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The Cyprus Tribute and Geopolitics in the Levant, 1875–1960 Diana Markides
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For Melina, Ely, Alexis and Christian
P reface
Cyprus is no stranger to the exaction of tribute. It has been the island’s lot through the centuries. Ancient Cypriot states were paying tribute to Assyrian kings in the seventh century before Christ. In the late fourteenth century, the island was placed under tribute to the Genoese. The island was not a vassal or tributary state to the Ottoman Empire, but one of its provinces. As such, its surpluses over and above those not absorbed by its governors were allocated to the Sultan.1 We shall see that the continuance of such a phenomenon under British administration after 1878 had its own peculiarities. It was nevertheless part of the essence of colonial governance in the island that it by no means marked a sharp rupture with the Cypriot past, in this as well as other ways.
The period of British ascendancy in Cyprus has been largely framed within our historical understanding in strategic terms, an approach heralded in Prime Minister Disraeli’s original conception of the island as a place d’armes in the Eastern Mediterranean. This was at a time when the British were in signal need of a stronghold in that region to match the part played by Gibraltar at the other end of the great Middle Sea since
1I have chosen not to put the word “tribute” in inverted commas in the main text, as is often done in order to indicate that it was not a tribute in the classic sense. The British considered it a complimentary part of the genuine Egyptian tribute whose collection they also controlled. By any other name, the tribute would not have been more or less legitimate. I have therefore refrained from splattering the text with inverted commas around the ubiquitous word.
1704. But in fact fnance was at least equally consistent as a thread running through Cypriot affairs in the decades of British rule. “follow the money” would therefore be an appropriate principle for the historian of Cyprus to adopt in analysing subject matter between the occupation of 1878 and independence in 1960. This book follows the money in something of that spirit. The treatment here is based on the supposition not only that the tribute imposed during British rule, and its fate, provides a convenient way of doing this, but that as a method it sheds fresh light on the British colonial presence in the island and its interaction with the surrounding society.
This book examines the history of the Cyprus tribute, as it came to be known, by taking a longer and broader view of the issue than it has yet been accorded. It examines the regional context of the decision to use Cyprus surpluses for the repayment of debt within the framework of the Eastern Question. The debt to which the Cyprus surpluses became hostage had its origins in the Crimean War. Links are suggested, between Ottoman bankruptcy after 1875, russia’s new advance through the Balkans in 1877, Britain’s desire to raise a new loan, the Ottoman Defence loan, to prop up Turkey against the ominous russian threat, and the Cyprus tribute. Such links are examined within the more general tendency for the fnancial and strategic interests of the European powers to be intertwined.
By a close analysis of aspects of Cypriot history in a regional context, I have sought a more comprehensive understanding of the question which can easily become distorted in a purely insular framework. It becomes clear that the decision to use the Cyprus surplus to service an Anglo-french guaranteed debt was not a result of the British occupation of Cyprus, but one of the reasons for it. It was, indeed, the diffculty in collecting the necessary sum and the resulting chronic Cypriot grudge that, more than anything else, became a permanent thorn in the fesh of Anglo-Cypriot relations. The question of enosis, intercommunal relations in Cyprus, Britain’s strategic and fnancial policy in the Mediterranean and her relationship with other regional and European powers cannot be set in watertight compartments. They are interdependent and have to be examined together. Historians are becoming increasingly aware of the multifaceted and lateral aspects of the modern history of the island. The existing literature has tended to look at the struggle for union with Greece, as the defning preoccupation in colonial Cyprus. This has resulted in oversimplifed perceptions. In the early
years of British rule, there was, in fact, a complex interplay between the tribute issue and Hellenic aspirations for union with Greece that underpinned Cypriot political psychology. In 1901, as the aspiration for union with Greece began to take on a more organised, political form, the High Commissioner Sir William frederick Haynes Smith was to observe that the tribute was “the constant thought of all classes. They speak of it on every occasion; they dream of it; and I believe they never refer to it without a curse in their hearts”.2 The book seeks to unravel this trajectory.
A start has been made in this direction, in more general histories. The pioneer was Sir George Hill. In his classic, A History of Cyprus, he addresses the issue in a special chapter. It is a recurring theme in George Georghallides’ monumental works, A Political and Administrative History of Cyprus 1918–1926: With a Survey of the Foundations of British Rule, and Cyprus and the Governorship of Sir Ronald Storrs: The Causes of the 1931 Crisis. rolandos Katsiaounis has illuminated the social consequences of the tribute policy during the early years of British rule in his Labour, Society and Politics in Cyprus During the Second Half of the Nineteenth Century and the recent book published by Kypros Georghallis in
(The British in Cyprus: Tax and Politics in the First Period of Colonial Rule and the Tribute Issue), focuses particularly on the tribute issue as it was presented by the elected members of the Cypriot legislature, and within the British parliament.
A discussion on the political economy aspect of Cypriot colonial experience generally is beginning to emerge in Cypriot academia. This book seeks to contribute to this process, looking at the tribute question in the developmental framework in the 1920s and 1930s with its growing focus on rural indebtedness. These issues are studied within the broader theme of the transformation in imperial thinking regarding development and welfare which made the Cyprus tribute policy, as I have called it, and similar situations elsewhere, less tenable.
Nevertheless, the evidence suggests that just as the modern Cyprus tribute was conceived to meet British regional strategic interests, so the special impetus for, and nature of, the abolition of the tribute is to be found
2Holland and Markides, (2006), The British and the Hellenes: Struggles for Mastery in the Eastern Mediterranean 1859–1960, Oxford: Oxford University Press, 169.
in that same regional context. The abolition came about, not so much from changing perceptions of imperial obligations, nor even as a result of Cypriot domestic pressure, although this became signifcant in the 1920s. The underlying impetus for change and the way it was brought about rested in the classic context of high politics and high fnance in Egypt. The interaction between Cypriot and Egyptian affairs at all sorts of levels and across the political, social and economic spectrum is another under-studied aspect of Cypriot history. At a time when the governments of Cyprus and Egypt are collaborating closely in the feld of energy supplies, this book hopes to provide a springboard for more research in that area.
The fact that the payment of the Ottoman debt charge from Cyprus revenue ended during the governorship of Sir ronald Storrs, a personality more connected with Palestine and Egypt than with Cyprus, echoes the tendency of affairs in the latter country to dwarf insular Cypriot concerns. The transfer of the debt charge to the British taxpayer was, nevertheless, once again disguised as a greatly increased grant-in-aid to the island. The book analyses why Whitehall continually resorted to this subterfuge, frst in relieving, then in abolishing the payment.
Examining political developments in Cyprus through the prism of the tribute issue facilitates a better understanding of its considerable effect on them. The absence of any imperial role for Cyprus as a place d’armes, as originally envisaged, meant that there was no imperial interest in funding the infrastructural development of the island. British policy was Treasury-driven. The book analyses why it failed and how its failure resulted in the local colonial government having to impose a deeply unpopular fscal policy for which there was no adequate explanation. It examines the extent to which local resistance to this policy affected, not only constitutional and political development in the island and AngloCypriot relations, but the nature of the relations between the two major communities. The evidence suggests that it was this Treasury-driven tribute policy, rather than the fear of enosis per se, that required the loyal Turkish Cypriot vote in the legislature and prevented a more liberal political agenda. Moreover, it becomes clear that it was the diffculty in enacting that legislation, once the loyalty of the Turkish Cypriots could no longer be relied upon, that led to plans for more arbitrary rule. The British understanding crystallised into the belief that either the tribute must go or arbitrary rule must be enforced. The book analyses the sequence of events that resulted, instead, in arbitrary rule immediately after the abolition of the tribute.
The two fnal chapters examine the lingering political signifcance of the tribute issue. In the 1930s, the penny-pinched authoritarian governors of Cyprus themselves pressed Whitehall to repay the Cyprus surplus held in London. They perceived it as a source of much-needed funding for development which would, at the same time, appease the underlying grievance of the islanders against the British. Chapter 6 examines why the return of the surplus was perceived by them to have such political importance, in the context of Italian expansion into the Eastern Mediterranean. It follows the declining political signifcance of the tribute issue in an economy in the process of modernisation. The growth of the mining industry, cooperatives and trade unions, but especially the Second World War itself, transformed Cypriot society, while corresponding changes took place in imperial attitudes. After the war, the British government would be putting money into the island in order to stay there. The new surge of enotist politics in spite of, and to some extent, as a result of, deep political divisions, together with the growth of Turkish nationalism, all made the tribute issue irrelevant. Cypriots of both major communities no longer expected anything from the British, but sought a future outside the British Empire. The epilogue observes the irony of the fact that the island was not fnally transformed into a base until after the tribute had become anachronistic and irrelevant. Moreover, the last vestiges of Ottoman rule and British colonialism expired together. In the new three-cornered struggle for Cyprus, while long-since forgotten by its local inhabitants, the shadow of the tribute issue would linger yet in the course of internal British discussions on Cyprus, requiring a new act of parliament, fnally to lay it to rest in 1961.
fikardou, Cyprus Diana Markides
a cknowledgements
for all the consideration I have received during research, I would like to thank the staff of the National Archive at Kew, the State Archives of the republic of Cyprus, the library of the University of Cyprus, the library of the Archaeological research Unit of the University of Cyprus, the British Library, the London library, the Gennadius library in Athens, the library of the University of Birmingham, the archives of the Bank of England, Guildhall library and Hatfeld House library. Thanks are also due to Alexander Apostolides, Klearchos Kyriakides, Alexis rappas, George Kazamias, Maria Panayiotou and Edhem Eldem for responding so readily to my requests for information. The generosity and good humour of Aristides Coudounaris has become legendary. He was an endless mine of information—the Who was Who of Cyprus. He will be sadly missed. I would like to thank Simeon Matsis, the Bank of Cyprus historical archive and the organisers of the series of illuminating and enjoyable conferences on the economic history of Cyprus. I am grateful to my colleagues at the History and Archaeological department of the University of Cyprus for their unwavering support. Thanks are due too to my editors at Palgrave Macmillan, and particularly to Oliver Dyer, for his warm collaboration. I am grateful, as ever, to my friend and proofreader, Thelma Blatchford. I am, as always, deeply indebted to my colleague and mentor, robert Holland, for reading the text and making very helpful suggestions. responsibility for its contents, of course, rests entirely with me.
I am very fortunate in my friends. A warm thanks to Giles and Angela Dixon who once again put me up, and put up with me, during my regular visits to Kew, and to my oldest friend, Mema Leventis, who provided a home-from-home for me in central London. My greatest debt I owe to my husband, Sophocles, without whose patient understanding and loyal support, I could not have completed this book.
1 Bonds and Bridgeheads: The Geopolitical and Financial Context of the British Acquisition of Cyprus, 1875–1878
2 Creating Tributes: The Formal Establishment of the Cyprus Tribute in Context, 1878–1883
3 Bricks Without Straw: The Dilemmas of the British Administration in Cyprus, 1884–1900
4 The Cyprus Tribute in Times of Tumult: From Ottoman Suzerainty to British Colonial Rule, 1900–1925
5 In the Shadow of Egypt: The Abolition of the Ottoman Tribute in Cyprus, 1924–1931
CHAPTE r 1
Bonds and Bridgeheads: The Geopolitical and financial Context of the British Acquisition of Cyprus, 1875–1878
The European crisis created in April 1877 by the russian advance towards Constantinople underlined the precarious future of the Ottoman Empire. Acquiring some territorial compensation in the Eastern Mediterranean to offset russian gains became a matter of urgency for Britain, as russian infuence fooded through the Balkans and the Caucasus. The subsequent secret treaty, which legalised the British occupation of Cyprus, was a defensive alliance with respect to protecting the Asiatic provinces of Turkey from russian encroachment. The island was to be used “to enable England to make necessary provision for executing her engagement”.1 Just before agreement had been reached, the British foreign secretary, Lord Salisbury, had assured the Sultan that the territory would remain a part of the Ottoman Empire and that the excess of revenue over expenditure would be paid over annually by the British government to his Treasury because Her Majesty’s Government had no wish “to diminish his current receipts”.2 This chapter will explore the relation of this fnancial arrangement written into the annex of the convention to the geopolitical rationale that brought about the choice of Cyprus.
It is an overworked truism that the island is strategically placed. The way in which, and extent to which, strategic use was or was not made of
D. Markides, The Cyprus Tribute and Geopolitics in the Levant, 1875–1960, https://doi.org/10.1007/978-3-030-13777-9_1
it by the British from the late nineteenth century well into modern times is a complex matter less closely examined. The allusion of the prime minister, Benjamin Disraeli, to the island as a place d’armes in the Eastern Mediterranean was intended to create visions of a great naval and military base. In fact, the former was never to materialise, while the latter would remain largely unexploited until the contemporary age of sophisticated surveillance and long-range aircraft. We shall examine the more complex interaction of high fnance, high politics, European interdependence and regional strategy within which the British came to administer the island. Pinpointing the logic behind the speedy employment by the British exchequer of any surplus revenue on the island in the service of the 1855 Crimean War loan, is central to this approach. furthermore, the relation of this debt to the Cyprus tribute will be examined, probing in more detail into how this issue affected political and constitutional developments within the island.3
The Levant is an area of the world where diplomacy, fnance, commercial and strategic interests critically converge. It is within the context of these overlapping concerns that the nature of the British presence in Cyprus from 1878 to 1960 becomes clearer. Coping with the Eastern Question, the attempts of the European powers to control, if not contain, the disintegration of the Ottoman Empire was as much a matter of balancing European power, as about European rivalry, especially in those areas of great strategic sensitivity surrounding the narrow entrances to and exits from the Mediterranean. Policy decisions on the way fnance was handled were part of this balancing act. It has become fashionable in recent years to overstate the role of debt collection as a motive for imperial occupation, particularly in Egypt and Tunis, Cain and Hopkins being eloquent proponents of this theory.4 Certainly, in the case of Cyprus, there are no such straightforward motives. Here, strategic and fnancial concerns were interwoven. If strategic concerns were the underlying incentive for a forward policy, the decision to occupy Cyprus was made,
3 I have chosen not to put the word “tribute” in inverted commas in the main text, as is often done in order to indicate that it was not a tribute in the classic sense. The British considered it a complimentary part of the genuine Egyptian tribute whose collection they also controlled. By any other name, the tribute would not have been more or less legitimate. I have therefore refrained from splattering the text with inverted commas around the ubiquitous word.
4 Cain and Hopkins (1993, 362–369).
not least on the basis of information by men on the spot who had access to circles in the metropolis with infuence and power. John Darwin has aptly referred to such people metaphorically as “bridgeheads”. The “bridgehead”, he writes, was “the hinge or interface between the metropole and a local periphery. It was the transmission shaft of imperialism and the recruiting sergeant of collaborators”.5 These infuential people, both on the spot and in London, were often at the same time lobbyists for fnancial concerns. Their advice, while well-informed, could be weighted to bring about the result they wanted. We shall explore the role of “bridgeheads” in the British occupation of Cyprus, as well as the nature of the island’s intended use as a bridgehead to access Western Asia.
The Crimean War loan to Turkey of 1855 is at the centre of developments covered in this analysis. It was raised in the fraught circumstances surrounding the Crimean War which, itself, launched the long period of Turkish indebtedness to European bankers. The £3 million loan raised the previous year and secured on the Egyptian tribute was fast running out and, in the wake of the battles of Alma, Balaklava and Inkerman, the Turks’ need was indisputable. A large loan was required to support the extensive military operations now envisaged. The £5 million sterling proposed could not be raised without government guarantees. Nevertheless, the foreign secretary, Lord Clarendon, conceded very easy terms for the french with whom he was determined to maintain the closest relations. The British government would agree to pay the interest if the Turks defaulted and the french government would subsequently pay them. “They know”, was Clarendon’s rueful observation, “how much we will submit to rather than disturb the good understanding between the governments and the armies if we can possibly prevent it”.6 This British tendency will be traced well into the twentieth century in relation to this loan.
Opposition in parliament was overcome by the need to “do that which is necessary for the present emergency”.7 Clarendon observed that no foreign government had ever made a loan on such good terms. Because the guarantee put the new loan on the same footing as British
5 Darwin (1997, 69).
6 Anderson (1964, 55). See also Appendix II, Declaration exchanged between the British and french Governments relative to the Turkish Loan, July 27, 1855.13A484/7/4 (BEA).
7 The Times, 24 and 28 July 1855.
stocks and the Porte was to receive the money without paying commission, the Bank of England, from the start, undertook to manage the loan as a British government obligation. The attempts of the minister to the Porte, Stratford de radcliffe, for effective supervision of expenditure failed, in spite of the efforts of the presence of British and french loan commissioners. Their work was continually obstructed. Nevertheless, a precedent had been set. A form of European supervision had been agreed by the Porte and their efforts foreshadowed the much tighter fnancial control that Turkey would submit to in the years to come.8 A precedent was set, not by any desire for imperialist penetration in the Ottoman Empire, but simply by the need to defeat russia. Indeed, the chief concern of William Gladstone, then chancellor in Lord Aberdeen’s coalition government, was over the right of occupation implied by the assignment of special revenues and the infringement of Turkish sovereignty that this would mean.9
The realisation of this concern crystallised in the context of new russian encroachments on Turkey, after decades of heavy European investment there. Bankruptcy in 1875 has been described by Christopher Clay as one of the key events in Ottoman history and “arguably one of the key events of modern history in general”.10 Because it was a substantial factor in the disintegration of the empire, it became entangled with the strategic and balance of power concerns of European high politics which were so characteristic of the Eastern Question. The prime protagonists in this European intervention in the Levant were the maritime powers of Britain and france.
The cultural and scientifc achievements of Napoleon Bonaparte’s brief campaign in Egypt (1798–1801), and the subsequent french affliations of its Khedive, Mehmet Ali, secured a special relationship for france with Egypt which was to prevail at least until the Suez crisis in 1956.11 The french construction of the Suez Canal in the face of much British scepticism, with its grand opening ceremony presided over by empress Eugenie in 1869, reignited the romance and glamour of the Napoleonic tradition. However, it was inevitable that the
8 Anderson, 60–63.
9 Anderson, 57.
10 Christopher Clay (2000, 1).
11 Paul Strathern (2008).
successful functioning of the canal as a vital short cut to Asia would draw the British into the area whenever free movement through it was under threat.
It was, in fact, the fnancial crisis in the Ottoman Empire in 1875 that opened the way for an increasing British involvement. Nowhere was the crisis more acutely displayed than in the Ottoman tributary state of Egypt. As Suez Canal shares slumped, the British prime minister, Benjamin Disraeli, snapped up the 40% holding offered for sale by the bankrupt Khedive Ismail. It was a development welcomed by the man responsible for the construction of the canal and director of the Compagnie de Suez, ferdinand de Lesseps.12 Politicians and the press in Paris, however, resented the British encroachment. The purchase was also looked upon with concern by some British politicians, uncomfortable with the surreptitious nature of the deal, and worried as to what future diffculties such an involvement in Egypt might entail.
The following year, Ottoman bankruptcy was exacerbated by rebellion in the Balkans and the prospect of a russian–Turkish war. It was essential for the maritime powers of Britain and france that the strategic status quo in the region be maintained. Growing instability in the region coincided with consternation in the fnancial hubs of London and Paris. Heavy public investment in Egyptian, as well as Ottoman government bonds secured, not least, on the Egyptian tribute, slumped to a new low and it became clear that the country’s revenue would be unable to service its multiple debts. financial reform in Egypt, with a view to maximising revenue, was the only way to secure the debts, and that reform, it was believed in London and Paris, could only be brought about under European supervision. Not least for strategic reasons, the British would not risk the french gaining a monopoly of infuence in Egypt by allowing them to intervene alone. Developments in the following fve years focused on fnding effective forms of Anglo-french intervention that the concert of Europe could agree to. Since major banks throughout Europe held large quantities of Egyptian stock and the other European powers had no wish for a physical embroilment on the Nile, European consensus was not diffcult to achieve. The problems that arose during this process related to Anglo-french differences as to the extent and nature of intervention required in Egypt.
12 Tel. Lyons to Salisbury, 11 July 1878, HHM/3M/1.
The french government, which was particularly vulnerable to pressure from its fnanciers, was obliged to agree to Disraeli’s initial proposal in July 1876 for joint Anglo-french intervention, on behalf of the bondholders, in Egypt’s fnancial management. It is telling that to bring about this arrangement Disraeli’s agent was not his foreign secretary, Lord Derby, but Alfonso rothschild, head of the french branch of the great European banking family.13 The result was a mission to Egypt carried out by the British fnancier and politician, George Goschen, a director of the Bank of England, and the french fnancier, Edmund Joubert, co-founder of the Banque de Paris. The fact that whereas Goschen was a representative of British bondholders, Joubert was offcially employed by the french government, refects a deliberate British attempt to distance itself from the bondholders in contrast to the very close alignment of the french government with the Bourse.14
The Goschen-Joubert mission brought about the consolidation of the Egyptian debt. The Caisse de la Dette, a special committee was created in Cairo, composed of representatives from all the creditor states. The British and french together had a majority vote. It was intended that, through it, Egyptian revenue would be secured to service the national debt to European bondholders. By 1877, it was becoming increasingly clear that the surplus revenue raised, even under European supervision, would be insuffcient to service the debt. With a great deal of reluctance on the part of the french, the possibility of lowering interest rates in some cases began to be considered.
It was within the framework of this new, more direct involvement in Egyptian fnances that, in July 1877, a new arrangement was agreed upon for the servicing of the Turkish loans to which the Egyptian tribute had been mortgaged. They were the 6% loans of 1854 and 1871, and the 4% Anglo-french guaranteed loan of 1855. These came to be known collectively as “the tribute loans”. The 4% loan of 1855 was only partially mortgaged to the Egyptian tribute. The wording of Article III of the Anglo-french-Turkish treaty of 1855 read as follows:
The interest and sinking fund of the said loan shall form a charge on the whole revenues of the Ottoman Empire, and especially on the annual
13 Parsons (1977, 84–85).
14 Hunter (1999, 184).
amount of the Tribute of Egypt which remains, over and above the part thereof appropriated to the frst [1854] loan, and moreover to the customs of Smyrna and Syria.15
Initially, the agreement sought was for interest to be lowered to 4% on the 1854 and 1871 loans, so that the sum gained would allow all three to be serviced entirely by the Egyptian tribute. The arrangements changed as a result of the major geopolitical crisis. In April 1877, a new war had broken out between russia and Turkey. The russian army moved down into the Balkans in support of the Slavic races rebelling in that region. In July 1877, the strategic fort of Plevna fell. The Ottoman Empire now urgently needed a new loan to raise a defence against the russian attack. The British were particularly anxious that the russians be halted by the Ottoman army. In order to achieve french cooperation in persuading the Khedive to despatch Egyptian troops to the Balkans and allow the Anglo-french protection of the canal, the British agreed to join the french in pressing the Khedive further to secure the servicing of the Egyptian debt as a whole. Disraeli’s main concern, however, was to raise a new Ottoman Defence Loan for the Sultan. Turkey required urgent fnancial aid to mount a continuing defence against the russians. The sum gained by the lowered interest rate on the 1854 and 1871 Egyptian tribute loans would have to be used to raise money for Turkey instead of covering the balance of the interest on the 1855 Anglo-french guaranteed loan as originally planned. It would have to be found elsewhere. The British prime minister sought another part of the Ottoman Empire from which to raise it.16
The British and french governments were exceptionally sensitive to the 1855 loan, because of the risks engendered by their guarantee.17 Confdence in the London stock market and the Bourse, so crucial to both economies, depended on interest coupons being paid on time. According to the motto emblazoned on the coat of arms at the entrance to the London Stock Exchange, its word was its bond. It followed that,
15 See Appendix I for text of Convention between His Imperial Majesty, the Sultan, His Britannic Majesty and His Majesty, the Emperor of the french, 27 June 1855. See also Lord Tenterton to the Secretary of the Treasury, 13 July 1877, fO424/36 (NA).
16 Parsons, 80.
17 Lee (1934, 186).
once the Sultan had defaulted on the interest on the 1855 loan, the British and french governments were beholden to pay it. Both governments were anxious to prevent this burden on their treasuries becoming long-term. Ottoman revenue would have to be secured as soon as possible. The part of the Ottoman Empire chosen to raise the balance on the interest of the 1855 loan was Cyprus. Because the surplus revenue of the island was essentially bailed into secure the interest, it became a piece in the jigsaw of the strategic and fnancial interest of both powers in the Levant, at a time when the Ottoman Empire and its strategic satellite, Egypt, dissolved into bankruptcy. The fact that this fnancial crash coincided with a russo-Turkish war led to a blurring of the edges. It was essential to the maritime powers of Britain and france that Turkey, the main buffer against russian encroachment on the Levant, be propped up, at least fnancially. To this end, but also in order to maintain essential confdence in the London and Paris money markets, the fnances of Egypt and ultimately of Turkey itself had to be supervised in order to be reformed and rendered more productive. At the same time, the British wished to indicate, by a physical military presence in the region, that they would not tolerate further russian expansion south of the Caucasus. Such a move would constitute a threat to the land route to India.
The ideal territory to cover both these needs, a strategic base and a source of Ottoman revenue, was the area known as the Hatay in the Ottoman province of Syria with its deep-water port of Alexandretta, but the french, already involved in Beirut, considered Syria to be in their exclusive sphere of infuence. In 1840 and again in 1869, the french had risked war with Britain to ensure their predominance there. Vital french collaboration in Egypt could be destabilised by blatant British acquisitiveness in Syria. Instead, Cyprus would be a stepping stone to the Hatay. Meanwhile, there was a very specifc fnancial use to which the island could be put.
The island’s suitability for such specifc use was indicated by information gleaned, not least, by Sir Austen Henry Layard. A diplomat, but also a family friend of the Disraelis, Layard’s connection with Turkey was long and colourful, an archaeologist and author, he also involved himself in fnancial enterprise, founding the frst short-lived Ottoman Bank in 1856. Disraeli appointed him minister to the Porte in March 1878 as the russians prepared their advance southwards. He was chosen as
a man “with the necessary experience and a commanding mind”, but also because he was “not too scrupulous”.18 Another source of valuable information regarding the island was Sir robert Hamilton Lang, a Scotsman who had carved out a brilliant career for himself with the Imperial Ottoman Bank, the mighty french-dominated successor of the bank founded by Layard in 1856. Lang had himself founded the Cyprus branch of the Imperial Ottoman Bank at Larnaca in 1863. The main function of this bank was as a repository of revenue for the Porte.19 Lang directed it for nine years before being elevated to the Cairo branch. During his sojourn in Cyprus, he also served as British Consul. At the same time, he created and ran a successful agricultural establishment.20 On reaching the pinnacle of the Ottoman Bank in Constantinople, Lang worked very closely with a leading Greek banker, George Zarif to create a new framework for debt collecting in the empire. Zarif would himself become involved in Cyprus, buying large areas of land there in advance of the British landing. He attributed the conception of the plan for the British occupation and administration of Cyprus unequivocally to Henry Lytton Bulwer, Britain’s minister to the Porte from 1858 to 1865.21
In securing a place d’armes in the Eastern Mediterranean, Disraeli and his foreign secretary, Lord Salisbury, were also looking for a place “that would provide the best material guarantee to secure our interest on the Turkish loan [the 1855 Guaranteed loan]”.22 In accordance with Article 3 of the Annex to the Cyprus Convention, signed on 1 July 1878, the surplus revenue of Cyprus, a sum to be calculated in the following years, was designated for the Sultan of the Ottoman Empire.23 This sum was, in fact, diverted on a regular basis to the Bank of England to pay the British and french bondholders of the 1855 Crimean War loan. Having no deep-water harbour, Cyprus was of little immediate use as a military or naval base. Its proximity to Syria and Egypt and its new link
18 Waterfeld (1963, 356).
19 Baruh and Apostolides (2015).
20 The British Museum, 2017.
21 Zarif (n.d., 236).
22 Private Letters from Col. Home and Others: Part III, Papers of Sir John Lintorn Simmons, fO358/1, NA.
23 for the full text of the Cyprus Convention, see Appendix IV. See also Hill (Vol. 4, 2010, 301).
with the latter’s fnances, nevertheless made it strategic in the broader sense.24 The fnances of Egypt were, by 1878, under Anglo-french dual control. The Anglo-french guarantee of the 1855 Crimean War loan became the lynchpin in the connection between the small island of Cyprus and Anglo-french relations in the Levant. rivals as often as not, the British and the french again and again had to fnd means of accommodating each other because of their mutual and greater fear of russia and the subsequent need to maintain the regional status quo.25 In addition to this, both having trading and imperial interests east of Suez, they needed to secure free movement of shipping through the canal.
It was in the context of the strategic and fnancial interdependence of the two countries, and the fuctuating relations between them, that Britain came to occupy Cyprus in 1878, and it was because of the same fnancial and strategic interests, that the Cyprus tribute came into being—and stayed in being, even after the island ceased to be a de jure part of the Ottoman Empire in November 1914. Cyprus had not been a tributary state before 1878 since it was a province ruled directly by the Porte. Still part of the territory of the Ottoman Empire, after 1878, it would be administered by the British who offered to hand over the excess revenue to the Sultan.26 The legal advisors of the foreign Offce confrmed that since the excess revenue of Cyprus formed part of “the whole revenue of the Ottoman Empire”, it could legally be diverted to service the 1855 loan. The word “tribute” could only be used accurately, regarding this sum, if Her Majesty Queen Victoria, were a vassal to the Sultan which was hardly the case. Because the excess Cyprus revenue was being used to top up the Egyptian tribute for one of the “tribute loans”, it came to be called the “Cyprus tribute”. The word had some logic in the Egyptian context. Much has been made of the British misuse of the word “tribute” in relation to Cyprus. By any other name, the use to which the excess revenue of Cyprus was put would not have been more or less legitimate.27
24 Holland and Markides (2006, 92–93).
25 robinson and Gallagher (1961, 77–94) for a clear analysis of the Anglo-french relationship in the Levant.
26 I have chosen not to put the word “tribute” in inverted commas in the main text, as is often done in order to indicate that it was not a tribute in the classic sense. I have refrained from splattering the text with inverted commas around the ubiquitous word.
27 Yiangou et al. (2016, 91).
The progress of the russian army down through the Balkans had underlined the need for Anglo-french accommodation.28 By December 1877, the critical strategic bastion of Plevna had fallen, and the russians were on their way to Constantinople. The European war that might have followed was prevented by a series of secret pacts negotiated by the British foreign secretary, Lord Salisbury, with Austria, russia and fnally Turkey—the Cyprus Convention. There was an indignant public outcry in france when the British occupation of Cyprus took place, because it was so near to Syria and Lebanon. In fact, the french foreign minister, William Waddington, had been aware that the British government was making an agreement with the Sultan to administer some Ottoman territory, before the Cyprus Convention was signed at the end of May 1878. He was promised confdentially, as a quid pro quo, that the British government would support the french takeover of Tunis, and all the indications are that—below the line—there was an understanding that through the administration of this Ottoman territory, they would secure the balance of the interest guaranteed by the french government, to the bondholders of the 1855 Ottoman loan, not covered by the Egyptian tribute. Waddington was assured that the “place d’armes” would not be Syria.29 financial affairs were the most worrying factor for the french government in the spring of 1878. Weighed down by reparations to Germany after the franco-Prussian war, the country was struggling. Among many other fnancial problems, the Crédit Foncier de France, having invested money in Egyptian bonds, was on the brink of collapse. The public had invested heavily in the Foncier believing it to be as solid as government bonds. Its fall, Disraeli certainly thought, was likely to bring the french government down with it.30 Accepting the British occupation of Cyprus was a small price for the government in Paris to pay for a helping hand in keeping these banks afoat. The occupations of Tunis as well as Cyprus both had fnancial as well as strategic potential.
By 1878, Europe as a whole was well into a long period of economic depression, set off by the collapse of the Vienna stock exchange in 1873. In Britain in 1878, the collapse of the City of Glasgow Bank led to a severe banking crisis, “seen by some as a fateful turning point in British
28 robinson and Gallagher, Africa and the Victorians, pp. 77–94.
29 Waddington to Dufaure, 8 July 1878, MAE M &D Turquie 129, cited in Parsons (1977, 83).
30 Disraeli to Lady Bradford, 1879 in Marquis of Zetland (1921, 213).
banking and, indeed, in economic history”. In these depressed circumstances, the Bank of England expected to be the natural partner of the government. Philip Currie of the foreign Offce, himself from a banking family, observed to Salisbury, regarding the Bank of England, that,
any transactions between the government and a joint stock bank would certainly be known, whereas those subsisting between the treasury and the bank are accompanied with a secrecy greatly to the advantage of the state.31
The British were usually under less pressure from their fnanciers than the french. In the case of Egypt, Disraeli’s government was drawn into more support for the bondholders than they traditionally would have admitted. This policy was undertaken with much more urgency by Lord Salisbury, than by his predecessor, Lord Derby, who had resigned from the cabinet during the stormy session of the 7 March 1878 when the prospect of occupying Cyprus was discussed. In April 1878, soon after becoming foreign secretary, Salisbury had written privately to the Chancellor of the Exchequer, Lord Northcote,
the Suez Canal and the [Egyptian] tribute in our eyes were more important (than British obligations to the Khedive) I’m afraid that if we declined to assist the french to any extent in pressing the claim of the bondholders, we should alienate france, cause her to work against us prematurely, and injure our future position seriously without much helping the canal shares or the tribute.32
Salisbury also indicated the need to appease french sensitivities in a draft fnancial treaty he drew up for the implementation of the part of the Cyprus Convention covering “Western Asia”. The Cyprus Convention included a commitment by Britain, if necessary, to take up arms, should russia insist on retaining Bartoum, Ardahan or Kars, or more seriously should she attempt to “take any further territories of his Imperial Majesty, the Sultan”. As a quid pro quo for this commitment, the Sultan would agree to necessary reforms proposed by the British government
31 Kynaston (2016, 224).
32 Salisbury to Northcote, 8 April 1878, Add.Ms.50019/3844, BL.
and take measures for the protection of Christians in this region.33 It is no coincidence that the term “Western Asia”, the point of view of the India Offce, was used in offcial correspondence at this time. Once again strategic and fnancial British interests converged. Part of the interest on the 1855 guaranteed loan was secured on “the general revenues of the Ottoman Empire and particularly the customs dues of Smyrna and Syria”.34 Alexandretta, Syria’s only deep-water port, had been the preferred place to entrench a British presence in the Levant in 1877. Solutions to fnancial concerns could there be merged with a grand strategy to protect the land route to India. Hence, Disraeli’s remark that “In taking Cyprus the movement is not Mediterranean, it is Indian”.35
The plan was to pre-empt the spread of russian infuence south of Batoum, not by fghting the russians in the Caucasus; that had been avoided, for the moment at least, by the secret pact with russia, but by what Salisbury called, “a pacifc invasion of Englishmen” into “Asiatic Turkey”. As in Egypt, British offcials would supervise the collection of revenues and an Alexandretta-to-Baghdad railway would open up the land route to trade. Cyprus and Alexandretta together would provide “the keys to Western Asia”.36 Having shied away from insisting on the more strategic port of Alexandretta from the start, because of french sensitivities, the Disraeli government hoped to gain it by stealth. By demonstrating how prosperous Cyprus would become under a model British administration, they would encourage the Porte to allow, effectively, the British administration of Western Asia.37 The draft Anglo-Turkish fnancial treaty drawn up by Salisbury in August 1878, indicates the signifcance for him, of the fnancial aspect of the Cyprus Convention. In this sense, it defnes the conditional terms to which Turkey must agree in order to be given a new British loan. The terms he proposed were as follows:
1. England lends to Turkey x million—say 8 at 3%, repayable by sinking fund in 30 years which is equal to 5%.
33 Article I, The Cyprus Convention (Hill 1952, 300).
34 Lord Tenterton to Secretary of the Treasury, 13 July 1877, fO424/36, NA, Kew.
35 Monypenny and Buckle (London, 1929, 1226).
36 Steel (1999, 133).
37 Headlam Morley (1920, 193–291).
2. In return, Turkey (a) accepts reforms proposed in my dispatch, (b) accepts offcers named by England for collection of all revenues in Asiatic Turkey (you may exclude southern Syria to please the french) till loan is repaid: said offcers having appointment of all revenue offcers under them, (c) comes to terms with Greece about rectifcation (d) gives telegraphic wire to England.
3. England undertakes to apply money received in the following order: (a) payment of 5% on 8 million loan, (b) expenses of government in Asiatic Turkey including nothing military except what is necessary for order, (c) 2% on nominal value of all Ottoman debts, including russian indemnity. If revenue is insuffcient (which for some time it will be), the 2% is to be paid in order of chronological priority (d) residue, if any, to Constantinople.
4. Cyprus “Tribute” to pay balance of guaranteed loan of 1855 to England and france: and a more intelligible agreement about crown lands to be signed.
5. In consideration of rectifcation of Greek frontier, france and England to agree to restrain Greece from attacking Turkey for 10 (changed to 30) years.38
It is clear that Salisbury envisaged a regime in Western Asia similar to that in Cyprus with the emphasis on reform and the collection of revenue. Expenses of the government in Asiatic Turkey would be paid, but “nothing military”. The Cyprus surplus—the word “tribute” is in quotes in his hand-written text—was expected to cover the balance of the interest on the Guaranteed loan of 1855, not covered by the Egyptian tribute.
Salisbury had indicated his sense of the interaction between high fnance and high politics regarding the Eastern Question in the course of the Congress of Berlin, at which ratifcation of the British occupation of Cyprus was sought from the European powers. In a letter to Lord Northcote, Chancellor of the Exchequer, he reported that,
An idea has been thrown out to pay the russian indemnity, by us assigning to the russians whatever tribute they are able to get from the tributary provinces, north of the Balkans. If this is done, it will dispose of the fnancial question, for the Congress is not likely to take up the case of the
38 Salisbury to Northcote, 22 August 1878, Add.Mss., 19/ 93/4, BL.
Turkish bondholders out of pure frailty of heart. The advantage of the scheme would be that it would remove a constant cause of russian intervention in Turkey.39
Waddington had made it clear to the British government that the french considered Egypt the proving ground, a test of British good faith. from 1877, the British government commitment to debt-collecting in the Ottoman Empire was linked, not least, to maintaining good relations with france on a global scale, while securing growing infuence in Egypt.40 Salisbury had defned his policy, as follows:
We have no wish to part company with france, still less do we mean that france should acquire Egypt in any special ascendancy; but subject to these two considerations, I should be glad to be rid of the companionship of the bondholders.41
Securing interest payments for the Anglo-french bondholders, then, was part of British policy in Egypt, of which Cyprus was considered something of an appendage. The prime minister and his colleagues wished to do nothing to irritate the french unnecessarily.
Here, we have one more indication of an island, that although of no great use in itself as a military or naval place d’armes would be held rather to prevent it falling into undependable or even hostile hands. Meanwhile, it remained a link in an intricate web of European power in a volatile region of great strategic signifcance. Cyprus was for the British not so much a base in the sense of “boots on the ground” but a piece of the geopolitical jigsaw created by Anglo-french interdependence in high politics and high fnance, part of the give and take of strategic and political imperatives in the region.
With this broader context in mind, let us take a look at what contemporary sources have to tell us of the sequence of events surrounding the British occupation of the island in June 1878. Dwight Erwin Lee has attributed the choice of Cyprus to the advice of Colonel robert Home, an intelligence offcer who was posted at the British Embassy
39 Salisbury to Northcote, 20 June 1878, Add.Mss., 19/38/4, BL.
40 Parsons (1977, 80).
41 Salisbury to Lyon, 10 April 1879, cited in robinson and Gallagher (1961, 84).
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CHAPTER XXXIV.
I was getting dark when the dogcart drove up to Oldcastle Farm. The front door which had been partly destroyed by the forcible entry of the police was open, and both gentlemen were inclined to the conclusion that the lonely tenant of the house had left it. They were confirmed in this opinion when, on ringing the bell, they found no notice taken of their summons.
“Poor lad’s turned it up,” said Captain Mulgrave turning to Thurley with a nod.
“It looks like it.”
They tied the horse up to an iron ring in the farm-house wall provided for such purposes, and went inside, leaving Freda, who now hung back a little, to come in or not, as she pleased. As soon as the two gentlemen had gone down the entrance hall, Freda slipped in after them, and waited to see which way they would turn. After a glance into the rooms to right and left, they went through into the court-yard. Taking for granted that Dick had at last followed the only possible course of abandoning the old shell of what had been his boyhood’s home, they were going, by Thurley’s demand, to explore those recesses where the smuggled goods had formerly been stored.
Freda knew better than they. Tripping quickly through the empty rooms and passages, she reached the door of the banqueting-hall, but was suddenly seized with a fit of shyness when she heard the sound of a man coughing. However, she conquered this feeling sufficiently to open the door under cover of the noise Dick made in poking the fire, and then she stood just inside, shy again. Dick felt the draught from the open door, turned and saw her. He was sitting in his own chair by the fire, with the old dog still at his feet. The shadows were already black under the high windows on the side of the court-yard, but the light from the west was still strong enough for Freda to see a flash of pleasure come into his face as he caught sight of her.
“You have a bad cold,” she said in a constrained voice, coming shyly forward as he almost ran to meet her.
“Yes, there’s a broken window up there,” said he, glancing upwards, “and—and the curtains the spiders make are not very thick.”
“Poor Dick!”
She said it in such a heartfelt tone of commiseration that the tears came into his eyes, and when she saw them, a sympathetic mist came over her eyes too.
“They think you have gone away,” she said in a whisper, glancing up at the windows which overlooked the court-yard, “but I knew better!”
“Who are ‘they’?”
“My father and Mr. Thurley.”
“Your father! I didn’t know that he was alive till yesterday. What will he do? There will be all sorts of difficulties about the trick he played.”
“He will have to go away. But he seems rather glad; he is tired of living up here, he says.”
She spoke rather sadly.
“And you?” said Dick.
“Oh, I’m not tired of it. I think the old Abbey-church the most beautiful place in the world. I should like to spend my life here.”
“And will you go away with him?”
“No, he is going to take me back to the convent.”
“What! For ever? For altogether? Will you be a nun?”
“Yes.”
“Do you like that?” asked Dick very earnestly, “to go and waste your youth and your prettiness, shut up with a lot of sour old women who were too ugly to get themselves husbands?”
Freda laughed a little.
“Oh, you don’t know anything about it,” she said, shaking her head, “they are not at all like that.”
“But do you seriously like the thought of going back as much as you liked the thought of being a nun before you left the convent?”
There was a long pause. At last:
“No-o,” said Freda very softly. “But—it’s better than what I should have had to do if I hadn’t chosen that!”
“What was that?”
“Marry Mr. Thurley.”
Dick started and grew very red.
“Oh, yes, it is better than that, much better,” he assented heartily.
“Yes, I—I thought you’d think so.”
She said this because they were both getting rather flurried and excited, and she felt a little awkward. Both were leaning against the table, and tapping their fingers on it. Something therefore had to be said, but in a moment she felt it was not the right thing. For Dick began to breathe hard, and to grow restless, as he said quickly:
“You see it’s not as if some young fellow of a suitable age, whom you—whom you—rather liked, could ever have a chance of—of asking you to be his wife. That would be a different thing altogether.”
“Ah, yes, if I were not lame! If I could ride, and row, and—and sail a boat!” said Freda with a quavering voice.
“No, no, just as you are, the sweetest, the dearest little——”
He stopped short, got up abruptly, and rushed at the fire, which he poked so vigorously that it went out. Then, quite subdued, he turned again to Freda, and holding his hands behind him, as he stood in a defiant attitude with his back to the fireplace, he asked abruptly:
“Would you like to know what I’ve been making up my mind to do, during these days that I’ve been living here like a rat in a hole?”
“Ye-es,” said Freda without looking up.
“Well, you’ll be shocked. At least, perhaps you won’t be, but anybody else would be. I’m going to turn farm-labourer, and here, in the very neighbourhood where I was brought up a gentleman, as they call it.”
The girl raised her head quickly, and looked him straight in the face, with shining, straightforward eyes.
“I think it is very brave of you,” she said in a high, clear voice.
“Hundreds of well educated young fellows,” he went on, flushed by her encouragement, “go out to Manitoba, and Texas, and those places, and do that or anything to keep themselves, and nobody thinks the less of them. Why shouldn’t I do the same here, in my own country, where I know something about the way of farming, which will all come in by-and-by? You see, I know my family’s disgraced, through my—my unfortunate cousin’s escapade; for even if it’s
brought in manslaughter in a quarrel, as some of them say, he’ll get penal servitude. But, disgrace or no disgrace, I can’t bring myself to leave the old haunts; and as I’ve no money to farm this place, I’ll get work either here, if it lets, or somewhere near, if it doesn’t. I’ve made up my mind.”
The obstinate look which Freda had seen on his face before came out more strongly than ever as he said these words. During the pause that followed, they heard voices and footsteps approaching, and then Captain Mulgrave opened the door. The breaking up of the organisation he had worked so long seemed already to have had a good moral effect on him, for he spoke cheerfully as he turned to John Thurley, who followed him.
“Here’s the hermit! but oh, who’s this in the anchorite’s cell with him? Why, it’s the nun!”
John Thurley looked deeply annoyed. He had an Englishman’s natural feeling that he was very much the superior of a man who looked underfed; and it was this haggard-faced young fellow who, as he rightly guessed, had been the chief cause of the failure of his own suit. Captain Mulgrave’s good-humored amusement over the discovery of the young people together woke in him, therefore, no responsive feeling. Before they were well in the room, Freda had slipped out of it, through the door by the fireplace, and was making her way up to the outer wall. Dick was at first inclined to be annoyed at the interruption; but when Captain Mulgrave explained the object of his visit and that of his companion, the young man’s joy at the project they came to suggest was unbounded. This was the setting up of himself to farm the land, for the benefit of his aunt, to whom it had been left for life.
“Mr. Thurley is a connection of hers and wishes to see some provision made for her. So, as I felt sure you would be glad to do your best for her too,” continued Captain Mulgrave, “and as you have some knowledge of farming, I suggested setting you up in a small way as farmer here, and extending operations if you proved successful. How would that meet your views?”
Dick was overwhelmed; he could scarcely answer coherently.
“I never expected such happiness, sir,” he stammered, in a low voice. “I would rather follow the plough on this farm than be a
millionaire, anywhere else. Why,” he went on after a moment’s pause, in a tone of eager delight, “I might—marry!”
He flushed crimson as Captain Mulgrave began to laugh.
“Well,” said the latter, “I don’t know that you could do better. You were always a good lad at heart, and my quarrel was never with you, but with your cousin. He used your services for his own advantage, but I must do you the justice to say it was never for yours. So find a wife if you can; I think you’re the sort to treat a woman well.”
Dick took the suggestion literally, and acted upon it at once. Leaving the two other men together in the darkening room, with some sort of excuse about seeing after the house, he went outside into the court-yard, and soon spied out Freda on the ruined outer wall. He was beside her in a few moments, looking down at her with a radiant face.
“I’m going to stay here—on the farm—to manage it myself—to be master here.”
“Oh, Dick!” was all the girl could say, in a breathless way.
“It sounds too good for belief, doesn’t it? But it’s true. That old Thurley must be a good fellow, for he’s going to help to start me. It’s for my aunt’s benefit he’s doing it; he’s a connection of hers.”
“Oh, Dick, if you had had a fairy’s wish, you couldn’t have chosen more, could you?”
There was a pause before Dick answered, and during that pause he began to get nervous. At last he said:
“There is one more thing. Your father said——”
A pause.
“Well, what did my father say?”
“He said—I might marry. Is—it true?”
And it took Dick very few minutes to find out that it was.
THE END.
TRANSCRIBER’S NOTES.
Florence Warden was the pseudonym of Florence Alice (Price) James.
Minor spelling inconsistencies (e.g. back-door/back door, farmhouse/farm-house, etc.) have been preserved.
Alterations to the text:
Add TOC.
Punctuation fixes: sentences missing periods, quotation mark pairings, etc. [Chapter XIII]
Change “in which the jury had veiwed her father’s body” to viewed. [Chapter XXXI]
“and the other asked the way to Oldastle Farm.” to Oldcastle. “a good suggestion; and Dick took advantage af it.” to of.
[End of text]
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