Abstract:

The Ottoman state has spent the last two hundred years in modernization efforts; it has failed to meet production consumption and has constantly lost land, war costs and compensations have become unbearable and has failed to pay its external debt since 1854. The first foreign debt was taken in 1854 due to the Crimean War. By 1874, 23 foreign debts received separately were 239 million liras, while only 127 million liras passed to the government. Until 1865, the annual reimbursement of foreign debts could only be made with new foreign debts. The main reason for this conclusion was that external debt was allocated to customs expenditure instead of being used in production areas. Although the budget revenue was 25 million pounds until 1875, the compulsory external debt was 12 million pounds and the wave debt was 17 million pounds. In other words, the revenue earned by the Ottoman State in 1875 was insufficient to pay their debt that year and the 5 million pounds of debt was not paid. However, it is not possible for the government to allocate its income to debts and to pay the charity spending to the state to survive. In short, the Ottoman state collapsed financially and declared a morotoryum.