The European crisis created in April 1877 by the Russian advance towards Constantinople underlined the precarious future of the Ottoman Empire. Acquiring some territorial compensation in the Eastern Mediterranean to offset Russian gains became a matter of urgency for Britain, as Russian influence flooded through the Balkans and the Caucasus . The subsequent secret treaty, which legalised the British occupation of Cyprus, was a defensive alliance with respect to protecting the Asiatic provinces of Turkey from Russian encroachment. The island was to be used “to enable England to make necessary provision for executing her engagement”.1 Just before agreement had been reached, the British foreign secretary, Lord Salisbury , had assured the Sultan that the territory would remain a part of the Ottoman Empire and that the excess of revenue over expenditure would be paid over annually by the British government to his Treasury because Her Majesty’s Government had no wish “to diminish his current receipts”.2 This chapter will explore the relation of this financial arrangement written into the annex of the convention to the geopolitical rationale that brought about the choice of Cyprus.
It is an overworked truism that the island is strategically placed. The way in which, and extent to which, strategic use was or was not made of it by the British from the late nineteenth century well into modern times is a complex matter less closely examined. The allusion of the prime minister, Benjamin Disraeli , to the island as a place d’armes in the Eastern Mediterranean was intended to create visions of a great naval and military base. In fact, the former was never to materialise, while the latter would remain largely unexploited until the contemporary age of sophisticated surveillance and long-range aircraft. We shall examine the more complex interaction of high finance, high politics, European interdependence and regional strategy within which the British came to administer the island. Pinpointing the logic behind the speedy employment by the British exchequer of any surplus revenue on the island in the service of the 1855 Crimean War loan, is central to this approach. Furthermore, the relation of this debt to the Cyprus tribute will be examined, probing in more detail into how this issue affected political and constitutional developments within the island.3
The Levant is an area of the world where diplomacy, finance, commercial and strategic interests critically converge. It is within the context of these overlapping concerns that the nature of the British presence in Cyprus from 1878 to 1960 becomes clearer. Coping with the Eastern Question , the attempts of the European powers to control, if not contain, the disintegration of the Ottoman Empire was as much a matter of balancing European power, as about European rivalry, especially in those areas of great strategic sensitivity surrounding the narrow entrances to and exits from the Mediterranean. Policy decisions on the way finance was handled were part of this balancing act. It has become fashionable in recent years to overstate the role of debt collection as a motive for imperial occupation, particularly in Egypt and Tunis , Cain and Hopkins being eloquent proponents of this theory.4 Certainly, in the case of Cyprus, there are no such straightforward motives. Here, strategic and financial concerns were interwoven. If strategic concerns were the underlying incentive for a forward policy, the decision to occupy Cyprus was made, not least on the basis of information by men on the spot who had access to circles in the metropolis with influence and power. John Darwin has aptly referred to such people metaphorically as “bridgeheads”. The “bridgehead”, he writes, was “the hinge or interface between the metropole and a local periphery. It was the transmission shaft of imperialism and the recruiting sergeant of collaborators”.5 These influential people, both on the spot and in London, were often at the same time lobbyists for financial concerns. Their advice, while well-informed, could be weighted to bring about the result they wanted. We shall explore the role of “bridgeheads” in the British occupation of Cyprus, as well as the nature of the island’s intended use as a bridgehead to access Western Asia.
The Crimean War loan to Turkey of 1855 is at the centre of developments covered in this analysis. It was raised in the fraught circumstances surrounding the Crimean War which, itself, launched the long period of Turkish indebtedness to European bankers. The £3 million loan raised the previous year and secured on the Egyptian tribute was fast running out and, in the wake of the battles of Alma, Balaklava and Inkerman, the Turks ’ need was indisputable. A large loan was required to support the extensive military operations now envisaged. The £5 million sterling proposed could not be raised without government guarantees. Nevertheless, the foreign secretary, Lord Clarendon, conceded very easy terms for the French with whom he was determined to maintain the closest relations. The British government would agree to pay the interest if the Turks defaulted and the French government would subsequently pay them. “They know”, was Clarendon’s rueful observation, “how much we will submit to rather than disturb the good understanding between the governments and the armies if we can possibly prevent it”.6 This British tendency will be traced well into the twentieth century in relation to this loan.
Opposition in parliament was overcome by the need to “do that which is necessary for the present emergency”.7 Clarendon observed that no foreign government had ever made a loan on such good terms. Because the guarantee put the new loan on the same footing as British stocks and the Porte was to receive the money without paying commission, the Bank of England , from the start, undertook to manage the loan as a British government obligation. The attempts of the minister to the Porte, Stratford de Radcliffe, for effective supervision of expenditure failed, in spite of the efforts of the presence of British and French loan commissioners. Their work was continually obstructed. Nevertheless, a precedent had been set. A form of European supervision had been agreed by the Porte and their efforts foreshadowed the much tighter financial control that Turkey would submit to in the years to come.8 A precedent was set, not by any desire for imperialist penetration in the Ottoman Empire, but simply by the need to defeat Russia. Indeed, the chief concern of William Gladstone , then chancellor in Lord Aberdeen’s coalition government, was over the right of occupation implied by the assignment of special revenues and the infringement of Turkish sovereignty that this would mean.9
The realisation of this concern crystallised in the context of new Russian encroachments on Turkey, after decades of heavy European investment there. Bankruptcy in 1875 has been described by Christopher Clay as one of the key events in Ottoman history and “arguably one of the key events of modern history in general”.10 Because it was a substantial factor in the disintegration of the empire, it became entangled with the strategic and balance of power concerns of European high politics which were so characteristic of the Eastern Question . The prime protagonists in this European intervention in the Levant were the maritime powers of Britain and France .
The cultural and scientific achievements of Napoleon Bonaparte’s brief campaign in Egypt (1798–1801), and the subsequent French affiliations of its Khedive, Mehmet Ali, secured a special relationship for France with Egypt which was to prevail at least until the Suez crisis in 1956.11 The French construction of the Suez Canal in the face of much British scepticism, with its grand opening ceremony presided over by empress Eugenie in 1869, reignited the romance and glamour of the Napoleonic tradition. However, it was inevitable that the successful functioning of the canal as a vital short cut to Asia would draw the British into the area whenever free movement through it was under threat.
It was, in fact, the financial crisis in the Ottoman Empire in 1875 that opened the way for an increasing British involvement. Nowhere was the crisis more acutely display...