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FINANCE] expenditure and the movement of funds in the provinces were to be confided to the Imperial Ottoman Bank, which extended and perfected its own organization for the purpose.

Passing now to the examination of the budget, it should be observed that the method of estimating the revenues—a matter of great difficulty owing to the previous want of method—is described by Laurent as follows: “For every nature of receipts the total effective collections for the five last known years were set out, the averages were taken of these and the increase or decrease of the yearly average of those same years was worked out and added to or deducted from the figure previously obtained. The only exception made to this rule was in the case of revenues showing a yearly increase, such as Post Office revenue, tobacco, salt, for which were taken the figures of 1323 (1907) increased by a certain average.” The expenditure was arrived at in the manner previously described and when the general budget came to be made up the severest pruning was found necessary, the original demands of the various ministries and departments having resulted in a deficit of upwards of £T9,000,000. It is thought better here, for the sake of clearness, to reserve observations on revenues specially assigned to the international administration of the Ottoman Public Debt, and on the expenditure of that administration, and to deal with that subject separately, while, however, including the total figures of both in the general figures in order to reproduce exactly the totals shown in the budget of the empire. The principal items of revenue and expenditure are as follows, the figures being taken from the published budget above-mentioned.

Revenue. Direct Taxes. —The tax on realty (verghi) is estimated to yield £T2,599,420. Duties on profession (temettū) consist (a) of a fixed duty leviable at rates declared in a schedule forming part of the special law (Dec. 8, 1907) regulating the tax, and (b) of a proportional duty at the rate of 3% on the value of buildings occupied by companies or individuals in the prosecution of their business; of 3% on salaries (subject to certain deductions) of employés of such companies and individuals; and on government contractors and revenue farmers, at the rate of 3% of 10% of the value of contracts filled and of revenues farmed. The law is defective and unfair in its incidence, and it is not applicable to foreigners. The government promised in 1910 to remedy the law with the assent of the Great Powers, and, if successful in its negotiations, to present an amended law. The duties are estimated to produce £T393,107; other professional duties £T110,887—together £T503,994. A “Military Exoneration tax” is levied on male Ottoman subjects between the ages of 15 and 75 to the amount of £T50 for 135 persons—certain exceptions such as priests, religious orders, &c., are allowed. The estimated revenue from this source is £T1,289,612. “Prestations” are payments in lieu of services (apart from military service) to the state, such as maintenance of highways, &c.—in effect, purchase of exoneration from forced labour. These duties vary in different parts of the empire: in the vilayets of Constantinople, Bagdad and Adrianople, and in the sanjaks of Bigha and Tchatalja the day’s work is calculated at 5 piastres (about 11d.); in the vilayets of Aleppo, Trebizond, Angora, Iannina, Konia, Sivas and Kastamuni at 4 piastres (about 9d.); and in most other parts of the empire at 3 piastres (about 7d.). These taxes were formerly levied either in cash or in kind: it has now been decided to levy them in cash only, although this change was expected to cause some arrears. Allowing for these, the estimated revenue is £T553,938. The “tax on sheep, camels, buffaloes and hogs” (aghnam, meaning literally “sheep,” but for taxing purposes the other animals are included under the same name), formed originally part of the “tithe.” It was transformed long since into a fixed amount per head of the animals taxed, which amount varies according to the region in which the tax is levied, the highest tariff being in the sanjak of Jerusalem (7½ piastres) and the lowest in the Yemen (1 piastre). The estimated receipts are, from sheep £T1,790,720, from camels and buffaloes £T144,520, and from hogs £T8890, or together £T1,814,152. “Tithes” are the direct descendant of the kharaj already alluded to above. It should here be noted that, from the fiscal point of view, the reforms instituted at the commencement of the 19th century may be summarized thus. In permanent remuneration of certain services to be rendered to the state, the sovereign assigned to civil or military functionaries territorial regions for the purpose, and with the power, of collecting land taxes imposed by Mussulman and Imperial law, i.e. the kharaj or tithe, and transfer and succession duties. The tithes were originally based on one-tenth of the agricultural produce of the country, but this proportion was gradually raised under the euphemistic pretence of “public instruction,” but really, under financial pressure, to 12% and again in 1900 for military “equipments” (Tejhīzāt-i-’Askeriyeh) by a further ½% to 12½%. This last surtax, which produces about £T90,000 per annum, was specially affected to a loan, known as the “Tejhīzāt-i-’Askerieh of 1905,” of £T2,640,000, by virtue of a contract between the government and the Deutsche Bank (April 17,

1905). The estimated receipts from the “Tithes” (including tobacco and silk, both hypothecated to the Public Debt Administration) are £T6,731,107. The remaining taxes under the category direct are the forest-dues (generally speaking 15% of the value of wood cut), estimated to produce £T130,094; the mining dues (being a fixed duty of 10 piastres per 10,000 sq. metres of the superficial area covering the mine, and a proportional duty varying from 1% to 20% of the gross value of metal contained in the ore, according to the kind of metal and the method of extraction of the ore), £T45,141; and tax-papers (Tezkērēs), £T58,434. The total “direct taxes” (inclusive of tobacco and silk tithes) are thus estimated to amount to £T13,725,892.

Section II. of the budget is composed entirely of revenues from stamp-duties. Of these, commercial stamps are among the revenues specifically hypothecated to the Public Debt Administration, £T460,079; the others, consisting of legal stamps of various kinds, registration and transfer-duties, &c., are estimated to produce £T653,373 forming a combined total of £T1,113,452.

Under Section III. fall the “indirect contributions” as now reclassified. The first revenue specified among these in the budget is that accruing from the wine and spirit duties, which is again among those assigned to the Public Debt, £T283,079. Licenses for sale of Tumbēki, a variety of Persian tobacco used for the narghilē, £T2046. By far the most important “indirect” revenue is that produced by the customs, consisting of import, export and transit duties, and various unspecified receipts. Under the old commercial treaties which lapsed about 1890—but which have been maintained “provisionally” in force until one or other of the great powers consents to set a term to the negotiation of fresh treaties—an ad valorem duty of 8% was imposed on all articles imported into the Turkish empire. In 1905 financial resources had to be found for the special administration of the three European vilayets as insisted upon by the powers, and to this end the Porte initiated negotiations with the latter to increase the import duties by 3%. As is usual in Turkey, this opportunity was seized for the demand of redress of grievances by such powers as considered they had any, and the negotiations were protracted until July 1907, when France finally gave in her adhesion. Since then the import duties have been collected at the rate of 11% ad valorem under the supervision of the Public Debt Administration, the bondholders having certain rights, under the decree of Muharem, described below, over any increase of revenue arising from modification of the commercial treaties. By the provisions of the “Annex Decree,” also described below, three-quarters of the additional revenue is assigned to the Turkish government, and one-quarter to the Public Debt Administration to swell the sinking-fund. Fresh negotiations were also undertaken to increase the import-duties by a further 4% in order to balance the deficit shown in the budget. In the year 1910–1911 the import duties were estimated to produce £T3,980,395, the transit duties £T20,276, and the export duties (1% ad valorem, which it was hoped the government might soon afford to abolish) £T168,993 total customs revenue, £T4,217,752. The remaining “indirect contributions” are port and lighthouse dues, £T148,426. Sanitary taxes, £T20,519, and fisheries and sporting licenses affected to the service of the public debt, £T153,990. The revenues figuring under “indirect contributions” thus reach a total of £T4,825,812.

Monopolies form Section IV. of the budget, and include in the first place the salt revenue (£T1,227,750), which is assigned to the Public Debt Administration, and tobacco revenues of which the larger part, £T865,737, is assigned to the same administration, the total (including share of Tumbēki profit) producing £T965,754; the remaining monopolies are: fixed payment from the Tumbēki Company, £T40,000; explosives, £T106,323; seignorage (Mint), £T10,466; and posts and telegraphs, £T912,129. The “Monopolies” thus render a total revenue of £T3,262,424.

Section V. includes receipts from commercial and industrial undertakings belonging to the state. These are the Hejaz railway, £T152,000; the Dolma-Bagtchē gas-works, £T59,130; technical school, £T8536; the Tigris and Euphrates steamships, £T62,513; and mines (Heraclea coal and other), £T120,710; forming a combined total of £T402,889.

Section VI. is composed of receipts from“State Domains” of which a large proportion was formerly included in the civil list. Under the deposed sultan the Civil List Administration had encroached in every direction not only on the revenues properly accruing to the state, but upon private and upon state property in most parts of the empire. Thus it is explained in the preface to the budget that the revenues “proceeding from the deposed sultan” are not classed together under one heading, but that they have been apportioned to the various sections under which they should fall “whether taxes on house property or property not built upon, tithes, aghnam, forests, mines, cadastre, sport, military equipment, private domains of the state, various receipts, proceeds of sales, rents”—a truly comprehensive list which by no means set a limit to the private resources of Abd-ul-Hamid II., who looked upon the customs also as a convenient reserve on which he could, and did, draw when his privy purse was short of money. Apart from the sources of revenue specified above, of which the amounts actually transferred from the civil list are not stated, Section VI. is estimated to produce £T513,651. In the previous budget there