Imperial Ottoman

Economy · Article

Ottoman Coinage and Currency

The akçe, the para, the kuruş, and the sultani: silver and gold coinage in the Ottoman Empire, the history of debasement, and 19th-century monetary reform.

The monetary system of the Ottoman Empire was one of the most distinctive in the early modern world, and it is an essential part of the broader history of the Ottoman economy and trade. For more than five centuries the basic silver coin of the empire was the akçe, originally a small, high-purity piece that circulated from the Balkans to Mesopotamia. The akçe was supplemented by the gold sultani introduced under Suleiman the Magnificent, by the para, and by the larger kuruş or piastre, and the whole system underwent repeated debasement before being replaced in the nineteenth century by a European-style decimal currency.

The akçe: the basic silver coin

The akçe was introduced in the late thirteenth century by Orhan, the second Ottoman sultan, and it took its name from the silver German groschen (in Turkish akçe, from the Italian acino, meaning “grain”) that circulated in the Mediterranean at the time. The first akçes were of high silver content, and the early Ottoman coinage was a model of stability. Under Mehmed II (the Conqueror) and Bayezid II, the akçe continued to be struck in good silver, and it was the principal unit of account throughout the empire.

The akçe was, however, a small coin. The standard of account was 3 akçes to 1 para and 40 akçes to 1 gold sultani. Because most daily transactions involved sums far in excess of a single akçe, the para and the akçe were largely the coins of small change, while larger transactions were conducted in gold or, from the seventeenth century, in the kuruş. The akçe remained the unit of account, however, and salaries, taxes, and fines continued to be expressed in akçes long after the actual coins in circulation had been heavily debased.

The gold sultani and the gold trade

The gold sultani was introduced by Suleiman the Magnificent in the early sixteenth century, in part to pay the army and in part to compete with the Venetian ducat and the Egyptian ashrafi. The sultani was a high-purity gold coin that circulated widely across the Islamic world, in the Persian Safavid state, in Mughal India, and in the Arabian peninsula. It was an important international currency, and it helped the Ottomans conduct large-scale trade with the East. The sultani was, in turn, supplemented by the heavier gold piece called the zeri mahbub and by the yüzlük, a higher denomination for large transactions.

The gold trade was a substantial sector of the Ottoman economy and trade. Gold was imported into the empire from West Africa via the trans-Saharan trade, from Europe through the capitulations, and from the mines of Ethiopia and Sudan, and it was re-exported to Persia and India. The Ottoman mints in Istanbul, Bursa, Cairo, and Aleppo produced gold and silver coin for both domestic and foreign use, and the prestige of the sultani was such that it was imitated in the mints of neighbouring states.

Debasement and crisis

The akçe was debased repeatedly from the late sixteenth century onward. The wars of that period, the growing burden of military expenditure, and the chronic shortage of silver from the European mines put the Ottoman state under severe pressure, and the standard response was to reduce the silver content of the akçe rather than to raise taxes. Under Murad III the silver content fell sharply; under Ahmed I and the early seventeenth-century sultans it fell further; and by the time of the financial crisis of the late seventeenth century the akçe had lost nearly all of its value.

The effect of debasement on the economy was severe. Prices, expressed in akçes, rose sharply, particularly the prices of goods that had a fixed value in the world market. Soldiers, officials, and pensioners whose pay was fixed in akçes found their real income falling rapidly, and the state was forced to pay them in larger denominations: the para, the kuruş (piastre), and various larger gold and silver pieces. The collapse of the akçe did not destroy the Ottoman monetary system, but it did undermine the predictability of the system and made the long-term planning of state finance very difficult.

The price revolution of the sixteenth century, driven by the influx of American silver through European trade, hit the Ottoman economy as well. The state’s response was, as already noted, debasement rather than taxation, and the result was a long period of inflation that historians have documented in the price records of the great foundations and pious endowments of Istanbul and Bursa.

The kuruş and the eighteenth century

By the eighteenth century the working coin of the Ottoman economy was the kuruş (piastre), a large silver coin of about 30 to 40 grams. The kuruş was supplemented by smaller denominations, including the para, the akçe (now a token coin), and various gold and silver pieces. The kuruş was a heavy coin, and it was difficult to handle in large numbers, but it had the merit of a stable silver content, and it was the principal unit of account for many transactions.

The eighteenth century also saw a growing shortage of specie, particularly silver. The European powers were draining silver from the Ottoman economy in payment for the manufactured goods that were now flooding the Ottoman market under the capitulations. The Ottoman balance of payments turned steadily against the empire, and the state was forced to borrow from European banks at high rates of interest. The Public Debt Administration, established in 1881 to manage the bankruptcy of the previous decade, took over the collection of several Ottoman revenues and remitted the proceeds to European creditors. The effects of this on the monetary system are described in the Ottoman economy and trade.

The 19th-century reform

The 19th century saw a thorough reform of the Ottoman monetary system, modeled on European practice. The first important step was the introduction in 1844 of the mecidiye, a gold coin named after Sultan Abdülmecid I and modeled on the French 20-franc piece. The mecidiye was of high purity and stable weight, and it was the first of a series of European-style gold and silver pieces. The next step was the creation in 1863 of the Ottoman Bank, a Franco-British institution granted the right to issue banknotes. The banknotes circulated widely, and they helped to fill the gap left by the chronic shortage of specie.

The reform was completed in 1881 with the introduction of a decimal currency: 1 lira = 100 kuruş. The system was modeled on the franc and the mark, and it remained in use, with various modifications, in the Turkish Republic. The transition to a European-style currency was one of the major institutional reforms of the late Ottoman period, and it reflected both the influence of European economic models and the long-term integration of the Ottoman economy into the world market.

Conclusion

The history of Ottoman coinage and currency is a long story of remarkable stability followed by repeated debasement and, in the end, transformation. The akçe, the sultani, the para, and the kuruş were the working coins of an empire that was for several centuries one of the great monetary systems of the world. The 19th-century reform brought the Ottoman system into line with European practice, but it could not reverse the underlying economic dependency on European capital that the capitulations and the unequal treaties had created.