Armenian economic power: A principal cause of the 1915 Genocide

Despite the fact that the Ottoman government persecuted its Christian subjects, especially Armenians, it utilized their talents and capabilities to advance the interests of the state. The economic activities of individual Armenians posed no threat to the Ottoman state. Armenians could freely engage in commerce and the trade vocations; satisfying the monetary demands of the government and its ruling class. During those productive years, the Ottoman rulers had no need to persecute the Armenian community further, especially since the property of the Christian infidels officially belonged to the Muslims. This was a well dedicated tradition throughout the Ottoman Empire.

Starting in the mid-19th century, the growing economic clout of the Armenian community began to emerge as a serious concern for the Ottoman authorities who launched a policy of economic terror towards Armenians and other Christian residents. As a result, these communities lost a huge portion of their fixed (land, property) and other assets, including large tracts of arable land.

No sooner had this wave of violations and arbitrary manifestations of coercion relaxed somewhat when the 1894-1896 massacres of Armenians broke onto the scene – bringing an unprecedented surge of new destruction and pillage, the severing of economic links in certain regions, a decrease in production and a serious economic downturn.

English statesman Lord Bryce noted at the time that one of the most important contributing factors for the massacres was the fact that Armenians had been able to concentrate the most vital economic levers in their hands and that they had assumed the vital role of pioneers in economic development.

Immediately after the 1894 massacres in Sassoun, Sultan Abdul Hamid II stated the following to German Ambassador Ratoyn – “I would prefer to die rather than allow reforms in Armenia, since reforms would give Armenians equal rights, and with the brains and work ethic they would advance so far ahead that we Turks would become their subjects.

The 1894-1896 Armenian massacres served as a signal to later generations of Turks. The Young Turks, who came to power in 1908, believed that Abdul Hamid, by not killing off all Armenians, had just done half the job since Armenians had been able to amazingly bounce back from all the losses they had suffered and once again pose a serious threat to the Turks.

Turkish desire to gain control of Armenian wealth

It is an undeniable fact of history, that in the state policy to organize and implement the Armenian massacres, one of the greatest factors, alongside religious hatred, was the desire by the Turks to gain control of Armenian wealth. There was an obsession to become rich overnight, in the blink of an eye, and this played an important role in the 1909 Adana massacres carried out by the Young Turks.

Soon after the declaration of the 1908 Constitution, it became clear to the Young Turk leaders that is was non-Turk elements that were taking advantage of the flawed and incomplete application of the Constitution; having begun to develop their economy and national culture at heightened rates. Armenians also began to take a direct role in the social and political life of the country. With their mastery of oratory and public speaking, the finer points of the law and familiarity with European culture and linguistics, Armenian member in the Ottoman parliament incited jealousy and fear in their Turkish colleagues.

Dr. Nazim Bey – Armenian struggle for reforms would lead to their independence

The Turkish fear and hatred of Armenians reached a pinnacle in 1912-1913 after the defeat of the Ottomans in the Balkan wars and the raising of the matter of Armenian reforms.In the opinion of Dr. Nazim Bey, one of the leaders of the Young Turks, the struggle waged by Armenians for reforms would serve as the cornerstone for Armenian independence, and he regarded the establishment of an Armenian state in the eastern villayets as sounding the death knell to their pan-Turkish aspirations. As proof of this, he pointed to the fact that after the declaration of the 1908 Constitution Armenians had seized the road leading to unequalled national, cultural and economic development. With the formation of an Armenian state, the Turks would not only give up on their ideal of uniting the various Turkish races but that also the Turkish state would be restricted to the limited confines of the Seljuk sultans of Konya.

Dr. Nazim viewed this prospect as the beginning of the end of the Turkish nation. He also believed that the decimation of Armenians would not only close the final page on the Armenian Question but would free Turks from being subjected to Armenian economic competition, opening up wide vistas of activity in front of them. Then too, Armenian wealth would revert to the Ottoman state and the Turkish people.

Another Young Turk leader, Javit Bey, believed that the killing off of Armenians in the Ottoman Empire down to the last man, woman and child, was not only important in terms of national policy but that it was equally vital in terms of establishing Turkish dominance over the country’s economy.

Armenian economic power would translate into political power

According to John Giragosian and non-Armenian political analysts, the Young Turks, extreme nationalists from the start, became all the more fanatic in their views not only due to external exigencies bit first and foremost due to the fact that the Turks had lost out economically because of that domestic competition. The Young Turk government was quite concerned that this Armenian economic power would serve as the basis for their future political victories. Gradually, the belief took hold within the ruling Young Turk circles that sooner or later the “subject” Armenian people would take control of the reins of power, just as they had done in the economic sector.

Only with the removal of this powerful competitor could the future of the Turkish race be secured. Other than the military and other government levers of power, the Turks had no other resources to rely upon to remove the threat posed by Armenians to the continued existence and their Pan-Turanist dreams.

The nations of Europe made no attempt to stop the Young Turks from carrying out their plans to eradicate the Armenian people since they were looking out for their own geo-political interests. The European nations had obtained numerous economic monopolies in the Ottoman Empire. The Armenians controlled the Empire’s commerce and thus posed serious competition to the Europeans and were a hindrance to their plans to totally control the economy of the Empire.

There are numerous orders, directives and communiqués issued by the Young Turks regarding the registration, seizure and redistribution of property abandoned by Armenians that have survived till today. In addition, there are “Abandoned Property” statues on the Ottoman books that attempted to regulate the seizure and appropriation of Armenian property.

Eradication of Armenians led to Ottoman economic downturn

During the years 1915-1923, Armenians residing in 66 cities and 2,500 villages were plundered. The private property of 500,000 Armenian families was confiscated and looted.

After the massacres and deportations of Armenians, the Ottoman economy hit rock bottom.

In a diplomatic document issued by the Austro-Hungarian Empire dated December 2, 1915 one reads – “In addition to having significance from a purely humanistic point of view, the persecutions of Armenians also has serious economic ramifications. With the removal of the Armenians, Turkey is on the precipice of an economic catastrophe.”

In a report filed on May 19, 1915, the Austro-Hungarian military attaché to the Sublime Port states that due to the deportation of the majority of Armenians, there are huge regions in Asiatic Turkey now cleansed of its productive populace and where economic life has been paralyzed.

The American Consul in Aleppo, Jesse Jackson, writes the following report to U.S. Ambassador Henry Morgenthau on August 3, 1915 – “Since 90% of domestic commerce of Turkey was controlled by Armenians, the country is facing devastation. In those districts that have seen the deportations of Armenians, not one leather maker, doctor, ironmonger, blacksmith, potter, tailor, shoemaker, jeweler, pharmacist, doctor or lawyer is to be found or any other craftsman or skilled professional.  Even taking into account the few exceptions to the general state of affairs, the country is in dire straits.”

Leslie Davis, the U.S. Consul in Kharpert, files the following report on June 30, 1915 – “As a result of the deportations of the Armenians, the province, in terms of commerce and manufacturing, will return to the middle ages. According to official statistics, 90% of the commercial and trade transactions were brokered by Armenian owned banks. All these transactions will be sunk with no possibility of being renegotiated. There is not one professional or even an average laborer to be found in many sectors. If exemptions aren’t made for certain craftsmen, it is hard to believe how those Turks, who have adopted the ways of civilization to this or that degree, will continue to live.”

The Young Turk leaders were forced to take special measures. The American Consul in Syria, Jesse Jackson, in a report dispatched to the U.S. Secretary of State on March 4, 1918, writes that a few months after the extermination of the Armenians in Ourfa the town’s Muslim residents, seeing they no longer have a bakery, pharmacy, flour mill, spinning mill and other craftsmen and traders, petitioned the government in December of 1916 to relocate surviving Armenians in Ourfa.

Ottoman foreign debt paid by Armenian bank deposits

The productive layer of the country decreased substantially with the physical eradication of the Armenians. As a result, commerce, manufacturing and the trades in the country fell precipitously. But these were temporary and passing issue for the Turks.

On the contrary, the state budget, despite the severe war conditions, posted unprecedented growth – 35 million Ottoman gold lira (1913-1914); 38 million (1915-1916); 85 million (1917-1918). In 1918, for the first time in the history of the Ottoman Empire, the Young Turk government issued securities to the tune of 19 million Ottoman gold lira (One Ottoman gold lira contains 6.62 grams of pure gold, which is equal to about 0.24 ounces). It is fairly simple to assume that the Ottoman coffers were filled due to the plunder and seizure of Armenian property and belongings. European researchers state that the Empire was able to pay off the foreign loans that threatened it newly won independence due to the deposits of Armenians in the Ottoman banks.

The Turks eventually formulated a national bourgeoisie on the expropriation of Armenian property amassed over the centuries through hard work and due diligence. They were soon able to completely “Turkify” the economy within Turkey itself.

Anahit Asoyan
Junior Researcher – Matenadaran