Moneylending and Production for Overseas Markets
The increasing pervasiveness of moneylending and the deepening of market relations in Jabal Nablus helped pave the way for coastal and foreign merchants to invest in the interior regions of Palestine. The following salam contract, drafted in early May 1851 between a Christian merchant from Jaffa and a Nabulsi peasant from the village of Aqraba, provides some clues as to how this type of moneylending practice was used in the local organization of producing cash crops for European markets:
On the date [recorded] below, Khalil Mitri son of Yusuf Khawaja Mitri arrived and paid to the sane mature man, Abd al-Rahman al-Khalil, one of the people of Aqraba village, a sum of 2,997 piasters…as salam on the amount of 81 kayla of sesame—the good unirrigated sesame free of dirt and straw, and that is measured by the kayla of Nablus city in the usual sa. [It is to be] transported from this aforementioned town to Jaffa, where the salam was contracted. The [transportation] fee is to be paid by Khawaja Khalil…not by Abd al-Rahman.…[The grace period is] five months from this date. The aforementioned Abd al-Rahman has acknowledged receiving the salam capital [ra’smal] in full…after which, Khawaja Khalil promised that as soon as the sesame arrives and is sold, and no matter how much the Supreme God might bestow in profit, he will pay a third of this profit to the aforementioned Abd al-Rahman.[28]
Khawaja Mitri was apparently a well-informed merchant, for he invested in sesame production in 1851; and, according to Alexander Schölch, French imports of Palestinian sesame increased greatly beginning in 1852.[29] Because Schölch’s conclusion is based on export statistics from Jaffa, the financing of this increase must have started the previous season, which is exactly when Khawaja Mitri signed the salam contract with Abd al-Rahman from Aqraba.
The stamp and list of witnesses on the contract tell us that Abd al-Rahman signed it in Jaffa. This might not sound striking, but considering the prevailing view of Palestinian peasants during the Ottoman period as living in isolated villages and engaged solely in subsistence agriculture, the initiative and entrepreneurial spirit of Abd al-Rahman are worthy of note. Indeed, Abd al-Rahman had come to Jaffa a few months earlier and negotiated a similar contract.[30] His actions indicate that he was free, willing, and capable of responding quickly to such offers and that he knew full well that his crops would be shipped to France. Abd al-Rahman should not be considered unique. As seen in the Chapter 3, and as Alexander Schölch and Marwan Buheiry both argued, on the basis of export statistics from the latter part of the nineteenth century, Palestinian peasants were sharply attuned to the fickle changes of international demand and acted accordingly.[31]
Abd al-Rahman, like most Palestinian peasants at that time, probably needed a quick infusion of cash in order to stay afloat in an increasingly monetarized agricultural sector. The availability of cash could make the difference between success or failure for many peasants, especially for those who were heavily dependent on rain-fed agriculture, where productivity fluctuated with the vagaries of the weather. His success in seeking out a faraway merchant at a time of high demand suggests that he had exerted considerable effort to negotiate the most favorable conditions for himself—in essence, bypassing the Nabulsi merchant community.
Apparently confident of the profit margin he was about to make on this deal and eager to insure the supply of sesame, Khawaja Mitri offered Abd al-Rahman two incentives not normally encountered in salam contracts. First, he agreed to cover the transportation costs, which were considerable given the distance involved. In effect, this increased the per-unit price in favor of the peasant. The second incentive was innovative and reflects the adaptability of salam contracts: a profit-sharing arrangement. Abd al-Rahman still had to provide the sesame regardless of weather conditions or price changes, but he could augment the moneys he received in advance with a percentage (one-third) of the profits made by the merchant.
It is not certain whether the incentives offered in this contract represented an isolated case or whether they were typical of the dealings between coastal merchants and the peasants of the interior. The latter was more likely, if only because non-Nabulsi merchants, as was seen in Chapter 3, had a difficult time bypassing local commercial networks and luring peasants, much less guaranteeing the enforcement of contracts.[32] In this regard, it is difficult to escape the conclusion that under certain conditions, like those that characterized this case, the use of the salam contract could encourage trade, help meet local needs for liquid capital, increase investment in agricultural production, promote economic growth, and even work to the benefit of both parties concerned.
Salam contracts took on a much more sinister character once the context was changed, however. Judging from the available evidence, the salam contracts drawn up by Nabulsi oil merchants reflected neither the urgency felt by Khawaja Mitri nor his need to sweeten loans with incentives. On the contrary, they were usually characterized by low prices, no profit sharing, and constant threat of enforcement by government officials and subdistrict chiefs. This is because most Nabulsi peasants suffered from a heavy imbalance in power relations with locally powerful moneylenders. At the same time, they were forced to turn to them in order to meet their tax obligations. The olive-based highland villages of Palestine became more vulnerable to this combination of taxes and debt over the course of the nineteenth century.