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Contract

1879-11-22

SALT

SALT

The contract confirming the establishment of the Administration of the Six Indirect Taxes. 22 November, 1879

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  • Title: Contract
  • Date: 1879-11-22
  • Transcript: Between The Imperial Ottoman Government, represented by His Highness Said Pasha, Primne Minister, and His Excellency Edib Efendi, Finance Minister, acting in conformity with the Imperial Decree dated 7 Zilhijja 1296 (10 November, 1879, in Rumi calendar) [22 November, 1879] on the one hand; and Messieurs M. H. Foster, Émile Deveaux and J. von Haas acting in the name of the Imperial Ottoman Bank and its group; Messieurs Georges Zarifi, Salomon Fernandez, Bernard Tubini, Eustache Eugénidi, Théodore Mavrogordato, A. Vlasto, A. Barker, Z. Stefanovich, Léonida Zarifi, Georges Coronio, Ulysse Negroponti and Paul Stefanovich-Schilizzi on the other; the following matters have been agreed upon: Article 1: For a period of ten years, starting from 1/13 January 1880 and ending in 1/13 January 1890, the Imperial Government leases out to Messieurs M. H. Foster, Émile Deveaux, J. von Haas, Georges Zarifi, Salomon Fernandez, Bernard Tubini, Eustache Eugénidi, Théodore Mavrogordato, A. Vlasto, A. Barker, Z. Stefanovich, Léonida Zarifi, Georges Coronio, Ulysse Negroponti and Paul Stefanovich-Schilizzi, the collection of the stamp duty (varaka-i sahiha), and the State Treasury tax (resm-i miri) and license tax (ruhsatiye) duties on alcoholic beverages of the provinces of the Empire enumerated in the appended list, with the exception of the customs dues on alcoholic beverages; the fishing dues for Constantinople and its suburbs, following the details on the related list; and of silk tithe for the suburbs of Constantinople, as well as Adrianople, Brussa, and Samsun, following the details on the related list, and with the exception of customs dues on silk. Article 2: The yearly price of the tax farming for the entire duration of the lease will be equal to the net revenue, of the four aforementioned taxes in beshlik and metallic currency, increased by ten percent for the year running from 1/13 March, 1879, to 1/13 March 1880. The net revenue shall be established on next 1/13 August on the basis of the figures for the revenues, in beshlik and metallic currency, less the sum representing general collection expenses apllicable to these four contributions.The price of the lease shall be paid, in beshlik and metallic currency, by the second party of contractors, in monthly instalments of one twelfth of the total.Any portion of the net revenues in excess of the price of the lease shall be divided, in equal shares, between the State and the contractors. Article 3: The four contributions farmed out shall be collected by the contractors, in accordance with the existing related tariffs and regulations, which shall not be modified without the consent of both parties.The mobile stamps and stamped papers necessary for the service shall be prepared and delivered to the contractors by the Government, and under the control and at the expense of the contractors.In between stamping operations, the machines and instruments used for the stamping shall be kept under a double lock, one copy of the keys of which shall remain in the hands of the Government, and the other in the hands of the contractors.At the end of the lease, all pieces that might be in the hands of the contractors shall be returned to the Government.The Imperial Government shall, in accordance with the existing regulations, lend all its support to the second party of contractors for the collection of the duties farmed out and shall take into consideration all proposals that shall be made by the contractors, either in view of the strict application of existing regulations, or in view of the introduction of modifications deemed necessary in order to improve the mode of collection of duties. Article 4: State control over the administration of tax-farmers shall be exercised through auditors appointed by the Sublime Porte.These auditors shall examine the accounts but shall have no right to interfere with the administration of the tax-farmers.The contractors reserve the right to either constitute themselves as a company for the exploitation of the tax-farm of the four duties, or to transfer their lease to a third parties; however, in both cases, they will remain directly responsible towards the Imperial Government. Article 5: In the name and on the account of the State, the Imperial Government entrusts to the contractors named in Article 1 of the present contract for a period of ten years starting in 1/13 January, 1880, the administration, of the monopoly on salt and tobacco produced in the provinces of the Empire enumerated in the appended list, with the exception of the tobacco tithe.The State shall exercise its control over this administration through inspectors it will. These inspectors shall have the right to examine the accounts and verify the coffers of the said monopolies, but shall not have the right to interefere in the administrative process. Article 6: The modifications, which the Government or the second party of contractors shall wish to bring to the attention of one orthe other of the monopolies, shall be decided upon by mutual consent between the two. Article 7: The surveillance of and the police forces provided for the security of both the duties contracted and of the monopolies administered by the contractors shall be governed by employees of the Government.The party of contractors shall have the right to submit their observations to the Government in order to draw its attention, when necessary, on the incapacity or insufficiency of these employees; the Government commits itself to take such observations into serious consideration.The salaries of all the employees, as well as the expenses relating to the offices established inland and on the coasts with the exclusive purpose of collecting the six duties mentioned in this contract shall be paid for by the product of these duties, in proportion to the expenses caused by each one of them. The expenses and salaries of the customs surveillance and police staff situated at the, borders and on the coasts, responsible for the surveillance of customs duties and of the aforementioned duties, shall be reimbursed by the directors of these customs and by the administration of the six taxes in the proportion of fifty-five percent. for the administration of these duties, and of forty-five percent. for the aforementioned customs.The contractors reserve the right to employ secret surveillance agents who shall report possible frauds with respect to the farmed out taxes or the salt and tobacco monopolies.It is understood that these surveilance agents will receive, as usual, their share of the fines and doubled duties collected from the transgressors, in accordance with the existing regulations.The Imperial Government commits itself to punish such frauds upon the report of the contractors, in accordance with the laws in effect and in proportion with the severity of the offence. Article 8: The yearly product, gained from the four duties and from the revenues of the salt and tobacco monopolies will be attributed in the following fixed and invariable manner:1º. The party of contractors shall levy every quarter, from the revenues of each semester, a sum of two hundred and seventy-five thousand Ottoman liras which they shall use for the reimbursement, capital and interest included, of the following credits: 690,000 approximate amount of the credit of Mr. G. Zarifi, backed by customs revenues, including interests, as of 1/13 January, 1880; 1,800,000 approximate amount of the credit of MM. Salomon Fernandez, A. Barker and their co-contractors, resulting from drafts on the customs administration, including interests, as of 1/13 January, 1880; 860,000 approximate amount of the credit of the Imperial Ottoman Bank, backed by theiindirect contributions and the taxes as part of the 1,080,000 advance of the said bank, including interests, as of 1/13 January, 1880; 1,750,000 approximate amount of the debit of the government's statutory account current with the Imperial Ottoman Bank, including interests, as of 1/13 January, 1880; 3,625,000 approximate amount of the credit of the Imperial Ottoman Bank, resulting from the great unified advances, including interests, as of 1/13 January, 1880; 8,725,000 Total. The said advances will bear a yearly interest of eight percent., starting in 1/13 January, 1880.This sum of 275,000 liras shall be distributed among the aforementioned credits, according to the agreement that shall be reached among the creditors.2º. Once this quarterly levy of 275,000 liras has been realised, all sums in excess shall be reserved to the bearers of domestic and foreign Public Debt bonds, and the party of contractors shall pay these sums, through the Imperial Ottoman Bank, into the hands of the representatives of the said bearers, appointed by the Imperial Government, by including the revenues of Cyprus and Eastern Rumelia, to the limit of the yearly sum of one million three hundred and fifty liras, representing the sums attributed yearly to the servicing of the Public Debt by a decree of the Imperial Government dated this day. It is understood that payments to the bond bearers of the revenues of Cyprus and Eastern Rumelia is conditional to the cashing in of the said revenues. Article 9: In the event that the Imperial Government should increase the present duties determined for the contracted collection of the four taxes, all excesses resulting from this increase, compared to the product of the year preceding that of the said increase, shall be delivered to the Imperial Government, following the deduction of ten percent., representing collection expenses. Article 10: The accounts and assignments prescribed in Article 8 will be realised at the end of each quarter, taking into account the yearly interest of eight percent. in favour of the Government on the monthly payments of the four taxes mentioned in Article 2. The party of contractors shall also pay to the Government the same yearly interest rate of eight percent. on the levies they shall make, every fifteen days, from the revenues of the salt and tobacco monopolies, until the sum of 275,000 liras is reached.The conversion into Ottoman liras of the currencies originating from the four taxes farmed out shall be made at the end of each month, and the conversion of the currencies originating from the two administered taxes shall be made every fifteen days, by the second party of contractors and with the agreement of the Imperial Tresury.The Imperial Ottoman Bank shall buy, with the agreement of the Imperial Treasury and at the best of its interest, drafts to the amount of the remainder of the revenues that shall bepaid to the said Bank, under the terms of Article Eight, for the servicing of the Public Debt.If, at the end of the fourth quarter of a trading year, the total net amount of the revenues for that year exceeds the sum of two million four hundred and fifty thousand liras, including the revenues of Cyprus and of Eastern Rumelia, the sums in excess shall belong to the Imperial Treasury. Article 11: In the event that, at the end of the period of then years, 1/13 January, 1890, the payment of the debt to the creditors listed in Article 8 is not completed, both in capital and interests, all the stipulations of the present convention shall remain in effect until the complete extinction of these credits, except for the yearly price of the tax farming, established, on the basis of the net product of the four taxes for the preceding year without any increase. Article 12 All stipulations of the present convention, particularly those concerning the collection of the four taxes, the administration of the salt and tobacco monopolies, and the assignment of their product to the reimbursement of the sums due by the Imperial Government, are irrevocable in accordance with Article 8, except for the cases foreseen in Article 13 below, and cannot be modified or suspended, regardless of circumstances or causes invoked.In consideration of this condition and as a consequence of this convention, the revenues of the General Administration of Indirect Contributions, excluding those that are included in the present agreement, shall be, as of 1/13 January 1880, entirely liberated and disengaged to the benefit of the Imperial Government.The contractors of the 1,660,000-lira advance agreed upon by the contract dated 20 November/2 December, 1878, commit themselves to deposit, on 1/13 January, 1880, with the Imperial Ottoman Bank, in packs sealed by both parties and previously verified by the Treasury, all of the drafts drawn on the General Administration of Customs and Indirect Contributions; in parallel with the proportional reimbursements made in accordance with the present agreement from the 1,800,000 liras mentioned in Article 8, the said drafts shall gradually be liberated and returned to the Imperial Government by the said Bank, in the presence of both parties and proportionally to the amount of each reimbursement.The Imperial Ottoman Bank shall also have to return to the Imperial Government, at the same date, the kaimes forming the backing of the unified Great Advances, in order to be cancelled and incinerated. Article 13 In derogation of the preceding Article, the Imperial Government reserves the right to terminate, before the end of the ten-year period, the stipulations of the present convention under the two following essential and peremptory conditions:1º. If the credits listed in Article 8 are entirely reimbursed, both in capital and interests;2º. If a new arrangement, more favourable to the bearers of bonds of the domestic and foreign Public Debt than the present one herein agreed upon by the Imperial decree of this day, should be reached between the Imperial Government and the said bearers of bonds.In the event that both these conditions are met, the present convention shall be cancelled.It is understood that, if this cancellation were to take place during the course of any year, the stipulations of the present convention concerning the collection of the four taxes will remain in effect until the end of the month of December of the said year.If this event should take place, the Imperial Government commits itself to pay the following to the contractors mentioned above:1º. An indemnity for the future salaries of employees recruited on the basis of contracts still in effect;2º. Other extraordinary expenses justified by valid documents.It is, however, stipulated that this payment cannot exceed, once piad, the price of the lease for one single year. Article 14 Any conflict that should arise between the Imperial Government and the contractors, with respect to the interpretation or execution of the present agreement shall be submitted to the judgment of four arbiters, appointed by both parties; the said arbiters shall elect a super-arbiter to give a casting vote if need be.The arbiters' verdict shall be final and unappealable. Artcile 15 The present agreement shall be notified, by the Sublime Porte, to the foreign legations in Constantinople.Two copies made in Constantinople, on this 7 Zilhijja 1296, (10/22 November, 1879 in Rumi calendar). Additional Article Considering the dispositions of Article 5 of the present agreement, the party of contractors commit themselves to ensure, on a permanent basis, the presence of a quantity of salt necessary for public consumption in all of Government salt storehouses, so that private local individuals, traders, and corporations, who should apply to these storehouses, can always acquire salt. Exceptions will be made, however, under extraordinary circumstances, which may impede salt production or destroy existing stocks.Made and signed on the same day, month, and year as above. Said (signature) Finance Minister Edib İbrahim (seal) For the Ottoman Bank: M. H. Foster Em. Deveaux J. von Haas G. Zarifi for my son, L. Zarifi, G. Zarifi S. Fernandez G. Coronio B. Tubini A. Vlasto A. Barker Z. Stefanovich Théo. Mavrogordato E. Eugenidi Paul Steph. Schilizzi Ulysse Negroponti

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