Persian Empire 1845

Chapter 531 Ottoman Government

"Sultan, this is Austria's suggestion: to build a railway from the capital to Thessaloniki, and then to Sarajevo. This railway would allow us to mobilize our troops more quickly and also boost our economy!"

Grand Vizier Rashdi Pasha reported the railway progress to Sultan Abdulaziz. With the opening of the Constantinople-Edirne railway, the Ottoman Empire was now a railway-owning nation. However, the Ottomans did not have complete control over the railway; their treasury was empty, so they had to allow Britain and France to invest in it.

The Ottoman Empire's annual revenue is 6600 million Ottoman lira, equivalent to 5500 million rials. That's only a third of Iran's revenue—what can they possibly do with that?

"In that case, let's discuss it with Britain and get it completed as soon as possible."

The Sultan gave the order, but Finance Minister Kamil Pasha knew that money would have to be borrowed again.

The massive foreign debt was a consequence of the Crimean War, with Ottoman loans quickly exceeding £20 million. The Westernization reforms of the Tanzimat era were costly but failed to improve tax collection efficiency. The tax farming system was not thoroughly reformed, and the Ottoman government even contracted out tobacco tax collection to a French company. Even so, revenue increases were limited.

The government ostensibly levies a 10% tithe on agricultural products, but in practice, local officials add layers of taxation, resulting in farmers bearing an actual burden of 20-30%. Meanwhile, small taxes are levied on market transactions, with inconsistent tax rates and significant local embezzlement.

“Sudan, the current loan interest rates from Britain and France to our country have reached 6%. If we take out a loan, we will have to pay a large portion of the interest when we repay it.”

Camille Pasha pointed out the problem they are facing: if interest rates keep rising, one day they will be unable to pay their debts. Nobody knows what will happen then, but it will certainly be terrible.

The Ottoman Empire was already heavily indebted, and continued expansion would only lead to bankruptcy. The only consolation was that France and Spain had already followed this path. The Ottomans could learn from them to improve their finances, but the price would likely be a change of dynasty or even death.

"But what do we do now? We can't exactly ask Iran for a loan, can we?"

Aziz also looked dejected, reminiscing about his glorious ascension to the throne, only to find himself in this state. He had envisioned transforming the Ottoman Empire into a world power, but instead of becoming a power, he had succeeded in selling out his country. How come Iran can spend money as it pleases, while he has to live frugally? It's unfair!

"I'm afraid only in this way can Iran offer a loan interest rate of only 3.5%, which will allow our country to pay half the interest."

Iran's offer was indeed very good, so they intended to accept it, but it seems that many people disagree.

"That's true, but what do we have as collateral?"

"Haven't we done it before? What's wrong with doing it again?"

A few days ago, the Ottoman Empire proposed to Iran in exchange for railway construction rights in exchange for a loan, and Iran responded by agreeing. Now that they've secured the loan, they can try again!

"This time it's the Izmir Railway, what will be next? Will it extend to other places?"

War Minister Avni Pasha has consistently opposed lending to Iran. Seeing that the second-largest power is about to replace the largest, instead of consolidating his own position, how can he lend to the second-largest power?
"Well, to tell you the truth, the 300 million lira you secured was actually a loan from Iran. Current tax revenue can't cover the shortfall in spending; the only options are raising taxes and borrowing. But raising taxes now will likely drive even more people to rebellion."

If Avnipasha could quickly quell the rebellion on Crete, there would still be a surplus.

The Cretan rebellion that erupted the previous year had left the Ottoman Empire in a state of turmoil. The local Greeks, dissatisfied with the corruption of local officials and harboring illusions of Greek unification, launched an uprising. The Ottomans sent troops to suppress it, but the Greek rebels waged a guerrilla war, while Athens repeatedly appealed for international assistance. It's worth noting that Greek independence was achieved with the help of countries like Britain, France, and Russia. If uprisings continued like this, the Ottoman Empire would soon be partitioned, and he would become its last sultan.

"If we want to continue with the loan, what should we use as collateral?" the Sultan asked the Finance Minister.

“Cyprus, the railway from Izmir to Ankara, and mining taxes. These should be enough to borrow 5000 million lira.”

A collective gasp swept through the crowd; this amount was likely far more than 5000 million lira. Cyprus alone was worth 3000 million, or even more. If this were directly mortgaged, Syria wouldn't stand a chance either.

"Could we change it? Some people will be unhappy if we do it this way."

The Sultan was already quite adept at taking out loans; his brother had started borrowing heavily during his reign, and he himself had done the same. After all, the Ottomans were short of money.

"That's settled then, get on it!"

"Sudan!"

Avni Pasha wanted to say something, but the Sultan simply left. This country is probably beyond saving.

Camille Pasha returned to his home, instructed no one to enter his study, and closed the door. Guests were already waiting for him.

"This is detailed information about the Ottoman army, as well as a report on future plans to build railways in the Balkans."

These documents, classified within the government, were easily given away. And to Iranians no less.

"I never expected that Camille Pasha, who was in charge of Ottoman finances, would give these away so easily."

"Now everyone knows that the Ottoman Empire is about to collapse. The Russians, Serbs, and Greeks are eyeing it covetously, eager to carve up the country's land. But we are powerless to do anything about it."

Kamil Pasha was once a patriot dedicated to reform, but upon assuming a high position, he discovered that the real enemy was not outside, but within the government itself. Incompetent bureaucrats and a complacent Sultan became the main obstacles to reform, and he was powerless to do anything about it, only able to patch up the leaky ship.

But he also needed to find a way out. He had deposited all his savings in Iranian banks and was planning to resign. However, in order to ensure a better future for his family, he began to secretly collude with the Iranian government.

"Believe me, you made a very good decision."

These documents are quite important, but the greatest gift Kamil Pasha gave Iran was the Ottoman diplomatic correspondence. Because of the Cretan uprising and ethnic issues, the Ottomans intended to invite various countries to a conference in Constantinople, but Iran was excluded. This petty trick was insignificant to Iran; it was nothing more than a child's tantrum.

"Right now, all I want is for myself and my family to survive."

Ottoman, Ottoman, anyone can step on him, what should he do?
(End of this chapter)