ARMENIANS IN THE OTTOMAN ECONOMY
Anahit Astoyan

e-ottoman-economy/
2009/10/19 | 18:07

Making Their Mark in Commerce and Manufacturing

Prior to WW I, Armenians played a pivotal role in various sectors
of the Ottoman economy including foreign and domestic commerce,
manufacturing, the banking sector, etc. The Turkish bourgeoisie, in
comparison, found itself in a secondary role and oftentimes dependent
role. The Young Turks feared that the further strengthening of the
Armenian community, both economically and materially, would serve as
the basis for their future political victories. Gradually, the Turkish
ruling elite came to the belief that sooner or later Armenians would
be in a position to take over the reins of political power, just as
they had done in the economic sphere.

The organizers of the Armenian Genocide, besides pursuing political
ambitions, also wanted to free themselves from competing with
Armenians. By cleansing the Ottoman Empire of Armenians, the Young
Turks also removed their most powerful economic competition, their
property and, through the expropriation of Armenian wealth, they
were able to cover a large part of their war expenses as well. The
Young Turks, in a word, due to the wealth stolen from Armenians,
were able to pay off much of the foreign debt threatening the newly
independent Turkish republic. A Turkish bourgeoisie would soon rise
on the centuries-old property and wealth accumulated by Armenians.

Let’s now take a brief look at the Ottoman economic sectors where
Armenians played a significant role:

The selection process for Ottoman government officials took into
account a candidate’s national and religious identity rather than
competence and personal values. The vast majority of the bureaucracy,
the police, military and court system were comprised of Muslims,
largely Ottoman Turks. Taking mastery over the ruling governmental
functions, they left the economy mostly to non-Turkish elements.

Ottoman Turks hadn’t yet bvreacged that level of sophistication where
they could manage and develop the empire’s economy and thus they were
obliged to rely upon the experience of their non-Turkish subjects.

Armenians, as the representatives of one of the oldest civilizations
in the Near East, along with other subject people, strove for five
years to keep the Ottoman economy flourishing. Deprived of the right
to participate in administrative and military activities, commerce
and crafts were the fields that became more or less the sectors where
Armenians could manifest their skills and inherent competence.

The Ottoman sultans would quickly populate the cities they conquered
with Armenians. In 1453, after seizing Constantinople, Sultan Muhammed
ordered Armenian craftsmen and traders to the ravished capital to
rebuild and turn it into a showpiece of the empire.

Armenian merchants reach out to Iran, India and beyond

Starting in the 15th century, the shops of Armenian traders began
to flourish in Constantinople. Commerce between the Mediterranean
and Black Seas to Iran and India beyond was largely in the hands
of Armenian merchants. From the other prime Ottoman trading port of
Smyrna, Armenians were in contact with the nations of Europe. From
here, Armenian caravans made their way to Persia and other Asian
countries. The custom taxes paid by Armenian merchants were one of
the large sources of revenue for the Ottoman government coffers. From
the 16th to 19th centuries, Armenian merchants played a major role in
the development of Ottoman commerce and facilitated the transportation
of Ottoman goods to Europe and Asia.

>From the 16th century onwards, the Armenian amira and "chelepi" class
("chelebi" meaning ‘godly’ in Turkish). Like the "amiras", they were
wealthy merchants with close ties to government circles and high
civil servants whose affairs they managed. These titles of honor were
given to enterprising entrepreneurs from the regions that relocated
to the capital, obtaining authority and influence. These Armenian
amiras and chelebis soon worked their way into the inner sanctum of
the empire’s ruling elite, a closed world to Christians. In the 18th
century, these prominent individuals began to manage many important
government departments and posts.

Amiras and Chelebis: Wealthy merchants with government ties

The Tiuzian family held a unique place in art and jewelery making
and over the generations became the royal goldsmiths. The management
of the mint and gold and silver reserves was confided to them. The
Demirjibashian family ran the empire’s shipbuilding and cannon-making
facilities. For generations, the Dadian family oversaw the outfitting
of the military and arms and paper manufacture. Silk production and
custom fee collection was the purview of Mgrditch Amira Jezayirlian.

After the Crimean War in the mid 19th century, when the Ottoman
Empire opened its doors to the West, Armenians were ready to play
a major role between the empire and Europe. Armenian merchants were
fluent in the languages and customs of the Europeans. Many Armenian
merchants, not satisfied with the selection of goods offered by the
Europeans, established direct links with European manufacturers and
commercial associations. Many Armenian merchants actually set up
shop in various European cities and branched out beyond the narrow
confines of Ottoman trade.

By the 1850’s, large numbers of Armenian merchants were making their
way to Constantinople Smyrna and other coastal towns from the interior
regions. This further strengthened the position of Armenians in the
Ottoman economy. Armenian commercial houses in the capital and Smyrna
became institutions unto themselves. With the introduction of European
capital and manufacturing, the economic condition of Armenians quickly
improved. In 1908, "Hay Bankan", a branch of the Ottoman Bank to be
managed by Armenians was established and greatly facilitated Armenian
commercial transactions.

However, this Armenian economic development took place under the
arbitrary conditions rampant in the Ottoman Empire. For instance,
Turkish merchants with similar revenues were charged three times less
in taxes than their Armenian counterparts. Plunder and deliberate
arson had taken their toll on the markets in Van, Adana, Kharpert
and elsewhere. In 1908, the Ottoman authorities seized Armenian
manufacturing centers in the town of Kharpert.

Despite these trials and tribulations, Armenians continued to play
a leading role in Ottoman trade and commerce.

The following statistics, culled from the Armenian State Archives by
historian John Giragosian, give a picture of the economic state of
Armenians prior to WW I.

In the villayet of Sivas (Sebastia), 141 out of 166 commercial
importers and 127 out of 150 importers were Armenian. Out of the
9,800 small traders and craftsmen, 6,800 were Armenian.

Alexander Myasnikyan, in a lecture he presented in Moscow in 1913,
noted that despite the fact that Armenians comprise 35% of the
population in the villayet of Sivas, they make-up 85% of the traders,
70% of the craftsmen and 80% of the manufacturing houses.

The drive and initiative of Armenians wasn’t only confined to trade
and commerce. They proved their mettle in all economic sectors. There
were also Armenian merchants who transported European machinery and
parts back to the empire and started to produce goods with European
quality and appearance.

Armenian manufacturing prior to the Genocide

Gradually, the nature of capital in the Ottoman Empire began to
change from commercial to manufacturing capital. In Arabkir, at the
beginning of the 20th century, where Armenians were mostly engaged in
linen production, there were already scores of manufacturers focused
on specific linen products; sheets, tablecloths, intricate weaves, etc.

The woolen items and copper pieces produced in the towns of Garin,
Van and Baghesh were sold locally as well as overseas. Of the 150
manufacturing units in operation in the villayet of Sivas at the time,
130 belonged to Armenians; the rest in Turkish or foreign hands. Out
of the 17,000 production workers, some 14,000 were Armenians.

One must remember that the Turks remained loathe to enter commerce
and the crafts, believing those professions to be beneath them.

Overwhelmingly, they aspired to the loftier heights of government
and military appointments, leaving Ottoman subject peoples the task
of creating conditions for the economic prosperity of the empire.

In his memoirs, Sultan Abdul Hamid II (the Red Sultan) wrote, "The
source of all our evils is that the Ottoman doesn’t strive to create
any actual value. He is accustomed to become a ‘baron’ and to leave
the real work to others. He lives to enjoy life. Our youth believe
that they cannot become anything other than an officer or official."

To be continued