TOPICS OF THE DAY.
THE FUTURE OF TURKISH FINANCE.
NV-Esee no reason to believe that the Turkish Government will continue paying half the interest on their Debt. Why should they? There is no external force to compel them, they clearly have no conscience in the matter, and it is not their immediate interest to do it. The talk about the external pressure to be applied at Constantinople is obviously the mere result of Bondholders' indignation. Who is to apply it? Will the clergymen and widows bombard Constantinople, or will the Sultan be shocked by the curses of Infidel speculators for the rise No one can apply it but a great Power, and the great Powers, for different reasons, will abstain. Russia is believed to have advised repudiation, and holding no Turkish bonds, is certainly not sorry to see Turkey deprived of the credit which might enable her to resist attack. Austria has an interest in Turkish weakness, and will not reopen the Eastern question for the benefit of Bondholders in Paris or London. Germany is conciliating Russia, and will go on conciliating her till the hour of struggle comes. France is not prepared for any policy which might hazard her possibilities of a Russian alliance, and Great Britain is under Lord Derby, who throughout the recent insurrection has shown that he thinks support to Turkey, as she is, the least troublesome and hazardous policy to maintain. He cannot offer pecuniary aid, and will not offer threats. It is doubt- ful if a distinct menace by England and France united, to leave Turkey to her fate, would frighten the Divan into honesty, and less than that would certainly produce no effect whatever. Mahmoud Pasha would smile, and plead necessity. As to conscience, we never could understand the English theory about the special pecuniary conscience of the Turk. He is a Mohammedan, it is true, and Mohammedanism teaches good-faith, but he is no better a Mohammedan than a Spaniard is a Christian, and Christianity teaches good-faith too. As to his special quality as Turk, the Turk has been distinguished for ages for violent finance, for plundering provinces and confiscating the property of individuals. A Turk is always taking bribes, or keeping back soldiers' pay, or selling concessions he never intends the buyer to profit by. As late as the days of Sultan Mahmoud, who died in 1840, it was the practice even in Constantinople to arrest and torture men who grew too rich, till they disgorged ; and even now in the remoter provinces really wealthy men anxiously purchase protection at Constantinople. No official promise to the tax-payer is ever kept, and a genuine Pasha has no more scruple about inventing fictitious arrears of taxes or doubling an assessment than a Wall-street speculator has about forcing gold up to an unreal value. If the Constantinople group who have managed this matter were under any moral restraint, and yielded merely to necessity, they would have made an arrange- ment with the Bondholders under which good security would have supplied the place of interest. It would have been perfectly possible, for example, to have changed the whole Debt into a Consol Stock at three per cent., and by a proviso that the five Governments should for a certain number of years always appoint the Finance Minister, to have recouped the Bondholders for their apparent loss. Turkish Stock would then have been worth as much as Portuguese, and no real suffering would have been inflicted. The ruling Turks, how- ever, were not thinking of right or wrong, or credit, or bond- holders, or anything else but their own position. They must take somebody's money, or tell the Sultan that he must com- promise with Bosnia ; and as they could not take their own subjects' money, they took their creditors'. They first decided to halve the interest. Then they decided to give some rubbishy paper, instead of the other half of the interest. Then they issued a solemn official assurance that they were not going to halve the interest. Then they forwarded enormous selling orders to all accessible Bourses. And then they issued their decree halving the interest. No man exposed by the Com- mittee on Foreign Loans could have combined baseness, incom- petence, and a determination to have somebody else's money in higher perfection. We may rely on it, if it suits them to take the remainder of the money promised to the creditor they will take it without the smallest compunction, and it is most likely to suit them. They have not taken enough to put the Treasury straight. The deficit they have acknowledged to exist before the Bosnian insurrection, amounts to £5,000,000 a year, and with all their new expenses—which are not going to decrease, for the insurrection as a source of expense is not over—they have only taken £6,000,000 a year, and owe more than a year's difference on a single debt which the creditors decline to renew. Their clumsy violence and Asiatic contempt for obligations have closed all money markets to them ; a forced loan would be useless, unless- they broke their first maxim of statecraft, and levied it in Constantinople itself, so risking what they never risk, their heads ; and they will within six months be in as great• pecuniary straits as ever. They must have money to keep the machine going, even if all the harpies, the women, the Pashas, the money-dealers, and the Generals did: not redouble their exactions on the score of "the grand relief secured to the Treasury," and they will double them. They- will see endless luxury for themselves in those six millions. We venture to say every sixpence to be saved by repudiation for the next five years is appropriated already to claims which will not bear examination, but which will nevertheless, or rather for that reason, be paid in full. More money must be obtained, and why not of the Bondholders ? Without a Debt the Treasury would be really solvent, and as to further loans, any chance of them has been stopped already. The faith of Turkey is worthless, and what else has she to offer to future creditors. The Egyptian Tribute ? It is pledged to England and France already for the guaranteed Crimean loan, hypo- thecated again to the holders of the 1874 bonds, and now' offered once more as " security "—Heaven save the mark I—fon- the interest promised on the coupons offered instead of interest in cash. The taxes ?—They are all pledged already, and pledged without sincerity. Holders of " mutton Turks " are not a whit the better for the sheep-tax which was hypothecated to them, but which they are not to get. The Bondholders have a right on paper to the tribute, to the customs' duties of Constanti- nople, to the sheep-tax of Asia Minor, and to all sums paid into the Treasury, and their " right " would not fetch twopence- halfpenny at auction. The right to a bit is as valueless as the right to all. What is the use of a claim to a particular penny out of a shilling, when you have a claim to the shilling itself, and cannot get it Loans are stopped, and if the Divan want money, which they are sure to do for themselves and their master, as well as the State, they will take what comes into the Treasury, and leave their creditors to go without.. They will be better off in purse, and no worse off in reputation..
But we shall be told there are the "vast resources " of Turkey, and if time is granted, they may be made available- Admitted, but how much time, and by whom is it to be em- ployed ? A wise and powerful and sober Government could in thirty years double the population of Turkey and triple its revenue, and so might one make a Paradise of the Persian! desert ; but what chance is there of such a phenomenon The talk about the "vast resources" of these Asiatic and semi- Asiatic States is talk merely. They all—Turkey, Persia, China, Japan, and the rest of them—possess vast resources, but they are not resources from which cash can be extracted by taxation in a hurry. Suppose—the most extreme case pos- sible—that Mr. Gladstone, according to the funny rumour in the Daily News, was bought by the Turkish Government, and invested with any fiscal authority he liked, what could he do ? He could not stop the Sultan's personal waste, or the extremely small expenditure on the necessary Depart- ments. He could not get any more out of the Farmers- General. He would have, first of all, to supersede those gentry by honest officials—who are unprocurable—and then to supersede their method of collection, which is distraint by military force, by some civilised method, and there is but one, the sale of the land liable to the tax. The British Government in India, availing itself of the demand for land arising from the multitudinousness of the population, and of its military irresistibleness, did this, and the land-tax is now its financial sheet-anchor ; but the Turkish Government will not and cannot attempt such a plan. If it demanded money instead of property, and in default evicted the cultivators, it would have to face insurrections in every province at once, and after all, gain nothing, fresh land being too cheap to make purchase under unpopular circumstances the desire of anybody- It can, when resisted, only distrain, and only distrain by military occupation. Turkish finance, in fact, can be regenerated only by agrarian reform, which is quite possible, but which, involving as it would the creation of an honest staff of collectors, a rigid settlement of the rentals, and the substitution of a money payment for every other exaction, would take twenty years to carry out, while no man in Constantinople expects to be in office for two. " Scientific taxation "—that is, indirect taxation on luxuries and imports—even in India produces very little, less than eight millions a year in all ; and in Turkey, where the body of the people are at least as poor, and smuggling is so easy, would probably produce nothing. A coffee-tax would draw, but God help the collec- tors ! Any decent Government indeed would be compelled to expend much more than is now done, for it would pay its army, now always in arrears ; pay its police, who now live by oppres- sion ; and pay for its public works,—roads, for example, which are now done by the corve'e, or not done at all. Turkey, in plain words, is not civilised enough to bear so civilised an in- stitution as a great National Debt, and cannot be made so, except by changes equivalent to the extinction of her independ- ence. Her rulers do not want and could not bear the restraints indispensable to a full treasury, and they can only be superseded by measures which would be inconsistent with the existence of the Sultanet, with Mohammedan ascendancy, and therefore with the existence of Turkey as we now know it. The present race will do nothing to secure reform of the kind the Bond- holders want, and could do nothing, even if they were not, more than French Legitimists, more than Russian professors, more than New York purists, made powerless by incurable despair. They know the case is hopeless, except through means which they hate worse than the existing anarchy, and they provide for themselves. When Jay Gould made a fortune by selling " Eries " because he was certain they would fall, in conse- quence of his own exposure and his colleague's assassination, he did the precise thing which would seem to a Turkish Minister a surpassing stroke of finesse, and what " reform " do Bondholders hope from such men ?
We are asked whether the prospect in Egypt is as bad as in Turkey. Not just yet, if the Khedive can raise a loan on any terms whatever, say by issuing sixes at fifty per cent. discount. If he can do that he will go on paying while the money lasts. But we can see no reason for supposing that when loans stop, and he is pressed beyond endurance for money, he will go on paying the foreign Bondholders. Why should he ? We shall not be allowed to annex Egypt because of his default, and cannot allow any other Power, not even Italy, to do so in our stead. There is, therefore, no external compul- sion, and no internal compulsion, for Ismael's conscience would probably tell him not to skin his Fellaheen for the benefit of foreigners, and loans being refused, no interest in keeping up a struggle already unendurably severe. We should say it would end, though not just yet, and end in a much more complete and, so to speak, civilised way than the Turkish one. There would be no arrogant decree or useless bother about coupons, but a quiet cessation of remittances, endless gracefully worded apologies, a few sheets of unexpected statistics, complicated by the word "Daira," and great content and a sense of being rich in the palaces at Cairo and Alexandria. Why should an Egyptian Turk impoverish himself to be better than the Khalif ? Of course, if money is not wanting, there will be no change, but the ruling Mussulman who is unembarrassed is yet to seek.
Previous page
