had been a special heading, “Proceeds of Domains transferred from
the Civil List,” estimated to produce £T620,233, which may have
been intended to include all the various receipts above enumerated.
Section VII., formed of the tributes of dependencies of which the two principal are the Egyptian, £T765,000, and that of Cyprus £T102,590 (assigned to the public, debt) comprises a total revenue of £T871,316. Finally, various receipts of which the principal separately specified are government share of railway receipts (Oriental railways and Smyrna-Cassaba railway), £T201,710, and “subscriptions” for the Hejaz railway, £T264,600, form Section VIII.
The total revenues of the empire are thus estimated to produce £T125,848,332, and seeing the careful and moderate manner in which the estimates have been framed, this may be looked upon rather as a minimum than a maximum. The minister of finance stated in his budget speech to parliament, delivered on the 23rd of April 1910, that the revenues for the year 1909–1910, which had been estimated to produce £T25,000,000, had as a matter of fact produced £T26,500,000.
Expenditure. Ministry of Finance.—The first item of expenditure shown in the budget is the service of the public debt, amounting to £T8,288,394. The Public Debt Administration plays so considerable a part in the finances of the Ottoman Empire, and its history is of such importance that a special section of this article will be devoted to it below. Under the budgetary heading “Public Debt” is included, as it should be, all expenditure in connexion not only with the public debt proper, but also with advances from banks and others, railway guarantees, an account of which will also be found below, and all capitalized liabilities, as far as known, contracted by the state.
It is explained in the preface to the budget that one of the abuses of the previous régime had been to obtain advances from credit establishments at high rates of interest varying from 7% to 9%, when it was found impossible to issue a public loan. The rates on these advances have now been generally reduced to 6% with the exception of that on the advances from the lighthouse administration, which refused to allow any reduction below 7%. In the years 1908–1909 the advances were reduced by £T688,000, in addition to repayments allowed for in the budget, and the credit agreed for the year 1909–1910 is £T663,000, as compared with £T1,160,000 for the previous year. In the year 1910–1911 the outstanding advances were to be so far paid off that the credits to be opened under this head would be still further reduced by £T500,000.
The civil list has been reduced to the definite amount of £T443,880, which, without the consent of parliament, cannot be increased. The sultan receives an annual allocation for himself and household of £T240,000, the crown prince one of £T24,000, and a sum of £Tl53,000 is assigned to the Imperial princes and the sultanas. The deposed sultan was allowed £T12,000 a year, and a similar amount was set aside to provide dowries for two sultanas who were just about to be married. The debts of the former are stated in the preface to the budget to be very large, and as payments are effected fresh creditors present themselves with undeniable vouchers in their hands, causing much embarrassment to the minister of finance: no figures, however, are given. The Finance Bill provides that these debts are to be paid out of supplementary credits.
Under the reformed constitution every senator is entitled to a salary of £T100 per month, any remuneration which he may receive from the government for other services to be deducted from the senatorial allowance which, however, it may of course exceed. Deputies are allowed £T300 for each session of parliament, and £T50 per month in addition should the session exceed its legal duration. They are further allowed travelling expenses from and to their constituencies on the basis of rules governing journeys of functionaries receiving a monthly salary of £T50. The amount reserved in the budget for these purposes is £T181,871.
The ministry of finance absorbs £T2,989,600. In this are included the expenses of the administration of both the central and provincial departments of the finance ministry, the mint, charitable allowances, expenses and presents in connexion with the holy cities (£T121,410), pension funds of state officials (£T628,038), administrative allowance made to the agricultural bank (£T225,380) and various other expenses. Various administrative reforms were in hand in 1910–1911, by which it was expected considerably to reduce the credits demanded by the finance ministry—especially those in connexion with the holy cities. Special attention was called by the minister to the fact that the system of contributions of officials to the pension funds has been modified, the deduction from salaries being now 10% instead of 5%, and the contributions to the funds being made as to one-third by the treasury, and two-thirds by the officials, instead of the reverse as formerly: the economy effected is about £T300,000. A credit of £T17,124 is allowed for the central accounts department. The total credits for the ministry of finance are, then, as follows: Ottoman public debt, £T8,288,394; House of Osman, £T443,880; legislative corps, £T181,871; treasury, £T2,989,600; central accounts department, £T17,124; forming an aggregate of £T11,920,869.
Indirect contributions, or more familiarly “customs,” are allowed credit of £T512,670. The minister of finance points out the immense importance of the thorough reorganization of the customs administration. The services of a first-rate English expert (Mr R. F. Crawford) were obtained, and much has been done at Constantinople, but the provincial custom’s offices are still lamentably defective. These were immediately to be taken in hand, and considerable sums are being voted for repairs of existing customs buildings and the construction of new buildings. The reforms already accomplished have resulted in a marked increase in the customs revenues.
Posts and telegraphs, which absorbed a credit of £T782,839 in 1910–1911, have also long been in urgent need of extension and better administration. An additional credit of £T90,000 was granted, as compared with the previous year, and increased expenditure was foreshadowed for the future; on the other hand, it was confidently expected that the post office receipts would increase in far more rapid ratio than the expenditure.
The ministry of the interior was estimated to require £T1,157,230. This sum covered “immigration expenses,” i.e. assistance given in settling Mussulmans immigrating from provinces detached from the Ottoman Empire. There can be no doubt that this expenditure is remunerative, since many rich regions of Asia Minor have long suffered from want of population.
Military expenditure, including the three departments of war, is as follows: the army (excluding artillery), £T8,280,452; ordnance, £T356,439; and gendarmerie, £T1,694,778. As regards the first of these, it is curious to observe that the budget decree of 1880 stringently limited the peace strength of the Ottoman army to 100,000 men, “including officers and generals,” in order to put a stop to the rapidly increasing military expenditure; but this was merely the expression of a pious wish, at a time when European financial good will was indispensable, that expenditure might be kept down. No real attempt has ever been made to observe the decree, and indeed observance has been impossible seeing the dangers which never cease to menace the empire. To some extent the real level of military expenditure has been masked by the separation of certain payments into “extraordinary” expenditure, a course which, it is understood, has not been followed in the budgets of the “new régime,” and which will not be revived. It should however, be remarked that out of an “extraordinary” budget, which will be mentioned below, sums of £T709,305 and of £T27,827 were allocated to the ministry of war and the ordnance department respectively in 1909. It is not expected that military expenditure can be much reduced, except in the direction of supply contracts, which have been the cause in the past of iniquitous waste of means.
The official budget shows a credit for admiralty expenditure of £T1,000,327, which is apparently less than that for the previous year by some £T220,000. This, however, is not a real decrease, salaries of functionaries not on the active list having been removed to the region of supplementary credits, as are those of civil departments. As a matter of fact, the marine budgets of the two years are almost identical. The vote of £T500,000 a year for ten years for the reconstruction of the Ottoman navy by “national subscription,” as already mentioned, was not included in the official budget, nor was there any allusion to it in the prefatory memorandum. The minister of finance did, however, allude to it in his budget speech, (April 23, 1910), and stated that four destroyers purchased in Germany had been paid for from the national subscription only, without touching the ordinary state revenues. It should be added that the Greek War (1897) revealed to the sultan the decrepit state into which the Ottoman navy had fallen, and considerable “extraordinary” expenditure—much of which was wasted—has been incurred since (and including) 1902 to put the least out-of-date warships into a serviceable condition.
The ministry of commerce and of public works absorbed £T883,161 a reduction of some £T180,000 on the previous year. The government acknowledges the unavoidable necessity of greatly extending and improving the internal communications of the country, but cannot see its way to doing so satisfactorily out of the ordinary resources of the country. This question was being seriously studied, and it was hoped that a comprehensive scheme would be presented ere long. The Hejaz railway figures in the budget for £T550,180, and it is explained that this will not only cover working expenses, but also the final completion of the line.
Floating Debt.—This is really an accretion of undetermined liabilities which has been indefinitely, and probably alternately, advancing and receding for a great number of years, and which no previous minister of finance, or Turkish government, had the courage to face. Now and then it has been dealt with piecemeal, when some particular class of creditors has become too pressing, but it is more than probable that the piece got rid of has been more or less rapidly replaced by fresh liabilities occasioned by budgetary deficits, or by the mere accumulation of interest on debts allowed to run on.
