Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1912-12-11
FINANCE PUZZLE
IN TURK Defeat
What VIII Happen to Holders
Of lis Debt?
triple MONEY ALLIANCE. +"

France, England and Germany, Having
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 first
steps toward peace negotiations NJ
Leroy-Beaulieu, political and fnan-
cial authority of high repute, puts the
situation thus: Turkeys appeal will
hardly be considered unless its gov
eminent accepts as terms of peace its
complete abandonment of it's 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
stantinopIe. it is admittedly correct as
regards at least 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 to
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 Il precedent in assuming
a proportional part of the similar debt
when taking possession of Tripoi An
agreement somewhat similar has been
made by Spain in Morocco.
But events have crowded so closely
and have already come so near to the
complete dissolution of the old order
for Turkey in Europe that awkward
questions will shortly have to be faced.
1t 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 Debt?
The present situation is plain enough.
France, England and Germany, the
s'Triple Money Alliance" have for
years opened their money markets
wide to Turkish loans, and it is highly
improbable they will not unite to in
sist on preserving the guarantees of
their citizens investments. France
has the heaviest interests at stake. A
moderate estimate assigns to French
holdings 20 per cent Of the total Tur-
kish obligations The Unified 4 per
cent loan-the most important-can
present no immediate difficulty. It's
annual service demands G2,157,375
pounds Turkish, equal about $40
each in American money!, and the an
nual receipts applied to it are $4,000
900, so that there is a reserve of nearly
100000 for eventualities.
But the nature of the guarantees of
this principal debt shows whence diff
the revenues of the salt and tobacco
monopolies, stamp and alcohol taxes,
fishery dues and silk tithes, commercial
licenses. the tribute of Bulgaria, dues
from oriental Rumelia and surplus
revenues of the island Of Cyprus.
Since these latter are themselves the
result of international agreement,
Drecedents to solve the coming diff
culties may be found in them.
These are only five of the fourteen
Turkish loans quoted on the official
stock exchange at Paris.
The Balkan allies surely cannot ex-
pect to take the attitude of Cuba with
respect to the Spanish national debt;
still less that of Germany in Alsace-
Lorraine with regard to the French
national debt
The Ottoman Bank Problem.
The difficulty of the Ottoman bank is
peculiar, but may not prove insoluble.
privilege for which it has certain obi
cations to the Turkish government.
This is not reason why is should not
continue to serve the needs of what
ever new regime may be established,
even that of the Balkan allies. They
have no substitute for its dozen
branches in what was Turkey in Eu-
rope.
The more curious part of the problem
arises from the fact that the bank has
been obliged to make loans to the Turk
ish government for the present war
and has received as a guarantee treas
ury notes which themselves are guar
Rnteed by revenues collected by the
debt administration.
In all this financial hornets nest it is
we'll to point out that all the nationG!
banks of the world have a certain COM
mon interest of self defense. They can
not afford to allow so important an in