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The Ottoman Empire in the “Great Depression” of 1873–1896

Published online by Cambridge University Press:  03 March 2009

Şevket Pamuk
Şevket Pamuk
Affiliation:
Assistant Professor of Economics, University of Ankara, Turkey. He is now Assistant Professor, Department of Economics, Villanova University, Villanova, Pennsylvania 19085.
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Abstract

Contrary to the view that the periphery of the world economy benefited from rapidly expanding trade, the Ottoman economy actually faced a distinctly unfavorable world conjuncture during the last quarter of the nineteenth century. Rates of growth of foreign trade dropped, external terms of trade deteriorated, declining wheat prices affected peasant producers, and the establishment of European control over Ottoman finances led to large debt payments abroad.Indirect data indicate that rates of change of agricultural and aggregate production were also lower during the “Great Depression” as compared to the later period.

Type
Articles
Information
The Journal of Economic History , Volume 44 , Issue 1 , March 1984 , pp. 107 - 118
Copyright
Copyright © The Economic History Association 1984

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References

1 Whether the Great Depression of 1873–1896 was limited to purely monetary phenomena has been the subject of much debate during the last two decades. See, for example, Saul, S. B., The Myth of the Great Depression, 1873–1896 (London, 1969);CrossRefGoogle ScholarMcCloskey, Donald N., “Did Victorian Britain Fail?” Economic History Review, 23 (12. 1970), 446–59;CrossRefGoogle ScholarWilliamson, Jeffrey G.. “Late Nineteenth-Century American Retardation: A Neoclassical Analysis,” this JOURNAL, 33 (09. 1973), 581–607;Google ScholarRostow, W. W., The World Economy: History and Prospect (Austin, 1978);CrossRefGoogle Scholar and Lewis, W. Arthur, Growth and Fluctuations, 1870–1913 (London, 1978).Google Scholar For the three largest industrial economies—Great Britain, United States, and Germany—this was not a period of absolute decline but of lower rates of increase in the levels of industrial production compared to before and after. See, in addition to the above, Mitchell, Brian R., European Historical Statistics. 1750–1970 (New York, 1975);CrossRefGoogle ScholarHoffmann, Walther G., Das Wachtum der Deutschen Wirtschaft seit der Mitte des 19. Jahrhunderts (Berlin, 1965);Google ScholarGallman, Robert E., “Commodity Output, 1838–1899” in Trends in the American Economy in the 19th Century, Vol. 24 of Studies in Income and Wealth (Princeton, 1960);Google ScholarU.S. Bureau of the Census, Long-Term Economic Growth, 1860–1966 (Washington, D.C., 1970);Google Scholar and Lewis, Growth and Fluctuations, Appendices 1 and 2. Moreover, rates of growth of world trade were distinctly lower during this period. See Rostow, The World Economy, p. 679;Google Scholar and Hanson, John R. II, Trade in Transition, Exports from the Third World, 1840–1900 (New York and London, 1980), p. 14.Google Scholar

2 Hanson, Trade in Transition, pp. 16, 90–92.Google Scholar

3 Aybar, Celal, Osmanli Imparatorluğunun Ticaret Muvazenesi, 1878–1913 (Ankara, 1939)Google Scholar for a compilation of the official foreign trade statistics of the Empire; also Issawi, Charles, The Economic History of Turkey, 1800–1914 (Chicago, 1980), pp. 74–145.Google Scholar

4 Based on Issawi, Charles, The Economic History of the Middle East, 1800–1914 (Chicago, 1966), p. 30;Google ScholarParis, Robert, Histoire du Commerce de Marseille, Tome V, 1660 à 1789, le Levant (Paris, 1957), pp. 572–77;Google Scholar and Masson, Paul, Histoire du commerce français dans le Levant au XVIIJe siècle (Paris, 1911).Google Scholar

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6 This was certainly the case for Ottoman trade with Great Britain. See Public Records Office, Customs 4, Customs 8, and Customs 10 series. Also Owen, Roger, The Middle East in the World Economy, 1800–1914 (London and New York, 1981), chap. 3.Google Scholar

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10 Annual rates of change for the entire period are somewhat different from the weighted average of the two subperiods, because the years 1881 and 1897 were included in the calculation of the former.Google Scholar

11 Pamuk, “Foreign Trade, Foreign Capital,” chap. 2.Google Scholar

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13 The author's calculation based on Eldem's estimates of the gross national product of the Empire for 1907, 1913, 1914. See ibid, pp. 302–5.

14 For purposes of comparison, note that for South America as a whole, share of exports in national product is estimated at 10 percent in 1860, 14 percent in 1880, and 18 percent in 1900. The comparable shares were distinctly lower in Asia, averaging 1.0 percent in 1860. 2.1 percent in 1880, and 4.6 percent in 1900. The share of exports in the national product of Jamaica fluctuated around 20 percent during the same period. See Hanson, Trade in Transition, pp. 22–23.Google Scholar

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20 Shaw, Stanford, “The Nineteenth-Century Ottoman Tax Reforms and Revenue System,” International Journal of Middle East Studies, 6 (1975), 451–53;Google ScholarTurkey, , ve Maadin, Orman ve Ziraat Nezareti, idaresi, istatistik, 1323 Senesi Avrupay-i Osmani Ziraat İstatistiği (Istanbul, 1326/1910)Google Scholar and 1325 Senesi Asya ve Afrikay-i Osmani Ziraat İstatistiği (Istanbul, 1327/1911).Google Scholar

21 Blaisdell, Donald C., European Financial Control in the Ottoman Empire (New York, 1929)Google Scholar, chap. 3; for lists of the Ottoman floatations and their magnitudes, see Issawi, The Economic History of the Middle East, pp. 94–106; Owen, The Middle East in the World Economy, p. 104.Google Scholar

22 Blaisdell, European Financial Control, pp. 80–84.Google Scholar The Ottoman Empire was hardly alone in this respect. From 1822 to 1825 and the 1870s are regarded as the two periods with widespread defaults on government borrowing during the century preceding World War 1. Honduras, Costa Rica, Santo Domingo, Paraguay, Spain, Bolivia, Guatemala, Liberia, Uruguay, Egypt, and Peru also defaulted or obtained rescheduling between 1872 and 1875. See Borchard, Edwin, State Insolvency and Foreign Bondholders, Vol. 1: General Principles (New Haven, 1951), pp. xx–xxi;Google ScholarJenks, Leland H., The Migration of British Capital to 1875 (London, 1938).Google Scholar

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24 For an account of the rivalry and this particular wave of railroad building, see Feis, Herbert, Europe, the World's Banker, 1870–1914 (New Haven, 1930)Google Scholar, chap. 15; also Earle, Edward M., Turkey, the Great Powers and Baghdad Railway, A Study in Imperialism (New York, 1923). After the 1860s, British investment in the Ottoman Empire, in the state debt, in railways, and elsewhere declined.Google Scholar

25 Quataert, “Limited Revolution”; Owen, Middle East in the World Economy, pp. 200–9.Google Scholar

26 Feis, Europe, the World's Banker, chap. 14.Google Scholar

27 Based on Eldem's estimate of the level of gross domestic investment after the turn of the century. Eldem, Terkik, p. 290.Google Scholar

28 Based on Eldem's estimates of the gross national product of the Empire for 1907, 1913, 1914; ibid. pp. 302–5.

29 See, for example, British consular reports from the Syrian and Eastern Anatolian provinces of the Empire during the 1880s and 1890s. Parliamentary Papers, Accounts and Papers, “Commercial Reports” from Damascus, Aleppo, Diyarbakir, Erzurum, passim.Google Scholar

30 For the decline of handicrafts-based manufacturing and the weak beginnings of industrialization, see Issawi, The Economic History of Turkey, pp. 272–78, 298–320; Owen, The Middle East in the World Economy, pp. 209–13.Google Scholar

31 The agricultural tithe constituted the largest single revenue item in Treasury collections, accounting for more than a quarter of the total revenues. Donald Quataert, who undertook a similar exercise utilizing the tithe revenues of the Anatolian provinces of the Empire, offers the following description and assessment: “during the Hamidian period (1876–1908)…the tithe generally was collected by tax farmers who purchased the right at government auction. The amount paid for the tax farm was fixed by the state on the basis of the district's tithe yield for the previous three years. There was, therefore, a lag between increasing production and rising tithe revenues. …It is evident that tithe revenue changes only imperfectly registered increases in agricultural production. The conclusions derived from analyzing these revenues should be viewed as only an approximation of shifts in the value of agricultural production.” In contrast, for example, “the animal tax, primarily the agnain vergisi, was perhaps the best administered (tax falling on the rural producers), but was often paid through an arrangement with the tribal chieftain and related more to the degree of state authority over him than to the number of animals owned by his group.” Quataert, Donald, “Ottoman Reform and Agriculture in Anatolia, 1876–1908” (Ph.D. diss., University of California, Los Angeles, 1973), pp. 15, 31.Google Scholar

32 For the 1910s the share of agriculture in the gross national product of the Empire has been estimated at slightly over one-half. Eldem, Tetkik, pp. 302–4.Google Scholar

33 Quataert, “Ottoman Reform and Agriculture,” p. 348.Google Scholar