THE MONETARY POLICIES IN TURKEY BETWEEN THEARMISTICE OF MUDROS (1918) AND THE GREAT DEPRESSION OF 1929 ACCORDING TO THE AMERICAN EMBASSY DOCUMENTS

The Ottoman Empire came out of WWI by signing the Armistice of Mudros on October 31st, 1918. The Allied Powers soon occupied the Ottoman territories based on this armistice. This meant the de facto end of the Ottoman Empire. The Turkish nation, however, came victorious out of the National Struggle that was waged for political independence and established a new Turkish state, which relied on national sovereignty. Nonetheless, the new Turkiye was, in many aspects, a successor to the defunct Ottoman state and thus, had to strive for finding cure to the social, economic and political problems that it inherited from the Empire. Once political independence was secured, important steps were taken in order to establish the economic independence as well and this led the new rulers to follow a “national path” in the economic realm. One of the first steps for curing the economy was coining and printing new “national” money. In 1924 first national coin was issued and in 1927 first national paper money was released. In this process, the government paid attention for the protection of the value of the new currency and to this end, a regulation (by-law) was issued in 1927 on the stock exchange in order to guard the value of the Turkish currency vis-à-vis the foreign currencies.Turkiye’s monetary policies in this period was closely monitored by the American diplomatic mission in Istanbul (High Commissioner for Istanbul until 1927) who compiled reports on the economic situation (monetary policies in particular) in Turkiye and reported to the US Department of State. This study analyzes and evaluates the monetary situation and policies in Turkiye between the Armistice of Mudros (1918) and the Great Depression of 1929 based on the diplomatic documents kept in the National Archives and Records Administration of the USA (NARA).