The gentlemen of the "Z.E.G.," after months of inactivity spent in reviling the Turks and studying Young Turkish and other morals and manners by frequenting all the pleasure resorts in the place, managed at last to get the exports of raw materials set on the right road, and so it came about that the fabulous sums in German money that had to be put into circulation in payment of these goods, in spite of Turkey's indebtedness to Germany, led to a very considerable depreciation in the value of the Mark even in Turkey for some time.
But until the understanding as to exports was finally arrived at, there were many dramatic events in Constantinople, culminating in the Turks re-requisitioning, with the help of armed detachments, stores already paid for by Germany and lying in the warehouses of the "Z.E.G." and the German Bank!
On the financial side, apart from Turkey's enormous debt to Germany, the wonderful attempt at a reform and standardisation of the coinage in the middle of May 1916 is worthy of mention. The reform, which was a simplification of huge economic value of the tremendously complicated money system and introducing a theoretical gold unit, must be regarded chiefly as a war measure to prevent the rapid deterioration of Turkish paper money.
This last attempt, as was obvious after a few months' trial, was entirely unsuccessful, and even hastened the fall of paper money, for the population soon discovered at the back of these drastic measures the thinly veiled anxiety of the Government lest there should be a further deterioration. Dire punishments, such as the closing down of money-changers' businesses and arraignment before a military court for the slightest offence, were meted out to anyone found guilty of changing gold or even silver for paper.
In November 1916, however, it was an open secret that, in spite of all these prohibitions, there was no difficulty in the inland provinces and in Syria and Palestine in changing a gold pound for two or more paper pounds. In still more unfrequented spots no paper money would be accepted, so that the whole trade of the country simply came to a standstill. Even in Constantinople at the beginning of December 1916, paper stood to gold as 100 to 175.
The Anatolian population still went gaily on, burying all the available silver medjidiehs and even nickel piastres in their clay pots in the ground, because being simple country folk they could not understand, as the Government with all its prayers and threats were so anxious they should, that throughout Turkey and in the greater and mightier and equally victorious Germany, guaranteed paper money was really much better than actual coins, and was just as valuable as gold! The people, too, could not but remember what had happened with the "Kaimé" after the Turko-Russian war, when thousands who had believed in the assurances of the Government suddenly found themselves penniless. In Constantinople it was a favourite joke to take one of the new pound, half-pound, or quarter-pound notes issued under German paper, not gold, guarantee and printed only on one side and say, "This [pointing to the right side] is the present value, and that [blank side] will be the value on the conclusion of peace."
Even those who were better informed, however, and sat at the receipt of custom, did exactly the same as these stupid Anatolian country-people; no idea of patriotism prevented them from collecting everything metal they could lay their hands on, and, in spite of all threats of punishment—which could never overtake them!—paying the highest price in paper money for every gold piece they could get. Their argument was: "One must of course have something to live on in the time directly following the conclusion of peace." In ordinary trade and commerce, filthy, torn paper notes, down to a paper piastre, came more and more to be practically the only exchange.
A discerning Turk said to me once: "It would be a very good plan sometime to have the police search these great men for bullion every evening on their return from the official exchanges. That would be more to the point than any reform in the coinage!"
Those who could not get gold, bought roubles, which were regarded as one of the very best speculations going, until one day the Turkish Government, in their annoyance at some Russian victory, suddenly deported to Anatolia a rich Greek banker of the name of Vlasdari, who was accused of having speculated in roubles, which of course gave them the double benefit of getting rid of a Greek and seizing his beautiful estate in Pera.
Only the greatest optimists were deceived into believing that it was a profitable transaction to buy Austrian paper money at the fabulously low price the Austrian Krone had reached against the Turkish pound, which was really neither politically nor financially in any better a state. The members of the "Committee of Union and Progress" had of course shipped their gold off to Switzerland long ago.