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La dette publique : une histoire longue

Two Sticks and One Carrot: Public Debt and the International Financial Commission in Greece 1854-1859

Deux bâtons et une carotte : la dette publique et la Commission financière internationale en Grèce 1854-1859
Christina Laskaridis et Adamantios Syrmaloglou
p. 797-829


Le présent article constitue une contribution à l’histoire monétaire et financière de la Grèce en présentant à un public plus large la Commission financière qui a été créée à la fin des années 1850 à la suite du long défaut de paiement de la Grèce sur ses prêts étrangers. Le port du Pirée a été bloqué deux fois dans les années 1850 et la suppression des armées occupantes était subordonnée à la création d’une commission financière. L’article s’articule autour d’un document principal, négligé par l’histoire financière grecque. Il s’agit du rapport final de la Commission composée des représentants des gouvernements britannique, français et russe, qui s’est tenue entre 1857 et 1859. Le présent article examine comment les créanciers ont déterminé le montant du dédommagement à exiger au moment où des difficultés de remboursement sont apparues, et quelles pressions ils ont exercé pour garantir leurs propres objectifs politiques dans la région.

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  • 1 Tunçer (2015) raises a paradox of these attempts to financially supervisethe more successful exter (...)

1In the wake of the recent financial crisis, the repayment difficulties of Greek public debt coupled with extensive creditor interference was and still is extensively debated in numerous publications. Many authors underscored that the history of Greece’s external debt and its evolution are important for contemporary analysis and provided insights into the long-term trends of the Greek economy (see for instance Reinhart and Trebesch, 2016). A new round of scholarship into how international financial relations progressed hand in hand with imperial visions has been motivated. Staples of the interplay between state repayment difficulties and foreign bondholders (Wynne, 1951) and strategic use of foreign finance such as Hobson’s classic study (1902), Feis (1930) or those explored in Brewer (1990) have been joined by a new tide of work. Narsey (2018) examines British imperialism and the making of colonial currency systems. Tunçer (2013) examines the ‘Black Swan’ of the Ottoman Empire and Tooze and Ivanov (2011) the ‘Black Sheep’ of Bulgaria, both revisiting the financial supervision that foreign powers imposed over states facing debt repayment difficulties. The variety of means with which repayment was secured in the nineteenth century is more broadly examined in Waibel (2013), focusing on military pressures in Latin America and the interventions following the defaults in late 1870s—defaults that led to the establishment of four commissions of international financial control elaborated in detail in Tunçer (2015).1 Protective measures to secure financial interests of creditors only gradually became organized in the latter half of the 1800s. Organizations to formally represent private creditors only arose in 1868 with the inauguration of the Corporation of Foreign Bondholders of Great Britain, analyzed in Winkler (1933). The tides of defaults around the independence struggles in the early nineteenth century and the so-called heyday of the gold standard from 1870 onwards have received most attention. This article brings to the fore a lesser known example from the 1850s to illustrate how creditors calculated a countries’ debt repayment capacity, how finance became entangled with imperial rivalry, and how repayment difficulties were resolved through the broader prism of foreign policy.

  • 2 Auchmuty (1939) was the biographer of the key Commissioner of the Financial Commission, Thomas Wyse (...)

2The present article constitutes a contribution to the monetary and financial history of Greece by introducing to a wider audience the Financial Commission that was established in the late 1850s following the longstanding lack of payment by Greece on its foreign loans. The paper is oriented around a neglected primary document of Greek financial history, the final report of the Commission that was appointed between 1857 and 1859 and was composed of the representatives of the governments of Britain, France and Russia. Its purpose was to examine the fiscal condition of Greece and determine when and by how much, Greece could repay its creditors. The existence of the report was known to important scholars of modern Greek economic history (Dertilis, 2005, 296-297; Dimitrakopoulos, 1977, 172-174; Koliopoulos, 1987; Kofas, 1981, 69 ff; Auchmuty, 1939).2 Kofas stands out as he discussed in detail Greek foreign economic relations of the 1850s based on diplomatic correspondence and other primary sources.

3The full text of the report however has hitherto remained unpublished and it is this void that we intend to fill. Despite its shortness, the report is, as we are going to argue, an important historical document, revealing the way economic diplomacy and foreign intervention in small countries operated on a day to day basis in the mid-19th century. It provides key insights into how creditors used debt obligations to put pressure on debtors and to secure their own policy objectives in the region. The Financial Commission is an illustration of how repayment difficulties were instrumental in applying pressure on Greece to pursue policy objectives that were friendly to the British. The paper also illustrates the way creditors ascertained how much to demand when repayment difficulties arose. It provides clues about economic policy constraints and dilemmas in small underdeveloped countries of the European periphery as the Great Powers of the day were competing for political authority, economic resources and secured trade routes in the wake of the formation of the Holy Alliance between Russia, Prussia and Austria in 1815. The creditors tried to impose an elevation of their rights and to insist that loan repayments be prioritized over other expenditures. However, the sole result of the Commission was to eke out a single interest repayment, before Greece fell back into arrears. However, with Greece’s political orientation now firmly aligned with the British, falling back into arrears was not formally dealt with until 1878.

4The paper first focuses on the importance of public debt for Greek independence and the development path adopted when the modern Greek state was formed under the guarantee of the Great Powers in 1832. We will then turn to Thomas Wyse, the British ambassador (plenipotentiary) who chaired the Financial Commission and provide biographical information about him. Next, we will refer to issues related to the report itself and comment on its findings. Wyse’s interim reports, his daily letters, as well as the final report, are a valuable source for financial historians, as they reveal in a straightforward manner the way economic diplomacy and foreign intervention operated on a day to day basis (Kofas, 1981, 69 ff). Debt was used as a means to constrain the actions of a government and as a means to suggest policy reform not only with the motivation of repayment, but also for the reorientation of foreign diplomacy. Finally, we conclude with brief remarks to highlight the importance of the document. The Commission report is included as an Appendix to this paper.

1. Public Debt and the Making of the Greek State

5The Greek War of Independence started in 1821 and was financed, inter alia, by two foreign loans issued in London in 1824 and in 1825 respectively by private creditors. Their nominal value was 2,8 million British pounds and future state land property was promised as collateral. Revolutionary Greece cashed only a portion of the Independence loans, 1,57 million, the rest being absorbed by commissions, fees and payments to middlemen. The revolutionaries spent the money predominantly to purchase battleships to fight the war, and the fees absorbed by middlemen, and speculators provoked heavy criticism from the Times of London newspaper (Andréadès, 1904, 25-26). The long duration of the uprising as well as civil war like conditions among the revolting Greeks led the provisional Greek government to default in 1827.

6The European Powers of the day—Britain, France, and Russia—shared some common goals in the region, but mostly differed on the question of who was going to fill the regional void of the declining Ottoman Empire. Independence was a prolonged struggle and when the Egyptians came to the rescue of the Ottomans, the Great Powers intervened and defeated their joined forces at Navarino in October 1827, thus making the Ottomans concede Greek independence. The war of Independence ended with the formation of the Modern Greek state, with initial borders however that excluded the majority of Greek Orthodox Christians living in the Balkan peninsula under Ottoman control.

  • 3 See Senior (1859) and or a longer account of Nassau Senior’s travels to Greece see Psalidopoulos an (...)
  • 4 Revolts broke out in Nauplio, Peloponnese, and other major cities nationwide during 1862. For the p (...)

7The Greek National Assembly elected a leader, Ioannis Kapodistrias, as the first Greek ruler, who was at the service of the Russian Czar rather than an Anglophile. Kapodistrias acknowledged the burden of the independence loans of the 1820s but postponed any repayment until the country could recover economically. Despite his efforts to create a modern state, he provoked internal backlash resulting in his assassination in 1831. Due to the political vacuum that resulted, the Great Powers signed the London Convention in May 7, 1832, establishing a Kingdom in Greece with the Bavarian Prince Otto von Wittelsbach as a ruler. This clearly evidenced that the Great Powers preferred a foreign noble as a king instead of any contemporary Greek politician. A regency council composed of Bavarian administrators governed the country in the initial period of administration because the King was still a minor. Otto assumed power in 1835, first as an absolute monarch until the uprising of 3rd September 1843, and thereafter as a constitutional one. He ruled Greece until 1862, when he was dethroned and forced to return to Bavaria due to a series of factors, above all his lack of respect for the constitution. Otto’s role was broadly condemned and much responsibility for the state of Greece was placed on the Bavarian rulers’ shoulders. The British envoy’s niece described the Royal couple as permitting “when they did not actually sanction, trickery and corruption throughout the length and breadth of the land” (Wyse, 1871, 12), an opinion supported by Nassau Senior’s account who derided King Otto for he “treated his population just as they had been treated by the Turks—as a mere sponge out of which money had to be squeezed. He did nothing for them … he treated them as an appanage to Bavaria, as a country given over to him as a younger’s son’s portion” (in Auchmuty, 1939).3 Eventually, the governments of Britain and France would play a crucial role in his dethronement, as Otto took a favourable attitude towards Russia during the Crimean war.4

  • 5 For details on the how the loan was intermediated, including the role of Otto, the delayed negotiat (...)
  • 6 For the economic and political dependence of Greece from the three protecting powers during this pe (...)

8Under the Convention of 1832, the Great Powers, next to imposing the King, agreed to financially support the new regime through financial assistance: they would guarantee a loan of 60 million francs to Greece. The Great Powers raised the money through the House of Rothschild and committed to pay it out to Greece in three tranches of 20 million each.5 The interest rate was set at 5% with a maturity of 36 years. Article 12, paragraph 6 of the 1832 Convention, foresaw that the plenipotentiaries of Britain, France, and Russia would be watchful over the repayment of the loan. As recounted in Ferguson (1998, 256), the Rothschild’s were determined to compete with other bankers (Bavarian and Spanish) to handle the Greek loan, for although Greece was considered “worthless”, the guarantee by the Great Powers was not. It was also, according to Schönhärl (2019), the first loan for which an international guarantee of this sort was provided. This important clause meant that all three parties had to unanimously agree as to any demand or action related to Greece.6 It gave rights to the Great Powers to have priorities over Greek revenues and simultaneously to oversee Greece’s domestic affairs. In other words the Convention contained within it a manner of “surveillance” over Greek public finances and foresaw “procedures”, such as diplomatic interventions, in case the Greek state would not meet its obligations toward its borrowers (Andréadès, 1939, 333; Levandis, 1944, 35-40). This turned out to be the basis of the attempt to legitimise the creation of the Financial Commission in 1857, as we shall describe below. The creditors encouraged domestic policy reform in the service of the repayment of the loan through for instance, the development of the administration and tax collection capacity of the state. Although the creation of the Kingdom of Greece was at once the result of a war of independence, it was simultaneously also one of dependence on foreign powers. The extent of this control allowed Greece and the period under question to be considered one of the earliest cases of financial imperialism in Europe (Wynne, 1951).

  • 7 See Wyse (1871) for an account of the disputes with the Greek cabinet on the extent of the issue.

9The Constitution established in 1844 introduced male suffrage, enabling citizens of Greece to voice their views on certain issues such as promoting democracy, or to see their country expand territorially in order to include all Greeks still living under the Ottomans as well as to develop economically. Three political parties, the “English”, “French” and “Russian”—their names deriving from their orientation towards a particular fraction of the Great Power—dominated the political scene of the time. These parties followed closely the interests of the Great Power with which they were allied and identified domestic interests to align with the interests of the respective foreign government they supported. As such, domestic politics were embedded in particularism and the promotion of local interests (Petropulos, 1968). Throughout the Otto dynasty, Greece was a poor agricultural country and its economy did nοt industrialise. A weak and mostly uneducated administration could not implement many economic plans besides the ones imported by the Bavarian cameralists during the Regency period. Greece had a total area of 47,516 square kilometres, and its population was 819,969 people according to the 1837 census and 1,096,810 in 1861 (Ministry of Interior—Office of Public Economy, 1862, xii; Charitakis, 1931, 6). The number of citizens who were liable to pay taxes in 1858 was 250,000 approximately (Proceedings of the Hellenic Parliament, Session 34, March 7, 1858, 434). Most of the farmers did nοt enjoy property rights until 1871, in contrast to the Greek Church and the Greek state which had inherited Ottoman property. It is worth mentioning that the latter was the biggest landowner in the country. Although only 46% of the land area was arable, the tithe (“dekati”, one tenth) was the main source of tax revenue, corresponding to one tenth of the gross value of agricultural production (Sideris, 1931). Military expenditures absorbed an immense portion of government expenditure, around 24% of the state budget (Stassinopoulos, 1935). They arose largely from provisions that the Great Powers had stipulated in the Convention that Greece takes on responsibility for the expenses of the Bavarian army in order to protect the King they instituted. During the period of Otto’s reign, the main role of the regular army—which consisted until 1837 of Bavarian mercenaries—was the protection of the royal family (Stassinopoulos, 1935). Law and order across the kingdom were not fully guaranteed due to the widespread activity of brigands.7 Their ability to incite from time to time raids into Ottoman territory close to the country’s frontiers, or to defy Greek law, often satisfied public opinion and part of the press in Greece, however at times became a foreign policy issue (Koliopoulos, 1987; Auchmuty, 1939). In contrast to other countries in Western Europe, Greece had no aristocracy or a formed civil society, and hence organising to achieve further parliamentary reform was forestalled.

2. Two Blockades and a Financial Commission

10The first two tranches of the loan of the Great Powers were used by Otto’s governments for unproductive purposes, such as to cover the expenses of Bavarian military force and bureaucracy (see Levandis, 1944, 40-41). Greece found itself in difficulties to repay interest and capital on time. After going into arrears in 1838, finally in 1843 the country declared its inability to repay the loans and demanded the disbursement of the third tranche in order to comply with payments, which the Great Powers declined. At the same time, the “Megali Idea” (“Great Idea”) emerged as a foreign policy maxim (Skopetea, 1988), whereby territorial aggrandizement was for the majority of Greek politicians not only a national issue, but an economic one as well; they opined that an extended state would be more prosperous and able to repay foreign debts.

  • 8 For the Don Pacifico affair, see Hannell (1989, 495-507).

11The Great Powers were hostile to these ambitions and tried their best to contain Greek claims to Ottoman territory. Both the French and the British wanted to avoid the Ottoman Empire disintegrating further as they didn’t want Russia to profit from the declining power of ‘The sick man on the Bosporus’. Otto tried to outplay the Great Powers by dividing them and changed his governments, frequently appointing alternatively as Prime Ministers members of the three political parties. By showing little sympathy to any particular Great Power and by seeking assistance from the Germanic world he succeeded initially to neutralize the agreement between the Powers to any particular action against Greece. However, by the 1850s, Otto sided on a more permanent basis with the Russian Party, appointing prime ministers from this political party to the great fury of Britain and France. This came at a time when the Ottomans gave rights to the (Catholic) French in the Holy Places (Jerusalem) as opposed to the (Orthodox) Russians. Russophilism in Greece took off and British and French diplomacy tried to restrict and contain Otto’s foreign policy plans (Kofas, 1981, 46). The British, feeling sidelined and disrespected by Otto, resorted to crude gunboat diplomacy and in the 1850s Greece’s port of Piraeus was blockaded twice. The royal navy blockaded the port in 1850, and for the duration of three and a half months under the pretext of the Don Pacifico affair (also known as the Parker incident).8 This coercive action taken against Greece was also motivated by a desire to strike a blow against Otto’s absolutist reign (Auchmuty, 1939, 252).

12A second blockade was co-administered with the French during the Crimean war (1853-1856) and its aftermath, and lasted for four years (Kofas, 1979). In reaction to Otto’s stance towards the Russians during the Crimean war, England, together with blockading the port with the French naval army, rearranged the ministerial cabinet so as to reflect British and French parties (Auchmuty, 1939, 264). The British philhellenic movement—vibrant at the commencement of the 1820s—had already declined (Rosen, 1998, 72-74) and Greece’s irredentist goals stumbled upon Britain and France’s geopolitical plans (Kofas, 1979, 95). In an attempt to stem the diversion of Greek money to the Russian cause, the local British envoy, Thomas Wyse, brought up the issue of repayment of the foreign loans. Along with the troops, fresh demands for the repayment of the loan were made (Auchmuty, 1939, 263). The blockade disrupted trade heavily and made it even more difficult for the country to find the means to repay its loans. Greece did not participate in the Crimean war that ended with Russian defeat.

  • 9 FO 32/282 T.W. Letter May 26 1859.
  • 10 FO 32/282 T.W. Letter May 26 1859.
  • 11 FO 32/280 T.W. Letter November 1856.
  • 12 FO 32 281 T.W. Letter April 29 1858.

13This was the state of play when the representatives of Britain and France forced the Greek government in 1857 to accept—as a precondition of the ending of the blockade—a Financial Commission. The local British diplomat Thomas Wyse explained, “On the Conclusions of the Peace and the cause for occupation ceasing, the Allied powers proceeded to withdraw their troops from Greek territory but before they took this step, the British Government in particular required a sufficient guarantee for the better administration of the Nation.”9 What Wyse implied was that the basic remedy for the country was to reform its administration. Despite widespread objections by the Greek ministers, Wyse “urged … in terms the strongest I could use, the appointment without delay of a Commission of the Three Powers”.10 The legitimacy to interfere, as Wyse repeatedly put forward “was offered by the Loan originally guaranteed by the “Three Powers”, and the right they had to insist on the payment of interest” (Wyse, 1871, 9). The establishment of the Commission as an extension of the creditors’ rights was put forward: it was “a right which clearly belongs to the Powers who are creditors of Greece and which right they are particularly justified in using at a moment when the Greek government offers to make a partial and trifling payment on account of its debt, but at the same time requests the Three Powers not to insist on taking even the small sum so offered but to permit the money to be employed in developing the resources of the country.”11 Greece had offered an alternative, to initiate small scale repayments, which was rejected in favour of a full inquiry. The Greek offer: “besides being only a repetition without additional securities of similar promises made not performed by the Greek government on previous occasions, it did not meet the objects which the governments of England and France had in view—a searching inquiry into the whole question. It was accordingly, without much difficulty rejected.”12

14And with this, the Commission commenced its meetings to ascertain what the repayment prospects were. The aim of the Financial Commission would be to examine the economic condition of Greece and determine how, when and by what means, Greece would honour its obligations toward its lenders. The British envoy, Sir Thomas Wyse is discussed in greater depth below as he served as chairman of the Commission having been based in Greece since 1849, and although at times unpopular, had risen to prominence from his handling of the Don Pacificio affair. His work on the Financial Commission was described by his biographer as his life’s greatest labour (Auchmuty, 1939, 268), and as his life’s ‘crowning’ achievement by his niece (Wyse, 1871, 4).

3. Thomas Wyse

  • 13 For a detailed description of Thomas Wyse’s personal life, see Salmon (2009) and Auchmuty (1939). T (...)

15Thomas Wyse was born on December 9, 1791, in Waterford, Ireland.13 In 1800 he entered Stonyhurst College, and then he was admitted to Trinity (1809), gaining distinctions in Latin and Greek. After his graduation, he prepared for law studies, receiving an annual allowance of 600 pounds sterling from his landlord father. As a typical member of the upper-class Irish society of the time, he participated in societies, and clubs such as the Trinity History Society, the Liberal Club, and travelled extensively abroad, including around the Mediterranean.

16By the end of the Napoleonic Wars, he lived in continental Europe from 1815 to 1825. In 1825 he faced financial difficulties and returned to Waterford. He collaborated with the New Monthly Magazine contributing articles about his travelling experiences. He then wrote under the pseudonym, Abraham Eldon, his first book The Continental Traveller’s Oracle; or, Maxims for Foreign Locomotion (1828), receiving an advance of 150 British pounds. At the same time he began his involvement in politics. He had lived a devout life, in an environment broadly hostile to his faith, and hence had to wait for Peel’s Catholic Emancipation act in 1829 that would admit Catholics to parliament, and with this, participated more formally in parliamentary contest. He became a member of parliament and advocated views on civil and religious liberty, supported actively plans for the Irish poor, voted for welfare provisions, welcomed the Irish public works bill in 1831, and spoke in favor of educational reform, in particular a national system of education, drawing attention to the advancement of elementary education in Ireland (Wyse, 1835 and 1836). He married the niece of the Emperor Napoleon, which his biographer described as the “the most foolish, and perhaps uncalculated act of his life” (Auchmuty, 1963, 35). This led to many personal miseries, including eventual separation from his wife and children.

17In the aftermath of the great Irish famine, he was appointed British plenipotentiary to Greece in 1849 by the then Prime Minister John Russell, replacing Edmund Lyons. According to his biographer, given Wyse’s distinguished political career, as well as an extensive knowledge in classical antiquity, acquaintanceship with the evolution of the Greek language, and the many languages needed for diplomatic post, there were few positions better suited than the Athenian legation. Based in Athens, he followed therefore closely all the daily exchanges with Otto and his governments during very turbulent times. Thomas Wyse lived in Athens from 1849 until his death on April 15, 1862. At a time when Lord Palmerston, a powerful statesman dominated British foreign policy, Wyse followed all too energetically. Through his work through the handling of Don Pacifico and subsequently his work in the Financial Commission he gained considerable status and promotion for his work and was received as a senior statesman on his return (Auchmuty, 1939). After the Financial Commission, he returned for a break to England and “begged to be removed to some other appointment” (Wyse, 1871, 12), desiring a colonial governorship or a placement at a less distant capital (Auchmuty, 1939, 236). Disappointed, he returned to Greece in 1861, as his experience was too great to replace. He engaged in the issues of English foreign policy still pertaining to Greece, such as the Ionian islands and the tax on currants. He fell ill and died there a year later in April 1862 from heart disease.

  • 14 Notable among these are Wyse, 1865 and 1871. Both of them were published posthumously by his niece, (...)

18Alongside his duties, he continued writing books based on his life experiences of travelling. Two of these are devoted to impressions of Greece, largely the result of his role in the Financial Commission.14 Wyse travelled extensively around Greece to ascertain to what degree the plea of poverty with which Greece had resisted repayment was truthful. As a public administrator with full authority to negotiate, he promoted the interests of British authorities. As a liberal-minded person, he stood for the modernization and rationalization of the Greek state, supporting, as we will see, among others, the creation of a land register and reforms of public administration.

4. The Financial Commission Report

  • 15 See FO 32/280 T.W. Letter November 4 1856 and FO 32/280 T.W. Letter February 19 1857.
  • 16 FO 32/282 T.W. Letter February 9 1857 and FO 32/280 T.W. Letter February 17 [p.231].
  • 17 FO 32/280 T.W. Letter February 24 1857.
  • 18 FO 32/282 T. W May 26 1859.
  • 19 FO 32/280 T.W. Letter February 24 1857.
  • 20 FO 32/280 T.W. Letter February 24 1857.
  • 21 Ozeroff was a new Russian diplomat stationed in Greece replacing Persiany in April 1857 (FO 32/280 (...)
  • 22 The French financier is mentioned as Le Marquis de Ploeuc by Wyse’s niece, Winifred Mary Wyse, in t (...)
  • 23 FO 32/282 T. W. Letter May 26, 1859.
  • 24 FO 32/282 T. W. Letter May 26, 1859.
  • 25 FO 32/282 T. W. Letter May 26 1859.

19The British and French armies had not yet departed before the Financial Commission was instituted. In January 1857 the Financial Commission was announced to the Greek foreign minister, in mid-February 1857 the Commission held its first meeting15, and in May 24, 1859 its last. Only by the end of February 1857 had the final occupying armies left from Piraeus. Evacuation was conditional on the acceptance of a Financial Commission that was to inquire into the financial condition of the country. Wyse explained that the Commission would “request to the Greek government for certain important papers respecting the revenues of Greece … When the Greek government shall place these papers at our disposal, we shall be prepared to the take the necessary measures for the departure of the troops.”16 The Financial Commission was composed of the representatives of the three governments of Britain, France and Russia, after an agreement that the Commissioners should be the local diplomats. Wyse was elected Chairman and official spokesperson between the Commission and Greek government.17 Recognized as primus inter pares among committee members, he proved skilful in maintaining a cordial tone among the trio (Wyse, 1871, 9) but also skilful in navigating the contempt for foreign interference.18 Wyse described the necessity of insisting that the Commission was merely seeking to make “serious and friendly recommendations”19 and did not seek to interfere with the administration, in order to avoid objections to foreign interference. The initial Secretary of the Commission was M. de Greling, Secretary of the French legation20, but ultimately Wyse was the only initial member to remain for the full duration of the Commission’s work. The final report was signed by Thomas Wyse, Charles de Montherot, and Alexander Ozeroff respectively.21 The French financier M. le Comte de Ploene22 and the British army officer Edward Strickland also participated as advisors in the Commission (Wyse, 1871, 9-10). The Russian representative did not apply for a financial advisor in the belief that the intentions of the Commission were minimal, and the sittings would not last more than a few weeks.23 The composition of the Commission was a delicate matter. There were reactions from France to ensure that the Commission would be composed by the local diplomats as according to Wyse they wished “to avoid all objections which the Greek government might raise against such a measure affecting the independence of a sovereign state, like Greece.” In order to minimise these objections “the Three Government’s appointed their Diplomatic Representatives here to form the Commission, who being already charged by the 12th article of the Convention of 1832 with the duty of watching over the exact performance of its stipulations were de facto under another title, a Commission with duties and powers analogous to those now in view.”24 Greece had objected, and as described by Wyse, “the great difficulty had been felt at first, on the part of Greece, in admitting a Commission at all, and it was not till it was known that the Commission was to be composed of the representatives of the Three Powers already charged with a similar duty, under the Convention of 1832, that the objection was waived.”25 Russia, although defeated by the Ottomans in Crimea, was still a power and could name a member of the Commission too.

  • 26 The purview over fiscal matters as listed by Wyse in FO 32/282 T.W. Letter May 12 1859 were: admini (...)
  • 27 FO 32/281 T.W. Letter April 29 1858.
  • 28 FO 32/280 T.W. Letter February 24 1857 (286).
  • 29 FO 32/280 T.W. Letter TW March 10 1857, where he also noted that the precedent was to follow the “c (...)

20The purpose of the Commission was to examine the fiscal condition of the Greek state, its revenue and expenditure, the collection of tax revenues, and the resources of the country as a whole.26 This was put by Wyse as “we must not only know what the Greek government received, and how it received it, but why it does not receive more, and what it does with what it receives.”27 Despite the requests by the Greek government, the Commission was in no way bound to “relieve the Greek government from any portion of the interest due or to be due on the Loan.”28 The inquiry was organized into sections “not only to facilitate inquiry, but to enable us more easily to draw our conclusions and to present them in an effective form to the Greek government.”29

  • 30 FO 32/280 T.W. Letter June 1, 1857 and FO 32/280 T.W. Letter December 10 1857. Strickland’s complai (...)
  • 31 FO 32/281 T.W. Letter February 24 1858.
  • 32 FO 32/281 T.W. Letter January 1958 (29).

21The Commission’s terms of reference were drawn relatively widely and the Commission saw that debt repayment prospects were a function of a broad array of issues. As noted in Wyse (1871) “the inquiry branched out into every question touching on the government of Greece in general, and was far from being restricted solely to finance … Each portion of the administration was closely examined.” (Wyse, 1871, 10) Greek officials were to supply the Commission with whatever statistical information was necessary to achieve that goal. The Financial Commission was a dedicated data collection effort, frequently requesting information in specific tabular form.30 Tables documenting the movement of commerce, the items for export and import as well as their respective values in order to ascertain the commercial activity in each Port were given largely incomplete.31 The documents submitted by the Greek government were examined line by line and in general subjected to scrutiny in order to highlight the numerous defects and deficiencies of Greek financial administration.32

  • 33 A statement was placed before the Commission to inform it of the views of the earlier Bondholders. (...)
  • 34 Complaints about delays were made repeatedly, for instance in FO 32/280 T.W. Letter May 28 1857, FO (...)
  • 35 FO 32 280 T.W. Letter December 1857 (450).

22In short, the representatives sought to determine the means by which Greece’s public debt would be repaid. The London Convention stipulated that revenues of Greece would be directed towards the servicing of Greece’s loans, revealing their self-serving interests in Greece’s economy. As re-stated in the final report of the Commission: “the first revenues of the State, in such manner that the actual receipts of the Greek Treasury shall be devoted, first of all, to the payment of the said interest and sinking fund, and shall not be employed for any other purpose”. Following Wynne (1951) and Schönhärl (2019) the revenue of the country had been twice committed by the creditors—first as a guarantee for the 1824 and 1825 loans and subsequently, to the guarantee of the Great Powers.33 Due to the blockades of the Greek ports and the low opinion towards the aspirations of the Great Powers among the Greek population, the Commission’s work was seen in a negative manner by the Greeks, and the civil administration was not forthcoming to the Commission’s demands. This partly explains the long duration of the work of the Commission.34 However, delays were also on account of the Commission taking its time to organize itself: having started in February, it was not until December that a more thorough subdivision of, for instance, the type of receipts they would inquire into was more firmly agreed to.35

  • 36 FO 32/280 T W Letter March 2nd 1857, (304).
  • 37 According to FO 32/282, TW Letter May 12th 1859 there were seven state departments which Wyse had i (...)
  • 38 He travelled with his niece, a friend and an artist.
  • 39 Although not initially intended for publication, Wyse began to entertain the possibility to publish (...)
  • 40 FO 32/282 T.W. Letter May 26 1859.

23The evidence was collected through testimonies of relevant minsters, documents retrieved by members of the Commission and provided by the public administration.36 In order to fulfill the terms of reference of the Financial Commission, there was a division of labour among the Commissioners with respect to which aspects of the administration each would investigate. Wyse took on the Departments of Foreign Affairs, Justice, Religion and Public Instruction.37 To fulfill the investigation he set off across the country to record the state of the country.38 The efforts to compile the Commission’s final report were drawn from these works. An Excursion in the Peloponnesus in 1858 was written in the summer of 1858 published in 1865, and Impressions from Greece was published in 1871.39 The process of drafting reveals a layer of intra creditor negotiation: Wyse’s judged that on various occasions Ozeroff’s wording appeared “too weak” and that he objected to suggested amendments that sought to expose the failings of financial administration of the government, as touching on interference in the institutions of the country.40

  • 41 FO 32/282 T.W Letter May 19 1859.

24Wyse recounts how the Greek Foreign Minister, Rangabes, requested that certain issues be taken into consideration by the Committee before their final decision would be taken. He wanted to ensure that the Commission’s demands upon Greece’s resources would take into account the need to have funds for public infrastructure as well as the need to repay debts owed to internal creditors. Wyse replied that precisely the committee’s work had been to lay out how to deal with the competing demands on resources; however, he objected to the sentiment: “With regard to the internal debts of the country, I could not see what preference they could claim before those of the Three Powers”, raising his broader views on what was being implied, “Such logic, pushed a little further would exempt every debtor, prodigal or unfortunate in the application of his loans from all obligations to his creditors.”41

25On April 27, 1860, after 60 sittings in total, the envoys presented their findings to the Greek government. “The reports of the Commission on the several departments were submitted to their respective heads, in order that any errors of statement might be corrected. The labours of the Commission were embodied in a Report” but “the large mass of valuable papers which accompanied this Report … has never been printed” (Wyse, 1865, vii-viii). The reasons mentioned were that this would cost too much. “Even when Sir Thomas Wyse came to England in the following year, no one but Lord Clarendon, Lord Russell, and one or two of the Government, seemed to have the lightest cognizance of, or to take the smallest interest in, the matter” (Wyse, 1871, 11).

  • 42 FO 32/280 T.W. Letter June 1 1857.
  • 43 FO 32 280 T.W. Letter March 10 1857.
  • 44 FO 32/282 T.W. Letter May 26 1859 Wyse describes how, following French objections, his initial high (...)
  • 45 FO 32/282 T.W. Letter May 19th 1859.

26The Final Report, a mere eight pages in length and included in the Appendix was written initially in the language of diplomacy, French, and then translated into English. The report is, despite its short size, an important historical document. It testifies on the state of play between lenders and borrowers in the mid-19th century. It can be read as a document of insatiable creditors or opportunistic partners who seek the improvement of the country’s finances to enable it to fulfill its obligations. We can also see Wyse’s liberal views imprinted in his notes from his travelers around the country: despite being a devout Catholic, his extensive visits to numerous dilapidated monasteries provoked him to urge the government to send financial assistance and blamed much of the corruption and the sorry state of Greek finances on the clergy; he also urged the government to reform the abysmal prison system (Wyse, 1871; Wyse, 1865). Wyse insisted on genuine information collection: “our inquiry to be worth anything, much be based on data.”42 The proffering of an expertise with the appearance of being seen as technical and mutually trusted by the Three powers was paramount to the Commission’s work. “We had not been entrusted by our Government with this duty for any other purpose than … the most impartial elucidation of truth, wherever it should be found and anything, in word or act, which would detract from this character and tend to substitute for it, … would not only be entirely foreign to the whole purpose and probing of such a proceeding, but would go far to impede our operations, and neutralize in the end, any benefit we might expect as their legitimate result.”43 However, when it came to the difficult question of what, in the end, should the Financial Commission demand in terms of payment, Wyse proposed amounts far greater than his co-Commissioners would accept.44 Nonetheless, from the very first draft, the commissioners were “generally agreeing in spirit and substance, thought some change desirable in its language and arrangement.”45

27The first thing noted in the final report relates to the “land question” and the absence of a clear demarcation of national estates and plantations in the country which had allowed the misuse of public property and encroachments and above all had hindered a rational planning of land exploitation and national income. The Commission opined that the councils responsible to administer the national land property under their jurisdiction had failed to act in a responsible manner and there were no guarantees in place that would make them to do so. The Commission proposed that this had to be amended.

28A second issue according to the final report was that the tax system of Greece was not efficient. The manner of verifying and collecting taxes, and the renting of taxes to individuals—as was the practice of the day in Greece—had generated arrears. The land tax impeded the development of agriculture which was the principal source of wealth for the country. Furthermore, the civil servants who were charged with fiscal affairs escaped any kind of control and supervision and hence corruption was thought to be endemic. In addition, although the Ministers of Finance were to be kept informed about the real economic condition of the communal funds—the local government finances—and the use to which they were put, they did not possess the authority to command fiscal policy in full.

29Moreover, a further concern raised by the Financial Commission was that the statements of the final accounts of the state budget had not been ratified by the Hellenic Parliament since its establishment in 1844. The final report of the Commission stated that while fiscal revenue and expenditure increased, the amounts committed for debt repayment decreased. The Commission estimated the size of Greek public debt to be 56,142,304 French francs in 1859 and, if things were left unchanged and no repayments made, it would double to 121,528,198 by March 15, 1870.

  • 46 For a comprehensive introduction to the history of economic thought in 19th century Greece, see Psa (...)
  • 47 FO 32/282 T.W. Letter May 26 1859.

30The Commission was of the opinion that the Greek government should create a land register in order to put an end to the encroachments committed upon public land property, modifying thus the laws governing land taxation. The land register would create preconditions of legitimate property rights, an obvious orientation to further the capitalist development of the economy. But first and foremost, the improvement of the functions of public administration was a crucial factor to efficacious reforms. In this area however, no recommendations were made, despite the fact that many Greek intellectuals, foremost the prominent economist and University Professor Ioannes Soutsos, as well as and other distinguished members of the Greek Parliament, drew attention to such needed reforms with minimal results (Psalidopoulos and Stassinopoulos, 2009, 491-517; Psalidopoulos and Syrmaloglou, 2005, 229-258).46 Concerning the repayment of the loan, the Commission concluded that the country was in a state to contribute a minimum sum of 900,000 francs per year towards its creditors, which was close to 4% of the tax revenues at the time (Dertilis, 2005, 297). According to Wyse, although much below the amount stipulated in the 1832 Convention was triple the amount initially suggested by the Greek Foreign Minister.47

31Prior to the presentation of the general report in the House of Commons, some of the Commission’s preliminary proposals provoked heated debate in Greece. There were incidents of non-compliance by Greek civil servants to orders given by the Commissioners, as well as an effort on the part of Wyse to extend the mandate of the Commission and make its intervention harsher for Greek authorities (Kofas, 1981, 91-95). In March 1858, and for six successive sessions, the central issue in the debates of the Hellenic Parliament was the modification of the public finance accounting law of 1852. Greek politicians of the time discussed—without producing any substantive result—ways to increase the efficiency of the tax administration and the statements of final accounts of the State Budget of the fiscal years 1845-1858 (Proceedings of the Hellenic Parliament, Sessions 34-39, March 4-27, 1858, 416-519). The Greek political system was not ready for the implementation of such fiscal reforms.

  • 48 FO 32/282 T.W. Letter May 12 1859.
  • 49 FO 32/282 T.W. Letter May 26 Letter 1.

32The Commission’s objectives were, on the one hand, to secure debt repayments and therefore to increase the Greek governments capacity to raise revenue. The final report demanded that debt repayment commence immediately and that frequent accounts be sent to the Legations of the Great Powers. On the other hand, they proposed modernizing reforms that could have rationalised Greek finances and which Wyse described as being both beneficial and easily adopted by Greece.48 For instance, Wyse recounts the detailed investigation into each budget component, commenting on whether there was sufficient amount for the repair of buildings, encouraging money to be spent on infrastructure. He could not conceal, however, his contempt as he described the inexplicable delays regarding the organisation of a bureau of public works and the difficulties in organising a body of engineers.49

  • 50 This puts doubts on the earlier portrayal of the Commission as simply providing friendly advice.

33Although the Final Report stipulated that repayment begin and that “this sum should be increased progressively at periods”, its effectiveness was minimal. The Commission’s main result was that interest was paid just the once in 1859, and then not again until Greece came to an overarching agreement with its creditors in 1878. According to Wyse (1871), this was done, for had it not “the Customs, so wretchedly administered, would be seized, or some other lawful but severe measure be adopted” (Wyse, 1871, 11).50 Nonetheless, after this final report was submitted, the report of the Commission was forgotten. Wyse’s niece notes in 1871, that the final report was neglected by successive Greek governments, “its former existence is now almost unknown.” This was also true of the developments in England—“in all the discussion on Greek affairs last year, whether in Parliament or in the Press, no allusion what-ever was made to it except by the Earl of Carnarvon” (1871, 4).

5. Conclusion

34The Commission saw the interplay between borrower and lender as an open sum game and its recommendations defy standard depictions. The “protecting” powers, which had agreed to guarantee the 1832 loan, were not shy to intervene openly in the politics of a country under their supervision, using gunboat diplomacy and open coercion in order to achieve their goals. The Greek political system was not ready to implement the advice of a Commission whose members were in the majority nationals of Powers that had recently blocked Hellenic ports and brought the economy to its knees. The Commission did not lead to an extensive control over fiscal functions as would arise in the supervisory commissions of the late nineteenth century. Their attempt to inquire in detail into the financial condition of the country and their efforts to retrieve information was an important aspect of their interference. They proposed reforms that would further state development and finally agreed to a middle ground level of repayment, which bar for one instance, was not adhered to.

35The way events eventually unfolded helps interpret the Commission and its final report as part of the political desires of Britain. Because of political turmoil, the king was soon thereafter expelled. A new, Danish, prince became the King in 1864, as the Great Powers decided. British policy to Greece was very favourable—the Ionian Islands were given to Greece nurturing thus the goal of the “Great Idea.” The King returned the favour by navigating his government according to British interests in the Levant. The Russian influence in Greek politics diminished, and so did the old political parties. After the Commission and one repayment of interest, little more was retrieved. On the financial front Greece remained in arrears with its creditors, (see Kofas, 1981, 128) but the Great Powers did nοt react in a hostile manner toward Greece—their foreign interests in the region were now fully accommodated.

  • 51 For details see Psalidopoulos (2019).
  • 52 According to Wynne’s estimation (1951, 296), less than a quarter of the proceeds of these loans was (...)

36Almost 20 years later, in 1878, and due to discussions about the “Eastern Question”—namely the future of the crumbling Ottoman Empire—and events leading to the Congress of Berlin, Greek politicians understood that they had to come to an agreement with all Greece’s creditors: the bondholders of the 1824 and 1825 loans, as well as the loan of 1832 guaranteed by the Great Powers. This led to an arrangement51 that allowed the country to resume payments and therefore have access to further foreign financing. Seven new external loans were contracted between 1879 and 1890 stirring the economy, bringing temporary affluence and creating a bubble. Bad fiscal management and unproductive use of the loans led however to a new default in 1893.52 Public debt continued to be heavily interlinked with volatilities of the Greek economy and the interference of foreign powers.

The authors would like to warmly thank François Allisson, Cléo Chassonnery-Zaïgouche, Pierre de Saint-Phalle, Jean-Sébastien Lenfant, Aurélien Goutsmedt and Michalis Psalidopoulos for all their helpful feedback. We would also like to thank two anonymous referees and the archivists at the National Archive, UK.

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Boxes FO 32/280 to FO 32/283 and FO 32/291 in: FO 32 1827-1905 Foreign Office: Political and Other Departments: General Correspondence before 1906, Greece, National Archives, Kew, United Kingdom.

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Appendix: Final Report of the Financial Commission, 1860

General Report of the Commission Appointed at Athens.

To examine into the Financial Condition of Greece.53

La commission composée des représentants des trois gouvernements d’Angleterre, de France et de Russie qui a été instituée en 1857, pour examiner l’état financière54 de la Grèce, ayant rempli son mandat conformément à ses instructions, a adopté unanimement le Rapport qui suit.

La Commission, dans sa première séance du 18 Février, 1857, a tracé le programme suivant de ses travaux :

1. Examen des diverses branches de revenu, et des ressources du pays.

2. Examen du mode de perception des revenus.

3. Examen des dépenses.

4. Examen des réformes que l’on peut proposer.

Elle a décidé que le point de départ de ses études serait l’année 1845, sans qu’elle ait voulu cependant limiter l’étendue de ses investigations.

La Commission a dû se préoccuper en premier lieu de l’administration, son programme supposant l’étude préalable du système administratif qui développe les ressources, constate et perçoit les revenus.

Le mode de perception a été examiné en même temps que les recettes.

Elle s’est ensuite occupée des dépenses.

Enfin, comme conclusion de ses investigations, la Commission a pris en considération la dette.

Les améliorations dont l’administration paraissait susceptible, et le développement des ressources du pays, ont appelé l’attention de la Commission en même temps que les observations critiques qui étaient faites lui paraissaient fondées.

La Commission Financière est d’avis que les études qu’elle s’était proposé de faire pour répondre à ce programme peuvent être considérées comme terminées, et elle rappelle la déclaration faite dans le procès-verbal No.10 de la séance du 25 Janvier, 1858, par laquelle elle ne donne aux travaux qui lui sont remis aucune consécration, n’adoptant ni ne rejettant les données sur lesquelles ils reposent, ni les conclusions qui en sont tirées: elle ne les accepte que comme des documents à consulter, et à prendre en considération.

En conséquence, ayant pris en considération les documents et les informations recueillies dans les différent Ministères ;

Vu les notes remises par M. Strickland (Assistant Commissary General), attaché au Ministère Britannique pour les travaux de la commission ;

Vu les notes et le résumé général déposé par M. le Comte de Plœne, Inspecteur des Finances, chargé d’assister le Ministre de France ;

Vu les documents déposés par M. le Ministre de France ;

Vu les documents déposés par M. le Ministre de Russie ;

Vu les notes et documents remis par M. le Ministre d’Angleterre, Président de la Commission ;

Ayant pris en considération les informations verbales données au sein de la commission par les Ministres des Affaires Etrangères, de l’intérieur, des Finances, et par le Président de la Cour des Comptes:

Toutes les pièces ci-dessus mentionnées dans les procès-verbaux des soixante séances de la Commission;

Attendu qu’il résulte de ces informations:

Que le domaine national, qui n’est ni délimité ni reconnu, est constamment amoindri par les empiètements :

Que les déniers communaux et l’emploi qui en est fait sont restés jusqu’ici ignorés de l’Etat, échappant ainsi à sa surveillance, bien qu’il fut chargé par la loi de la tutelle des communes dont la prospérité est le principal élément de la prospérité générale de la nation ;

Que plusieurs des impôts et de revenus ne rendent pas à l’Etat ce qu’ils devraient lui rendre ;

Que l’impôt foncier donne plus particulièrement lieu à des abus préjudiciables au Trésor, et que cet impôt entrave le développement de l’agriculture, principale ressource de la Grèce;

Que les agents chargés de la gestion comme du recouvrement des revenus du Trésor publique échappent aussi à la surveillance parfaitement indiquée cependant dans la législation;

Que chaque année la masse des arriérés, qui enlace dans la dépendance du fisc un nombre inconnu de débiteurs, prend des proportions plus vastes;

Que les lois destinées à faire rentrer ces arriérés sont restées sans effet sérieux;

Que cet état de choses est une atteinte grave aux intérêts du Trésor ;

Attendu que les Ministres Ordonnateurs des dépenses n’avaient rendu jusqu’ici aucun compte;

Que les Ministres des Finances n’avaient presque jamais justifié depuis 1845, par les comptes que la loi leur prescrivait de publier, ni des ressources du Trésor public, ni de l’emploi qui en avait été fait, puisque si les comptes de 1850, 1851, 1852, avaient été établis, lors de la constitution de la Commission, le seul compte de 1850 avait été soumis aux Chambres, et aucune loi des comptes n’avait été rendue ;

Attendu que la Cour des Comptes n’a pas justifié par les déclarations de conformité et les rapports qu’elle est tenue de publier que l’Administration est régulière, et que les comptes des Ministres sont ce qu’ils doivent être;

Attendu que les Chambres n’ont pas porté de remède à cette situation puisque, en fait, le contrôle législatif pas plus que le contrôle judiciaire ne s’est exercé ;

Et que dès lors les comptes produits par l’Administration n’offrent pas toutes les garanties légales d’exactitude et d’authenticité ;

En résumé:

Que l’administration des finances n’est pas réglée avec l’ordre nécessaire;

Que les efforts des différents agents n’ont pas assez constamment pour résultat l’application sérieuse des lois;

Que la publicité et le contrôle des actes de l’Administration, qui sont les garanties du pays et des Puissances Protectrices, n’existent pas en fait.

En ce qui concerne l’Emprunt de 1832 :

Attendu que les ressources du Trésor Grec se sont accrus sans qu’il ait été satisfait aux engagements contractés par les Traités, ni aux promesses solennellement réitérées;

Attendu qu’à mesure que les ressources du Trésor s’accroissent, les dépenses prennent un essor proportionnel, sans que l’on puisse trouver dans la situation du pays, soit en travaux d’utilité publique, soit en encouragements donnés à l’industrie, ou par toute autre initiative venant de l’Etat, une compensation suffisante aux sacrifices faits annuellement par les Puissances Protectrices ;

Attendu qu’à mesure que les dépenses s’accroissent proportionnellement aux recettes, les provisions pour les Budgets de restitution des sommes dues aux Puissances décroissent proportionnellement ;

Attendu que dans cette situation, toutes les sources du crédit public ouvertes seulement aux nations qui remplissent leurs engagements sont taries pour la Grèce ;

Que cet état fâcheux pour les intérêts du pays s’aggrave chaque jour, puisque en admettant même qu’il plaise aux trois Puissances de faire l’abandon des intérêts dus pour les avances qui ont été faites jusqu’au 1 Janvier, 1859, la Dette de la Grèce s’élève à cette date à 56,142,304 francs 75 centimes, et qu’elle serait au 1 Mars, 1870, époque de sa libération vis-à-vis les porteurs d’obligations de 121,258,198 francs 81 centimes ;

Rappelant l’Article XII, §6 de la Convention du 7 Mai, 1832, ainsi conçu : « Le Souverain de la Grèce et l’État Grec seront tenus d’affecter au paiement des intérêts et du fond d’amortissement annuels de celles des séries de l’Emprunt qui auraient été réalisés sous la garantie des trois Cours, les premiers revenus de l’État, de telle sorte que les recettes effectives du Trésor Grec seront consacrées avant tout au paiement des dits intérêts et du dit fond d’amortissement, sans pouvoir être employées à aucun autre usage, tant que le service des séries réalisées de l’Emprunt sous la garantie des trois Cours n’aura pas été complétement assuré pour l’année courante. Les Représentants Diplomatiques des trois Cours en Grèce seront spécialement chargés de veiller à l’accomplissement de cette dernière stipulation; ”

Qu’en conséquence aux termes stricts de cette Convention le service des intérêts et de l’amortissement peut être immédiatement exigé ;

La Commission est d’avis :

Que l’attention du Gouvernement Grec soit sérieusement appelée sur la nécessité de mettre un terme aux empiétements commis sur le domaine national par un cadastre, ou par la vérification des titres de propriété, ou par toute autre mesure qui répondrait à ce résultat:

Sur l’utilité qu’il y aurait, dans l’intérêt des contribuables et du Trésor, de modifier certaines lois d’impôts, notamment celle sur l’impôt foncier ;

Sur la nécessité de donner aux lois de finance toute leur efficacité, par une action administrative plus ferme, plus vigilante ;

Enfin sur l’impérieuse nécessité d’assurer la publicité des actes de l’Administration, et leur contrôle par les pouvoirs judiciaires et législatifs créés par les lois spéciales et par la Constitution.

A cet effet aux époques fixés par les lois pour la présentation des Budgets, la production des comptes par les Ministres, la publication du Rapport Général de la Cour des Comptes, et de ses déclarations de conformité, et la promulgation de la Loi des Comptes, des exemplaires imprimés de ces documents, en nombre suffisant, seront remis aux Légations d’Angleterre, de France, et de Russie.

Enfin, l’étude attentive des ressources du Trésor Hellénique, faite par la Commission, l’a amenée à la conviction que la Grèce est en mesure de contribuer aux sacrifices qui sont fait chaque année pour elle.

Quant à la fixation de la somme qui peut lui être demandée, convaincue que la Grèce bien administrée aurait pu dès aujourd’hui remplir complètement ses engagements, que dès lors il serait loisible aux Puissances, sans froisser aucun principe de justice, de la mettre en demeure de payer intégralement les intérêts et l’amortissement ;

Néanmoins, voulant encore lui donner des facilités, ne nuire ni à aucun de ses services publics ni à son développement régulier, et éloigner toute contestation légitime, la Commission propose de fixer le minimum de la participation de la Grèce au chiffre de 900,000 francs.

Dans la prévision de l’accroissement des ressources du Trésor Grec, la Commission est d’avis que cette somme devra s’accroître progressivement à des époques qui seront déterminées lorsque le mode de paiement et d’affectation des sommes payées par la Grèce à l’amortissement de la dette seront réglés.

La Commission rappelle que sa modération dans la fixation du chiffre du premier paiement donne droit aux Puissances de compter sur des réformes efficaces dans l’Administration Grecque; ces espérances trompées elle est d’avis qu’il y aurait lieu d’insister sur la stricte exécution de la Convention de 1832.

La Commission ne méconnaît pas les difficultés contre lesquelles on peut avoir à lutter dans un pays si récemment constitué ; et pour éviter autant que possible les erreurs dans ses appréciations, elle a toujours voulu tenir compte du temps et des circonstances.

La Commission a pris acte des assurances que lui ont données les Ministres du Roi, qu’ils faisaient tous leurs efforts pour améliorer la situation financière de la Grèce, et elle se plait à espérer que ces louables dispositions se traduiront par des faits.

Au moment de terminer ses travaux, la Commission reçoit de M. le Ministre des Affaires Etrangères, un état qu’accompagne une lettre d’envoi à la date du 8/20 Mai, 1859 (voir le procès-verbal No. 60). Cet état mentionne par Ministère en un chiffre et une désignation brève, sans autre développement, des dépenses, s’élevant à 15,735,000 drachmes, auxquelles le Trésor devrait nécessairement faire face, si ses ressources venaient à dépasser celles qui sont absorbées aujourd’hui dans les Budgets.

La Commission rappelle qu’en fixant avec une modération qu’elle ne regrette pas le chiffre de 900,000 francs comme minimum de ce que devra payer la Grèce, elle n’a pas perdu de vue les nécessités de ses services publics, et les besoins de son développement régulier.

Elle n’a pas tenu compte des tendances avérées de l’Administration Grecque, que révèle encore une fois ce dernier incident ; mais elle a aussi voulu rappeler qu’avant les besoins, plus ou moins contestables, qu’on lui expose, il y a le respect des Traités et des promesses solennellement réitérées, qui est le premier devoir d’une Administration qui veut fonder le crédit public et honorer son pays.

Mais, attendu d’ailleurs, comme il a été dit plus haut, que les comptes publiés n’offrent pas les garanties légales d’exactitude et d’authenticité ;

Que la Commission dès lors n’a pu constater que l’accroissement successif des dépenses, et la tendance de l’administration, à absorber toutes les recettes par des dépenses intérieures, afin de justifier l’impossibilité de satisfaire à ses engagements ;

Que jusqu’à ce que les garanties que les lois et la Constitution demandent pour la validité des comptes soient obtenues, la Commission ne saurait dire si les crédits ouverts aux Budgets et dépenses représentent les dépenses réellement indiquées dans ces Budgets et des besoins réellement satisfaits.

Dans cette situation la Commission ne peut voir dans le Tableau qui lui est transmis qu’un travail de circonstance, qui n’est pas de nature à modifier ses conclusions.

Athènes, le 12/24 Mai, 1859.






THE Commission composed of the Representatives of the three

Governments of England, France, and Russia, which was appointed in 1857 to examine into the financial condition of Greece, having fulfilled its task in conformity with its instructions, has unanimously adopted the following Report.

The Commission at its first sitting on the 18th of February, 1857, traced out the following programme of its labours:

1. An examination into the different branches of the revenue, and of the resources of the country.

2. An examination into the manner of collecting the revenues.

3. An examination into the expenditure.

4. An examination as to the reforms which might be proposed.

It decided that the year 1845 should be the period from which its survey should date, though, at the same time, it was not desirous of limiting the range of its investigations.

The Commission was bound to give its attention, in the first place, to questions of administration, its programme taking for granted the preliminary consideration of the, administrative system, which develops the resources and verifies and collects the revenues.

The manner of collection was examined into at the same time as the receipts.

It afterwards occupied itself with the expenditure.

Then, as a conclusion to its investigations, the Commission took the debt into consideration.

The improvements of which the Administration seemed susceptible, and the development of the resources of the country, called for the attention of the Commission, while, at the same time, the critical observations that were made appeared to be well founded.

The Financial Commission is of opinion that the inquiries which it proposed to make in accordance with this programme may be considered as terminated, and it refers to the declaration made in the procés-verbal [sic] No. 10 of the sitting of the 28th of January, 1858, by which it gives to the statements which are forwarded to it no official sanction, neither adopting nor rejecting the data on which they are founded, nor the conclusions which are drawn from them: it only accepts them as documents to be consulted, and to be taken into consideration.

Consequently, having taken into consideration the papers and Reports collected in the various Ministerial Offices, viz.:

The notes furnished by Mr. Strickland (Assistant Commissary-General), attached to the British Minister to assist the labours of the Commission;

The notes and the general résumé deposited by the Count de Plœne,

Inspector of Finances, charged to assist the French Minister;

The documents deposited by the French Minister; The documents deposited by the Russian Minister;

The notes and documents furnished by the English Minister, President of the Commission;

Having taken into consideration the verbal testimony given before the Commission by the Ministers for Foreign Affairs, of the Interior, of Finance, and by the President of the "Cour des Comptes";

All the documents above mentioned in the proces-verbaux [sic] of the sixty sittings of the Commission:

Seeing that it results from these inquiries:

That the national domain, which is neither marked out nor known, is being constantly lessened by encroachments;

That the communal funds, and the use which is made of them, have been ignored up to the present time by the State, thus escaping its supervision, although it was by law entrusted with the guardianship of the communes, whose prosperity is the principal element of the general prosperity of the nation;

That several of the taxes and revenues do not bring in as much to the State as they ought;

That the land tax, in particular, gives rise to abuses prejudicial to the Treasury, and that this tax impedes the development of agriculture, which is the principal resource of Greece;

That the agents charged with the administration, as well as with the collection, of the public treasure, also escape the supervision, which is, however, clearly directed in the Legislation;

That every year the mass of arrears, which involves an indefinite number of debtors in liability to the revenue, assumes more vast proportions;

That the laws destined for the recovery of these arrears have been inefficacious;

That this state of things does considerable harm to the interests of the Treasury;

Seeing that the "Ministres Ordonnateurs" of the expenditure had not rendered up to the present time any account;

That the Ministers of Finance had scarcely ever, since the year 1845, verified either the resources of the public Treasury, or the use which had been made of them, by the accounts which the law ordered them to publish, since, if the accounts of 1850, 1851, and 1852, had been made out at the time of the appointment of the Commission, the account of 1850 only had been submitted to the Chambers, and no financial law had been passed;

Seeing that the Court of Accounts has not established, by the declarations of conformity, and by the reports which it is bound to publish, that the administration is regular, and that the accounts of the Ministers are such as they ought to be;

Seeing that the Chambers have not remedied this state of things, in fact, the Legislative control has been no more exercised than the judicial control;

And that, therefore, the accounts produced by the Administration do not offer all the legal guarantees of exactitude and authenticity:

In short:

That the administration of finance has not been regulated with the necessary order;

That the efforts of the different agents have not had for their result, as often as they should, the serious application of the laws;

That the publicity and the control of the acts of the Administration, which are the guarantees of the country and of the protecting Powers, do not, in fact, exist.

As regards the Loan of 1832:

Seeing that the resources of the Treasury Of Greece have increased, while the engagements contracted by the Treaties, and solemnly reiterated promises, have not been fulfilled;

Seeing that in proportion to the increase of the resources of the Treasury, the expenditure increases likewise; while it is impossible to discover, either in the state of the country, in works of public utility, or in the encouragement given to industry, or in any other proceeding emanating from the State, a sufficient compensation for the sacrifices yearly made by the Protecting Powers;

Seeing that, while the expenditure increases in proportion to the receipts, the appropriations for the budgets for the repayment of the sums due to the Powers proportionately decrease;

Seeing that, in this state of things, all the sources of credit open only to nations who fulfil their engagements, are exhausted as regards Greece;

That this state of affairs, grievous for the interests of the country, is aggravated every day, since, admitting even that it should please the three Powers to give up the interest owing for advances made up to the 1st of January, 1859, the debt of Greece amounts at this date to 56,142,304 francs 75 centimes, and it would amount on the 15th of March, 1870, the time fixed for its acquittance towards the owners Of bonds, to 121,528,198 francs 81 centimes;

Adverting to Article XII, section 2 of the Convention of the 7th of May, which is thus worded:- ‘The Sovereign of Greece and the Greek State shall be bound to appropriate, to the payment of the interest and sinking fund, of such instalments of the loan as may have been raised under the guarantee of the three Courts, the first revenues of the State, in such manner that the actual receipts of the Greek Treasury shall be devoted, first of all, to the payment of the said interest and sinking fund, and shall not be employed for any other purpose, until those payments on account of the instalments of the loan raised under the guarantee of the three Courts shall have been completely secured for the current year. The Diplomatic Representatives of the three Courts in Greece will be specially charged to watch over the fulfilment of the last-mentioned stipulation;"

That in consequence, according to the strict terms of that Convention’ the payment of the interest and of the sinking fund may be immediately demanded;

The Commission is of opinion:

That the attention of the Greek Government should be seriously called to the necessity of putting an end to the encroachments committed upon the public domain, by a "cadastre," or by the verification of property titles, or by any other means which would have the desired result;

To the advantage that would result as regards the taxpayers and the Treasury, if certain laws on taxes, particularly that on the land tax were modified;

To the necessity of giving to the Laws of Finance all their efficacy by more firm and more vigilant administrative action;

Finally, to the imperious necessity of ensuring publicity to the acts of the Administration, and their control by the judicial and legislative powers created by special laws and by the Constitution;

For this purpose, at the periods fixed by the laws for the presentation of the Budgets, the production of accounts by the Ministers, the publication of the General Report of the Court of Accounts and of its declarations of conformity, and the promulgation of the Law of Accounts, printed copies of these documents, in sufficient numbers, shall be furnished to the Legations of England, France, and Russia.

Finally, the attentive study of the resources of the Greek Treasury made by the Commission, has convinced it that Greece is in a state to contribute towards the sacrifices which are made every year for her.

As regards the naming of the sum which may be demanded of her, convinced that Greece, if well-governed, would have been able from the present time completely to have fulfilled her engagements; that consequently the Powers might, without offending any principle of justice, require her to pay in full the interest and the sinking fund;

Nevertheless, still wishing to give her facilities, not to prejudice any of her public services or her regular development, and to get rid of all legitimate controversy, the Commission proposes to fix the minimum of the contribution Of Greece at the sum of 900,000 francs.

In anticipation of the augmentation of the resources of the Greek Treasury, the Commission is of opinion that this sum should be increased progressively at periods which will be determined upon when the mode of payment and of appropriation of the sums paid by Greece towards the extinction of her debt shall be settled.

The Commission observes that its moderation in fixing the amount of the first payment entitles the Powers to count on efficacious reforms in the Greek Administration; if these hopes are deceived, it is of opinion that the strict execution of the Convention of 1832 should be insisted on.

The Commission does not overlook the difficulties which may have to be contended against in a country so recently constituted, and in order as much as possible to avoid errors in its calculation, it has always taken into consideration both the time and the circumstances.

The Commission has taken note of the assurances given by the King’s Ministers, that they were making every effort to improve the financial situation of Greece; and it trusts that these praiseworthy dispositions will be carried out.

Just at the close of its labours, the Commission received from the Minister for Foreign Affairs a statement, together with a covering letter dated the 8/20 of May, 1859 (see Procès-verbal No. 60). This statement mentions, under the head of each Department, in one sum and in a short form, without any other development, certain expenses amounting to 15,735,000 drachmes, which the Treasury would be necessarily obliged to meet if its resources were to exceed those which are at present absorbed in the Budgets.

The Commission observes that, in fixing, with a moderation which it does not regret, the sum of 900,000 francs as the minimum that Greece ought to pay, it has not lost sight of the necessities of her public services, nor of the wants of her regular development.

It has taken no notice of the real tendencies of the Greek Administration, which this last incident has again revealed; but it has also wished to observe, that before the wants, more or less questionable, which are pointed out to it, there comes respect for Treaties, and for promises solemnly reiterated, which is the first duty of an Administration that wishes to establish public credit, and to be an honour to its country.

But seeing besides, as has already been said above, that the accounts published do not offer legal guarantees of exactitude and authenticity;

That consequently the Commission has only been able to prove the successive increase of the expenditure, and the tendency of the Administration to absorb all the receipts by internal expenses, in to justify the impossibility of keeping its engagements:

That until the guarantees which the laws and the Constitution demand for the validity of the accounts, are obtained, the Commission is unable to say whether the credits opened for the Budgets and the expenditure represent the expenditure really indicated by these Budgets, and the requirements that are really satisfied.

In this state of things, the Commission can only look upon the tabular statement which has been transmitted to it as a documented prepared for a special purposed, which is not calculated to modify its conclusions.

Athens, 12/24 th. May, 1859.





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1 Tunçer (2015) raises a paradox of these attempts to financially supervisethe more successful external supervision was in reinforcing creditworthiness, the greater the delay in centralising fiscal capacities in the examples studied: the Ottoman Empire, Egypt, Greece and Serbia.

2 Auchmuty (1939) was the biographer of the key Commissioner of the Financial Commission, Thomas Wyse, wherein reference to the final report is made.

3 See Senior (1859) and or a longer account of Nassau Senior’s travels to Greece see Psalidopoulos and Theocharakis (2015).

4 Revolts broke out in Nauplio, Peloponnese, and other major cities nationwide during 1862. For the political events which contributed to the end of Otto dynasty in Greece, see Aspreas (1930).

5 For details on the how the loan was intermediated, including the role of Otto, the delayed negotiations between the three powers see Schönhärl (2019, 6) and for an older account Wynne (1951). For the Rothschild banking house, see Ferguson (1999).

6 For the economic and political dependence of Greece from the three protecting powers during this period, see Kofas (1981).

7 See Wyse (1871) for an account of the disputes with the Greek cabinet on the extent of the issue.

8 For the Don Pacifico affair, see Hannell (1989, 495-507).

9 FO 32/282 T.W. Letter May 26 1859.

10 FO 32/282 T.W. Letter May 26 1859.

11 FO 32/280 T.W. Letter November 1856.

12 FO 32 281 T.W. Letter April 29 1858.

13 For a detailed description of Thomas Wyse’s personal life, see Salmon (2009) and Auchmuty (1939). The present section relies mainly upon these sources.

14 Notable among these are Wyse, 1865 and 1871. Both of them were published posthumously by his niece, Winifred Mary Wyse.

15 See FO 32/280 T.W. Letter November 4 1856 and FO 32/280 T.W. Letter February 19 1857.

16 FO 32/282 T.W. Letter February 9 1857 and FO 32/280 T.W. Letter February 17 [p.231].

The Commission first requested copies of budgets and statistical accounts of the state of national property: FO 32/280 T.W. Letter March 2 1857. These were also requested in a certain format, for example, they requested “to furnish them with a statement of the National Property, comfortably, to the Tabular Form” with a copy of the format required included: FO 32 280 T.W. Letter May 19 1857.

17 FO 32/280 T.W. Letter February 24 1857.

18 FO 32/282 T. W May 26 1859.

19 FO 32/280 T.W. Letter February 24 1857.

20 FO 32/280 T.W. Letter February 24 1857.

21 Ozeroff was a new Russian diplomat stationed in Greece replacing Persiany in April 1857 (FO 32/280 T.W. Letter 14 April, 1857). The French Minister based in Athens at the time of the Commission’s inauguration was Mercier, replaced by de Montherot in September 1857 (FO 32/281 T.W. Letter April 29 1858).

22 The French financier is mentioned as Le Marquis de Ploeuc by Wyse’s niece, Winifred Mary Wyse, in the introduction of Thomas Wyse’s book (1871, 9).

23 FO 32/282 T. W. Letter May 26, 1859.

24 FO 32/282 T. W. Letter May 26, 1859.

25 FO 32/282 T. W. Letter May 26 1859.

26 The purview over fiscal matters as listed by Wyse in FO 32/282 T.W. Letter May 12 1859 were: administration, receipt, collection, revenues, expenditures, debt and reforms, with the first issue to be examined being perishable property, followed by national lands, then taxes. Wyse’s intention was not only to inquire into detail about each source of revenue but how these could be further extended into “probable means of raising revenue, in other words, into the “Resources,” (in the most extended sense), of the country” (FO 32/280 Letter TW March 10 1857).

27 FO 32/281 T.W. Letter April 29 1858.

28 FO 32/280 T.W. Letter February 24 1857 (286).

29 FO 32/280 T.W. Letter TW March 10 1857, where he also noted that the precedent was to follow the “course usually adopted in out Royal and Parliamentary Commissions.”

30 FO 32/280 T.W. Letter June 1, 1857 and FO 32/280 T.W. Letter December 10 1857. Strickland’s complaints on the defects of the receipt classification as well as their remedies.

31 FO 32/281 T.W. Letter February 24 1858.

32 FO 32/281 T.W. Letter January 1958 (29).

33 A statement was placed before the Commission to inform it of the views of the earlier Bondholders. FO 32/291: ‘Statement of the Claims of the Greek Bondholders of the Loans negotiated in London in the years 1824 and 1825,’ describing in full their frustrated efforts at claiming repayment and their hopes that the Commission entails.

34 Complaints about delays were made repeatedly, for instance in FO 32/280 T.W. Letter May 28 1857, FO 32/281 T.W. Letter January 14 1858 and FO 32/281 T.W. Letter April 29 1858. For the table of documents requested, indicating when the reminders were sent, and the time taken until the documents were furnished see FO 32/281 1858 p 156, Table titled “Table showing the dates of demand and receipt of the Papers required.”

35 FO 32 280 T.W. Letter December 1857 (450).

36 FO 32/280 T W Letter March 2nd 1857, (304).

37 According to FO 32/282, TW Letter May 12th 1859 there were seven state departments which Wyse had identified for the investigation.

38 He travelled with his niece, a friend and an artist.

39 Although not initially intended for publication, Wyse began to entertain the possibility to publish An Excursion in the Peloponnesus in 1858 towards the end of life. As he grew ill, he bequeathed the manuscript to his niece in hope to see its publication. Impressions from Greece was found much later in his papers by his niece years after he had passed away.

40 FO 32/282 T.W. Letter May 26 1859.

41 FO 32/282 T.W Letter May 19 1859.

42 FO 32/280 T.W. Letter June 1 1857.

43 FO 32 280 T.W. Letter March 10 1857.

44 FO 32/282 T.W. Letter May 26 1859 Wyse describes how, following French objections, his initial high demands were decreased.

45 FO 32/282 T.W. Letter May 19th 1859.

46 For a comprehensive introduction to the history of economic thought in 19th century Greece, see Psalidopoulos (2015, 68-76).

47 FO 32/282 T.W. Letter May 26 1859.

48 FO 32/282 T.W. Letter May 12 1859.

49 FO 32/282 T.W. Letter May 26 Letter 1.

50 This puts doubts on the earlier portrayal of the Commission as simply providing friendly advice.

51 For details see Psalidopoulos (2019).

52 According to Wynne’s estimation (1951, 296), less than a quarter of the proceeds of these loans was used to public works in general and infrastructure projects in particular. Even the railway loan of 1890—the only one which was requested exclusively for developmental purposes—applied mostly to budgetary needs. For the external loans of this period, see Wynne (1951, 296-302). See also Levandis (1944, 66-72) and Andréadès (1939, 365-368).

53 This document is kept in the archives of the Foreign Office in the National Archive at Kew, UK. There are several folders dedicated to the work of the Financial Commission; the final report is found in Box FO32/282 in a folder named ‘Financial Commission Vol 3’ dated 1859. The Final Report is among Wyse’s letters and to the best of our knowledge this is the first time it has been reprinted in full. French and English versions of the text are consolidated in a single printed document eight pages long. It was printed by Harisson and Sons, best known for printing the official government journal of records “The London Gazette” from 1765 to 1910, but they also maintained private presses in the Foreign Office. The French text appears before the English and yet there is no French title. It is reprinted in the style and syntax of the original, with no modifications made to either the French or English. According to Wyse’s letters, the first draft was assigned to Ozeroff to be written directly in French. There are several versions before the final draft. We would like to acknowledge the National Archive at Kew for permission to reproduce the text, and to thank François Allisson and Aurélien Goutsmedt for their attention to the French text. All footnotes are editorial and provide clarifications that could be helpful to the reader.

54 As expressed in the Report.

55 This is in the original. The English text begins on the same page.

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Christina Laskaridis

SOAS University of London,

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Adamantios Syrmaloglou

School of Management, University of Peloponnese,

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