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Karataşer Cost Of Living In Ottoman Empire…
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COST OF LIVING IN OTTOMAN EMPIRE DURING THE
ARMISTICE PERIOD: A CASE OF ISTANBUL
1
Assistant Professor Büşra KARATAŞER,
Faculty Member, Department of Economics,
Faculty of Economics and Administrative Sciences, Namık Kemal University,
bkarataser@nku.edu.tr
ABSTRACT: At the time when the Montrose Armistice was concluded, the economic situation in
Ottoman Empire(Turkey) was very serious. The food crop that had been produced was not enough to
meet the needs of consumption. The First World War had a huge impact on this situation. There was a
great loss of life because of the war and the number of people required for production was not
sufficient. In this study, the question of the cost of living in Istanbul, and whether the reasons given
and the precautionary measures taken were sufficient, is central. Accordingly, this study aims to
investigate cost of living in Istanbul during the armistice period.
The problems experienced during the armistice and the solutions to these problems will be evaluated
from an economic point of view. This study used historical data and archival resources to explain
people’s economic life and consumption siutation in Istanbul during armistice period. In order to
prevent the loss of life, the Economy Struggle Commission, sample grocery stores and sales booths
were established and economic solutions were found for cost of living increases. This study is limited
by case of Istanbul and period from 1918 to 1922 in Ottoman Empire. This study provides useful
information about living conditions and consumption situation of population in Ottoman empire
during armistice period. In addition, archival resources are clarified for actual period.
Keywords: cost of living the armistice period, economic history, otoman empire
INTRODUCTION
The Armistice Period is the period of the transition from the Ottoman Empire to the Turkish
Republic which occurred between 1918 and 1922. This period is also a period in which both
political and social transformations were experienced. A period was entered into in which the
political importance of the capital city, Istanbul, diminished. The Ottoman Empire was
divided in accordance with the provisions of Sèvres Treaty. Istanbul was occupied on
November 13, 1918 and in 1919 the delegates of the Allied Powers were in occupation of an
important part of the city. Leaders of the Union and Progress Party left the country along with
the previously ruling government. In the Armistice Period in Istanbul the predominant factor
in political life were the occupying forces (Toprak, 1994:19).
The Turkish people struggled against poverty, starvation and famine in the First World War
and the Armistice Period. Setbacks occurred in production during the war years and in the
aftermath. Production decreased because of the war and there were periods in which no one
1
Bu makale 20-21 Mayıs 2017 tarihinde İstanbul‘da düzenlenen International Congress of Management
Economy and Policy isimli kongrede bildiri olarak sunulmuştur.
JOEEP | Journal Of Emerging Economies And Policy Vol.2 (1) | July 2017
181
could be found to reap harvests. During this period the Ottoman Empire was a state whose
economy consisted primarily of exporting raw materials and importing manufactured products
(Boratav, 2007:20).
By the time the Montrose Armistice was concluded, the economic condition of the country
had deteriorated. Production stocks were insufficient and crops were being produced under
difficult conditions and with insufficient resources. Producers did not want to sell their crops
because of the war and for this reason products could not be supplied to the city center. The
destructive effects of the First World War were both economic and social. During the war,
migration occurred from the occupied regions of the country to other regions. This migration
increased the population and made the food requirements of the region around Istanbul,
whose food was already inadequate, unsustainable (Himmetoğlu, 1975:246-247). Istanbul,
which developed and expanded its governing area in 19th century, was one of the cities with
an important role in the world economy. Although there was some distress during the First
World War and afterwards, Istanbul maintained its position as the commercial center until the
proclamation of the Turkish Republic. While the population of Istanbul was 356,653 people in
1844, it grew to 875,575 in 1855 and 909,978 in 1914. The increase in population, however,
only changed the structure of the groups making up the city in terms of their numbers. The
number of governmental officials decreased and the wage levels dropped in the city after
1908. Nevertheless, as a consequence of the degree and size of the civil and military
bureaucracy there was a substantial number of consumers (Koraltürk, 1998:38). Occupations and
movements by the National Forces in this period caused the governing of Istanbul to remain
confined to the city and its dependent areas. This situation caused the budgets which were
prepared not to set a budget by year until 1920. The fact that a budget could not be set in a
period in which the defense expenditure of the country was so intense also caused problems in
the use of resources. Laws of advance payment could not substitute for the budget and
difficulties were experienced in expenditure. The country split into three separate customs
territories within a short period of time because the balance of income and expenditure could
not be assured. Transition from one customs territory to another customs territory was excised
and this therefore caused setbacks in the delivery of goods. Setbacks were experienced in the
delivery of goods notably in Istanbul and within the country and this situation turned the
problem of food shortages into an even more troubling situation.
1. ECONOMIC LIFE IN THE ARMISTICE PERIOD
The army, which fought under difficult conditions throughout the war, spared no sacrifices,
but its living conditions became harder and hopes of winning the war were lost. While the
Ottoman soldiers had insufficient equipment and food they were fighting with an army on the
opposite side which was well fed and which was fully equipped. As the war continued, news
that the situation at the front was serious spread swiftly and the number of deserters increased.
While the number of deserters was 300,000 in 1917 it increased to half a million in 1918. The
Karataşer Cost Of Living In Ottoman Empire…
182
deserters took shelter in the mountains with their equipment and formed gangs. These gangs
started to steal from the villages and the food storehouses (Yalman, 1930:62).
The Cabinet of Union and Progress, which was in power from the beginning of the First
World War, frequently attracted criticisms and attacks because of the depression the country
was experiencing. The economic condition of the country had worsened by the date of the
armistice’s conclusion (Eldem, 1994:130). The import of grains from various countries ceased
and shortages were experienced across the country as stocks ran out. Istanbul was the city
most affected by the distress brought about by the First World War. With the return of a large
number of military personnel, the settlement of soldiers from the allied powers from 1918 on,
the influx of exiles from the Bolshevist regime in Russia and of refugees fleeing raids by
National Forces and seeking shelter, Istanbul was no longer able to bear this burden. Price
rises, financial difficulties and a lack of public order began to be seen in the city (Temel,
1998:38).
2. COST OF LIVING
After the war had ended, the struggle against the rising cost of living continued all over the
world. After Vienna and the large Russian cities Istanbul was among the most expensive cities
in the world (Aydın, 2010:442). The prices of vital necessities increased at a rate of 1350%
between 1914 and 1920 in Istanbul whereas the price increases in London and Paris were at a
level of 200-300% between the same dates. When compared to cities in Europe, the cost of
living in Istanbul was very high (Georgeon, 1997:85).
According to the Public Debt Index, the level of the cost of living in Istanbul in October 1918
had increased by 15 times compared to the prewar cost and by 7 to 8 times when delivery
prices were taken as the data. However, the wages of government officials increased by 50%
by that date. Therefore, government officials lost 60% to 80% of their purchasing power with
respect to their wages. The purchasing power of a government official who earned 100 liras
corresponded to 25 liras before the war (Eldem, 1994:131).
Food Supervision was established on November 30, 1918 with the intent of solving the food
problem that the country was experiencing. According to the decree it issued not only the
nutrition of the public but also the nutrition of the army was made the responsibility of the
Food Supervision; that is to say to civil government (Bayur, 1983:543). The duty of the Food
Supervision was to supply the vital necessities for making the life of the army and the needy
and indigent community easier. The task of preventing the price of materials sold from
becoming more expensive for no reason and preventing high prices for them belonged to the
Food Supervision. Ships belonging to the Navigation Governance were to be assigned to the
order of the Food Supervision when required. The Food Supervision determined which
products were appropriate for exportation to foreign countries and also gave permission for
export. The Food Supervision was entitled to quote prices for purchase-sale and transport of
foodstuffs and all kinds of basic means and to explore and inspect whether or not tradesmen
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dealing with trade were closing sales in accordance with the law. Those who did not obey
statutory prices were subject to cash fines ranging from 5 to 500 liras and imprisonment from
24 hours to 1 year, or they were given both of these penalties (Ati, August 18, 1918). The
Food Supervision was established as a solution to the food problem but corruption and abuses
of the system could not be prevented. For this reason, the Food Supervision was
disestablished with a decree dated January 20, 1919 (Aydın, 2010:19). In place of the Food
Supervision the Public Food Management, which had the task of dealing with food duties and
which was attached to the Trade and Agriculture Supervision was established. The Public
Food Management was attached to the municipality with a decree dated February 12, 1919
but after a short while the Public Food Management was also abolished. The Economy
Commission was established on June 19, 1919 (Aydın, 2010: 37).
The Economy Commission conducted a study on the cost of living in Istanbul. As a result of
this study a report was prepared based on the wage of a family with two children, calculated
as 500 kurus, and considering the basic needs of that family. Prices in the first half of the year
1920 had increased at a rate of 227% compared to the beginning of 1914, and in the second
half of the year 1920 purchase and sale on the market slowed down (Aydın, 2002:443).
The Committee of Injunction of Engrossing was constituted during the war with the intent of
preventing the cost of living increasing but it was not able to prevent this. The institutions
established to prevent engrossing in Istanbul were constituted by being attached to the Police
Department and the Courthouse Supervision but the problem of the cost of living increased
day by day. The prices of the basic necessities would be announced by the Public Food
Management and criminal actions would be taken against anyone who did not obey the price
lists in order to prevent engrossing by tradesmen (Karataşer, 2013:114).
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A List Showing The Maximum Prices Of Foodstuffs Valid For One Week From
November 28, 1919
NAME OF FOODS
MAXIMUM
RETAIL
PRICE
NAME OF FOODS
MAXIMUM
RETAIL
PRICE
First Class American Flour
30
Small Potato
13
Extra Domestic Flour
30
Cube Sugar
75
First Class Domestic Flour
29
Cavan Granulated Sugar
54
Second Class Domestic Flour
---
American Granulated Sugar
---
Domestic Flat Grits Flour
26
First Class Santos Coffee
---
First Class Non-Grits Siam
Rice
---
Lave Coffee
---
First Class Non-Grits
American Rice
---
Rio Coffee
---
First Class Non-Grits Camolin
Rice
---
Ordinary Coffee
---
First Class Non-Grits English
Rice
---
Extra Filtered Olive Oil
110
First Class Non-Grits Rizon
Rice
---
First Class Edible Olive Oil
105
Grits Rice
---
Second Class Edible Olive Oil
94
Non-Grits Corn Rice
42
Third Class Edible Olive Oil
---
Grits Corn Rice
37,5
Extra Ingot Soap
60
Grits Rangon English Rice
32-34
Ayvalık Soap
62
Baku Rice
38-40
Domestic Soap
---
Bursa Rice
60
Salty Trabzon Butter
---
Tosya and Ankara Rice
59
Salty Anatolian Butter
130-140
Spain Bigan Chickpea
---
Konya Aksaray Edible Butter
160
Bigan Chickpea
21
Halis Aleppo Hadide Butter
155-170
Bandırma Chickpea
18
First Class American Butter
115
Anatolian Konya Chickpea
15
Second Class American Butter
108
White Pasta
43
Third Class American Butter
95
Brown Pasta
40
Margarine
---
Vermicelli
---
First Class Balkan Cheddar
---
Semolina Pasta
---
Second Class Balkan Cheddar
---
Bursa Product Surgeon Beans
---
Domestic Cheddar
---
Large Bush Beans
32, 25-35
First Class White Cheese
---
Small Bush Beans
---
Second Class White Cheese
---
Trabzon Beans
23-25
First Class Domestic Olive
62
Reddish Beans
22
Second Class Domestic Olive
57
Small White Beans
30-37
Third Class Domestic Olive
45-50
Red Lentil
---
First Class Golos Olive
---
Ordinary Lentil
---
Second Class Golos Olive
---
First Class Bulgur
25
First Class American Gas Oil
25
Second Class Bulgur
---
Second Class American Gas Oil
23
Selected Potato
15
Batum Gas Oil
---
Atoval Romanian Gas Oil
17
Source: BOA, DH.İUM E 57/47
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185
Weekly sales prices were valid for one week and served as maximum prices.
A sample was given to food government officials working in the municipality
administration for them to be able to identify the products indicated in the list.
The products that were bought by the customers were inspected to see whether or not
they conformed to these samples.
Tradesmen who had complaints about the prices in the list were able to apply to the
Economy Struggle Management via Food Chairmanship.
Complaints made by the community were transmitted to the Food Government
Officials and would be taken into consideration immediately (BOA, DH.İUM E 57/47).
There were great differences between the prices applied in Istanbul and prices applied in other
areas of the country. Transportation difficulties also had an impact on the prices of the
products. An increase in transport costs also caused the prices to increase. Besides that, prices
differed from region to region because of problems in the transport and the wagon trade, and
because of the extension of the war. For example, food prices in Izmir were fifty per cent
cheaper than food prices in Istanbul (Eldem, 1994:51). At the beginning of the Armistice Period
the prices of some consumer goods were as following (Pamuk, 2000:80):
Prices of some Consumer Goods during the Armistice Period
Consumer
Good
Year 1914
Year 1915
Year 1916
Year 1917
Year 1918
Year 1919
Bread
1.25
1.65
9.5
18
34
13
Flour
1.75
2.3
12
34
45
20
Potato
1
1.6
3
14
27
16
Pasta
3
4.5
24
65
90
38
Sugar
3
7.5
30
112
195
46
Tea
60
120
250
400
500
250
Rice
3
5
20
45
92
45
Olive Oil
8
14.5
24
88
160
115
Coal
115
126
200
420
975
3000
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3. REASONS FOR COST OF LIVING INCREASES
Obstacles to foreign trade routes were removed at the end of the Armistice Period. The newly
imported products thus caused an increase in supply on the market. During the First World
War and the Armistice Period it was more expensive to import wheat from Anatolia than from
New York as a result of occupations, gang activities and raids by National Forces (Boratav,
2007:29), but the increase in products on the market was still not successful in solving the
food problem. The reason for this stemmed from the fact that Ottoman money was
depreciating against foreign currencies (BOA, DH.İUM20-8/2-50).
Another reason for the cost of living increases arose from tradesmen and those in or close to
the power taking advantage of the war and the Armistice Period. Some merchants took
advantage of the differences in the rates of exchange and this had an impact on domestic
goods. For this reason prices caused the cost of living to continually increase. The Food
Management determined who was involved in engrossing and who bid more than 10% as
profiteers and a decision was taken to send these merchants to the Court-Martial (İkdam,
December 15, 1919).
Another reason for the cost of living increase was the absence of coal. The lack of in coal
caused transportation to come to a halt because the trains were run on coal. Procurement of
foodstuffs could not be carried out since vital consumer goods were also transported by train.
For this reason, there were difficulties in the transportation of foodstuffs to Istanbul. There
was especial difficulty in the transportation of wheat, and the absence of coal meant that the
population had no bread or that only uneatable poor quality bread containing straws or stones
instead of wheat was produced (Çavdar, 2014:285).
Another reason for the cost of living increase was the fact that the merchants were engrossing
with chaining method. A product that was sold in London for one lira should have been sold
for 4.5 lira in Ottoman money when differences in rate of exchanges, freight charges and
commission charges had been added to it, but while passing from hand to hand during the
circulation it became much higher than it should have been because of differences in the
dividends (Aydın, 2010:445).
A decrease in production, insufficient transportation, difficulties getting vital necessities to
Istanbul and activities such as smuggling were among the reasons for the increase in the cost
of living.
4. MEASURES TAKEN AGAINST THE COST OF LIVING
For the purpose of solving the problem of the cost of living different measures were taken by
the government of the Ottoman Empire.
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People from all strata, whether government officials, bureaucrats or the general public, were
substantially affected by the cost of living in Istanbul. Although consumer goods came from
foreign countries after the Armistice Period, the level of the cost of living did not fall. This
situation was an important indication that the cost of living did not just stem from insufficient
production or from the fact that products could not be found.
Although different reasons were given for the cost of living, the real reason stemmed from the
fact that the leaders of the Union and Progress Party gave the imported materials from Austria
such as sugar, gas, dry goods to groups who were close to them and blocked other merchants
from taking advantage of this right. This situation caused importation to be carried out by
only one set of importers and therefore caused prices and the cost of living to increase (Aydın,
2008:702).
Measures were taken in order to increase the supply of foodstuffs to prevent the cost of living
increases experienced in Istanbul. With this purpose, in the announcement made by the Public
Food Management on September 1, 1917, trade in barley, rye, corn, vetch, buckwheat and all
kinds of wheat, edible grains and breads was forbidden. (Başbakanlık Devlet Arşivleri,2013:175)
To provide the products the country needed and to prevent the cost of living from rising not
only the sale of foodstuffs but also the sale of all products that were found to be appropriate
with regard to the conditions in that period were potentially liable to banned by the
Committee of Injunction of Engrossing. The purpose of these prohibitions was to prevent an
insufficient supply of the most needed products within the country at that period. For this
purpose, the free sale of products such as cowhide leather and patent leather which were used
in shoe production was forbidden on August 25, 1917. Those who needed these prohibited
products had to receive credentials through consulting with the trades commission and they
then had to apply to the merchants with these credentials. In addition, those who owned these
products had to report how many of each product they had by the end of the month. Başbakanlık
Devlet Arşivleri,2013:172)
Another precaution taken against the food shortage was to announce food prices in list form.
The governor under the presidency of the Ministry of Internal Affairs, the pashas who were
the head of the Public Necessities, the Public Police Department and Commissions of Tax for
the War in Istanbul, Beyoğlu and Üsküdar came together on August 8, 1914 in order to ensure
that Istanbul would not experience food shortages because of the taxes and precautions that
taken as a result of the war. It was decided by the commission that the foodstuffs that were
going to be brought from abroad or from inland for the needs of Istanbul would be held
outside of the measures that were taken. It agreed that the bakeries, which had been seized for
military requirements would continue to produce bread for the needs of the public. It was
stated that the stockpiling and black-marketeering being experienced had caused great
difficulties in foodstuffs reaching Istanbul and that legal processes would be immediately
initiated against those who carried out such acts. It was also stated that definitive pricelists
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188
would be prepared and those who did not obey these lists would be punished in order to
prevent stockpiling and black-marketeering.( Başbakanlık Devlet Arşivleri,2013:34)
Moreover, precautions were also taken against preventing the increase in the cost of living
and against food shortages. For this purpose, a ruling was made by the Council of Ministers
on December 19, 1917. According to this ruling, it was stated that because there was
difficulty in the procurement of foods, foodstuffs such as grapes and figs would be counted as
foodstuffs and that, at the request of the Ministry of War, one-third of these products could be
exported and the remaining two-third of these products could be freely sold on the Istanbul
market (BOA, MV, 210/109).
Various precautions were taken for the purpose of removing the distress caused by the
growing cost of living. Because of the fact that shortages were experienced in the
procurement of necessities owing to the war, a fifty thousand kurus supplementary allowance
was requested by the Ministry of Internal Affairs for the purpose of distributing these
necessities to those in need and this decision was approved by the Council of Ministers (BOA,
MV, 212/1).
The Economy Struggle Commission was established to prevent the cost of living from rising
and to relieve the distress experienced. This commission was formed of specialists who would
be employed by the municipality and the Chamber of Commerce to continually inspect the
market and to take the necessary precautions to ensure a decrease in prices. (Aydın, 2010:445).
A ruling was made by the government about sending those selling high-priced goods to the
Court-Martial for trial to prevent increases in cost of living and the prices of all vital
necessities – especially foodstuffs. In the Grand Bazaar on September 4, 1917 it was
confirmed by the Committee of Injunction of Engrossing that Gömlekçi Hacı İsmail Efendi
had sold a Turkish yard of a fabric for thirty-six and a half kurus whereas he should have sold
it for ten kurus. Similarly, Mustafa Nuri Efendi and Mehmed Tevfik Efendi from the Grand
Bazaar were also dispatched to the Court-Martial because of handling cambric without having
declared this. ( Başbakanlık Devlet Arşivleri,2013:177)
The management which was established within the body of the Food Commission controlled
three areas: these were foodstuffs, transport and customs procedures. Priority was given to the
food necessities department which was dealing with the procurement of vital necessities. This
management tried to prevent the cost of living from rising by establishing control over the
entire city by assigning one inspector to each of its nine districts (Aydın, 2010:446).
Another measure taken to prevent increases in the cost of living was the opening of the
Sample Grocery Stores. It was decided by the Food-Economy Struggle Commission to open
sample grocery stores in various districts of Istanbul for the purpose of making the foods
needed by the public less expensive (Sabah, November 27, 1919). The Sample Grocery Stores
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189
were established to reduce, by managing them, the extravagant prices set especially by the
small retailers, but they were not themselves able to solve the problem of price increases.
Another practice carried out was the opening of the sales booths. The fact that the precautions
taken had been insufficient and the fact that these precautions had not been able to prevent
engrossing and the cost of living increases made the government search for new measures.
For this purpose, booths were built in the city and consumer goods began be sold in these
booths. These places, in which the merchants would be selling objects for a price close to
their wholesale prices, were allocated to them in various districts of Istanbul for free for a
given period of time. The purpose in constructing of these booths was to prevent goods being
sold at expensive prices by creating a competitive environment in which cheaper goods could
be procured (Terzi, 2012:90).
The use of sales booths in the struggle against excess prices was seen not only in the
Armistice Period but also in the period of Abdulhamid II. A large increase in prices was seen
in the period of Abdulhamid II because of the decline in the value of Ottoman money owing
to the war between the Ottoman Empire and Russia. There was an increase especially in meat
prices. Sheep were bought and slaughtered at night by military department suppliers
employed by Sultan Abdulhamid II so that the public would not go unnourished. These
slaughtered sheep began to be sold in sites opened next to the butchers and in this way the
butchers were made to lower their prices (Tahsinpaşa, 1990:192).
New measures were taken when it was found that domestic tradesmen were not applying to
open sales booths. For this purpose, it was stated by Woods, who was the food negotiator of
the Allied Powers that goods would be sold with the support of foreign companies and by the
American Assistance Committee. The American Assistance Committee promised to sell
products such as clothes, shoes, rice, sugar and coffee with only a small profit margin in these
sales booths. American sales booths sold cheap products to the public and booths were opened
booths in many districts of Istanbul, such as Beyazıd, Ayasofya, Sultanahmed, Aksaray,
Laleli, Yenicamii, Galata, Beyoğlu, Kasımpaşa, Beşiktaş, Kadıköy, Üsküdar, Beykoz and
Beylerbeyi. After a while, sales booths were also opened by the French, alongside the
American sales booths. Sales booths were built in Kadıköy, Fatih and Aksaray by the French
and these booths served for meat sales in particular (Terzi, 2012:92-102).
CONCLUSION
The economy was in a serious condition in Istanbul during the Armistice Period. Istanbul
suffered from food shortages. The decrease that had occurred in production because of the
occupation of the country and the war in Anatolia further aggravated the already existing food
shortage. Various precautionary measures were taken by the Istanbul government to prevent
increases in and to reduce the cost of living.
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190
The increase in the cost of living took hold of the entire world in the aftermath of the First
World War. The Ottoman Empire, and especially Istanbul, was also affected and to a greater
extent than other large countries. This period caused speculation on one hand and black-
marketeering on the other hand. Massive increases occurred in prices because the Ottoman
money was continuously depreciating. The purchasing power of the public diminished with
the depreciation of the currency.
The Economy Struggle Commission and the Economy Struggle Management were
established by the government to prevent the cost of living from rising. These commissions
were not able to solve the problem of the increasing cost of living and the government was
forced into taking new measures. For this purpose, the exportation of food products was
restricted and the attempt was made to provide the market with an excess supply.
One of the solutions that the Istanbul government applied to reduce the cost of living was to
create a competitive market. Products which had been imported were sold to booths that were
built in certain districts in the city. Through this, tradesmen who sold products at a high price
were obliged to reduce their prices.
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