Posts Tagged ‘Ottoman debt’

3. Increasing Foreign Diplomatic, Political and Military Involvement in Domestic Ottoman Matters: Consular Protection Extended to Non Ottoman Residents

Saturday, September 27th, 2008

In the wider arena of international power politics a new dimension emerged, in the form of European political, economic and commercial penetration into the Ottoman domain. This arose from three sources:(a) the Capitulations, (b) Ottoman debt burden following the Crimean War, (c) Legislative reforms necessitated by the debt burden and (d) European ‘aid’ extended to support, maintain and modernise the Ottoman Government.

a.   The ‘Capitulations’

  • Origin

Although Christian-European interface with the Arabs in relation to Palestine found its nemesis in the Crusades, and Arab military expansion into Europe reached its watershed with the Ottoman defeat in the Battle of Vienna in 1683, the Ottoman Empire never presented itself as monolithic and impenetrable to European influence.  However, after the European victory, the Ottomans found it expedient to enter into agreements with various European states (France leading the way), granting them preferential trading privileges, and exemptions in respect of excise and customs duties expressed in the various Capitulations.

  • Personal Jurisdiction of Non-Ottoman Subjects

Today, sovereignty is primarily linked to territory but a connection also exists between the sovereign or state on the one hand, and the subject on the other, whereby the latter, if found to be within the jurisdiction of a foreign sovereign or state, could then and still can today, claim in times of danger or personal distress, the extraterritorial protection of his own sovereign or state. The Capitulations therefore also included provisions in which the Ottoman government conceded power to the foreign states to safeguard the interests of their respective subjects. Such protection enabled foreign diplomats, consular officials and non-Muslim merchants to reside in the Ottoman Empire indefinitely without becoming either subjects of the Sultan and/or falling under his jurisdiction.

  • Foreign Subjects Exempted from Ottoman Local Laws

The Capitulations also contained exemptions from the application of considerable Ottoman legislation to foreign subjects engaged in trade who resided within the Ottoman jurisdiction. Such exemptions included liability to pay Ottoman poll taxes, bearing the cost and inconvenience of billeting Ottoman troops, and conscription from serving in the Ottoman armed forces as well as other financial impositions.

The European powers pressured the Ottomans into extending these privileges to non-Muslim middlemen (dragomans) and many others who could in any way be associated with foreign trade, such as currency changers, European-Arabic translators, warehousemen, artisans and even shopkeepers.

  • European Extension of the Scope and Exploitation of the Capitulations

In the course of the nineteenth century the abuse of the Capitulations became so rampant that European protection could even be bought as a commodity, and Ottoman deeds of appointment (berati) as dragoman virtually became transferable. The privileges acquired by non-Islamic non-Ottoman subjects were extended to the establishment of foreign banks, post offices and commercial houses, which took full advantage of Turkish weakness. In contrast, the foreign consuls became more powerful, each vying with the other in trying to advance the interests of their respective States.

  • Foreign Dhimmis (Non Muslims) Also Benefited

The foreign consular exploitation of the capitulations also enabled foreign dhimmis to avoid the indignities which they would otherwise have had to suffer had they been Ottoman subjects. Although non-Muslim Christians and Jews were in Islamic eyes treated as inferior persons, they could nevertheless acquire, if they were non-Ottoman subjects, a degree of consular protection against Ottoman autocracy greater than the Sultan’s own Islamic subjects could achieve for themselves. This could not but engender disaffection between the newly arrived foreign immigrant Jews on the one hand, and the Arab effendis and fellahin on the other hand, with whom they were in contact.

b.  Ottoman Foreign Debt Burden and the Costs of Ethnic Uprising in the Empire

During the Crimean War (1853-1856) and for the nineteen years following, the Ottomans incurred heavy foreign indebtedness, which enabled the European states and their consular representatives to exert greater political pressure in favour of the non-Ottoman nationals under their protection. The first foreign loan, contracted in 1854, created a degree of indebtedness which enabled the Western powers to exercise only a limited influence on Ottoman internal affairs. However, from 1863 onwards, debts accumulated and snowballed, so that by 1875 the Empire was bankrupt.  In 1876 financial matters were made worse by the uprising of ethnic Bulgarians against Ottoman sovereignty and the involvement of Russia in the process (Russo-Turkish War 1977-78).

Although the uprising was ultimately suppressed with heavy loss of life, ethnic opposition to Ottoman rule was to make the Ottoman government very sensitive to the concentration of ethnic minority groups within the Empire generally and was to influence its future policy regarding the settlement in Palestine of individual Jews and their supportive political and financial organisations.

This notwithstanding, the Ottoman need to repay its European-owed debts still demanded a restructuring of its governmental and financial administration. The latter was achieved by the establishment of the Ottoman Public Debt Administration in 1881 which took control over state revenues which benefited, to some degree, by the sale of public lands to sectarian interests, both Christian and Jewish.

The Ottomans found themselves in a cleft stick however. On the one hand, the reorganisation of the public debt management brought them some financial stability but, on the other, the process of reform allowed the European states and their diplomatic and consular representatives to exercise a degree of influence and pressure on Ottoman internal policy that would have been unthinkable a decade or two earlier.

(see Stanford Jay Shaw, Ezel Kural Shaw,  History of the Ottoman Empire and Modern Turkey: Reform, Revolution, and Republic: The Rise of Modern Turkey 1808-1975, Cambridge University Press, 1977; Birdal, M. “Cooperation, Commitment and Enforcement: Understanding the Ottoman Public debt Administration” , 2005-03-05 http://www.allacademic.com/meta/p71340_index.html

Thus European foreign consuls acquired further leverage to extend legal protection and privileges which hitherto had not been available to their foreign protégés resident in the Ottoman Empire. Unsurprisingly, Jewish and other non-Muslim immigrants arriving in Palestine preferred to retain their original foreign nationalities and claimed protection from the various foreign consuls against the arbitrary treatment meted out by Ottoman officialdom.

Such preference could not have created anything but resentment among the Islamic urban poor and middle class and among the rural fellahin. The exploitation of the 1858 Ottoman land legislation (subsection c.ii. below) by non-Ottoman nationals in their moves to acquire land in Palestine could only have added to this resentment.

c.  Ottoman Legislative Reforms Necessitated by Debt

i.  Non-Ottoman Subjects Gain Equality with Ottomans

The Capitulations, coupled with the financial consequences of the Crimean War coerced the Ottoman government into introducing important reforms designed to gain the support of its European Allies. Published on the eve of the 1856 Paris Peace Conference, the Hatt-i Humayun (Imperial Rescript) granted to foreign Christians and other non-Muslims rights equal to those of its Muslims subjects in respect of protection of their persons and property, freedom of worship, and provision of education for children of all religious communities.

Also included in the 1856 legislation was permission, at least theoretically, for foreigners to acquire land in their own names without their having to obtain a special firman from the Sultan. For Jewish would-be purchasers, however, there were still other problems to be overcome, as will be shown below.

The point being made at this juncture is the fact that Jewish non-Ottoman subjects resident within the Ottoman Empire generally and Palestine in particular, received extensive diplomatic protection from the vagaries of local Ottoman officialdom, a fact which impacted on an expanding Jewish land acquisition policy. To mitigate the effects of foreign interference in internal Ottoman Affairs and to ‘encourage’ permanent settlers to renounce their foreign protective status, the Ottoman Nationality Law was enacted in 1869, which created a common Ottoman citizenship, irrespective of religious or ethnic divides.

(see Kark, p.359;   Maurits H. van den Boogert,  Capitulations and the Ottoman Legal System: Qadis, Consuls and Beraths In The 18th Century, (Studies in Islamic Law and Society) Martinus Nijhoff, Leiden 2005

(http://www.amazon.com/gp/reader/9004140352/ref=sib_dp_pop_fc?ie=UTF8&p=S001#reader-link Isaiah Friedman, Germany, Turkey and Zionism, 1897-1918, Clarendon Press, Oxford, UK 1977 especially Chap 3. hereinafter “Friedman, 1977” )

ii.  Ottoman Land Reform Legislation, 1865

Motivated by the need to open up the Empire to foreign investment in order to overcome its financial crisis, the Ottoman government introduced significant reforms in relation to land, its registration, title holding, disposition, benefits and burdens, the totality of which had a major influence upon the redistribution, ownership and occupancy of rural land.

  • Customary Rights in Land

Prior to the introduction of the Ottoman Land reform legislation, ownership of land evidenced by registration of legal title in government records or written agreements was less important than its physical occupation and cultivation.

  • Peasants – fellahin – could acquire ‘ownership’ to uncultivated land, nominally owned by the State, if they planted and took its produce for two consecutive years.
  • They could also acquire rights of pasturage on communally controlled ‘musha’ land located close to the village land and used in common.

From the peasant’s perspective, musha tenure gave him neither incentive to work the land to the best of his ability nor to invest in it. While the system may have encouraged village independence, it also contributed to village disharmony.

“It was common practice for the urban landowning agent, who often functioned as the intermediary between the landowner and the peasantry, to move tenants or other agricultural labourers from plot to plot within a larger area of land so to prevent the fellah from claiming legal title on any particular parcel of land….
Not surprisingly, moving a peasant from one plot to another after every growing season disadvantaged him: it did little to engender a sense of economic security; it created harsh local jealousies over who received the most of often meagre amounts of good and mediocre land; it caused the peasant to extract what he could from his land and, antithetically, dissuaded him from upgrading a land area with physical (weeding, terracing, manuring) investment because the land would become someone else’s during the next growing season. …
Already strained by hamula or clan conflicts, a village regularly withstood periods of uneasiness each time unequal village lands were redistributed. Land disputes, encroachment on another’s land, and uprooting of trees were not uncommon where cultivable lands were sparse and the local village population increased over time.”

Kenneth W. Stein, “One Hundred Years of Social Change: The Creation of the Palestinian Refugee Problem” in Laurence J. Silberstein (ed) “New Perspectives on Israeli History: The Early years of the State” New York University Press, 1991 pp. 57-81 (hereinafter “Stein”)
http://www.ismi.emory.edu/BookChapters/Hundred%20Years%20Social%20Change.html

  • Land Reform 1858

In 1858, the Ottoman Government introduced significant land reform legislation in order to help discharge its foreign debts and to finance an ever growing bureaucratic government. This was to be achieved by (i) attracting foreign investment in land development, (ii) increasing central government income from land transfer fees and (iii) imposing higher taxation on both existing worked arable land and from bringing waste land into cultivation. Failure to pay the tax assessed on the land could result in its being forfeited and resold by public auction.

The legislation provided, inter alia, for:

  • dissolution of the communal musha ‘ownership’ of village lands and its redistribution among villagers into registered plots in accordance with a cadastral survey;
  • holding of kushans, or title deeds as evidence of ownership or title to the land – independently and distinct from its rights of occupation;
  • the acquisition of land – other than by purchase or inheritance –  by adverse possession (i.e. possession without objection from any other owner claiming valid title) for a period of ten years;
  • ownership to the land lapsed if it was not worked for three consecutive years (mahlul);
  • Government forfeiture of land remaining uncultivated for three years (without a legally acceptable reason), which would then be offered for re-sale by public auction;
  • Non-Ottoman subjects were permitted to purchase land in their own names which, prior to the legislation, could only be done through an Ottoman nominee or with special permission of the Sultan.
  • Effect of the Legislation on the Fellah

The implementation of the legislation had serious consequences for the Arab fellahin.

  • It put the fellahin under economic pressure to sell their land holdings, especially the now distributed musha shares, to urban interests or non-resident effendi landlords in order to discharge their pre-existing indebtedness and to reduce the risk of uncertainties in agricultural yields. The landlords in question, after consolidating their holdings into larger parcels, would subsequently sell them at highly inflated prices to Jewish development companies and individuals at considerable profit. Such was the situation that, by 1859, British born Lawrence Oliphant was able to report that almost every acre of the Plain of Esdraelon was under intense cultivation and the nomadic Bedouin presence all but eliminated, owing to the commercial activities of the new landlords, who charged exorbitant rents, payable in hard cash under penalty of instant eviction;
  • Although land title registration enabled there to be a clear separation between the ownership of land from its occupancy, the registration itself was accompanied by the payment high fees and additional tax valuations. Fellahin therefore preferred to have the ownership of their lands (including the newly redistributed musha) registered formally in the name of urban notables while they continued to cultivate the land in a share-cropping arrangement as previously.
  • Land registration also enabled the Ottoman officials to identify those eligible for compulsory military service. Fellahin, forcibly taken into the Ottoman army and away from their lands for more than three years, often found on their return that their land was now “owned” by another.
  • The separation of legal title from the rights of occupancy enabled absentee effendi landlords to threaten with eviction the Arab fellah who worked the land if he failed to pay his rent, and enabled the landlord to sell the property over his head to would be Jewish purchasers. The Arab fellah naturally felt resentment against the Jew rather than against the effendi because, prior to the legislation, there was hardly any market for land, and if a fellah failed to pay his rent, the landlord really had no option but to permit the fellah to remain in occupation and allow the latter’s indebtedness to increase.

As a consequence of these reforms, the Arab fellah in Palestine became inexorably dependent upon those who would provide him with temporary relief from economic hardship, and yet were, at the same time, the main cause of his situation. Ultimately, by necessity, he forfeited individual control over his own life and livelihood to others:

The Ottoman reform movement strengthened and benefited a relatively small, urban, landowning elite of no more than several thousand out of a population of more than half a million. Through the dependency of the patron-client relationships that evolved, landowning interests accrued local political prestige and influence, ensured themselves access to the accumulation and disposal of land, and used land as a commodity to obtain capital for maintaining their comfortable lifestyle. (Stein)

  • Government Sales of State Lands Ultimately Purchased by Jews

Registration of land ownership, as distinct from its occupancy, also encouraged the sale of government owned land to large scale Arab land speculators such as Alfred Sursoq of Beirut who purchased some 200,000 dunams at a suspiciously low price. The speculators were prepared subsequently to re-sell their interests at greatly inflated prices to Jewish land development companies. Such was the situation that by the end of the Ottoman period only 144 extensive landowners owned 3.1 million dunams (1 acre = 4.047 dunams). (Kark)

iii. Socio-Economic Consequences of the Land Reform

Thus, what started as an attempt by the Ottomans to bring about land reform as one of the means to ease their debt burden, ended with the abandonment by many Palestinian peasants of their agricultural occupations and their gravitation to nearby urban centres. While not yet ‘political refugees,’ because they still remained in their patrimony, nevertheless in the decades before the 1947 UN partition resolution, many Palestinians were already disenfranchised by their own leadership and then displaced from villages and from lands which they had either regularly or periodically worked.

The sale of land and the movement of the peasant population to the towns resulted in the fellah’s loss of his traditional livelihood. It created economic friction and an ever widening cultural gap between himself and the urban Palestinian population. To this was added social and economic unrest felt from an increasing non-Muslim presence in the Land.

Although the legislation had the effect of enabling Jews to purchase land directly and occupy legally in their own names, the implementation of the law encountered regional opposition, forcing its suspension by the Ottoman central government.

This notwithstanding, continual foreign consular pressure coerced the Porte to remove the suspension and to permit Jewish purchasers to take advantage of the legislation when the occasion arose – as it did later in the 1880’s.

(see Raphael Patai, Musha’a Tenure and Co-Operation in Palestine, American Anthropologist, New Series, Vol. 51, No. 3 (Jul. – Sep., 1949), pp. 436-445; Gerber,  especially Chapter 5; also Islam, Land & Property, Research Series, paper 2, Islamic Land Tenures and Reform, UN-Habitat 2005, http://www.unhabitat.org/downloads/docs/3546_86904_ILP%202.doc ; N. Forni, Land tenure policies in the Near East Land tenure policies in the Near East, UN Food and Cultural Organisation, http://www.fao.org/docrep/005/Y8999T/y8999t0f.htm ; David Hurwitz, Agrarian Problem of the Fellahin, in Enzo Serini and R.E. Ashrey (eds), Jews and Arabs in Palestine, Hechalutz Press, New York, 1936 p.49

d. German ‘aid’ extended to support, maintain and modernise the Ottoman Government

As part of the Porte’s efforts in extracting itself from its weak financial and political situation, it turned to Germany for assistance. She responded by making investment in transportation – communication infrastructure and transferring military and civilian administrative know-how to the Ottoman government. It naturally brought with it an extension of Germanic hegemony, trade links in the Middle East and military dependence on and strategic subordination to Germany’s political interests.

In particular, Germany financed and constructed a railway intended to run from Berlin to Baghdad, with an extension of the Hejaz branch from Damascus to Ma’an and thence to Medina – deep into the heart of the Arabian Peninsula. The new railway links were to be used to develop Ottoman internal communications, the transportation of grain, collection of taxes, military conscription and troop movement.

This last purpose was to become of crucial strategic value to Germany in the coming 1914-1918 World War. It converted the Hejaz into a strategic military asset; the numerous inlets along the peninsula provided German submarines with safe havens and opportunities to attack and sink Allied shipping en route to the Gulf and to India. Any German expansion eastwards towards would endanger British oil interests in the region, as well as undermine British commercial and strategic interests in the Suez Canal and unhindered access to Indian subcontinent and the Far East.

The German supplied organisational know-how for the restructuring and training of the Ottoman military machine also was to raise British fears. These brought repercussions in World War I when the indigenous Hashemites of the peninsula were faced with the choice of supporting the Central Powers (Germany,Austro-Hungary and the Ottomans) against the Western Allies. As will be shown later, Hussein, King of Hejaz succeeded in extracting from Britain  the latter’s recognition of a Hashemite sphere of influence extending well beyond the Hejaz: establishing the Hashemite kingdoms of Iraq and Transjordan, as well as asserting a claim to the territory west of the Jordan River. This was, of course, to have a direct impact on Jewish aspirations to establish a homeland in Palestine.

In civilian matters, the Porte attempted to restructure its governmental organisation in accordance with Weberian concepts of industrial specialisation and governmental bureaucratic organisation; abandoning government traditionally based of nepotism and the sale of offices to the highest bidder and to replace it with one founded on meritocracy and specialisation as the bedrock for hierarchical authority.

As will be shown in Section 4 next following, this impacted on the loci of Arab centres of political power in Palestine. Ultimately, Chapters V and VI will show how these changes influenced in turn both the effendi and the fellah in their respective relationship with the Jewish immigrants and their supporting organisations as well as with the British military and civilian governments after World War I.

Also not to be overlooked was Germany’s political support of Theodore Herzl in his attempts to obtain a Charter from the Sultan for the establishment of a Jewish Homeland in Palestine. Far from being altruistic, such support was intended to achieve two objectives: (i) to establish in the eastern Mediterranean the potential for a political entity friendly to German interests and (ii) as a means for ridding Germany of its Jews.   This subject is also examined more closely in Chapter V.