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Rh included the imperial civil list, the departments of the Sheikh-ul-Islamāt and of religious establishments, the ministries of the interior, war, finance, public instruction, foreign affairs, marine, commerce (including mines and forests), and public works, and, finally, of the grand master of ordnance. For every province (vilayet) a complete budget of receipts and expenditure was drawn up by its defterdar (keeper of accounts) under the supervision of the vali (governor); this budget was forwarded to the minister of finance, while each state and ministry of department received communication of the items appertaining to it. Each ministry and department then sent in a detailed budget to the Sublime Porte before the end of November of each year. (The Turkish financial year is from the 1st of March to the 28th of February o.s.). The Sublime Porte forwarded these budgets, with its own added thereto, to the minister of finance, who thereupon drew up a general budget of receipts and expenses and addressed it to the Sublime Porte before the 15th of December. This was summarily considered by the council of ministers, and then referred to the budget commission, which was to be composed not only of State functionaries, but of private persons “worthy of confidence, and well versed in financial matters,” and which was invested with the fullest powers of investigation and inquiry. The report drawn up by the commission on the results of its labours was submitted to the Council of Ministers, which then finally drew up a general summary of the definitive budget and submitted it by mazbata (memorandum) for the imperial sanction. When this sanction had been accorded the budget was to be published. The remaining regulations set forth the manner in which extra-budgetary and extraordinary expenses were to be dealt with, and the manner in which the rectified budget, showing the actual revenues and expenditure as proved at the close of the year was to be drawn up with the assistance of the state accounts department (divān-i-mouhassebāt). This rectified budget, accompanied by an explanatory memorandum, was examined by the budget commission and the Council of Ministers, and submitted for the imperial sanction, after receiving which it was ordered that both be published. Special instructions and regulations determined the latitude left to each department in the distribution of the credits accorded to it among its various heads of expenditure, the degree of responsibility of the functionaries within each department and the relations regarding finance and accounts between each department and its dependencies. These regulations provide carefully and well for all contingencies, but unfortunately they were only very partially carried out. It may indeed be said that it was only the previsionary budget (anglicé, the estimates) that received any approximately proper care on the lines laid down, while the rule that both the estimates and the definite budget (at the close of each year) should be published was almost wholly honoured in the breach; until 1909, when the Constitution had been re-established the budget had only twice been published, in 1880 and 1897, since the regulations were put into force. Not only were the budgets not published, but no figures whatever were allowed to transpire in regard to the true position of the Turkish treasury—which laid the accuracy of even the limited number of budgets published open to suspicion.

All this has now been changed, and the above regulations are conscientiously carried out with the differences in procedure necessary for compliance with constitutional methods, and with the submission of the Budget to the houses of parliament. The Budget is now published in full detail and that for the year 1326 (1910–1911), with the explanatory memorandum which prefaces it, is an admirable work, mercilessly exposing the financial shortcomings and sins of the previous system, or rather want of system, while unshrinkingly facing the difficulties which the present government has inherited. The account thus presented to us of what the previous confusion was, underlines and attests the summary exposition of it given in the last edition of this work. It was there stated that, on the most favourable estimate, the normal deficit of the Turkish treasury was £T2,725,000, (upwards of £T, 1,700,000 below the truth as now declared) and the following observations were appended:—

“This budget represents the normal situation of Ottoman finance; it does not tally with the budget published in 1897, which was prepared with a special object in view, and was obviously full of inaccuracies, nor indeed does it agree with figures which could be officially obtained from the Porte. It is, however, compiled from the best sources of information, and it exaggerates nothing. The formidable deficit is met principally in three ways. (1) By leaving the salaries of state officials and the army unpaid. In many parts of the empire the soldiers rarely receive more than eight months pay in the year, although in Constantinople the arrears are not so large. The reverse is the case with the civil officials, whose salaries in the provinces are paid more regularly than in Constantinople, owing to their being charged on the provincial budgets; the average arrears are from two to three months in Constantinople, and from one to three in the provinces. The arrears in civil and military salaries average annually about £T1,750,000. (2) By means of loans, both

public and from individuals. By financial expedients of this kind payments were effected by the treasury in fifteen years (1881–1896) amounting to £T1,666,000 or at the rate of nearly £T800,000 per annum. (3) By anticipating the revenues of future years. This is the method so frankly condemned by Ali Aga, as was seen above, in 1653. Delegations (havalē) are granted on the provincial treasuries for one or two years in advance, sometimes for a series of years, in order to pay pressing debts too heavy to be met in a single payment. No better description of the financial distress and disorder of the empire can be given than that set forth in the official report of the budget commission of 1888. “It has hitherto been considered necessary owing to financial embarrassment, to commence financial years with unbalanced budgets. Later, without taking into consideration the effective amounts in cash at the disposal of the vilayets, considerable sums were drawn upon them, by means of havalēs, out of proportion to their capacity. For these reasons, during the last two or three months of the financial year, the vilayets have not a para to remit to the central administration, and it has been considered imperatively necessary to draw on the revenues of the following year. Thus, especially during the last two years, urgent extraordinary expenses have been perforce partially covered by the proceeds of the ordinary revenues, the revenues of 1303 (1887) were already considerably anticipated in the course of 1302 (1886). The former year naturally felt the effect of this, and the tithes which should have been encashed in the last months of the year were discounted and spent several months in advance. Moreover, in order to meet to some extent the deficit arising as well from the accumulation of arrears of state departments since 1300 (1884) as, to a large degree, from gross deficiencies due to the neglect of the civil officials of the government to encash the revenues—to meet, further, the needs of the central administration, and above all, the urgent military expenses of the empire, and to provide a guarantee for bankers and merchants in business relations with the government and the treasury, part of the revenues of 1304 were perforce spent in 1303.” This commission proved the deficit of the year to be £T4,370,000. It set out also at length the very defective and disorderly condition of the state accounts. During the finance ministry of Agop Pasha (1889 to 1894) a good deal was done to set matters in order, but most of the ground then gained has since been lost.”

To this may be added a short extract from the Explanatory Preface to the Finance Bill for the year 1910–1911. After pointing out the immense difficulties which he had had to encounter owing to the absence of any regular accounts, and above all of any of “those statistics which constitute the soul, indeed the very life of a public administration,” and that it was therefore impossible for him to pretend that he had been able to free himself altogether from the effects of the past, the minister continues, “every time we have endeavoured to have recourse to the previous elements of appreciation, we found ourselves faced by the chaos which characterized former years. We have sometimes ascertained things so strange that we cannot forbear expressing our astonishment at the idea that a great power such as ours could maintain itself under such conditions.” M. Ch. Laurent, the financial adviser to the Turkish government, stated in a lecture on Turkish Finance, delivered in Paris on the 22nd of April 1910, that the Ministry of Finance has now been largely reorganized. Officials, he says, with grand titles and no responsible duties have been abolished, and departments with responsible chiefs created. The agents of the finance ministry, instead of being mere clerks, are now employed in “the assessment and collection of taxes, the control of expenditure, the preparation and execution of the budget, the estimates of the necessary cash required at different points of the empire—all that, in fine, constitutes the real financial administration of a great empire.” Laurent points out that direct taxes furnish 54% of the revenues of the empire, that agriculture is accordingly very heavily taxed, and that the tax on realty is both excessive and unfairly administered. The summary history given above of the origin of the system of taxation prevailing in Turkey explains how this came about. Reform of this system, and, further, very necessary reforms of the methods of collection of the wines and spirits revenue (which is protection turned upside down, the home-growers being far more heavily taxed than importers), and of the customs (in which almost every possible administrative sin was exemplified), were also undertaken. Three bills, moreover, were presented to parliament, the first regulating Public Accountancy, the second regulating the Central Accounts Department, and the third the service of the Treasury. By this last the centralization of receipts and