Page 130 - Mastermind: The Truth of the British Deep State Revealed

With the Treaty of Balta Liman, tariff walls against foreign markets were

removed and all registrations and records in domestic trade were lifted with-
out any protective measures. This development dealt a serious blow to young

Turkish industry, unready yet for foreign competition. Industries that de-
pended on local production like cotton, silk, wool, angora products, leather

processing, mining, and agriculture were seriously affected and couldn't help
but disappear. After a while, these products were no longer processed and

were sold to foreigners as raw materials for very low prices. Many local in-
dustry products, which prior to 1838 easily met the domestic demand and

were also exported, could be obtained almost only through import by 1850.

On the other hand, the falling tax revenues from foreign trade due to new

privileges given to Westerners, coupled with the effect of deficits in the state
budget, placed a heavy burden on the Ottoman Empire, leading to a major

economic crisis. Already struggling with the crippling costs of the Crimean
War of 1854, the Ottoman Empire for the first time in its history resorted to

foreign debts in a bid to get its economy back on its feet. Britain enthusias-
tically supported the move. As a result, the Ottomans borrowed a total of £3

million from Palmer in London and Goldschmidt in Paris on August 24,
1854. The loan was secured against the Egyptian taxes.

This move marked the beginning of intense borrowing, which couldn't

be paid off even long after the Ottoman Empire came down. In only twenty
years after the first loan in 1854, the Empire declared a total default and bank-

rupted. In the run-up to WWI, the Ottoman Empire had borrowed 243 mil-
lion Ottoman Liras, which made the total amount of foreign debt 409 mil-

lion Ottoman Liras.

The inability to pay back the loans allowed the creditors to gain control

of the biggest revenue sources of the Empire. The Ottoman Public Debt Ad-
ministration (Düyun-u Umumiye) was established during the rule of Sultan
Abdul Hamid II. Even though the name suggests that it was an Ottoman in-

stitute, it had a completely foreign administration that consisted of seven

people representing the creditors: British, Dutch, French, German, and Ital-
ian among others. This commission monitoring the foreign debt of the Ot-
toman Empire seized the entire revenues from tobacco, salt, silk, stamp and

Mastermind: The Truth of the British Deep State Revealed