In March 1897 the floating debt was calculated by a financial authority in the Fortnightly Review to amount to upwards of £T55,000,000, which might be compressed to £T25,000,000 since a large proportion was certainly composed of salaries in arrear and other items of a similar kind which the government would never, under any circumstances, make good. Laurent tells us that the present government having found it absolutely impossible to arrive at even an approximate estimate of this “occult debt,” recourse was had, in order to fix it, to the creditors themselves, and a short act of parliament was passed declaring all debts prescribed which should not be claimed by a fixed date. In consequence of this 560,000 claims were received, and a first examination showed that the aggregate amount reached by these claims was not less than £T13,000,000. Considering the dilatory methods of Orientals, even when they are creditors, it is doubtful whether this sum adequately covers the whole of the claims outstanding, and it may be found difficult, even for a parliament, to refuse claims which should equitably be admitted and which may be preferred later. High authority in Constantinople put the true amount of the floating debt in 1910–1911 at the amount previously estimated, viz. £T25,000,000. No provision was then made in the budget to meet these liabilities, nor did the minister in his prefatory memorandum make any allusion to them; in his budget speech, however, he announced that a scheme for dealing with them would be presented with the budget for 1911–1912. Under the heading “Floating Debt” in the budget for 1910–1911 are placed the advances before described.
No other items in the budget call for special remark, but in order that the information given may be complete, each head of expenditure is shown separately below, and the budget for 1910–1911, as first placed before the Turkish parliament, presents the following picture, from which it may be observed that the public debt absorbs 26% of the revenue, war service 38% and civil services 36%.
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This deficit was increased, by the action of parliament, to £T9,678,000. Almost immediately after the budget was drawn up a change of government took place, and largely owing to this fact the parliamentary budget commission introduced various modifications on the expenditure side of the account, which increased the estimated deficit to the account just mentioned.[1] The principal increase is due to the war departments, according to the budget speech of the minister of finance (April 23, 1910), although he states that some increase is apparent in all departments. The actual figures of the increase are not, however, given. Exaggerated importance must not be attributed to the swollen deficit. The demands of the various departments of state had been much cut down, and according to the minister of finance's own statement much of the reduction was merely unavoidable expenditure deferred; the fact that some of this expenditure, which had been jealously scrutinized, was to be undertaken at once, meant that demands on future years would be relatively reduced. A loan of £T7,040,000 was arranged with a German group headed by the Deutsche Bank. This loan followed upon one of £T4,700,000 in 1908, and another of £T7,000,000 in 1909 (of which the service is provided by the revenues assigned to the Russian War indemnities amounting to £T350,000 per annum, of which payment has been deferred for forty years), the year 1909 having shown a realized deficit of about that amount—a condition of affairs which would appear alarming were it not that the Turkish Empire was passing through absolutely abnormal times, and was attempting to convert the unstable morass of disorder, ineptitude and corruption left by the previous system into a solid foundation for good and orderly constitutional government. With the two previous loans above mentioned, £T5,500,000 capital liabilities were paid off, the work of reorganization had made considerable progress, and £T2,000,000 remained in hand at the beginning of 1910–1911 to continue it. As before stated reorganization was quickly followed by a marked increase of revenue, and it seemed probable that the forecast of the minister of finance that within a comparatively short time that increase would amount to £T5,000,000 was not excessive. Negotiations were undertaken to increase the customs import duties by a further additional 4%. This measure would produce about £T1,250,000 per annum.
Further expenditure was voted in the course of 1909, to be met by an extraordinary budget. On the receipts side of this budget were comprised the Austrian indemnity for the annexation of Bosnia and Herzegovina (£T2,500,000), cash and securities belonging to the deposed sultan (£T1,600,000), sale of old guns (£T300,000), sale of lands and other property recovered from civil list encroachments (£T908,000), and finally the unexpected balance of the proceeds of the 1908 loan (£T655,000), the whole forming an aggregate total of £T5,963,000. It was intended to assign to the war department £T3,804,918, to the grand master of ordnance £T358,108, to the admiralty £T93,912, and to the ministry of finance £T2,443,2O2 for the payment of the war indemnities in Thessaly and other urgent liabilities, the estimated aggregate extraordinary expenditure thus amounting to £T6,700,140. Some of the assets above mentioned proved, however, not to be easily realizable. Ready buyers were not found for the state lands, and the sale of the ex-sultan's securities was disputed by the German Reichsbank with which they were deposited, while the government did not consider it good policy to sell the Anatolian railway shares, which it seized at Yildiz, so that only £T450,000 were encashed by the ministry of finance from these sources. Of the sums really received the ministry of finance expended some £T3,000,000, in payment of the Greek indemnity, in repayment of £T1,000,000 of advances to the treasury and by assigning the credit voted to the ordnance department, and it was stated that these payments exhausted the extraordinary resources so far as it has been possible to realize them.
Collection of Taxes.—The Ottoman Empire possesses a very complete system of local self-government within certain limits. Every village or town district has a kind of mayor (mukhtar) appointed by election and approved by the official provincial authorities, and a “council of ancients” whose members are elected directly. The taxes are collected by means of the mukhtars, termed for this purpose kabz-i-mal (receiver of treasure), and under the supervision of gendarmes specially named, termed tahsildar (collectors). The official authorities provide lists of all the taxes to be collected to the tahsildars, who hand them, against formal receipt, to the kabz-i-mals. The latter are bound to pay in to the local authorities all sums collected in five days in town districts, and in fifteen days in villages, if under 1500 piastres; sums of 1500 piastres and over are paid in at once. The tahsildars check the accounts of the kabz-i-mals, and, if they discover peculation, send them at once to be dealt with by the chief official authorities of the caza (department); all the electors of a mukhtar are, ipso facto, joint sureties for him. If the tax-payer declines to pay his due, he is brought before the proper authorities by the tahsildar; if he persists in his refusal, all his goods, except those indispensable for his dwelling and the pursuit of his trade, are sold by auction, without recourse to a judgment by tribunal. If he has no goods which may be seized, he may be summarily imprisoned for a term not exceeding 91 days: two imprisonments for the same debt are not permitted. The military exemption tax is not collected as above, but by the spiritual chiefs of the various religious communities. None of the above regulations apply to Constantinople, where no military exemption tax is imposed, and where separate official regulations for the collection of taxes are in force. The system of farming put the revenues is admitted, and is almost invariably followed in the case of the tithes. When this is done, the revenues to be farmed are put up to public auction and sold to the highest bidder, provided he can prove himself amply solvent and produce sufficient sureties. Elaborate regulations are in force for this method of collection to secure the state receiving its full due
- ↑ On the 25th of June 1910 the chamber finally passed the budget
for 1910–1911. The figures were as follows:—
Ordinary expenditure, £T32,997,000; extraordinary expenditure, £T2,696,000; revenue £T26,015,000, leaving a deficit of £T9,678,000, which was brought up to over £T10,500,000 by special credits for the pension fund, the payment of debts incurred by Abd-ul-Hamid and indemnities to officials. On the other hand, the minister of finance reckoned that the revenue would probably show an increase of £T1,500,000, while about £T2,000,000 of expenditure would remain undisbursed, which, with a reserve of £T2,000,000 from 1909, would reduce the deficit to roughly £T5,000,000.
