A dishonesty which defies competition - A good stroke of business
- -Cent. per cent. for the merchant, but the producer suffers - Privilege
of a Greek subject - Country agents - A little usury - Rising in life -
Non-Greek foreign merchants - Base is the slave that pays - A swarm of
“PROFIT" is the primary motive of the existence of commerce in all its branches, but if profit is not kept in check by competition it ceases to be legitimate, and soon attains such monstrous proportions as finally to ruin both producer and consumer. Where there is no competition there is monopoly, and the disastrous effects produced by this system upon the country which tolerates or employs it are too well known to need repetition; in Turkey, however, monopoly flourishes in a degree happily unmatched elsewhere. In other lands it usually is but a last resource of the tottering finances of a Government, and even then is extended only to articles of luxury, such as tobacco; in the East it is the special property of a foreign nationality, the bitter and declared enemy of Turkey, and is not confined to a few articles of consumption but embraces every species of trade; all gradations of commerce or business in Turkey are in the hands of Greeks.
The reason of this is easily explained.
For competition to be possible it is necessary that the competitors should be able to use the same arms; competition against Greek merchants is impossible, for no other trader is able to employ the same weapons so skilfully wielded by the Greek merchant in Turkey:
"None but himself can be his parallel."
Turk is put out of the field by his innate honesty, and the European by his laws, which provide a punishment for fraud and for crimes against property.
No code, but that of modern Greece, carries its patriotism so far as to shelter its subjects and proteges from the penal consequences which ought to follow such a career as that of the Eastern merchant who transacts business upon the Greek system.
Entry into the guild of Oriental commerce is far from difficult, a few foolish scruples of conscience may require silencing if by some strange chance they should exist, but little capital is necessary: the only indispensable qualification is that the aspirant should be a Greek, for without this he will encounter nothing but hostility amongst his new brethren. The commencement of the commercial career is as follows: - Aristides arrives fresh from Greece at some port of Turkey, with a few piastres in his pocket, and a good "knowledge of business" in his head. For a day or two he walks about the town in search of an opening, and as he who seeks very frequently finds, provided he be not too particular as to the object of his search, the Chapter of Accidents soon puts him in a position to mount the first step of the ladder of commerce. A ease of goods has arrived at the Customhouse with an illegible address: a little paint, and a fee to the Gumrukji (Custom-house soon remedy this; to be sure there is no bill of lading, but another is easily manufactured and passes muster with officials who read a European language: the ease belongs to Aristides, as the first fruits of his applied “knowledge of business."
Just after this lucky stroke, Aristides sees a train of carts laden with grain approaching the town, he goes out to meet them, represents himself as the emissary of Pisistratis the great corn merchant, and offers them a price thirty per cent. under the last quotation. The peasants hesitate, but they are accustomed to the capricious falls in the price of wheat, they see that the streets of the town are blocked up with arabas of grain, and finally a hundred piastres of earnest-money conclude the bargain, and make Aristides the owner of their corn. He runs into the office of Pisistratus, is directed to the cafe where that gentleman is playing billiards, calls him aside, and says, “I have just bought so many kiles of grain for you at fifteen per cent. under the market price, send out one of your men with me to take them." Of course Pisistratus is delighted with his portion of the spoil, and Aristides pockets his fifteen per cent. [It may be well to explain, for the benefit of country gentlemen, how Aristides succeeds so easily in buying wheat at 30 per cent. under the quoted price; it is a common trick of Eastern grain merchants to send round into the country districts announcing a certain price per kile, say 100 piastres, and when some hundreds of peasants are assembled in or outside the town with their corn, a messenger is sent to say that no more than 70 piastres per kile will be given. The peasants have come long distances, often three or four days journey, and sooner than return home again with their laden carts, they accept the depreciated price offered.
No fall has really taken place in the price of grain, but the Greek merchants, acting together, see their way to “a good thing”, and don’t mind the road being rather dirty.] Next day the thing is talked over at the Merchants' Club, and Aristides wins golden opinions from all the members present; Pisistratus relates the history of the clever bargain, and Brasides adds, “Yes, the case of goods he sold me, (certainly I bought it cheap enough), cost him only thirty paras (three halfpence) for black paint, and five piastres bakshish at the Custom-house; decidedly, Aristides is a clever fellow who will make his way in the world, and I hope we shall soon see him amongst us here." So henceforth Aristides' reputation is established, and he has no difficulty in borrowing a small capital at 100 per cent. without further security than his proved commercial ability. He sets up for himself, and as his affairs prosper, that is, as he makes 200 or 300 per cent. profit, he is soon able to pay back the money borrowed, and even to commence lending to others at the same rate, whilst he launches out into the grander enterprises of Eastern commerce, which afford him still larger profits, and a wider scope for the exercise of his business talents.
Should things turn out badly, Aristides converts every thing he can into money, leaves his office for the benefit of his creditors, and withdraws to another field of action where he recommences business: in the East this proceeding is called “failing" - it is regarded as an “inseparable accident," and in no way damages the reputation of the merchant, for what trader in the East of five years' standing has not thus “failed"?
Such is a fair sample of the ordinary career of the Greek merchant. We will endeavour to sketch the progress of the Turkish subject in the same road; but, before studying individuals, let us glance at the general effects of Eastern Commerce upon this country.
It is a remarkable, fact that Turkey, whilst its exports are enormous, imports but very little, for the imports can hardly amount to four per cent. of the exports: the natural deduction would appear to be that the country must be excessively rich in specie, and yet in truth it is miserably poor: this is a sad economical anomaly, but nevertheless a fact. Yet it is not taxation which ruins the country, for, as may be seen in the chapters which treat of “The True Position of the Rayah" and "The Taxes of Turkey," this is fixed, all things considered, at the lowest possible rate. If we seek for the causes of this permanent pauperism of Turkey, we shall find one of them in Oriental commerce.
Eastern commerce is an illegitimate commerce, even leaving out of sight its prominent feature of dishonesty, for it is based not upon capital but upon credit, and upon credit purchased at an interest of sixty per cent. The profits accruing from it must therefore evidently surpass this percentage before they can benefit the merchant, and by supposing that they only amount to cent. per cent. we are understating the question.
In England or France, where the rate of six per cent. is rarely exceeded, and where temptations to usury are checked by the existence of large capitalists and of equitable laws, commerce taxes the country only to the amount of ten per cent. or one-tenth of the black mail levied by Greek commerce in Turkey.
Yet if the fortunes, or more correctly speaking the capitals in specie,
acquired in the country were spent in the country, as in France or England,
or if these capitals were used to encourage industry, these immense profits
would be but a minor evil, the effects of which would be felt only by the
producers and, par contre-coup, by the labourers, as is the case in England,
where nevertheless the gross capital annually
increases or at least is not diminished. But as in this country commerce is almost exclusively in the hands of foreigners, the gross capital does not increase, and leaves Turkey, to benefit other nations, whilst the land in which it has been gained is left equally destitute of specie and of produce. Such is, in our opinion, one of the greatest economical sores of Turkey.
Again, were this commerce legitimately based upon capital, and subject to the compensating law of competition, the percentage of its profits would not exceed ten or fifteen, and the evil would be mitigated in so much as the country would lose but fifteen per cent. instead of 100; but to prevent this the Capitulations step in, and, thanks to them, the competition even of capital against the absence of honesty and justice becomes impossible.
No man more honest than a Greek can live by commerce in Turkey, and a curious proof of this is that the Jews, who in other countries subsist upon the scraps of trade, cannot here compete with the Eastern merchant, whose morality is such that Turkey is perhaps the only country in the world where the Jew is, as it were, compelled to become a labourer or an artizan.
It may be objected, “Since you allow that large fortunes are made in the East, how can you say that its commerce is not based upon capital?"
We answer: first, because really large fortunes are rare, owing to a circumstance which acts as a counterpoise to the large profits made, namely, the absence of security; thus, the merchant who has realized a large sum of money well knows that, should he continue to speculate with it, it may be lost by the exercise of the same talent (in others) which gained it, and consequently he invests his earnings in some country where they will be beyond the reach of others like himself. Occasionally, one of these millionaires will embark some thousands in an affair which will double his stake in a few months; but this affair is not one with other merchants, his debtor is the easily duped Turkish Government, and as soon as he has pocketed the winnings of his final coup, he betakes himself to Europe with his booty.
Small fortunes made in Turkey are numerous: but for them what would become of Greece, whose soil is a desert - to the people of the West a desert, but peopled with the memories of great deeds and great men long since passed away, and leaving no legitimate descendants; but to the Hellene a desert which he abandons because there is no money to be made from it. But for them how would the Cretan insurrection have been kept up? Whose money purchased the Panhellenion, the Arcadi, and the Hellenos? Without these fortunes, how would the swarm of parasites in black frock-coats and varnished boots, who abound in every Turkish town, manage to exist?
Are they grateful to the authors of their fortune? ask one of them his opinion of the Turkish Government or the Turkish peasant, and from his answer judge for yourself.
Thus far we have shown the general action of Eastern commerce upon the state of Turkey, we will now turn to the tenacula of the great pieuvre that drains the life-blood of this unhappy country, and, having traced its vital principle, we will glance at its many arteries.
This vital principle is to be found in the Capitulations; if these did not exist there would still remain a certain amount of corruption in the Turkish tribunals which might allow this commerce to drag on its existence during a period, but corruption might be punished or even eradicated, and then the great monopoly would be at an end.
Such corruption would even act in some degree as a palliative of the disease by which it profited, as the bribes would at least be spent in Turkey: it may seem strange to say this, but what must Eastern commerce be when corruption itself is preferable ?
Let us suppose that the Capitulations are abolished, or have never existed, and take the imaginary ease of in Englishman who has been cheated by a Greek, and whose cause is brought before a Mussulman court of law: the Cadi (Judge) influenced by bribes gives judgement against him, contrary to the evidence.
The Englishman writes to the 'Times,' the British Consul storms, and the Cadi is deprived of his post as a lesson to those who may come after him. Unhappily, however, the Capitulations do exist in a very lively state; let us see what chance our Englishman has in fighting against those granted to Greece, and the better to show it, let us take not an imaginary but an actual case, one of the many which occur, and which are not known outside the consular and mercantile circles of Eastern towns.
The English firm of K. Brothers, of Birmingham, had a business connection with the Varna railroad then in course of construction by an English company: at Varna there lived a merchant who enjoyed the reputation of being one of the most honest and straightforward men in the town (every Greek gives himself this character, finding it useful in his transactions with Europe), and who was moreover the possessor of an English Foreign Office passport, and registered at the British Consulate as a British subject. He being thus subject to British jurisdiction, Messrs. K. Brothers believed that they might trust him as their agent for certain articles of merchandise, paying him a handsome percentage on the sales effected.
Mr. M, the merchant in question, opened a “store" or shop in which he sold the articles sent out by K. Brothers, with whom he was guaranteed by a declaration of agency legalized at the British Consulate. He certainly sold at twice the rate of profit prescribed by the English house, but as the other shops which dealt in similar imported wares of English manufacture were not content with a gain of less than 200 per cent., his business was very large.
In a short time K. Brothers sent out a further supply of goods, directing their English agent with the railway company, Mr. G., to examine the books of Mr. M.; these were found to be perfectly well kept, and showed a balance of 1800 l. in favour of Messrs. K. At the end of the year the English house asked that their balance should be handed over to them, and in consequence Mr. G. called upon Mr. M. with this request; he was answered that his authorization to receive the money for Messrs. K. Brothers was not sufficiently formal. Mr. S. of Kustendji (an Englishman) was then sent, and received the same reply.
At last the affair was put into the office of the British Consulate, and Mr. M. was sued for the whole sum, nearly 3000 l., owing to Messrs. K. Brothers - but in vain, for a barrier insurmountable by justice was encountered: the fraudulent merchant had become a Greek subject. On learning this, the Birmingham firm gave up all chance of recovering their money, and knowing something of the peculiarities of modern Greek law, forbade their agent to commence any proceedings in the Hellenic Consulate, preferring to put up with their loss rather than to lose their suit and be saddled with the costs in addition. Immediately after this affair Mr. M. was elected a member of the Merchants' Club of Varna: he is still living and trading, and still enjoys his old reputation as an honest man. [A Greek Consul admitted to one of the Authors that in a case such as the one related above, the English. firm would have had no choice of obtaining redress from a Greek tribunal, and he added that "he was sorry to say that in any trial for fraud, no matter how gross, committed by a Greek upon a foreigner, the former was always sure of an acquittal at the hands of his patriotic countrymen."]
Returning to the general features of Eastern commerce we find that not content with levying its percentage upon exports and imports, it even takes possession of the Government taxes: it buys, sells and resells the tithes, seizes upon such produce of the country as embraces articles of luxury (e.g. wine and tobacco) and whilst it has in no way contributed to the cultivation of the fields, it nevertheless raises the price of their produce by a system of action peculiar to itself,
This system consists in spreading over the whole country a network of agents who little by little absorb the small amount of specie distributed by commerce amongst the peasants, buying up their remaining produce at a reduction of fifty per cent. upon its value. But, as in Turkey the European dress does not confer upon its Oriental wearer the courage and pluck of the European, the former would find himself utterly powerless in presence of the courage of the natives: he is therefore compelled to employ Rayah agents, whose cunning is more than a match for that of their customers, and whose known poverty in specie ensures them against the attacks of brigands. The civilized Greek does not dare to risk himself amongst the dangers of the mountains, nor indeed will he venture five miles outside a walled town: the Greek who is not yet civilized becomes a Bakal, and the village Bakal is the last, but by no means the least noxious, link, in the chain of Eastern commerce.
Any Christian Rayah may attain to the dignity of this position, provided he can count upon his fingers, and that he have a clear idea of profit and percentage.
The village Bakal is usually a Greek, sometimes a Bulgarian, but invariably a Rayah: his stock in trade when he commences business need be no more than a pair of trousers, or rather knickerbockers, cut after the Greek fashion, and an entire absence of anything resembling a conscience.
He buys a barrel of wine at 30 paras an oke, with money borrowed at 100 per cent., obtains a stock of mastica (the common spirits of the country) on credit at 150 per cent. interest from some merchant in the nearest town, purchases a dozen tallow candles and a few salted fish, rents a hut, and opens his establishment.
Let us examine his mode of carrying on his business: the Rayah is returning from the neighbouring town where he has sold his wheat at 50 per cent. under its real value, that is, he brings back 50 per cent. of the value of his produce; he stops at the door of the Tukhan, or Bakal's shop, and calls for wine; he is served from the very same barrel which he made, and sold at 30 paras the oke, but he now pays for it 60 paras: the money received for his grain therefore suffers a reduction of 50 per cent., or to put, it in another way, 75 per cent. of the produce of his labour has already passed into the capacious pockets of Eastern commerce! If he purchases cotton or calico from the stock of the Bazerpan (travelling pedlar), he loses still more; or if he buys an English (?) knife at one of the town stores, he is cheated to at least the same extent.
Happily for the Mussulmans, Mahomet appears to have foreseen and provided against the village Bakal, and by prohibiting the use of wine to his followers has prevented the Turkish race from becoming completely extinct in Europe.
The Bakal has sold his barrels of wine and mastica, but as the villagers do not pay ready money, he can securely indulge in a little usury, and obtains from each of his debtors a signature (in the shape of a cross) to an I.O.U. payable at the time of Harman, or thrashing of the grain; this I.O.U. is marketable; the Bakal sells it, at a discount of course, to a merchant who pays him in mastica, and he continues his trade. He has paid 50 per cent. more than its value for his mastica, so he cannot sell it to the peasant under a profit of cent. per cent, in addition to which he charges an interest of 50 or 60; so he realizes clear profit of 100 to 110 per cent., which reduces the sum remaining in the hands of the peasant to 5 or 10 per cent. upon the value of his produce; Eastern commerce has absorbed 90 per cent., leaving the Rayah 10 per cent. in return for his labour kind the produce of the fields bestowed upon him by the munificence of the Turkish Government.
These are the effects produced upon the country by the Bakal. We will now follow him in his upward career. In a short time he has amassed a small capital invested in loans at 60 per cent. upon the only reliable security in Turkey - that of the peasant. He has bought a pair of varnished boots, and indulges the ambition of becoming a bond fide merchant. [The Authors mean to say a member of the higher branches of Commerce; bona fide is a term singularly inapplicable to anything connected with trade in the East.]
With this view he calls in his debts and realizes. Shortly afterwards he strikes out boldly into the sea of commerce, in which he occasionally encounters a shark or two; for whatever harmony a Turkish proverb supposes (perhaps erroneously) to exist among wolves, the genuine Greek shark has no scruples which prevent him preying upon his smaller and less audacious Rayah congeners. Very frequently, however, the Bakal succeeds in his new sphere, cheats the town with the same facility with which he taxed the country, and is soon able to buy the tithes of a village. His shop deals in contraband articles, such as gunpowder; his gains from these and similar speculations enable him to farm the taxes of an entire district, and before he is an old man he is a millionaire - in piastres not in pounds - but even this is not bad considering the easy manner in which his money has been made.
His reputation for wealth secures his election as Chorbadji, or mayor, of the town in which he trades. He still wears the Rayah fez (different in shape from that peculiar to the genuine Hellenes) but his Hellenic patriotism finds a vent in Greek breeches and white stockings. He is to be seen any day at the Conac (Pasha's official residence) seated modestly on the very edge of a chair, and approving with humble salaams every word that falls from the sententious lips of the Governor.
The Bakal's son, being destined for still greater things,
“Per correr miglior acqua alza le vele,"
wears clothes of the latest European fashion (as translated by the indigenous tailor), and is vehement in his orations against Ottoman tyranny. Miltiades has studied political oratory, amongst many other arts and sciences, at the university of Athens. More fortunate than his father, he is a Greek subject, and Eastern commerce in full uniform throws open the gilded portals of her temple, and invites Miltiades to enter even into the sanctum sanctorum.
His fez changes its shape, for he is no longer a Rayah, he need not tremble before a Pasha, nor conceal the means by which he earns his money. He is a Greek gentleman, and can even speak Greek-French; he speculates in the funds and upon the rate of exchange; he "fails" and makes a fortune by his failure. Whilst he cheats you he grasps your hand cordially and calls you “cher ami." Miltiades will some day be one of the "leading merchants " and “most honest men” of Constantinople.
There is yet another species of foreign merchant in Turkey - the European merchant as we will call him, to distinguish his class from that of the Greek. Be is usually a consul, vice-consul, or consular agent, or at the least a brother, nephew, or cousin of the consul of some nation to which Turkey has granted Capitulations. He is by no means so clever as his Greek competitor, and his business does not flourish with the same bean-stalk rapidity, but his quality of consul, or relation to a consul, stands him well in stead. This dignity makes him a power in the eyes of the local government, and though he wisely avoids litigation with a Greek subject, he can generally gain his suit against a Rayah, and always against a Mussulman.
Turks form but an infinitesimal fraction of the merchants of the East. They are occasionally to be found as grocers in a town, but this branch of trade is more usually engrossed by Persians, who show a greater aptitude than the Turk for the petty details of commerce. The Turk is rarely anything but a shopkeeper on a very small scale, with a little band of friends whose custom is always to be depended upon. He manages to exist upon his small profits, but he never makes a fortune.
We know of no Mussulman merchants in these districts. The reason may perhaps be found in the Report of Mr. Consul-General Longworth to the Foreign Office, dated Belgrade, April 10, 1867, and numbered 22 in the collection of Consular Reports on the condition of Christians in Turkey, presented to the House of Lords by command of Her Majesty.
"In a mixed commission for the settlement of debts between Turks and Christians, and the proceedings of which have been brought to my notice, some 300 or 400 claims have been respectively brought forward on both sides. On the part of the Turks they were without exception, whether substantiated by written receipts or by oral testimony, at once admitted. Of those preferred in the same manner against the Christians, how many will it be supposed were in the first instance acknowledged by the parties themselves ? Not one."
How could a commercial firm of Mussulmans exist amongst the Christians of the East, if it were to adopt the novel and ruinous principle of admitting its just debts?
The Mussulman of the towns is then usually an artizan or manufacturer. He is a baker, gunsmith, blacksmith, carpetmaker, or shoemaker. He prefers gaining his bread by honest hard work, and hard work is repugnant to the finer susceptibilities of the Eastern Christian. A Mussulman tutunji (totacconist) or kavedji (coffee-shop keeper) is occasionally to be found, but he is usually a "civilized Turk," and ipso facto a bad representative of his nationality.
Mussulman and European traders are but the few exceptions to the general rule that all commerce in the East is monopolized by the Hellene, or by the Greek or Armenian Rayah, but more especially by the first. Every year a swarm of individuals, whose only capital is a tall hat, varnished boots, and a “knowledge of business," which is born with the Hellene, alight upon the shores of Turkey. Of these every individual locust may not make his fortune, but at least he consumes enough of the produce of the land to enable him to live well, to wear a black frock coat and even gloves - luxuries paid for of course by the poor Turk or Rayah peasant. Add to the number of these comparatively insignificant parasites the greater "pieuvres," and the legions of the Bakal tribe and of the Rayah trader. When you have done this you will have some idea of the extent to which Turkey is drained of the produce of her labour, and you may even see how great must be her vitality since she feeds all these blood-suckers and yet exists.
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