THE OTTOMAN DEBT.

Lyttelton Times, Volume CXIV, Issue 16138, 15 January 1913, Page 9

THE OTTOMAN DEBT.

ARE BONDHOLDERS SAFE? Tho march of events in Turkey has raised the question whether that country might have to suspend payment on external loans. There is, however, says the London "Daily Chronicle," no reason to anticipate this position. The interest of Britain centres mainly in the Unified Bonds. The external loans are watched by a Council of Administration, composed of representatives of the various European countries intimately concerned as bondholders. These consist of the great European Powers, with the exception of Russia, which has not been a great lender to Turkey. To the Council of Administration have been _ assigned certain taxes and monopolies which should hold good whatever be the result of the war. This is clearly demonstrated by the declaration of Russia that the Ottoman External Debt is an international institution, and not a debt which might be treated lightly by a conqueror. The revenues for the service of the external debt are derived from the whole of the Ottoman Empire, and so in the case of portions of European Turkey falling into the hands of the Balkan States it would be necessary for them to recognise that various revenues were, still tho property of the Ottoman Council of Administration, having been pledged to the external bondholders. It is scarcely possible that the Balkan States, who will wish to increaso their, political power in Europe, will run the risk of interfering with an international debt organisation. This would inevitably bo followed by great difficulty in raising money in any financial centre. The " Chronicle " has been informed in official quarters that there is not the slightest reason for default' on the external loan, for the receipts should be quite sufficient to meet the service,' apart from tho large reserves which have been accumulated. A fairly largo proportion _ of these is invested in Turkish securities, but there is no anxiety regarding the next coupon, which falls due in March. As regards trade in Turkey, however, the outlook is depressing, for it has practically come to a standstill, and the revenue from all sources has shown a great falling-off. Outside the External Loan Great Britain is not greatly interested in Turkish affairs from the company point of view, as Turkey has generally floated such concerns internally. Certain of tho railway companies are known in London and on tho Continent, but the field is by no means wide. It may extend considerably, however, in tho not very distant future.