Money supply of EYTAM funds and the interest rate applied to the funds (1851-1926)

In the Ottoman Empire, as a result of the changes in the administrative organization made within the framework of the westernization movements that started with the Tanzimat, the Ministry of Emval-i Eytam was established in 1851. However, this Ministry was reduced to the level of directorate a year later in 1852, depending on the Shaykh al-Islam. The purpose of the establishment of the Ministry is to prevent the property of orphans from being usurped by the judges and their guardians and to ensure that the civil servants are included in the system. Another aim is to support the artisans, merchants, farmers and civil servants by evaluating the goods of orphans in a financial system. In order to realize these aims, the eytam chest was established on the same date under the Ministry. Later, in 1874, the Majlis-i Administration-i Emval-i Eytam was established within the body of Şeyhülislam. This Assembly acted as a supreme institution that oversees all orphan administrations and funds and, in a sense, appeals against the decisions of orphan administrations.

It is not possible to keep the ballot boxes separate from the Eytam directorate and assembly. The eytam funds, which are under the responsibility of the eytam directorate established in Istanbul under the Shaykh al-Islam, are responsible to the center for all their transactions. In the provinces, in the counties deemed appropriate, the eytam administration was formed by the mufti, the eytam director and some other persons under the chairmanship of the kadi. Eytam funds also operated within the body of this administration. Although these three institutions are complementary elements, their regulations have been published separately. However, when the contents of the regulations are examined, it is seen that the articles of these three regulations refer to each other. Eytam funds have been the main basis for the protection of the economic rights of orphans and their financial management.

While the name of the chest was "Eytam Chest" until 1906, it was changed to "Eytam İdanât Chest" as of this date. Later, on 9 October 1915, with an amendment made in the Regulations for Eytam Funds, the name of the ballot boxes was changed to Dersaadet Real Estate and Beytü'l-Property Directorate or Administration. However, the name of the eytam chests continued to be referred to as the Eytam İdanat Chest until 1926.

1. Money Supply of Eytam Funds to the Customer

The customers of Eytam funds are the state, artisans, merchants, farmers and civil servants. In this article, we will discuss how tradesmen, traders, farmers and civil servants can benefit from the ballot boxes. People who will borrow from the fund initially apply to the local shar'i court. Later, after the eytam administrations and ballot boxes were made widespread in the provinces, the suitors started to apply to the eytam administration or directorate. The person requesting a debt has to show a mortgage against the debt he will receive. Mortgage can be gold jewelry, a field or any real estate. The mortgage must be at or above the value of the money to be borrowed. There is detailed information about this in the eytam regulations and their addendums.

For example, according to the 1851 Regulations of Eytam, the mortgage to be taken should be one and a half times the amount to be borrowed. The property, which was shown as a mortgage, was appraised by the estimators. More stringent measures were taken on mortgages in the 1906 Eytam Regulation. While the mortgage was shown as one and a half times the property against the money borrowed before, this rate was doubled in the 1906 Ordinance. During and after World War I, this rate was tripled. According to the 1906 Regulations of Eytam, the valuation of the property shown as mortgage was decided to be made by the finance and municipalities. Another of the conditions for withdrawing money from the chests is to show a guarantor. The person who will borrow from the funds has to show a guarantor for the debt he will receive. Three people are shown as guarantors. The number of guarantors was reduced to two in the following years. Care has been taken to ensure that the guarantors are reliable. Regardless of their rank and position, it was checked whether the guarantors were financially able to pay the money. While guarantors were included in the debt contract made by the fund with the customer before the 1906 Regulations, after 1906 the guarantors were not included in the contract. A separate surety contract was made for the sureties and they were kept in the ballot boxes. Likewise, while the mortgaged goods were not included in the old debt contracts, after 1906 mortgages and their values ​​began to be shown in the contracts.

After the guarantor and mortgage documents were prepared, the suitor applied to the local Shari'a court with the documents. After the application was approved by the court, the money would be delivered to the suitor in the presence of the eytam manager within 15 days at the latest. All documents related to lending were kept in the ballot box until the debt was fully paid off. Before the money is delivered, a loan agreement is signed between the ballot box and the suitor.

The limit of the money to be given as a loan to a person from the Eytam chest There is no limit on. However, in the 1851 Regulations of Eytam, there is a statement that if the amount of money accumulated in the ballot box is more than twenty-five thousand kuruş, the money is given to the money changer company and evaluated. Again, in this regulation, the guardian and relatives of the orphan were prohibited from withdrawing money from the ballot box regarding those who would borrow from the ballot box. In the forty-fourth article of the 1906 Eytam Regulation, it is stated that up to five thousand kurus can be given to the parents and guardians of the orphan who will borrow money from the ballot box. It is stated that loans up to a maximum of ten thousand kurus can be given to these people in return for showing mortgages and guarantors.

According to the 1851 and 1906 Eytam Regulations, the borrowing period is three years at the most. This period was increased to five years with a decree issued on October 9, 1915. However, in practice, a five-year maturity is not preferred. During this period, the age of the orphan was taken into account. Time was edible again.

A warning was sent to the debtor by the Eytam Directorate one month before the debt was due. In the warning letter, it was reminded that the person owed and had to pay the debt. At the same time, the debtor was asked whether he would pay his debt. If the person did not pay his debt, he was informed that his mortgages would be sold. If the debtor was lost or gone somewhere else, he would wait until the last payment date of the debt. If payment was not made, the debtor's mortgage would be sold through a newspaper advertisement. The costs would be borne by the debtor. Sales transactions of mortgages were made at the latest one month after the last payment date. Beginning in 1915, this period was sold immediately without waiting. Mortgages were put up for sale three times over two months. However, if no bidder was found for the pledges put up for sale, these pledges would be transferred to the devil chests. If the debtor wants to renew the bill in return for his debt, he has to pay the debt in full.

Persons and their guarantors who do not pay their debts to the ballot box are given a prison sentence. With an amendment made in the Enforcement Law on August 7, 1907, people who owe debt to the orchard chest were sentenced to imprisonment. People who have not paid their debts and are sentenced to prison are prohibited from withdrawing money from the ballot box again. If the person who borrows money from the fund dies without paying his debt, it is taken from his estate without waiting for the repayment period of his debt.

2. Debt Agreement Signed in Eytam Funds (Eytam Guaranteed Idane Book)

Many books are kept in the Eytam administration and its chests. These are journals such as Journal Book, Summarized Book, Orphan Income Expense Book and Eytam Guaranteed Idane Book. The notebook group that concerns our subject is the administrative notebooks. The word İdane means debt or loan. The Eytam Guaranteed Idane Book was kept by the administrative officer. According to the thirty-sixth and forty-sixth articles of the 1906 Eytam Regulation, the administrative clerk was in charge of recording the administrations. In other words, he would take the bills to be given by the debtors and guarantors, send them to the places where they should be sent, follow up the incoming and outgoing documents and deliver the documents to the administrative officers. The ledger was kept after the necessary operations were made.

The book in which the signed debt agreements are collected is called the administrative book. Between the years of 1851-1906, the documents or debt notes related to the borrowers from the ballot boxes (idane huccets) were arranged in a mixed manner in the sharia registry books. These documents are written in plain text and there is no standard text in different local shar'i courts in terms of writing or text. With the 1906 Eytam Regulation, the arrangement of debt securities, bail bonds and many other documents became a standard text. While the Idane notebooks were printed in printed form in some regions, they were written by the clerks in accordance with the standard contract text in some regions. The number of pages of the notebooks consists of an average of one hundred and fifty pages. Each page is approved and each page is allocated to a debtor. Pages arranged in the form of debt securities are shown in tables.

At the beginning of each debt note shown in the table, there is information about the debt besides the personal information of the debtor. In the first digit of the table, there is the section showing the type of property (vineyard, garden, shop, house, field, store) of the person borrowing from the ballot box. In the second digit, the district, neighborhood or street address and house number of the borrower are shown. Next comes the household where the names of the borrower or persons are written. When we look at the other households in order, there is a household that shows how many years the debt has been taken. In the next household, the total amount of money to be repaid is written by calculating how much money was borrowed and how much interest it will pay. In the household named Rıbh-ı Mülzem, the interest amount of the money to be paid to the eytam chest is shown. In this household, two figures stand out. A The pearl is the actual interest on the principal. The second figure is the money received in the form of “precautionary” expenses, which will be used in all transactions of the debtor with the fund within five years. This money is collected every month by adding interest.

In the household under the name of Kıymet-i muhammine, it shows the monetary appraisal of the goods (shop, house, garden, store, field) shown as mortgage at that time. The valuation is done by the municipality and the finance and the certificate is given. The current prices of the real estates shown here provide important clues in terms of reflecting the economic and social life of each region. The last digit is the loan number. Although this number may seem like a chronological order at first glance, it is not. This household shows from which orphan's property the money loaned from the ballot box was given. In Eytam administration or funds, there is a book or record showing the property of each orphan. In this notebook, each orphan is given a number. This number is written to this digit.

The main text of the bill of exchange is in the middle of the table. The main text is a standard text. In it, the name of the debtor, address, how much money he received, what business he was engaged in, whether he received the valuation certificate of the mortgage shown and from which orphan's money he wanted to borrow are stated. In addition to this, it is stated by which guardian and eytam manager the transaction will be made, how much money can be paid to him from the money he will receive, and how much he will pay back. There is information that he signed a document stating that if he could not pay his debt, the mortgage and waiver shown would be sold, and that he appointed the eytam manager, kadi and mufti as a proxy for this, and that he would pay the court fees and taxes himself in case of court. This information is handwritten in spaces in the standard text.

Below the text of the contract are the names of two or three witnesses. Witnesses can be relatives of the suitor as well as officials in the court. Next to the names of the witnesses, there is the name of the debtor, the director of the eytam and the name and signatures of the kadi (naib or the chief deputy to the kadı), fingerprints or seals. In the blank part at the bottom of the text, the administrative fee and the registration fee are written. However, there is a certificate of affidavit specific to the court-i şer'iye transaction. This stamp is a tax on behalf of the state.

3. Interest System and Applications Applied in Eytam Funds

In the first quarter of the 19th and 20th centuries, many studies were conducted on banking and interest in the Ottoman Empire. In most of the studies, only a general evaluation and historical process were examined. In the studies on interest, while the ijtihads of the religious scholars of the period based on verses and hadiths were brought to the fore, some studies focused on monthly and annual interest rates. Especially in the first quarter of the 19th and 20th centuries, there are no detailed studies on both the essence of the interest system and the money supply or interest system applied in the idanat funds.

Eytam funds were established according to the foundation logic and operating system of cash foundations. In this logic, the word rıbh is used instead of the expression of interest in the supply of money. In the Ottoman Empire, there have been many studies on cash foundations, especially in the pre-Tanzimat period. In these studies, the fatwas of the religious scholars of the period about how the system worked come to the fore. However, it is seen that the actual applications are not much entered. In this study, we will focus on the system applied in the late Ottoman administrative books instead of the system applied by cash foundations. Again, we will use the term interest instead of the word rıbh used in administrative books and money foundations. In order to understand how the interest system applied in Eytam funds works, it is useful to make a small comparison about the essence of today's interest system.

In today's interest system, primarily interest is taken from the money borrowed from banks. In the practice of Eytam idânât funds, on the contrary, the collection of the principal is taken as a basis. This situation is clearly seen in the idâne registers. In order to understand the interest logic of the period or the interest system applied in eytam funds, it is necessary to understand and examine the contract in the debt deed shown in the eytam idane books.

According to the text of the contract, the borrower must pay the principal in six monthly equal installments after the money is delivered to him. For example, a person who withdraws money from the ballot box pays the debt in two installments if it will take it with a maturity of one year, in four installments if it is due in two years, and in six installments if it is due in three years. The debtor undertakes in the text of the contract that he will make the payment in this way.

Payment of interest and reserve is started from the month following the date of receipt of the debt. Monthly payments of people who borrowed from Eytam funds were accepted as the monthly payment date of the Gregorian calendar instead of the Rumi calendar after 1881.

has died. This situation is on 19 December 1881, "About the Annunciation of the Bî Kudret Medyûns from the Eighteen Hundred and Sixty-six Years of Milady to the Fundamentals of Mukaddem Eytâm." It was done with a will.

Interest and reserve (expenses) amounts are divided over sixty months or five years. If one of the installments is not paid, the debtor undertakes to sell the goods that he has signed as a mortgage in the contract he signed. For this, the debtor authorizes the eytam manager to sell the mortgage property. In addition, the debtor makes a commitment in the contract that he cannot sell or transfer the mortgaged property to another person until the end of the debt. The debtor undertakes that, even as a result of a natural disaster, if there is a loss in the mortgaged goods when signing the contract, the expenses of this loss will be covered from an amount of money determined as a reserve or expense fund. The money received in the form of reserve money does not protect the debtor. On the contrary, it protects the interests of the fund. For this, the debtor appoints the director of the eytam, the kadi and the mufti as proxy. At the end of the text of the contract, a general statement is used that the contract has been accepted under the above-mentioned conditions.

Money supply in Eytam chests is made in terms of kaime (paper money) and money / kuruş. In this context, to exemplify the text of the contract above, we can explain the interest application of the money loaned from the orchards as follows. For example, according to the Antalya and Çanakkale eytam administrative books between 1922 and 1926, a person who borrowed fifteen thousand kuruş from the ballot box for a year paid half of the debt, that is, seven thousand five hundred kuruş, in the first six months. He gave the remaining seven thousand five hundred kuruş in the second six months. He paid the interest in equal monthly installments in sixty months or five years from the date of signing the contract.

The debtor paid one hundred twelve and a half kuruş per month for five years for fifteen thousand kuruş. The principal interest and precaution to be paid within five years; It cost 112.5 * 60 = 6750 cents. A person who borrowed fifteen thousand kuruş from the fund paid 21 750 kuruş in return for 15000 kurus. The principal interest amount for one year is 1350 kuruş against the fifteen thousand kuruş taken from the fund. This amount is 9% as annual interest on the principal. This amount is the annual interest rate applied by the fund during this period. In other words, in 1922, Antalya Eytam Fund sold the money in line with supply and demand, with an annual rate of nine percent. 4500 kuruş, which was shown as an expense, was taken as reserve money for the expenses that will be spent in five years until the end of the debt. This corresponds to 36% of the principal. 6750 kuruş, which appears as the total interest, represents 45% of the principal.

From a person who receives twenty thousand kuruş from the ballot box for two years, the principal is collected in four installments in six-month increments of 5000*4=20 000 kuruş. The interest was paid 150*60=9000 kuruş out of 150 kurus per month. The debtor returned to the fund a total of 29 000 kuruş against the 20 000 kuruş he received. The interest on the principal to be paid to the fund is 3600 kuruş. This amount is 18% interest rate for two years. Of the 5400 kuruş shown as a prudence, it constitutes 27% of the principal received. 9000 kuruş, which appears as the total interest, represents 45% of the principal.

As can be seen in the examples given above, the annual interest rate is nine percent, no matter how many years the maturity rate is. The proportion of money received for prudence or expenses is 36% per annum on the principal with a one-year maturity, 27% for a two-year term, and 18% for a three-year term. To make a general assessment based on three examples, the interest on the principal to be given to the orphan remains constant at nine percent. The money taken as a precaution is the profit of the chest. In this case, because the preference of the funds and the profit share in the money supply is high, a one-year maturity was generally preferred. As a matter of fact, this situation is clearly seen in the Antalya and Çanakkale Eytam İdane notebooks.

We cannot generalize the system applied in the ballot boxes by looking at the example of Antalya and Çanakkale orthopedic donations. The examples given are an application of the orphan chests according to the 1906 Regulations. However, the real interest on the principal received by orphans varied between nine and fifteen percent annually in line with supply and demand. The rate of the money taken as a precaution does not remain constant and changes at the rate of interest on the principal. To give an example, the annual interest of the principal was realized as nine percent in 1922-23 in the Antalya and Çanakkale eytam idane fund. In return, the ballot box collected thirty-six percent for one year, twenty-seven percent for two years and eighteen percent for three years as a precautionary measure.

By 1924, the money supply was made at the ballot boxes in Antalya and Çanakkale regions at a rate of twelve percent annually in line with supply/demand. On the other hand, as a precaution, the profit of the fund in a one-year term has increased to forty-eight percent. In total, the annual interest rate is sixty percent came out.

4. Interest Rates Applied to Eytam Funds

We find information about the interest rates applied in the ballot boxes in the ordinances, wills and decrees. The first information on the subject took place in the 1851 Regulations of Eytam. According to the 1851 Regulations of Eytam, it was decided to charge six cents and ten money from the purse of the money taken from the ballot box. That is, money was given at an annual interest rate of fifteen percent. If the orphan's money cannot be used under these conditions and remains in the ballot box, instead of keeping the money in the ballot box, the purse is given to shopkeepers, merchants, money changers, etc., with a five cents interest rate to provide benefits to the orphan. could be loaned to individuals. This corresponds to a twelve percent interest rate.

Generally, the interest rate applied to the eytam funds is fifteen percent per annum. This ratio continued from the foundation of the ballot boxes until 1876. Due to the economic crisis that arose after the declaration of the First Constitutional Monarchy in 1876, the interest rate was applied as nine percent for three years with the intervention of the state. In Crete, this rate is fixed at twelve percent.

There is a short and clear article about the interest rate in the 1906 Eytam Regulations. In the forty-third article of the regulation, it is stated that "the deposits to be applied to the orphan's property shall be made over the amount applied to the existing general debt benefits". At the same time, in this article, interest rates are requested to be determined according to the amount that has been decided in the current situation or to be decided in the future. According to this article, the interest rate is determined according to supply/demand.

When looking at the debt securities or administrative books in the şer'iye register books in different regions of the Ottoman geography, the interest rate applied by the ballot boxes is generally around 15%. During periods of high demand for money, this rate increased to sixteen percent. During periods of low demand, around 9% to ten percent were borrowed. Money supply with low interest was mostly made during the Balkan Wars, World War I and National Struggle. The interest rate of the money borrowed by the state from the ballot boxes has generally been twelve percent in every period.

Eytam Funds suffered a great loss during the First Constitutional Period. Despite the measures taken against the ongoing social and economic problems in this period, the damage to the orgy funds increased day by day. In addition to these problems, the irregularity and nepotism of the ballot box administrators also increased the damage to the ballot boxes. For this reason, the Sheikh-ul-Islam administration has intensified its inspections in the ballot boxes since 1890. One of the inspection reports regarding the provincial orgy chests is the report from the Adana region. In the report of Adana Province dated April 10, 1906, the proposals made on the management of interest and money draw attention. In the report, it was requested that the money in the ballot boxes be deposited in Ziraat Bank. Detailed information is given on this subject. It has been stated that if the money is invested in Ziraat Bank, it will help the development of the country's agriculture. During this period, Ziraat Bank's annual interest rate is four percent. In Eytam Funds, the annual interest is twelve percent. Due to the high interest rates, ballot boxes were not preferred. The proposal of the province on the subject was that the bank would take the money from the ballot boxes with four percent interest and give it with six percent interest. This proposal of the province was not accepted at the beginning. However, on 14 March 1914, an annual interest rate of six percent was accepted with an agreement between the Sheikh-ul-Islam authority and Ziraat Bank.

Although such a decision was taken in 1914, during the World War I and the Armistice period, most of the provincial ballot box managers did not invest the money in Ziraat Bank and continued to sell money from the old-style ballot box with interest. In the period of the National Struggle and after, the Ankara Government did not intervene in the election ballot boxes for a while. The Ankara Government allowed the eytam administration and ballot boxes to act in accordance with its regulations. During the republican period, eytam funds continued to sell between nine and twelve percent annually.

Conclusion

Eytam administration and funds, whose foundation purpose was to protect and evaluate the social and economic rights of widowed-orphans, insane and people in need of care, were mostly concerned with the financial or economic affairs of orphans. The Eytam administration gave priority to the issues that could bring cash in all its transactions, starting with the writing of the orphans' estate. The orphans' heritage, such as all kinds of movable goods and jewellery, was converted into cash and transferred to the ballot box. Although this practice was made in order to protect the rights of orphans, the orphan administration has sought to generate income for the ballot box or employees throughout the historical process. For this reason, complaints have not been cut off in every period.

While it is stated in the regulation of the ballot box that orphans' money is used for the development of tradesmen, merchants and agriculture, from the beginning, the ballot box is the head of the ballot box.

its client was the state. As it will be remembered, the right to private property in Ottoman society was brought with the Tanzimat. It took a long time for this right to become widespread. People have always stayed away from private property in order not to pay taxes. Since the withdrawal of money from the funds is made against guarantor and mortgage, the benefit of tradesmen and farmers has been very limited. Due to these and similar reasons, the sale of money by the ballot boxes to tradesmen and farmers remained at a low level from the beginning. As a natural result of this, the main customer of the ballot boxes has been the state.

The interest system applied in the ballot boxes is different from today's system. According to the applied system, in the ballot boxes, the principal is primarily collected. No matter how many years the principal is given, its repayment is collected in six-month increments. The interest, on the other hand, was paid in installments every month within five years, regardless of how many years the money was given. According to the regulations of the Eytam funds, the interest rate is shaped on the supply-demand line. However, looking at the general practices, the annual interest rate applied by the treasury has varied between nine and fifteen percent, even though it is fifteen percent. The times when the interest rates are low are the periods when the country has political, social and economic problems. Although the interest rate was determined within the framework of the supply-demand balance, the government intervened in the interest rate in times of trouble. On the debt given by the funds to the government, an annual interest rate of twelve percent was applied in each period.

Paper money was used in monetary and interest calculations traded in Eytam funds. In banks, calculations were made in gold lira and the interest rate was applied as four percent annually. Due to the constant price increases, the value of money has decreased. In order to protect the interests of the funds, the Eytam administration took another fee from the debtor, under the name of reserve, in addition to the annual interest rate due to the decrease in the value of the money. This fee is taken in the form of expenses to be used in the fund and it is more than the interest amount. This fee is not reflected on orphans. Along with this fee, the borrower paid an average of between forty-five and sixty percent interest, well above the normal interest charged by the fund. This practice has reduced the demand for money from the ballot boxes. Likewise, the ballot boxes turned the coins kept in the ballot boxes into gold and silver in order to protect their rights. However, while the orphan was paid, it was paid by calculating on normal interest and kaime.