1

Aydın, N. (2010). Mehmet Cavid Bey (1875-1926) and his Thoughts. 2nd

Balkans and Middle East Countries Conference on Auditing and

Accounting History. İstanbul.

MEHMET CAVID BEY (1875-1926) AND HIS THOUGHTS

Necati Aydın

Bahçeşehir University, Turkey

necati.aydin@bahcesehir.edu.tr

ABSTRACT

When the Union and Progress (Ittihat ve Terakki) Party was in power during the years

1908 and 1918, Mehmet Cavid Bey directed the economic policy of this party as the Minister

of Finance. Mehmet Cavid Bey became a liberal Minister of Finance having been affected by

the ideas of Sakizli Ohannes Pasha and took his place as one of the members of economic

theorists and Ottoman Liberal Economy by publishing some studies such as “İlm-i İktisat”,

and his journal “Ulum-u İktisadiye ve İçtimadiye”(the Journal of Economic and Social

Sciences).

In this paper, the biography of Mehmet Cavid Bey who marked both Ottoman Financial

history and the Turkish Republic financial history to some extend with his liberal politics has

been considered in two parts. In the first part, his social life, in the second part, his thoughts,

activities and works on the Ottoman State Finance and its reflection on the Turkish Republic

finance have been dealt with.

Key words: The XXth Century, Mehmet Cavid Bey, the Finance of Ottoman State,

Biography.

1.His Life

1.1. Mr Mehmet Cavid’s Fami1y

Mr Mehmet Cavid, former Finance Minister, was born in Thessalonica in 1875. Mr

Mehmet Cavid’s father was Mr Naim. Mr Naim was a merchant in Thessalonica and married

his uncle’s daughter, Mrs Pakize. They had 3 sons. Their sons are respectively Mehmet

Cavid, Mustafa Şefkati and İsmail Kazım. Sabetayist1 Mr Mehmet Cavid’s life story is

interesting and quite mournful. He had a child named Şiar in his short life.

1 Sabetaism: It is a mystic (cabalist) religious community founded by an Izmirian Jewish rabbi Sabetay Sevi by

announcing himself “Messiah” and separating from the Orthodox Judaism. This group that seemed to be

2

Mr Mehmet Cavid’s wife was originally Mrs Circassian Aliye Nazlı, who was taken to

the palace when she was just very young, was placed there and called “Cute baby” by II.

Abdülhamid. Mrs Aliye Nazlı married Mr Burhanettin the Sultan’s son, and Mr Osman

Ertuğrul, the Sultan’s offspring, was born from this marriage. When the Ottoman Empire

collapsed and the dynasty was sent into exile, Mrs Aliye Nazlı divorced the Sultan’s son Mr

Burhanettin and married Mr Mehmet Cavid in 1921. Osman Şiar was born from this marriage

on 25th October, 1924. There is no information about Mrs Aliye Nazlı’s family except that

they area Circassian. Mr Osman Ertuğrul, who is one of the inheritors of the Ottoman dynasty

and died in 2009, is the eldest son of Mrs Circassian Aliye Nazlı. Osman Şiar Yalçın

expressed that he belonged to Ottomanism by saying that “Many people do not know that I

am a relative off the Ottomans. They are surprised to know about that. I am by chance a

brother of an Ottoman Sultan’s son.”

Before Mr Mehmet Cavid was sent to death after standing a trial at the Independence

Courts, he had entrusted his son Osman Şiar to his close friend journalist Hüseyin Cahit

Yalçın. Hüseyin Cahit Yalçın raised Osman Şiar and gave him his surname.2

Mr Mehmet Cavid was a man who had experienced political coquetries all of his life.

When Mr Mehmet Cavid, who was elected the Thessalonica congressman on the top of the

list on the first(1908) and second term(1912), was elected as Thessalonica congressman, he

first took charge of the Budget Commission and after he had gained experienced here, the

political duties flowed one after the other. His first political duty was the Ministry of Finance

in the cabinet (5.5.1909 - 28. 12.1910) founded by Hüseyin Hilmi Pasha after the 31st March

Uprising. While he was keeping up that duty also in the cabinet of Ibrahim Hakkı Pasha

(24.1.1911- 28.9.1911), he was forced to resign. He was announced his resignation by saying

“We have reached these ranks under the flag of the Committee of Union and Progress. As

long as that flag rises in the Ottoman skies, we will be always here (by pointing out the

cabinet rows) in our chastity and philanthropic shield.” This speech of his was an example of

Unityist radicalism. Later on, he took charge of Said Pasha cabinet (30.9.1911-16.7.1912). He

first took charge of Minister of Public Works and then Finance Minister. Mr Mehmet Cavid,

who remained out of the Great Cabinet, was once again Finance Minister in the cabinet

formed by Said Halim Pasha (13.6.1913 - 3.2.1917) after Mahmud Şevket Pasha had been

assassinated. He was on the same duty when the Ottoman State entered into a war. When he

resigned (5th November, 1914) by refusing to enter the war, without discussing it in the

cabinet, Domestic Affairs’ Minister Talat Pasha undertook the Ministry of Finance by proxy.

Talat Pasha informed Mr Mehmet Cavid of all developments and did not make any decisions

without asking him. Mr Mehmet Cavid did not take any duties for 1.5 years but he continued

directing the Ministry of Finance from outside like a shadow minister. The Committee of

Union and Progress wanted to take the ropes in their hands by getting rid of Said Halim Pasha

and take the ropes in his hands. While Talat Pasha’s cabinet was being formed (4.2.1917-

8.10.1918) Mr Mehmet Cavid was in Germany and he did not want to join the cabinet but he

undertook it again upon the insistence of Talat Pasha (1917). He experienced the most

difficult moments of the war and saw the bitter disaster. According to what he wrote on his

memories, Enver Pasha did not inform the cabinet of the military operations. Upon the

resignation of Talat Pasha, his duty was over but he had to undertake Finance in the cabinet of

Muslim in appearance and have Sebataist Jewish faith inside for many years and did not marry to those who

were not Sebataists, joined the community in the Republic period by getting rid of their closed community

structure. 2 Yalçın, Soner; “Efendi 2”, Doğan Yayıncılık, Istanbul, 2003, p. 154.

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Izzet Pasha (14.10.1918- 8.11.1918) once again. Upon the resignation of Izzet pasha’s cabinet

that signed Moudros Armistice, Mr Mehmet Cavid’s political life ended. In short, he spent 4.5

years in practice and 1.5 years as Finance Minister in shadow in the Constitutional Period and

he was known for that in his remaining life.

Mr Mehmet Cavid was a man who was always under request, especially for the

Ottoman Finance. Mr Mehmet Cavid, who graduated from the civil service, taught and was a

head master at Fevziye Schools, took part as Thessalonica and Dardanelle congressman in the

Parliament, was assigned as the Finance Minister many times and resigned from that post,

was a close follower of the Committee of Union and Progress at the same time.3 He was

known as “The unique man who understands account books in his period in Turkey” in

Europe. He was condemned to death by Groom Ferid Pasha in his absence and for that reason

he went to Europe. Later on he returned back to Istanbul and worked at the General Debts

Management. He was one of the rare economists of his period and he issued the magazine

called “İktisadiye”-Economic- together with Ahmet Şuayp (1876-1910), who introduced us to

the positivism movement in every aspect that began with A. Comte in Europe and Rıza

Tevfik, who was a philosopher and statesman (1869-1949). He was a close friend of Talat,

Enver and Cemal Pashas, was in the comitadji team of the Committee of Union and Progress

and believed that the Committee of Union and Progress would save the country.4

When it was reported that Mustafa Kemal (Atatürk)5 would be assassinated when he left

for Izmir on Wednesday 16th June, 1926, the conspirators were caught with their guns. Their

aim was to kill Atatürk and take down the government. The conspirators who had been caught

stated that Mr Mehmet Cavid also had a role in this assassination plan and for that reason Mr

Mehmet Cavid was one of those who were arrested under assassination claims. In fact, those

who prepared the assassination were some of the leading ones of the Progressivist Republic

Party and some who belonged to the old party of the Union and Progress. The most important

individuals were Mr Şükrü, who was Izmit congressman from the Progressivist Republic

Party and Kara Kemal, who was the member of the old Union and Progress. Kara Kemal

directed and provoked this situation and took daring men around him like Abdülkadir, the old

governor of Ankara. In addition, some of the accused stated in their reports that they had

come together in the house of the old Finance Minister, Mr Mehmet Cavid. The decision that

the court had made was 13 executions and one of those whose executions was for Mr Mehmet

Cavid. The executions were performed on 26th August, 1926.

The date of 26 August 1926 was at least the beginning of mourning anniversaries in Mr

Mehmet Cavid’s wife Mrs Aliye Nazlı’s life even if it was not for the family. According to

the expressions of her son Osman Şiar Yalçın, his mother Mrs Aliye Nazlı had never been

happy after her husband was executed. In addition, she was always in material troubles and

she lived from helping hands around her. However, when the Democrat Party came to rule in

1950 and her husband Mr Mehmet Cavid’s friend Celal Bayar became the President, Mrs

Aliye Nazlı was assigned a salary. For that reason Mrs Aliye Nazlı was known to be familiar

with the Democrat Party. Celal Bayar gave help to the family and Mr Mehmet Cavid’s lost

grave was found and moved to Cebeci district in Ankara. Although Mrs Aliye Nazlı had

3 Eski Maliye Nazırı Cavid Bey; Editor: Şiar Yalçın; “Şiar'ın Defteri,” İletişim Publishing, Istanbul, 2003. p. 5. 4 Bardakçı, Murat; “Baykal’ın Bahsettiği Atatürk’e Suikast Girişimcilerinin Gizli Mektupları,” 21.01.2005

Dated Newspaper of Hürriyet. 5 He is the founder of the Republic of Turkey.

4

hostility against Atatürk, she did not raise her son Osman Şiar with these hostility feelings6

and she had an introverted life.

1.2. The Last Days of Mr Mehmet Cavid

As a liberal Mr Mehmet Cavid’s name was pronounced among the names of those who

committed an assassination on Atatürk on 26th August, 1926, he was executed by the decision

of the Independence Court.

In 1950-60 period, liberal principles appeared with the Democrat Party but this

movement was beaten down by the 27th May Coupe.

However, the liberal thoughts which Mr Mehmet Cavid stated are still alive today and

they are in continuity. His thoughts like “…it is more suitable for the State to sell off these

lands and buildings in hand at the suitable times under the suitable conditions….” and “the

worst monopoly is the State’s monopoly.” are some that reflect on the present economy.

The defence of Mr Mehmet Cavid, whose execution was wanted by the Independence

Court, regarding his assassination accusation at the last session of the Independence Court on

25th August, 1926 was later described as “Rhetoric Masterpiece”.

Mr Mehmet Cavid rejected the accusations about himself in his defence and said “I have

no news about anything.” During his defence, as a summary he said “Dear Judges,….I have

been under arrest with the order of your justice for 63 days having accused me of a heavy

crime...I am not addicted to any pleasure. Everybody knows the order of my life during the

most ordinary times. Such things have never taken place in my life... The insects that pester a

party torture both the party and nation about the responsibilities of what they have done...A

man like me who has played with millions of gold, not paper, in his life has not got even an

erected stone...Now the decision is yours and your high committees. Let the decision which

you will make not bother you in your happy times. It is all right if you have believed in my

words. If you have not believed in them, what can I do? It is destiny!”

The Independence Court that judged Mr Mehmet Cavid was not going to believe in

what the former Finance Minister had said and Mr Mehmet Cavid’s life was going to end on

the gallows the next day on 26th August, 1926. Mr Mehmet Cavid said as his last words

“God’s damnation is cruel. This is tyranny and tyranny!”, And Dr Názım, who was executed

with him said “Nooo! Upon my word, no! I have no relations with this matter, I have no

mistakes. I am an innocent!” Mr Mehmet Cavid’s grave was found by the order of Celal

Bayar while the Democrat Party was ruling and was moved to Cebeci County in Ankara in

1950.7

2. His Finance Minister Duty

2.1. Liberalism in the Ottoman State

Liberalism began entering Turkey with the Constitution (1839) in the XIXth Century. In

principle, the Ottoman State approached very much to the liberal basics of the West in the

6 Kalyoncu, Cemal A; “Babamın Mezarını Celal Bayar Buldu”, Journal of Aksiyon, Year:10, Issue: 499, No:30

Haziran 2004. 7 Yalçın, Soner; ibid., 2003, p. 55.

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civil law with the Constitution and went away from the Islam Law. Viz, all of the nationalities

of the State were accepted they would be equal before the law with regards to rights and

responsibilities with the mentioned Constitution whatever their religions, orders and races are.

In addition, this Constitution has a liberal qualification as it was a step for the constitutional

ruling in Turkey.

The Ottoman intellectuals also began to know the liberal thoughts closely, especially the

bourgeois communities under the affect of the Constitution and reform works following it.

The Ottoman army and civil bureaucrat intellectuals started a freedom movement

which we renamed as “The New Ottomans Movement” later on. The publications such as

“Tercüman-ı Ahval-Biography-”, “Tasvir-i Efkar-Pictures of Thoughts-” and “Muhbir-

Reporter-” and thinkers such as Şinasi, Namık Kemal, Ali Süavi, Ziya Pasha, who used to

write for these organs, were trying to sow the seeds of the freedom movement and grow them.

After 1850 Ali and Fuat Pashas wanted the State to take its hands from the economic

life and guarantee possession rights. And another character is Cevdet Pasha. He mentioned

that a movement for novelty was needed, stressed the importance of trade and that the

development of the trade should be through free trade.

We see the first liberal work on economic science as of the second half of the XIXth

Century. Ohannes Pasha from Chios is one of the liberal economy representatives of Turkey.

Ohannes Pasha’s “Classical Economy” book forms the basis of the economy thoughts.

2.1.1. His Thoughts on the Ottoman Economy and Finance

In addition, Mr Mehmet Cavid, who was on duty of Finance Minister for about 6 years

in the period of the Union and Progress, dealt with the work regarding the economy and was

an important politician. His articles on various magazines, and his work named “İlm-i İktisat-

Economic science-” in addition talking about Mr Mehmet Cavid, who was one of the first

liberal financiers, prove that he is an important financier who must be utilized.

The period which we define as the Second Constitutional Period (1908-1918) is the

period we see the most dynamic and lively term of Turkish political life in every aspect,

where the fate of the Ottoman emperorship is in hands of the Committee of Union and

Progress. In its body, there is a vast thought fan lying from the Ottomanism to Liberalism and

Pan-Islam and from Turkism to Westernism. And the economic thoughts of the Committee of

Union and Progress follows a line tending to the liberal economy between 1908 and 1914.

The architect of this economy policy is Mr Mehmet Cavid (1875-1926), who is considered to

be the verse and soul of the financial policy of the Committee of the Union and Progress. Mr

Mehmet Cavid, who is the son of a trader in Thessalonica, had been a consistent defender of

classical liberal school on account of his economic opinions. He wrote his thoughts on this

field in his various articles and books. Mr Mehmet Cavid published his first articles on

Mecmua-i Fünûn-Magazine for Sciences’ and became a person who had conveyed economic

science that flourished in his age in Europe and the developments on the statistical field to the

Ottoman. His most important work is his work that he named İlm-i İktisat-Economic science-

in 4 volumes. In addition, he also has got a statistical book named İhsâiyyât-Statistics- which

can be considered to be the first for the Ottoman and Republic of Turkey.

After the Second Constitution had been declared, Mr Mehmet Cavid issued the

magazines, Ulûm-ı İktisâdiyye-Economic sciences and İctimâiyye Mecmuası-Social

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Magazine- which were the most important publication organs for the movement of the liberal

and positivist thoughts in Turkey, in 24 issues between 1908 and 1910 with his friends Rıza

Tevfik and Ahmed Şuayip, who were famous philosophers in that period. His other most

important practice was to establish İ’tibâr-ı Millî Bankası-National Esteemed Bank- in order

to improve the private enterprise and empower in 1917. Along his duty at the Ministry of

Finance for more than 6 years and the period when the Committee of Union and Progress had

a voice in power, he defended that the capitulations should be terminated and thought to have

England and France accept them against the Ottoman Emperorship’s being impartial on the

First World War.

The main principles in his approach to the economy of Mr Mehmet Cavid, who

commented Marxism in his book and found him to be imaginative, is in short: “There are laws

that do not change and Darwin’s natural selection is also valid in economy”.

He defended in the works that he wrote that the development of the Ottoman

Emperorship would be possible only by integrating with the world economy and the foreign

capital should come to the country for that reason. He rejected protection and pointed out that

the private enterprise should be developed. He expressed the importance he gave for the free

trade with his words “…. according to us, realizing the free change is the main principle of the

economy by doing it without imaginations of the international trade and getting rid of the

trade barriers.“ by defending that the Ottoman Emperorship should be capitalized.

One of the parties that appeared during the Second Constitution was the Freedom and

Entente Party, which was founded on 21st November, 1911. Also this party that seemed to

tend to the liberalism with regards to their economic thoughts, asserted the thoughts of

personal enterprises and self-administration of Prince Sebahaddin. However, this party

seemed to be away from defending the liberal thoughts in reality and did not seem to come

around to the liberal thoughts.

As well as the Freedom and Entente Party having liberals in it, it come into prominence

as a political formation which was formed by the individuals having different thoughts, being

against the Committee of the Union and Progress in principle and that were deported as they

had not adopted this committee and being vulnerable to minority nationalism. In the light of

that, assuming that the Freedom and Entente Party is one of the elements that represent the

liberalism of the Ottoman Emperorship would not be quite right in respect to the historical

reality.

And the years 1914-1918 of the Second Constitution period, were the years when the

liberalism in the economy was left aside, and national economic policies were instituted and a

native bourgeoisie was created. During these years during the First World War when 1/3 of

the country’s land was lost, the Committee of the Union and Progress followed a national

economic policy also with the urgings which were brought by the war.8

Although his proposal for selling Taksim Barracks in order to cover the budget deficit

under the conditions of that period is an extremely courageous attempt, it is one of the proofs

that Mr Mehmet Cavid was an acute liberal economist. He is a financier that should be

investigated owing to only this proposal of his.

8 Akyar, Osman; “Liberalizm ve Türkiye”, Journal of Yeni Türkiye, Issue: 25, Ankara, 1999, p. 429.

7

Mr Mehmet Cavid is a financier and politician that defended the liberalism wholly in its

economic and political dimension. According to him, the State is a common limb of the

society that forms in a nation and the main duties of the State are defence, security and

performing the justice service. Economically the public works services and infrastructure

investments must be performed by the State. Freedom, which is an inherent part of economic

development, means that the State must not interrupt it. On the other hand, freedom does not

mean that everybody can do whatever they want. Although the freedom was obtained by the

governing constitution, it was harder to keep the constitution than to declare it.9

Mr Mehmet Cavid sometimes stated in his writing that there might be some deviations

by referring to the difficulties in practicing the liberalism precisely and for that reason

liberalism could be realized step by step if the countries considered mutually their policies

intended for each other.10 Mr Mehmet Cavid expressed clearly the biggest barriers of the

Ottoman State in being liberal as below:

“Having limited the right of possession and inheritance to a great extent, the ongoing

grab right of the State, owing to the State ruling’s structure or interrupting the first capital by

the tradition and artisan establishments and far beyond them, the Gediks11 that are very

different from the West feudality, allow the trade to be always in hands of a certain

community” Mr Mehmet Cavid never swerved from these thoughts of his own and verbalized

them both in his lectures and on his speeches and talks and in his articles.

2.1.2. His Thoughts on Economic Science

Some of the thoughts of Mr Mehmet Cavid on economic science in his work “İlm-i

İktisat-Economic science” that stand out and have important determinations regarding our

economy today when they are read, although they were written a hundred years ago, are as

follows:

“Ongoing interference of those who are not aware of economic science allows wrong

thoughts and beliefs to expand easily and complicates the mistakes to be corrected.12”

“Economic science is the total of the laws that the nature does not give human beings

from the birth itself and determine the production rules, the work areas in order that human

beings can use them with efficiency.13”

Mr Mehmet Cavid stated that economic science struggles with economic analyses and

economic synthesis in two ways and cited “the Problems of the Economic laws”. Mr Mehmet

Cavid had a complete belief that these laws were valid without considering the time and

place. While he was answering to those who had rejected, he emphasized the rejections by the

Socialists:

9 Şaylan, Gencay, “Değişim Küreselleşme ve Devletin Yeni İşlevi”, İmge Kitabevi, Istanbul, 2000, pp. 65-69. 10 Şaylan, Gencay; ibid., 2000, p. 69. 11 Gediks: Gedik is a Turkish word. It has no exactly English meaning. Briefly Gedik is an authority of trading

and Gediks were monopolistic unions. Also Gediks depend on government about permission and devolving.

It was used first, when Sultan III. Ahmet was an emperor. This type of trade was continued up to 1860

(Çağatay, Neşet; Ahilik Nedir?, Kültür Bakalığı Yayınları, Ankara, 1990, p.216). 12 Mehmet Cavid Bey, (Translation: Sema Alpun Çakmak); “İktisat İlmi”, Liberte Yayınları, Istanbul, 2001, pp.

233-249. 13 Mehmet Cavid Bey; (Translation: Sema Alpun Çakmak); ibid., 2001, pp. 239.

8

“The Socialists claim that the economic events do not change with laws but they change

with human beings and establishments. As the socialists aim at keeping equity in properties,

they accept them as if “all the economic rules are temporary things to be removed”

....whereas... according to them, the things which they accept to change according to

community have a continuous existence.14”

In this way, Mr Mehmet Cavid, who clarified the understanding of the economic law

and rule, underlined the judgement “No matter where it is in the world, the countries that have

generous capitals and use them well, respect the work shares, use machinery and determine

labour part according to the efficiency, improve - otherwise they remain behind.15” as a result

of this understanding.

2.1.3. His Thoughts on Monopolism and Industrialisation

It was clear that Mr Mehmet Cavid would be against all kinds of State intervention and

monopolies in the meantime as a natural extension of the liberal economic thought on mental

platforms; however, he stated that it was not possible for him to be also insensitive himself to

the monopolies that took place in the indispensable income sources in all of the developed

countries in spite of all economic handicaps. Like other countries, the Ottoman State should

form monopolies seen to be profitable in their profit point of view; but the monopolies like

matchstick production, which is not worth the burden to gain small material benefit, may be

left. Mr Mehmet Cavid stated that the Ottoman State should approach the oil production

partially with a monopoly understanding; however, it is a pity that this matter depended upon

the permission of the big countries16.

Although Mr Mehmet Cavid accepted partially the monopoly especially for specific

investments, he considered it as the reasons for the Ottoman State not to have been

industrialised by saying“...The worst monopoly is the State monopoly...” after the industrial

revolution, the number of banks increased and increased in England and in this way the

savings were directed to production and the importance of trade was more than it was in the

past. And as the bank sources were directed to the treasury financing in France, it did not

gain the same success as in England.17 As a result of the studies by Mr Mehmet Cavid on

these two countries, it is seen that he connected the reasons why the Ottoman State had not

been able to become industrialized according to the liberal economy rules of the two basics:

1. The industry which was monopolized by the government,

2. Other laws and bylaws regarding the industry: There were industry branches which

the State could not run and were forbidden to be performed by individuals and there were

industries which were subject to gaining permission from the government and industries

which were established depending upon other industries.

As samples for the industry kinds which the State could not do specially but forbade to

be done by the private sector can be said; quencher producing and sale and poppy cultivation,

14 Mehmet Cavid Bey; (Translation: Sema Alpun Çakmak); ibid., 2001, p. 240. 15 Mehmet Cavid Bey; (Translation: Sema Alpun Çakmak); ibid., 2001, p. 249. 16 Mehmet Cavid; “Ticaret Şirketleri”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Year: 2, Vol.: 2, No:18-21, pp.

767-847. 17 Mehmet Cavid; “Senesi Esbab-ı Mucibe Layıhası”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Year: 2, Vol.:

3, No: 23, pp.1052-1108.

9

quencher sales at shops, establishing publication houses, bread production etc. In addition,

some professions such as doctoring, pharmacy were defined as the professions that were

subject to permission under some conditions with regards to their general health benefits.

Mr Mehmet Cavid wrote a section with the heading ‘Public Goods and Properties’ in

his work. In this section, the author expressed what the State’s tasks were and weren’t.

2.1.4. His Thoughts on Auspices and Free Trade

Mr Mehmet Cavid can say “Trade is the biggest henchman of the civilization” as every

financier can. After that, he rejects definitely all approaches that obstruct the free trade. He

excoriates especially the auspices policy, which he names “Auspices Method”. He refused

“Auspices Method” with his words “Auspices policy does not develop industry. The things

that are needed for the non-developed countries in industry to develop are not auspices

policies but capital, science and education and these should spread.18”

After he defined George Friedrich List, who will be considered the pioneer of the

protective economy policies, as an economist whose fashion was over with his half century of

thoughts, he added this:

“The thoughts of List about a nation’s being both agriculturist, and industrialist and

trader cannot be approved because it is not possible to be everything. It is not necessary for a

country to have various industries. Instead of diversifying the industries, diversifying the

requirements is better. If economic development could develop only with an economic action

branch, it would be appropriate not to perform other than this industry branch.”

And Mr Mehmet Cavid stated the following thoughts about the protectionism and free

trading:

1. “...By reaching the international free trade and labour division to its maximum level,

the positive effects which this great means gain in the national production cause the same to

happen even in the international productions.”

2. “...International free trade allows efforts to appear to encourage the competition,

which is the source of all developments.”

3. “...Protecting the native goods from the competition of foreign goods stops all kinds

of development domestically, increases the prices and enforces consumers for more

sacrifices.”

Mr Mehmet Cavid, who determined around only 10 policies about free trade and

protectionist, gave the necessary answers towards his world view against the claims of those

who defended protective policies. Of course, he rejected the necessity to provide the balance

of the foreign trade exactly as a result of the free trade theory.19

2.1.5. His Thoughts on Trade Law

18 Mehmet Cavid; “Ticaret Şirketleri”, p. 789. 19 Mehmet Cavid; “Ticaret Şirketleri”, p. 801.

10

According to Mr Mehmet Cavid, full free trade in Unityism cannot be performed

politically owing to hostile treatments against each other. And when it is looked at in terms of

the economy, coordination in the trade law should be realized for a full free trade. In this way,

the solution for the disagreements to appear, brings in confusion. In case the same trade law is

already valid among the nations, the free trade will emerge as a natural result of that too. On

the other hand, the element that reflects the national characters of the countries is their civil

law. As performing an internationally civil law mutually means rejecting the personalities of

each country one by one for this meaning, it cannot find a practice area but this case is not in

question for the trade law.20

2.1.6. His Thoughts on Taxation

Taxes, which make up the most important source of State’s revenue was increased in

response to the requirement for increased revenue in the XIXth Century. This on the other

hand had the effect of further upsetting the situation of agricultural producers who were most

addressed by these taxes. As far as government spending was concerned we find that despite

decreasing income these expenditures were constantly increasing. Financing of long drawn

out wars and luxury consumption resulting from increased trade with the West were the main

factors increasing government spending and taxes.21

And about the taxes, Mr Mehmet Cavid, who defended “Law must be dependent upon

justice but not mercy”, was for calculating the taxes on an equity base. His tax arrangements,

the discounts made by him on taxes, tax offers by him were appropriate all the time. Mr

Mehmet Cavid touched upon that the taxation of the capital would cause economic problems

and defended the thesis of “...It is certainly necessary for each tax to be light and middle

level. Although taxes like these kinds makes necessary the development of a country’s welfare

and fortune, the taxes in high rate causes people to have problems22” about the taxation.

His first subject matter belongs to the tithe in terms of taxation. He said “The tithe is

such a tax that,…it cannot be touched easily. This is the tax that will be touched and improved

the hardest because the one who will touch it must accept its responsibility. One can hardly

find such a man who can undertake its responsibility. It is not possible to act by heart to

transform the tithe to land tax in all of the contemporary countries.” What Mr Mehmet Cavid

said has a great accuracy today. As a matter of fact, the tithe has been removed but it has not

been able to be transformed to land tax.

The second subject matter which Mr Mehmet Cavid touched upon in terms of taxation

was the dividend tax. The dividend tax was the tax that was collected from the artisans and

craftsmen at that time. Foreign companies were excluded from this tax. Mr Mehmet Cavid

had official correspondence in order to allow foreigners to contribute to this tax and expected

to have a positive answer especially from the French Government. He was going to remove

both an illogicality and injustice such as tax exemption of the foreigners by including the

foreigners in taxation and collect the taxes from people in both a rightful and just way. In

addition, in case this law had been accepted, the originated income would have meant

20 Ali Kâmi; “Sosyalizm Hakkında Tenkidat”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Year: 2, Vol.: 2, No:

17, pp. 707-720. 21 Tuncsiper, Bedriye, Arzu Tay, Fatih Bayramoglu; “Ottoman Empire’s Debt Management in 19th Century and

Role of The Galata Bankers (1838-1881)”, The Balkan Countries 1st International Conference on

Accounting and Auditing, 8-9 March 2007, Edirne, Turkey, p. 49. 22 Ali Kami; ibid., p. 722.

11

assuring 1 million TL of the 5 million TL deficits on the budget in 1912. Mr Mehmet Cavid

touched upon this in his articles on all occasions, that the economic power would come by

itself if the necessary sensitivity was fulfilled for making the trading process easier and

increasing the trading volume and infrastructure elements, transportation in the first instance,

were completed and that both the taxes could be collected on time and in increasing amount

as the taxpayers of the country that has a developed financial structure were also powerful23.

2.1.7. His Thoughts on Chambers of Commerce

Since the development of the trade is closely related with the wideness of markets,

following the open door policy of the countries will affect the world trade volume positively.

For that reason free trade has been defended continuously by Mr Mehmet Cavid. According to

him, the basic role in developing the international trade belongs to traders. And the task of the

State is to arrange the things that will make the free trade easier, to protect the rights of the

Ottoman traders in the eyes of the foreign countries and to inform traders of the facilities

abroad through the Embassies. This last duty is performed by chambers of commerce in many

European countries. In this way, the third party which will contribute to the development of

the trade is the chambers of commerce. The basic duties of these are to guide the State in

order that the trade can develop and traders can get over the barriers they meet24.

2.1.8. His Thoughts on The Stock Exchange

It is known that a share market had been formed in the Ottoman State since the XVIIIth

Century. However, assets and commodities stock exchange had not been established yet. In

general two kinds of transactions - cash and termed - were performed. The facilities which the

stock exchange introduced the investors to were arbitrage, steady or variable stock and

purchase of the low-priced common stocks which were expected to increase later. The

arbitrage is the transaction which can be done only by the professionals. The value of the

stocks and common stocks in the international markets is closely related with the economic

situation of the country which it belongs to. While the value of the stocks and common stocks

of the countries that are powerful economically increases, the value of the weak ones

decreases. In this way, those who will have transactions in the international markets must

form their portfolios both from different countries and from various investment means. While

the rich people give place to the steady- and variable-interest investment means, the small

capital owners must not take any risks. As the value of the stock and common stock has not a

continuous increase trend and will start decreasing after a while, the investor must turn some

of his common stocks that are in his portfolio to cash when he gets profit at 20-25% rate. Mr

Mehmet Cavid not only explained the terms such as stock, which come at first, liquidity, repo,

storage, exchange, divestment with examples, but also took in hand the treatment of stock

exchanges in the European markets25.

Mr Mehmet Cavid stated that the stock exchange process, which was named “Air

Playfulness26” in the Ottoman State, was a product of the mind. The levels of development

and civilisation of the countries are measured by the littleness of the State intervention. For

23 Mehmet Cavid; “Senesi Esbab-ı Mucibe Layıhası”, p. 1057. 24 Mehmet Cavid; “Senesi Esbab-ı Mucibe Layıhası”, p. 1059. 25 Mehmet Cavid; “Senesi Esbab-ı Mucibe Layıhası”, p. 1098. 26 Mehmet Cavid; “Borsa Muamelâtı”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Year: 2, Vol.: 2, No: 17, pp.

577-612.

12

that reason, Mr Mehmet Cavid did not consider the State intervention right on the stock

exchange transactions. They must close casinos and must not arrange lotteries.

2.1.9. His Thoughts on Property and Property Acquiring

Mr Mehmet Cavid touched upon “Private Property Acquiring”, too. He studied the birth

of the private property and put forward the idea that “If there had not been the private

property, a saving would not have come out, capital would not have formed, the works for

rehabilitation of land would not have existed and all of these should have been done by the

government and it is clear that it is impossible. For such duties cannot be expected from the

governments.27”

“Families have been formed only in the countries where there is private property and

inheritance... If the inheritance were not under guarantee, the individuals would not be eager

to accumulate capital...28” He determined the place of the private property with regards to a

complete economic system with his words “Those who have removed the inheritance, will

have removed the families”. Those who support the liberal economy policies today understand

and defend these two establishments of the social system which this policy depends upon with

the same approach.

2.1.10. His Thoughts on Employment of the Public Sector Workers

The number and salary increase of the workers who work at the State departments

where a hidden unemployment is seen has reached to the extent which cannot be met with the

budget facilities. Mr Mehmet Cavid foresaw the decreasing the number of civil servants as a

firm indication and stated the alternative methods that could be applied. Within this context,

superannuating them if their service period is enough, dismissing them if their service period

is sufficient by paying their compensation and discount on their salaries. There are

disagreements springing from the method and amount between the senate and parliament. The

most important benefit of the decrease in the number of the civil servants will be on the

change in people’s minds. People will no more see the civil service as the gateway to a good

living and they will bend to economic activities.29

The principle of getting a salary, which has been a discussed as one of the subject

matters especially in Turkey for the last 20 years, which determines the share of labour

according to efficiency has quite some similarities with the thesis which Mr Mehmet Cavid

had about distributing the income into labour 100 years ago.30

2.1.11. His Thoughts on Transportation

According to Mr Mehmet Cavid transportation is one of the problems that should be

solved. The basic reasons for having production at the livelihood level in the Ottoman State

were the insufficient facilities of transportation. When the production remained at the

livelihood level instead of tending to the markets, the tax income from this remained at a low

level. Mr Mehmet Cavid stated that it could not be thought that the Ottoman State would not

27 Mehmet Cavid Bey, “Borsa Muamelâtı”, p. 614. 28 Mehmet Cavid Bey, “Borsa Muamelâtı”, p. 620. 29 Fazıl Ahmet ve M. Cavid Bey; “Terbiye Tahsil”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Vol. 3, No.9, pp.

93-107. 30 Çavdar, Tevfik; “Türkiye’de Liberalizim”, İmge Kitabevi, Ankara, 1992, pp. 88.

13

be insensitive to using the railway as the main transportation means towards the end of the

XIXth Century. And the railways became necessary not only for product transportation but

also for political transportations such as transportation of the soldiers.

2.2. His Practices on Ottoman Finance

When the Committee of the Union and Progress took their first steps at State governing

in 1908, they did not have any economic thoughts and politics. The unique man in this area

was Mr Mehmet Cavid from the beginning to the end. Even when he was not Finance

Minister, yet he remained the unique expert due to having a special finance and economy

technique.

It can be said that Mr Mehmet Cavid caused a dualism within the Committee of the

Union and Progress by standing against the First World War. As Mr Mehmet Cavid was not

for entering the First World War, he left the government. Mr Mehmet Cavid, who was the

famous debt searcher in the European markets, accepted that there was a financial freedom as

well as political freedom and that great repressions could be carried out in a country. He was

of the opinion that a financial repression would shake more than a political repression would

do.

During the First World War Mr Mehmet Cavid was the initiator of launching the

banknotes in the market, establishing İtibar-ı Milli Bankası-Honourable National Bank and

issuing the first domestic bonds.

Although he took part as a counsellor during the Louisiana meeting, his liberal thoughts

were not esteemed after the Republic was declared. A finance policy of statist interventionism

was dominant until Özal in Turkey - including the Republic period.

Mr Mehmet Cavid was a prominent politician with his knowledge about the Ottoman

debts and his dignity at the foreign financing establishments. Ismet Pasha also took Mr

Mehmet Cavid to Lausanne in order to utilize his experience. He took him with him as a

consultant by negotiating with him in Istanbul. Mr Mehmet Cavid’s duty at Düyun-u

Umumiyye (Public Debts) was not calculated. Mr Mehmet Cavid, who arrived in Lausanne

one month later than the delegate (12th December, 1922), was going to help the Lausanne

delegate externally. He took Mrs Aliye with him. However, Mr Mehmet Cavid had a

disagreement with the Turkish delegates about eliminating the debts of the Ottoman State,

instead of having a disagreement with the Englishmen. What Ismet Pasha looked for, was not

what he found! Mr Mehmet Cavid was carrying on with the France delegate at Lausanne

Palace much more than he was carrying on with the Turkish delegate and this behaviour of his

caught the attention of the delegates and he began to ruffle feathers. Mr Mehmet Cavid was

approaching flexibly to Ismet Pasha’s thesis on distributing the debts of the Düyun-u

Umimiye (Public Debts) to the countries that had separated from the Ottoman State and was

suggesting solutions with Gurzon at the same time. This behaviour of his caused Ismet

Pasha’s indignation. In this case, Ismet Pasha, the chairman of the delegates, took Mr Mehmet

Cavid out of the delegation.

Mr Mehmet Cavid put importance separately on the transportation matter and for that

reason he published his two articles with a top heading “Umur-ı Nafıamız- Our Construction

Matters-“about Rumeli Şimendiferleri-Rumelia Railways-and Thessalonica-Monastery

Railway” in magazines. He touched upon, especially, the economic, political and military

importance of the railways for the Ottoman State. In addition, Mr Mehmet Cavid, who

14

reported the political events in details such as not having completed the border between the

Ottoman State and Austria, Serbian riots, Russian war and the remainder of some borders

inside Bulgaria, he dealt with the contracts made during the construction of these railways in

detail by touching upon the increases in the number of transported passengers, commodities

and goods that had also increased the production.

The thoughts of Mr Mehmet Cavid left important impressions both on forming the

constitution and financial operating. For example, the fundamental law of the Constitution

forbade confiscation and fatigues by defining the material rights of the State and the taxes

which did not have any law basis and brought the principle that everybody should pay taxes

according to their financial power. In addition, the accepted method of the budget and also the

authorizations of the senate and the parliament took shape around the thoughts of Mr Mehmet

Cavid. After the Crimean war, the loaning necessity of the State increased gradually, stamp,

liquor, permission duties and collecting tithes and the management of the salt-tobacco

restraints were given to Galata Bankers31 owing to the payment difficulties and this process

resulted in establishing Düyun-u Umimiye (Public Debts) department. In fact, the Ottoman

financial organisation was rearranged as a consequence of Düyun-u Umimiye (Public Debts)

because the Ottoman State did not have a central budget till Sultan II. Abdülhamit. All of the

economy historians know about this reality. The elite financiers like Mr Mehmet Cavid, who

gained the knowledge that was going to form the modern Ottoman finance at Düyun-u

Umimiye (Public Debts), came into existence. In the period of the Armistice, he went to

Switzerland as he faced prosecution by the Unityists while he was performing his duty at

Düyun-u Umimiye (Public Debts). He joined the London Conference held in 1921 as one of

the representatives of the Turkish National Assembly Government. He returned to the

mainland in 1922 and took a duty at the assembly of Düyun-u Umimiye (Public Debts).32

2.3. His Work on the Thoughts of the Ottoman State Having a Liberal Financial System

Mr Mehmet Cavid has many written works that he brought into the economy and

finance area. Among them were Ulûm-ı İktisadiye-Economic science and İçtimaiye

Mecmuası-Sociology Science that were published in 27 issues between 28th December 1908

and 14th March 1911. However, the issues between 18 and 21 were published together so

there were 24 issues in reality. Even if the thought movements were divided into the

categories such as Turkist, Socialist and Islamist; liberal and protectionist in terms of

economy; positivist and materialist in terms of philosophy, approaches for example

associating Islamist and Socialist are sometimes seen, too. And Westernism is, either partially

or completely, the reference of all the movements. The partial Westernism on one end or the

Westernism understanding of the conservative community can be attributed to the science and

techniques of the West. Abdullah Cevdet, who defended the West with all their

establishments in a radical way, is with his opinion, at the other end of the scale. The answer

31 Galata Bankers played an important role in financing of domestic and foreign debt in the Ottoman Empire

beginning from the reign of Mehmed II (Sultan Fatih) and peaking in XIXth Century, and later facilitated

establishment of a financial market in the Empire and its integration into the West. Their acceptance of this

role was a development forced upon all parties involved by the prevailing environment of the day. In this

role the bankers developed close relationships with persons at all levels of the Ottoman government

including the Sultan. Although they made many enemies along the way the bankers simply constituted a

rational profit seeking group. In many instances their interests overlapped with those of the State simply

because they were citizens of that State (Bedriye Tuncsiper, Arzu Tay ve Fatih Bayramoglu; ibid., p. 59-

60). 32 Çavdar, Tevfik; ibid., s. 88.

15

to the question to where Ulûm-ı İktisadiye-Economic science and İçtimaiye Mecmuası-

Sociology Science are on this fan or which of these elements they have within their bodies is

generally given that they are Positivist, Liberalist and Westernizers. There are a total of 22

authors’ signatures in this magazine.

The most efficient authors are surely the founders of the magazine. Ahmed Şuayib

contributed with thirty eight articles, Mr Mehmet Cavid with twenty seven and Rıza Tevfik

with fifteen. Most of these articles have a serial nature, especially the articles of Ahmed

Şuayib that continued nineteen issues under the heading “Fransa İhtilâl-i Kebiri-Great French

Revolution-” are in a book’s volume. This follows “Rusya-Russia-“which lasted eight issues.

And his other articles have the heading “Yirminci Asırda Tarih-History in the XXth Century”,

“Devlet ve Cemiyet-State and Society”, “Hürriyet-i Mezhebiye-Freedom Way”, “Düvel-i

Mütemeddinenin Siyaset-i Mezhebiyeleri Civilized Nation’s Political Ways”, “Avamil-i

İçtimaiye Factors of Social Sciences-” and “Viyana Mütemeri-Vienna Congress”. And the

articles of Mr Mehmet Cavid’s “Ticaret Şirketleri-Trading Companies” and “Borsa

Muamelâtı-Stock Exchange Transactions” are sizeable ones. They have “Ulûm-ı İçtimaiye-

Sociology Science” and “İktisadî Riyazi-Economic Accounting” headings.33

Mr Mehmet Cavid studied theoretically the liberal and protective finance policies, the

advantages and disadvantages of both policies, in which cases which countries would gain

benefits from which policies with other economic subjects in his books. He also replied in his

books and other articles as to why the focus on agriculture should have been made by the

Ottoman State. For that reason, and his duty at the Ministry of Finance, his articles in the

magazines, Ulûm-ı İktisadiye-Economic science and İçtimaiye Mecmuası-Sociology Science

are not mostly related to theory but to practice. He touched upon the necessity of free trade

and the results of the various economic policies that had been seen in different countries

within this context. Aynizade Hasan Tahsin, who was a Financier, Political Science Tutor and

headmaster of Galatasaray Lyceum (1st January 1923-24th February, 1923), gave the theatrical

economic knowledge in the magazine. Mr Mehmet Cavid, who was on duty as Finance

Minister with the Constitution governments for three years and eight months, concentrated in

all his articles that a strong finance depended on a strong economy.

Mr Mehmet Cavid had articles also on the stock exchange. He published three widely

extensive articles with the heading of “Borsa Muamelâtı-Stock Exchange Transactions-” in

the magazine. As well as he explained terms in these articles, where the stock exchange takes

the first step, such as liquidity, repo, receptacle, exchange, dissolution, by giving examples; he

also touched upon the process of the stock exchanges in the European countries. In addition, it

is seen that the thoughts for and against the stock exchange were discussed in these articles.

As can be understood from the articles, Mr Mehmet Cavid did not approve of casinos and

lotteries. It is seen that this view of his has come into conflict with the liberal view of today.

The unique pen that toiled systematically on the subject of economy history in the

Ottoman news, was that of Mr Mehmet Cavid. Although Ahmet Muhtar (1870-1934 Republic

of Turkey’s former Great Ambassador to Washington and former foreign affairs minister)

also had important articles regarding the economy and finance history, Mr Mehmet Cavid’s

articles were different with regards to content, volume and system. Mr Mehmet Cavid

surveyed in detail the developed trade construction of the old Greek, Rome and Phoenicia by

33 Karaman, Deniz; “Cavid Bey ve Ulûm-I İktisadiye ve İçtimaiye Mecmuası,” Liberte Yayınları, Istanbul, 2001,

pp. 65 -70; 201-209.

16

starting from India and Egypt, the great trading volume which the Arabians had reached, by

developing the shareholder method: Slavs carrying on the primitive behaviours of the

Germanic hordes from their existence to their disappearing; Germans sacking Europe and

Normans sacking Italy. He examined the safety precautions these counties had taken in order

to develop the trade and the lives of the traders in the fortified cities. The main trade ways

between the East and West, fairs and Hanseatic towns are the other subjects that were

emphasized. At the end of his studies, he understood that it was compulsory to find new

markets and to have the production financing through the companies as long as the industrial

production increased and the free trade was always more superior than its protection. So, he

examined the establishment, improvement and the effects of the companies on trade in Italy,

France, Finland, England and Germany and the concession that had been given to the

companies in the USA and India. Mr Mehmet Cavid found out the importance of

incorporating, and the usage of the company capital for financing, and wanted to have studies

on the history of the anonymous companies which are considered to be a new period on the

commercial organisation for the XXth Century and the importance of it on the economic life.

Mr Mehmet Cavid stated that he would also examine the law and financial matters about the

anonymous companies but this thought of his was not realized because the publication of

Ulûm-ı İktisadiye-Economic science and İçtimaiye Mecmuası-Sociology Magazine were

stopped. The reason for the 1911 budget was also revealed in the articles of Mr Mehmet

Cavid. In the article it was stated that a certain budget being prepared by the Ministry Of

Finance and the income and expenditure of the budget and loaning necessity were handled in

detail by estimating the budgets of all the departments in the Ottoman State in the first place.

We think the most interesting and important thoughts of Mr Mehmet Cavid among these are

about the Turkish oil.

Sultan II. Abdülhamit, declared the oil regions of Mosul and Kirkuk "Memaliki

Şahane", i.e. "Sultan’s Property" by thinking that Neftçioğlu family could not resist against

the strong English groups. However, all data changed as the Committee of Union and

Progress came into power after the Second Constitution in 1908 because the new government

transferred the Sultan II. Abdülhamit’s "Memaliki Şahane-Sultan’s Property" to the Ministry

of Trading and Agriculture and after that to the treasury because there were only those places

in hand as a guarantee for the loaning papers that they would issue. And then they rented the

oil deposits in Aynılgazel, which is 2 km to the west of Gayyare, which is near Mosul, to the

Germans for 1 year. The financing of the production unit was made by "Deutsche Bank". Of

course, England arose and wanted their rights. The government sent the Finance Minister, Mr

Mehmet Cavid, to London in order that he could carry out the negotiations. Mr Mehmet Cavid

also took Kalust Gülbenkyan, who was the expert of the subject matter, with him. However,

when grand vizier Sait Halim Pasha called Mr Mehmet Cavid to Istanbul urgently, the

authorization of carrying out the negotiations and terminating was given to Kalust

Gülbenkyan. The agreement was signed on 19th March, 1914: A company was going to be

established called "Turkish Petroleum Company". The shares, i.e., its capital, of this company

were going to be shared by "Turkish National Bank", "Deutsche Bank", "Anglo Persian

Company" and "Royal Dutch Shell", which was the joint stock company by England-Holland.

Mr Mehmet Cavid’s articles that covered seven issues under the heading “İktisadî

Yayınlar ve Olaylar-Economic Publications and Events” were serial ones. As it is understood

from the name, these articles in which he completely touched upon daily economic events

also handled the economic events taking place in the Ottoman State and world as well as the

criticism or introduction of the economy related articles that took place in various newspapers

and magazines. The subjects that had been negotiated in the parliament assembly were

published within this context. One of the most important subjects that was handled and

17

emphasized the most was the necessity of decreasing the number of civil servants. And

another article of Mr Mehmet Cavid was about establishing a statistical institution which

allows the developed level of the countries to be measured both within themselves and at

international level.

And other subjects that Mr Mehmet Cavid handled in his articles can be put in order as:

the employment policies of the public workers, increasing the import taxes, determining the

wages according to the efficiency principle, State debts, temporary budgets, public works, the

economic and political relations of the Ottoman State with other countries, foreign trade

volume and shares of the various countries, strikes and labour organisation rights.

When the articles which he published in his period are studied in general, it is seen that

Mr Mehmet Cavid had a liberalizing model that had been designed in detail and presented in

unity and taken up seriously by the Ottoman State.

RESULTS

The life of Mr Mehmet Cavid, who was one of the interesting persons of the

Constitution period as he belonged to a Sebataist family in Thessalonica and with his political

style and personality, is the suitable type to evaluate the policy of that time. Although he was

finance and economy expert of the Committee of Union and Progress, he was advisor for the

other practices of the committee.

Mr Mehmet Cavid was a plain liberalist as he always stated. However, he was not

stubborn and radical in his thoughts in order that he could overcome the problems as he was

between the past and present and he made any changes easily which at the time were

considered necessary. His thoughts and suggestions were regarding the solving of the urgent

daily problems that were perpetual, rather than theatrical and developing. It is clear that Mr

Mehmet Cavid inclined to the practical solutions that aimed at answering the pressures from

inside and outside. These were the dominant elements on the financial thoughts of Mr

Mehmet Cavid in the country, the Ottoman country, where there were often wars and

domestic riots.

He defended a policy of not hurrying in the areas such as the national industry and

economy. Mr Mehmet Cavid, who took the foreign capital to the highest level of the biggest

rescuer of the State and society with the practical results which he reached from his economy

knowledge, also described the destructive and cruel character of the capitulations as disasters.

For that reason, he was always against the financial auditing of foreigners. He complained

that the trade agreements did not change. He also had the psychology of the community that

was under the stress and depression of the capitulationist press. However, he was in a

difficult state of mind when adhering to the principles of the government against the foreign

press and bore the torture of such policy - for example in the Commercial Alcohol (the

protective law for the native viniculture that grows in the hinterland in Izmir- Thessalonica).

Osmanlı Bankası seemed to be sympathetic to Mr Mehmet Cavid Bey and he saw this

bank as one of the family individuals of the country (of course within the economic system).

Whether Düyun-u Umumiye (Public Debts) was a State department or not took his interest.

He was sorry because the Ministry of Finance did not have such an organisation. He thought

that it was a State department and perhaps he was also sure that this department was not

native. It can be said that he considered this establishment to be necessary. It shows how the

Second Constitution sustained the old one on what kind of basis, and granted it non-

18

changeability because this establishment, whose roots are foreign and the Sultan II.

Abdülhamit had a great role in forming it, got a good mark from the team that had taken the

Sultan II. Abdülhamit from the power.

He defended the view that the development of the Ottoman State could be possible only

by uniting with the world economy and for that reason the foreign capital should come to the

country.

Mr Mehmet Cavid showed with his attempts, especially İtibar-i Milli Bankası (he was

already one of the founders of this bank), that he was for establishing the national banks, and

financial establishments. However, he was against founding such national establishments

“with hard and harmful precautions”. And this last thought of his may be considered to be a

warning not to give place to “nationalist thoughts” and Turkist thesis in the economy and

finance policy in the Ottoman country.

The paths of those Union and Progress people and Republicans separated during the

negotiations in Lausanne. Moreover, Mr Mehmet Cavid, who was the old friend and Finance

Minister of the old Unityists, was taken to the commission as “consultant”. During the

negations, the general debts subject was being taken to the agenda. According to Rıza Nur

who was at the Lausanne commission, Mr Mehmet Cavid declared his thoughts in the

direction of the France-England thesis and in this case the thesis of the Turkish commission

was remaining weak. This case made Ismet Pasha, the chairman of the commission, angry and

he was taken out of the commission. Neither Ismet Pasha nor Mr Mehmet Cavid could forget

this event.

Adnan Menderes-Celal Bayar, who was in power in the 1950s, followed the liberal

ruling of Mr Mehmet Cavid until 1960. The following governments had to do the same, too.

Above all, the decisions made on 24th January and the period of Turgut Özal made this

thought reach the pinnacle. Liberating imports, starting to practice a realistic currency rate

that ends the Turkish Lira having an extreme value, tempting exports and foreign capital,

providing export with institutional support through insurance and finance, decreasing the

subventions gradually and terminating the price controls were foreseen. In short, the decisions

of 24th January were the steps that had been taken for abandoning the protective-

interventionist-economy policies which had been performed for all the Republic history and

forming a more liberal structure and they were based on the economic and financial thought

architecture.

Mr Mehmet Cavid tried to serve his country with his economy and finance knowledge

both during his long duty at the Ministry of Finance in the Ottoman State and in the first years

of Turkish Republic, even though it was for a short time, and took his place in the Turkish

Finance History as an economist who paid the price of the mistakes - even though the exact

evidence that proved his connection to the assassination attempt on Atatürk could not be set

forth - which he had made, with his life in the end.

REFERENCES

Akyar, Osman; “Liberalizm ve Türkiye”, Journal of Yeni Türkiye, Issue: 25, Ankara, 1999.

Ali Kâmi; “Sosyalizm Hakkında Tenkidat”, Ulûm-ı İktisadiye ve İçtimaiye Mecmuası, Year:

2, Vol.: 2, No: 17.

19

Bardakçı, Murat; “Baykal’ın Bahsettiği Atatürk’e Suikast Girişimcilerinin Gizli Mektupları,” 21.01.2005 Dated Newspaper of Hürriyet.

Çağatay, Neşet; Ahilik Nedir?, Kültür Bakalığı Yayınları, Ankara, 1990, p. 216.

Çavdar, Tevfik; “Türkiye’de Liberalizim”, İmge Kitabevi, Ankara, 1992.

Çulcu, Murat; “Marjinal Tarih Tezleri,”, e Yayınları, Istanbul, 1995.

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İletişimYayınevi, Istanbul, 2003.

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Vol. 3, No: 9.

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