ABSTRACT
Sources: Smyrna: ACCM Marseille, L. IX 1034/1035: Cours des Changes (1760-1788); REBUFFAT / COUDURIÉ [1966], p. 124, tableau XXIII (1787-1790). Constantinople: ISSAWI [1981], pp. 329f. (1790-1844); PAMUK [2000], p. 168 (1798); NOBACK [1851], 2. Abth., pp. 1711-1714, 1852 (1849/ 50); NOBACK [1858], pp. 335, 666 (1853/55); Smyrna Mail (1862-1864); Levant Times & Shipping Gazette (1868-1873); Levant Herald (Constantinople Messenger – Eastern Express) (1874-1914); The Economist, London (1874-1892). Concordance: WdW VIII, pp. 107-134
Currency: The monetary system in the Ottoman Empire was based upon the (new) silver piastre (kurus) of 40 paras at 3 aspers (akçes), which became the leading unit of account in the Ottoman Empire during the 18th century. So, at Smyrna and Constantinople the exchange rates were quoted in or for these piastres. After an era of relatively high stability, the debasement of the Turkish piastre started during the third quarter of the 18th century and continued over a long period of the 19th century:
The debasement of the piastre 1708-1844: fine silver content in grammes
Source: PAMUK [2000], pp. 163, 191
This development was a result of the war with Russia for predominance in the Black Sea area (17681774) and the following decline of trade with the Ottoman Empire. The attempts at stabilizing the currency always resulted in a loss in value of the silver coins against gold. The value of the piastre reached a low in 1831, subsequent to the fiscal difficulties caused by the wars against Persia (18201828) and Russia (1828/29, the latter being connected to the Greek Revolution and necessitating extensive reparations to the Russian Empire). “Closely paralleling the debasement of the currency was the sharp fall in its exchange rate” (PAMUK [2000], p. 193). The bimetallism and new standards for gold and silver coinage had not been introduced until the currency reform of 1844 was carried out in the Tanzimat era (i.e. during the politics of ‘reorganization’ between 1839 and 1876, urged by Western powers) following the model of the Egyptian currency reform of 1834 (see p. 585). The piastre or kurus (0.998 grammes of fine silver) and the new gold lira or Turkish pound (6.6147 grammes of fine gold) became standard units of currency and legal tender, being freely convertible at the fixed rate of 1 lira = 100 piastres (PAMUK [2000], pp. 208s.). In addition, a fixed ratio to sterling was established (1 lira = 18 shillings sterling). At the same time the matter of currency stability again became more severe because of the interest-bearing uncovered paper money in the area of Constantinople and its hinterland. This paper money was the so-called ‘kaime-i muteber-i nakdiyye’ (for short: ‘kaime’),
1708 15.4 1766 11.5 1808 5.90 1829 0.72 1716 15.9 1774 10.9 1809 4.42 1831 0.53 1720 15.8 1780 10.0 1810 3.74 1832 0.94 1730 14.9 1788 9.40 1818 4.42 1839 0.94 1740 14.5 1789 6.90 1820 2.95 1844 1.00 1754 14.2 1794 5.90 1822 2.32 1757 11.4 1800 5.90 1828 1.47
Due to international trade agreements over low import duties, the pledging of revenues and the growing external debt of the Ottoman Empire, which was largely economically as well as financially exposed to the influences of the Western consulates in Constantinople since the Crimean war (18531856), led into national bankruptcy on October 6th 1875. The result was a crisis of the Turkish bankers in Galata, prompting the Sublime Porte to issue more kaime money so that in 1879/80 there was finally a total of 14 million liras in kaime in circulation. With the currency reform of January 1st 1881 the Ottoman Empire moved from the bimetallic standard to a limping gold standard with the gold lira (6.6134 grammes of fine gold) of 100 piastres gold (kurus sag) or 105.26 piastres silver as the standard unit of coinage (new notes payable in gold were only offered by the Imperial Ottoman Bank until World War I; cf. SWOBODA [1902], p. 243). Therefore “the premium for gold over silver usually increased with the distance from Istanbul” and “from the 1880s until World War I, the silver kurus steadily lost value against the gold lira and other foreign currencies. The exchange rate of the old lira rose from 114 kurus in 1886 to 137 kurus in 1914 but remained stable against foreign currencies” (PAMUK [2000], p. 219). So the government succeeded in its policy of consistent external stabilizing of the currency but it “did not have the reserves and financial strength to redeem the existing silver stock and move to a full-fledged gold standard” (ibid., p. 217).
