly |
100000 for eventualittes.
But the nature Of the guarantees of |
his principal debt shows whence diff |
fulties may arise. They are a part Of J
he revenues of the salt and tobacco |
nonopolies, stamp and alcohol taxes,
shery dues and silk tithes, commercial |
fcenses, the tribute of Bulgaria, dues |
rom oriental Rumelia and surplus
revenues of the island OF Cyprus
ince these latter are themselves the
lesult OF international agreement,
recedents to solve the coming diff
! 3ulties may be found in them.
These are only five Of the fourteen
Turkish loans quoted on the official
Fock exchange at Paris.
The Balkan allies surely cannot ex-
ect to take the attitude Of Cuba with
aspect TO the Spanish national debt;
Ill less that of Germany in Alsace-
orraine with regard to the French
ational debt
The Ottoman Bank Problem.
The difficulty Of the Ottoman bank is
Pculiar, but may not prove insoluble.
is a private bank, with large issue
fivilege for which 1t has certain obli-
tions to the Turkish government.
llis Is not reason why Is should not
bntinue to serve the needs Of what
'er new regime may be established,
ren that Of the Balkan allies. They
Ave no substitute for its dozen
-anches in what was Turkey In Eu-
Spe.
The more curious part Of the problem
ises from the fact that the bank has
zen obliged to make loans to the Turk
b government for the present war
ld has received as a guarantee treas
4 y notes which themselves are guar
lteed by revenues collected by the
BIT administration.
In ali this financial hornets nest 1t is
ell TO point out that all the national
nks Of the world have a certain com
pn interest OF self defense. They can