Ottoman public debt
Encyclopedia
The Ottoman public debt was a term which dated back to 4 August 1854, when the Ottoman Empire
first entered into loan contracts with its European creditors shortly after the beginning of the Crimean War
. The Empire entered into subsequent loans, partly to finance railway construction and partly to finance deficits between revenues and the lavish expenditure of the Imperial court. Some financial commentators have noted that the terms of these loans were exceptionally favourable to the French and British banks which facilitated them, whereas others have noted that the terms reflected the imperial administration's willingness to constantly refinance its debts.
The Empire defaulted on its loan repayments in 1875. In 1881, as part of the Decree of Muharrem which reduced the overall public debt, the Ottoman Public Debt Administration
was established. This made the European creditors bondholders, and assigned rights to collect various tax and customs revenues of the Empire to the Administration.
Republic of Turkey
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
first entered into loan contracts with its European creditors shortly after the beginning of the Crimean War
Crimean War
The Crimean War was a conflict fought between the Russian Empire and an alliance of the French Empire, the British Empire, the Ottoman Empire, and the Kingdom of Sardinia. The war was part of a long-running contest between the major European powers for influence over territories of the declining...
. The Empire entered into subsequent loans, partly to finance railway construction and partly to finance deficits between revenues and the lavish expenditure of the Imperial court. Some financial commentators have noted that the terms of these loans were exceptionally favourable to the French and British banks which facilitated them, whereas others have noted that the terms reflected the imperial administration's willingness to constantly refinance its debts.
The Empire defaulted on its loan repayments in 1875. In 1881, as part of the Decree of Muharrem which reduced the overall public debt, the Ottoman Public Debt Administration
Ottoman Public Debt Administration
The Ottoman Public Debt Administration , was a European-controlled organization that was established in 1881 to collect the payments which the Ottoman Empire owed to European companies in the Ottoman public debt...
was established. This made the European creditors bondholders, and assigned rights to collect various tax and customs revenues of the Empire to the Administration.
Size
Ottoman Empire- In 1875 the nominal public debt was £200,000,000, with annual interest and amortization payments of £12,000,000, more than half the national revenue.
- In December 1881, the debt was reduced from £191,000,000 to £106,000,000 with the government's concessions to the OPDAOttoman Public Debt AdministrationThe Ottoman Public Debt Administration , was a European-controlled organization that was established in 1881 to collect the payments which the Ottoman Empire owed to European companies in the Ottoman public debt...
.
Republic of Turkey
- During the Paris Conference of 1925, the Republic of Turkey agreed to pay 62% of the Ottoman Empire's pre-1912 debt, and 77% of the Ottoman Empire's post-1912 debt. With the Paris Treaty of 1933, Turkey decreased this amount to its favour and agreed to pay 84.6 million liras out of the remaining total of 161.3 million liras of Ottoman debt. The last payment of the Ottoman debt was made by Turkey on 25 May 1954.