PART ONE

PART ONE

SOCIAL AND ECONOMIC ASSUMPTIONS ABOUT THE APPEARANCE OF THE GEMIDZHII CIRCLE

EUROPEAN CAPITAL INVESTED IN MACEDONIA

Just before the Russo-Turkish War of 1877, the Ottoman state was facing financial bankruptcy. It was facing budget deficits, inability to pay the annuities and interest on its debts, a trade imbalance and increased costs to support its army and administration. Then, immediately after the Berlin Congress in 1878, the state went complete bankrupt. The European capitalists and creditors of the Ottoman state became very upset and looked for ways to recover their investments. One of the ways to do that was to recover the Ottoman economy.

The European creditors convened a meeting in September 1881 in Constantinople to discuss ways to recover their investments. Based on their discussions and findings during this meeting, in December 1881, the Sultan sanctioned a decree, known as the Muhareem decree. The Muhareem Decree basically gave the European capitalist complete control of the Ottoman finances and trade markets. According to this decree, by 1873, the Ottomans had amassed a debt of 117,081,000 in Turkish gold Lira. This was now due and owed to the European capitalists. As a result of this the Europeans were given the go ahead to form a “Council to control the state budget” in Constantinople with the ability to work independently of the Ottoman government and with the task of finding funds to pay back the loans. At the time the Ottoman state was not economically developed and the income it had was from its monopoly on salt and tobacco and from taxing basic agricultural products.

The Muhareem decree was a full victory for European investment and a full surrender of Ottoman finances and economy to foreign investors and bankers. The “Council to control the state budget” was allowed to introduce foreign financial control inside a sovereign state. This foreign “Council” in fact directed all finances and economic life in the Ottoman state.

The foreign Council managed to put some order in the Ottoman finances. Up until 1880 no one really knew the exact amounts of state revenues and expenditures. The budget figures were more or less guesswork. The only thing the Sultans and their governments knew was that there was money or no money in the treasury. Starting in 1881 rough budgets began to appear with aims at balancing the state budget. But in order to do that, state revenues and expenditures needed to be clearly defined. In 1895, for example, the projected Ottoman state expenditures were as follows: military needs 7,756,000 gold lira, debt repayment needs 6,483,000 gold lira, administrative and management expenditures 3,828,000 gold lira, salary for the Sultan and his family 933,000 gold lira, subsidies to religious institutions 796,000 gold lira, education costs 50,000 gold lira, and healthcare costs 94,000 Turkish gold lira.

We can see from the above figures that a very large chunk of the state budget was dedicated to the military and debt repayment. In other words 14,239,000 out of 19,796,000 gold lira, or 84% of the total state budget went to maintaining the army and paying back the debt. Most of the budget (84%) was allocated to maintaining the administration, or non-productive functions, and only a small proportion (16%) of the state budget was spent on other programs with even a smaller portion (3%) going to social programs and productive purposes. Funds for infrastructure costs for building various state buildings, bridges, barracks, etc., were provided from exploiting the mainly working Christian population.

The main task of the Muhareem decree and the foreign Council was to find funds to pay the annuities and interest on the loans concluded from 1857 to 1873. However, the Ottoman state was also paying interest and depreciation on the loans concluded from 1874 to 1896 and other, more current, loans it signed with the Ottoman and other banks. The total payment of all debts paid by the Ottoman government annually was calculated to be about 6,400,000 Turkish gold liras. In other words the Ottoman government paid the European capitalists around 125,000,000 Turkish gold lira in a matter of two decades.

The European capitalists robbed the working people living under Ottoman rule not only through regular interest payments on the loans, but also directly through various joint stock companies and enterprises. At the end of the 19th century the European capitalists in the Ottoman state held in their hands 7 banks, 10 railroad companies, 10 ports, 5 mines, 4 tram companies, 5 hydroelectric and kerosene companies and 17 other companies. They owned a total of 54 companies worth 2 billion gold francs (1 Turkish lira = about 22.5 French gold francs). Those companies produced an annual income between 250 and 300 million gold francs.

The European capitalists also profited from trading with the Ottoman state. The Ottoman Empire was an excellent base for supplying European industry with raw materials and a spacious market for selling it manufactured goods. The European capitalists worked very diligently not to have their markets disrupted. In fact, not only were the Europeans not interested in industrializing the Ottoman state but it was against their interest to do so. The profits gained by foreign capitalists in their trade with the Ottoman state from 1884 to 1903 amounted to 176,230,000 Turkish gold lira.

With the enactment of the Muharem decree, commerce in Macedonia was subordinated to the laws that ruled in all parts of the Ottoman Empire. That meant that foreign capital had full domination over the entire state and guided all national and economic developments. As a result, the Ottoman Empire was led towards providing agricultural and other raw materials to the European industry and acquiring necessary finished products from abroad. This literally stunted the possibility of creating a local industry that would absorb domestic resources and at the same time produce for the domestic market.

This situation became more prevalent after the adoption of the Muhareem decree which allowed European capital to play a dominant role in the Ottoman economy and in the development of the Macedonian national economy. Fortunately, thanks to the more stable economic development that had taken place in Macedonia before the adoption of the Muhareem decree, the trade balance was either active or balanced. This can be seen from the numerous

reports generated by the various European consular representatives in Solun. For example, in 1864 imports in Macedonia amounted to 21,254,475 francs while exports amounted to 27,777,825; in 1865 imports amounted to 18,824,375, exports amounted to 29,832,775; in 1880 imports were 26,528,894, exports were 34,271,625; in 1881 imports were 30,851,850 and exports were 39,323,983. From 1864 to 1881, except for a few years, exports from Macedonia were regularly significantly larger than imports. But after the adoption of the Muhareem decree in 1881, the process began to reverse. In 1883 imports were already higher than exports; imports were 31,005,432 while exports were 29,763,800 francs. In 1884 imports were 45,761,600 while exports were 18,516,856. On average, in the twenty years (1864-1884) imports were nearly 29 million francs while exports amounted to about 33,111,000 francs.

In 1901 the passive trade balance in Macedonia was off by about 1,500,000 Turkish gold lira (33,750,000 francs). (Dino K’osev, History of the Macedonian national revolutionary movement, Sofia 1954 73-81; Alexander Matkovski and Poliksena Angelakova, Report from the French consul in Solun on the economic situation of Macedonia from 1882 until 1885 - Messenger of INI, XVI, 2, Skopje 1972 , 201.)

This brief overview highlights the influence European capital had on the economy in Macedonia and makes it easy to answer the question: “Why did the Gemidzhii decided to aim their bombs at European interests? And why did they do it in Solun?”

Solun during Ottoman rule was an important economic and administrative centre for the Ottoman Empire and for Macedonia. In addition to being the centre of all export-import traffic in Macedonia, it also housed Great Power and Balkan state general consulates as well as Western state trade offices and agencies. There were more companies and institutions that belonged to the European countries located in Solun than anywhere else in the Ottoman Empire. There were also various religious institutions, schools and associations managed and financed by the West and by the Balkan states. There were Jewish, Turkish, Greek, Bulgarian, Italian, French and other language schools. Solun was truly a cosmopolitan city.

The population of Solun was diverse. It is difficult, however, to determine how many people lived there in the days of the Gemidzhii because, as was for all of Macedonia, Ottoman demographic statistics were sketchy at best. Other people’s statistics were also not reliable. The least objective of all were the statistics produced by the Greeks. According to Ottoman statistics 88,000 people lived in Solun in 1890. The same number was also recorded for 1898. But, in reality, Solun grew very rapidly in the last two decades of the 19th century and therefore the Ottoman statistics cannot be correct. According to statistics produced by Steg, the French consul general in Solun, at the turn of the 20th century Solun had 120,000 inhabitants, of whom about 70,000 were Jews.

The French figures coincide with V. K’nchov’s familiar statistics, according to which 118,000 inhabitants lived in Solun of whom 55,000 were Jews, 26,000 were Turks, 16,000 were Patriarchates (assumed to be Greeks), 10,000 Exarchates and 8,500 of various other nationalities, the greater part of them being French, Italian and other Western Europeans.

Solun may have been a predominantly Jewish city but its surroundings were largely Macedonian. According to Steg: “About 350,000 Christians lived in the Solun Vilayet, of whom 220,000 were Exarchates and 130,000 Patriarchates who spoke a Slavic idiom in their family life. If we listen to the majority of Serbian publicists, all these Slavs were attached to the Serbian nationality… If we listen to the Bulgarian publicists there is no doubt about the nationality and language of these Slavs from the Solun Vilayet, they are all connected to the same family as those in their Principality. But a few years later, a third opinion sprang out, mainly from Russia... but the truth is that the last (Slavs) are undoubtedly not related to either nationalities (Bulgarian and Serbian) and represent a separate branch of the great Slavic family... If we listen to the Greeks of today, they say that the Bulgarophones are completely Hellenized...”

The diplomats and many others, in most cases, categorized the Macedonian people by church affiliation and not by their Macedonian ethnicity. The Macedonians who were affiliated with the Patriarchate Church were recognized as “Greeks”, those

affiliated with the Exarchate Church were recognized as “Bulgarians” and the supporters of the Serbian Church and propaganda schools were recognized as “Serbians”. Many often asked the question: “How could the same people belong to three or more nations?” Some even attempted to answer this question. They were aiding the wild propaganda led by Macedonia’s neighbouring countries struggling to win the souls of the Macedonian people. The Greek, Serbian and Bulgarian propagandists were satisfied with whatever was said as long as it aided their cause. They even viewed “church affiliation” as belonging to a “party”. But, being affiliated with a church or a party did not mean that the Macedonian people belonged to a particular nation outside of Macedonia. Steg estimated that, out of the 130,000 Macedonian Patriarchates there could be no more than 20,000 Hellenized people or people belonging to the Greek party in the Solun Vilayet.

A large number of Macedonians not only from Solun province, but also from all over Macedonia, began to settle in Solun at an accelerated rate, in the last two decades of the 19th century. This process was not easy. The city’s Jewish community provided most of the jobs for this sizable surplus labour, but the space for the mostly unskilled Macedonian labour force was very narrow. In spite of this, diligent Macedonians from near and far who were craftsmen and traders, farmers and ordinary workers kept coming to the city creating compact Macedonian districts. Wealthy merchants associated with the European trade also settled in Solun.

The idea of Macedonians settling in Solun was not well accepted by the Greeks, according to their propaganda. Their arrival was not welcomed, initially, by the Greek colonists and later, when it was revealed that Solun was the centre of Macedonian revolutionary activities, by vitriolic Greek propaganda. The Greeks did everything in their power, under the circumstances, to deny the Macedonians their existence and to minimize their presence in Solun. Later, after the Solun assassinations took place, they even attempted to drive the Macedonian population out of Solun.

According to official demographic statistics, the number of Macedonians living in Solun in 1903 was approximately 1,200. According to Steg, even though there were many neighbourhoods

populated by Macedonians, no Macedonian was working as a “Muhtar” (official registrar). This function was performed by Greeks, and with every newborn registered they wrote down “Rumi”, meaning “Greek”. As a result only two births in a year were officially registered in the Macedonian neighbourhoods.

Most Macedonians moved to Solun, meaning they were not born in Solun. Official statistics, among other things, basically used births minus deaths to determine the numbers. The settlers were seen as “drifters” and were not counted as “permanent residents”. As a result no official data was collected on them, ethnic or religious.

Even though K’nchov was interested in identifying the Macedonian population and showing it in larger numbers, in his statistics he classified it as “Bulgarian”. His statistics however, compared to the others, even though more or less biased, are relatively more accurate. Therefore we can assume that the number of 10,000 Macedonians living in Solun given by K’nchov is a lot closer to the truth. (Vasil K’nchov, Selected Works II, Sofia 1970. 440, Archives of Macedonia, Skopje, film 238, French consulate in Solun, May 13, 1903; Krste Bitoski, Contribution to the question of the number and national composition of the population in Macedonia in the early 20th century, Messenger of INI XXVI, 1, Skopje 1982, 181.)

Solun remained a constant in business and served as the import-export centre for Macedonia. It was the largest single gate through which European capital came in and left our country. The general turnover of import-export trade in 1888 was valued to be around 53,480,000 francs. The countries included in this trade were France, Italy, Turkey, Greece, Belgium, Germany, Switzerland, Romania, Spain and others. The top trader in goods and shipping was France. Import and export goods transported by French ships amounted to 13,127,264 francs. The other countries did less.

The vast majority of this trade was accomplished by ship. In 1889, for example, 1,254 steamships and 7,364 sailing ships passed through the port of Solun. The largest number of sailing ships that passed through were Turkish (6,574) and Greek (791). The largest number of steamships were French (398), followed by Turkish (250), English (236) and so on. In terms of goods transported, the

French were first (544,766 tons) followed by the English (252,712 tons) and so on. (Alexander Matkovski and Poliksena Angelakova, Reports from the French Consulate in Solun from 1887 to 1889 -Messenger of INI, XVI, 3, Skopje, 1972, 195 - 198.)

The French dominated trade by all means. The situation had not changed when the Gemidzhii decided to attack the foreign investors. It was by no accident that they chose Solun and a French steamer.