On the crisis of the Ottoman monetary system in the 16th century (notes on the depreciation of 1585/1589) Cover Image

Az oszmán pénzrendszer 16. századi válságáról (Megjegyzések az 1585/89. évi leértékelésről)
On the crisis of the Ottoman monetary system in the 16th century (notes on the depreciation of 1585/1589)

Author(s): Pál Fodor
Subject(s): History
Published by: AETAS Könyv- és Lapkiadó Egyesület

Summary/Abstract: Some of the scholars who have studied the main causes of the Ottoman monetary problems have found them rooting in international movements of precious metals (the abundance of silver, or, on the contrary, the scarcity of precious metals), while others have opted for the unsteady state of the solvency of the state. The author of the present paper also has surveyed the figures of the available state budgets from the 16th century, and these data clearly indicate that the positions of the central treasury were continuously deteriorating during the fifty years before 1582/83, especially after 1548. The accounts show that the “special war-taxes”, levied every year after 1576, were the only factor that had kept the budget from sliding in deficit much earlier. Despite the increasing taxes, in 1583 state finances got to a point where balance was to collapse. It was indicated by the fact that the exchange rate of akçe against gold in the free market fell to unprecedented depths as a result of financial pressure. The Porte wished to handle the crisis within a “monetary reform”, which essentially consisted in devaluating the akçe by 100% as against the Ottoman and Venetian gold, and the guru ş, a large size silver of western origin, its silver content also reduced by 44%. One of the purposes, probably the primary purpose, of the manoeuvre may have been to have as many as possible akçes at the disposal of the treasury since most of the army was paid with this money. Akçe becoming cheaper than guru ş, the Ottoman financial government thus tried in 1585/89 to have society pay its debts in guru ş rather than in akçe in the future. However, the laws of the market would soon establish a trading rate between the akçe and the other means of exchange, and so the “reform” slipped from the hands of the government. To sum it up, the monetary problems of the Ottoman Empire in the 1580s were caused by the difficulties of providing for a bureaucracy and an army both rather oversized. The only way to cut back public expenses in the circumstances seemed to be the debasement of the akçe . The appearance of the comparatively cheap American silver (or, more precisely, European silver coins) was another source of trouble because it moved the Ottoman government to try to meet the demand of the empire for metal from the mass of money moving in international commerce. This, however, exposed it to a larger extent to the changes in international prices and movement of goods. The depreciation of 1585/89 was the first Ottoman financial measure that attempted to handle these complex problems simultaneously. But the method was not fit for that, no harmony could be established among conflicting goals, and it is fair to say that the government itself never foresaw all the possible consequences of the operation.

  • Issue Year: 1999
  • Issue No: 4
  • Page Range: 23-33
  • Page Count: 11
  • Language: Hungarian