Ottoman Coinage, Money and Credit

Ottoman money changed as the empire expanded and as markets, mints and state finances changed. The small silver akçe served as an early coin and accounting unit; gold, copper and foreign coins circulated alongside it. Credit also operated outside banks: household lenders, merchants, moneychangers and charitable foundations advanced funds and recorded debts. Later, a large silver kuruş, the gold lira and government paper joined the mix. A price or debt stated in an accounting unit did not always describe the exact coins passed from hand to hand.

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Akçe, sultani and everyday payment

The Ottoman akçe was a small silver coin struck from the early fourteenth century. An early issue from Bursa bears the name of Orhan, whose reign began in 1326. A ruler’s coinage marked authority, but coins also met practical needs: the state needed money to collect dues and pay soldiers and officials, while households used small denominations in local markets. Copper mangırs could serve for low-value purchases.

Mehmed II introduced the gold sultani in 1477–78. A sultani contained about 3.57 grams of nearly pure gold and was kept close to the Venetian ducat in weight and exchange value. Its value in akçes varied over time and place. In 1477, one sultani exchanged for roughly 45–46 akçes; by the mid-sixteenth century the official rate was 60, while market rates could be higher, especially in western provinces. This made the sultani useful for large transfers and international payments, but the akçe and copper coins remained more practical for smaller exchanges.

A mint was a workshop where officials produced coins. In hand striking, a worker placed a prepared metal blank between two engraved dies and hit the upper die with a hammer, impressing designs on both sides. Each issue was made to a target weight and fineness, meaning the proportion of precious metal in the alloy; the ruler’s name or mark identified the authority behind it. Merchants and moneychangers compared coins by denomination, metal content and local exchange rate. A worn or clipped coin might be accepted at a different value from a fresh issue. Foreign coins also circulated, adding usable silver and gold to local markets.

Regional currencies and a changing silver standard

The empire did not use the same actual coins everywhere. In late-sixteenth-century Palestine, official records could reckon amounts in akçes even when the coins actually used were paras. In eastern Anatolia and Iraq, the larger silver shahi continued a regional coin tradition and was minted in cities including Baghdad and Mosul. In Egypt, the para remained an important coin and unit of account long after the akçe became unstable elsewhere. Accounting language and physical payment could therefore differ in the same transaction.

The severe akçe debasement of 1585–86 shows how the state could change a coin’s content. Debasement means reducing the precious metal in each coin. In 1584, 450 akçes were struck from 100 dirhams, a unit of silver weight; by 1586, the same silver mass yielded 800 akçes. The silver content of an individual coin fell from about 0.68 to 0.38 grams, a reduction of roughly 44 percent. The treasury could issue more nominal units from its available silver, but soldiers and other payees then received coins with less silver per akçe. The change provoked resentment and contributed to military disputes over pay. In the following decades, mints in Anatolia and the Balkans reduced or stopped akçe production, and European coins increasingly filled the gap. In some markets the akçe survived chiefly as a unit for writing accounts rather than a coin regularly used in exchange.

The government began minting large silver coins in 1690 to build a new currency around a denomination comparable to European coins already circulating in Ottoman markets. The full kuruş system took shape in the early eighteenth century. One kuruş equaled 40 paras or 120 akçes, and it became a leading unit of account and means of payment in Istanbul, Anatolia and the Balkans by mid-century. The para and smaller akçe denominations remained useful for lower-value transactions. Provinces such as Egypt retained distinct monetary patterns.

Loans, partnerships and cash foundations

Court registers make credit visible in everyday life. In a study of early-seventeenth-century court registers, historian Ronald Jennings examined about 1,400 entries from Kayseri and other Anatolian towns. They include small loans among relatives and outsiders, with women appearing as lenders and borrowers. Interest was often stated openly: a summary of Jennings’s evidence reports annual rates commonly between 10 and 20 percent in the recorded cases. A court entry gave the participants a durable record of the amount and obligation, which could support a later claim for repayment.

Islamic law condemned riba, a category of prohibited gain often associated with usury and loan interest. Jurists and Ottoman courts still addressed concrete contracts, and people used more than one way to finance an obligation. In a mudaraba partnership, for example, one person supplied capital or goods and an agent carried out trade; the partners divided profits by an agreed formula, while an ordinary business loss fell on the capital provider and the agent lost time and effort. This sharing arrangement worked differently from a loan with a fixed repayment.

A cash waqf was a charitable or religious foundation endowed with money rather than only land or buildings. Its trustee lent the capital and used the return to support the founder’s designated purpose. In the sixteenth century, Ottoman jurists debated whether cash could lawfully form a waqf and whether its lending conflicted with the prohibition on riba. Ebüssuûd, the empire’s chief religious jurist, defended the practice on practical grounds: ending the income from cash waqfs, he argued, would put the services they funded at risk. From the eighteenth century, some pooled waqf funds also reached Istanbul moneylenders, who combined them for larger finance.

Paper money, banks and state debt

In 1840 the government introduced the kaime, a paper instrument that functioned both as money and as an interest-bearing state obligation. The first handwritten issues were for 500 kuruş, paid 12.5 percent annual interest and ran for eight years. The government declared them legal tender for payments and public dues. As smaller denominations appeared, merchants gradually accepted them at face value in Istanbul. Counterfeiting and uneven acceptance led officials to print later issues with additional safeguards and to restrict circulation in the provinces.

The 1844 reform set the gold lira equal to 100 silver kuruş and established a new gold-and-silver standard. It made the relationship between the two metals official: each gold lira contained about 6.6 grams of gold, while each kuruş contained one gram of pure silver. The system offered a shared calculation for contracts and accounts, although older coins continued to circulate because the government could not redeem every previous issue at once.

The government borrowed abroad for the first time in 1854 during the Crimean War. The Ottoman Bank, founded in 1856 with British capital, initially lent small amounts, advanced funds to the government and discounted treasury bills. In 1863 a British-French partnership reorganized it as the Imperial Ottoman Bank, which served as the state’s banker and gained the privilege of issuing banknotes. It worked alongside moneychangers, private lenders and older credit networks rather than replacing them immediately.

After the government suspended payments on its foreign debt in 1875–76, the Ottoman Public Debt Administration was established in 1881. The Decree of Muharrem assigned it direct control of revenues from the salt and tobacco monopolies, stamp and spirits taxes, the fish tax and silk tithes in some districts. It collected these funds and applied them to interest and repayment on the debts, with an initial priority for loans held by local Galata bankers.